Bunting v Buchanan - [2012] NZHC 766

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV2011-404-003865 [2012] NZHC 766

UNDER the Companies Act 1993

IN THE MATTER OF an application to terminate the liquidation of SILVERDALE DEVELOPMENTS (2007) LIMITED (In Liquidation)

BETWEEN ANTHONY BUNTING, ELAINE TASSIE, GARY RAYMOND COOPER AND JANET MARY COOPER
Applicants

ANDJOHN BUCHANAN First Respondent

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Hearing: 23 August 2011

Counsel: L J Turner for applicants
G P Blanchard for first respondent
T J G Allan and J E M Lethbridge for second to fourth respondents

Judgment: 24 April 2012

JUDGMENT OF ASSOCIATE JUDGE ABBOTT

This judgment was delivered by me on 24 April 2012 at 5pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:
A Cool, Cook Morris Quinn, PO Box 1295, Shortland Street, Auckland 1140
J Lethbridge/T Allan, Grove Darlow & Partners, PO Box 2882, Auckland 1010

Counsel:
L Turner, Barrister, PO Box 775, Shortland Street, Auckland 1140
G Blanchard, Barrister, PO Box 1235, Shortland Street, Auckland 1140

ANTHONY BUNTING, ELAINE TASSIE, GARY RAYMOND COOPER AND JANET MARY COOPER V JOHN BUCHANAN HC AK CIV 2011-404-003865 [24 April 2012]

ANDROYDEN BRETT ALLNUT, DIANE PATRICIA ALLNUT AND JANENE MARY OLSON
Second Respondents

ANDGARY HUGH CHAMBERS, DENISE CATHY CHAMBERS AND DAVENPORTS HARBOUR TRUSTEE (2008) LIMITED
Third Respondents

ANDTHE IMPORTER BRASSWARE LIMITED
Fourth Respondent

ANDFREDERICK JOSEPH PURVIS AND SUSAN ELIZABETH PURVIS
Fifth Respondents

[1] This is an application by the shareholders of Silverdale Developments (2007) Limited (in liquidation) (SD2007) to terminate the liquidation.

[2] SD2007 was incorporated to carry out the development of commercial warehouse premises at 18 David McCathie Place, Silverdale. The applicant shareholders put it into liquidation on 15 May 2009 after the development was complete and the five strata title units in the development were sold to the respondents.

[3] The second to fourth respondents purchased four of the five units from SD2007.1 After taking possession they observed cracks in the floor slabs and raised this with SD2007’s directors. The parties have been unable to agree on the cause of the cracking or the cost of repair. The unit owners attribute it to faulty construction and say that the floor slabs will need to be replaced at a cost of about $2,300,000. The shareholders attribute the problem to site conditions and hard plastic tyres used on forklift machines in the warehouses. They contend that the cracks can be remedied for a cost of about $30,000.

[4] The unit owners dealt with the directors (the applicants Mr Bunting and Mr Cooper) for about a year before they learned that SD2007 was in liquidation. They then filed claims in the liquidation for their estimated costs of repair.

[5] The person who was initially appointed liquidator was not prepared to determine the claim in light of the dispute between the parties, choosing instead to apply to the court for a determination under s 307 of the Companies Act 1993 (the Act). He subsequently resigned and the first respondent (the liquidator) was appointed. The liquidator rejected the unit owners’…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Bunting v Buchanan

Details

AGLC: Bunting v Buchanan [2012] NZHC 766
Case: [2012] NZHC 766
Decision Date: 24 April 2012

CaseChat Overview and Summary

This is an application by the shareholders of Silverdale Developments (2007) Limited (SD2007) to terminate the liquidation. The shareholders are the applicants and the unit owners are the respondents. The unit owners purchased units from SD2007 and have commenced proceedings against it to recover the cost of repairing cracks in the floor slabs. The liquidator and the unit owners oppose the application. The court considered the criteria for termination under section 250 of the Companies Act 1993, and the public interest. The court held that the applicants had not made out a sufficient case for termination of the liquidation as there was a real but unpredictable prospect that SD2007 was insolvent, and its assets needed to be protected until the claims were determined. The proposal for protection of its assets did not fully protect the income stream, which should all be available for its creditors, subject only to proper costs of liquidation. There was a real possibility of prejudice to creditors if SD2007 was taken out of liquidation before the extent of the creditors’ claims was determined. The application to terminate the liquidation was dismissed.

Orders