Byrnes and Hewitt

[2024] NZHC 657

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2024-485-67

[2024] NZHC 657

Under the

INSOLVENCY (CROSS-BORDER) ACT 2006

In the matter of

an originating application for recognition of a foreign main proceeding pursuant to

section 7 and Schedule 1 of the Insolvency (Cross-border) Act 2006

And in the matter of

Tamarind New Zealand Pty Limited (In Liquidation)

In the matter of an application by

MATTHEW JAMES BYRNES AND ANDREW STEWART REED HEWITT in

their capacities as joint and several

liquidators of Tamarind New Zealand Pty Limited (In Liquidation), an Australian company

Applicants

Hearing:	On the papers
Appearances:	S Barker for Appellant
Judgment:	22 March 2024

JUDGMENT OF CHURCHMAN J

Introduction

[1]                  The applicants, Matthew James Byrnes and Andrew Stewart Reed Hewitt, seek the recognition of Tamarind New Zealand Pty Limited (Tamarind)’s liquidation as a foreign main proceeding in terms of the Insolvency (Cross-border) Act 2006 (ICBA),

BYRNES AND HEWITT V TAMARIND NZ PTY LTD (INSOLVENCY) [2024] NZHC 657 [22 March 2024]

and relief under art 21(1)(e) of sch 1 of that Act. They have applied in their capacity as the liquidators of Tamarind.

The Background

[2]                  Tamarind is an Australian company incorporated on 4 July 1997, which is part of the Tamarind Group of companies that are involved in the oil and gas industry. Following the failure of the Tui Project, a late life oil exploration joint venture between four companies including Tamarind (JV Entities), on 15 April 2020 the directors of Tamarind resolved to voluntarily wind up the company (the Australian Proceeding). Mr Byrnes and Mr Hewitt were appointed liquidators on 16 April 2020 in a shareholders’ meeting.

[3]                  The Ministry of Business, Innovation and Employment (MBIE) submitted on behalf of the Crown proofs of debt dated 22 June 2022 in the liquidations of the     JV Entities in the amount of USD 100,111,491.60 for the cost of decommissioning the Tui Field and for unpaid royalties. MBIE claimed that the JV Entities were liable to the Crown for the claimed amounts owed jointly and severally as a permit participant in Petroleum Mining Permit 38158. MBIE has also lodged a proof of debt in the liquidation of Tamarind dated 3 July 2020 claiming USD 100,109,722.97 on the same basis. IRD have also rejected the claims of the JV Entities to refundable tax credits on the basis the Crown’s creditor claims mean there is no credit owed to them.

[4]                  The liquidators of the other JV Entities seek to apply to the Court for directions on whether the Crown has any statutory and/or contractual entitlement to claim their decommissioning costs in their liquidations and whether the Crown has the right to set off the tax credit owed to the JV Entities against the Crown’s claim for decommission costs. The applicants seek to join the proceeding as they state they have an interest in its outcome. They submit that although a recognition order may not be required to be a party to the application, its outcome affects the realisation of Tamarind’s assets in New Zealand.

[5]                  This application was filed on 1 February 2024, and is supported by affidavits from Mr Byrnes and Mr Stephen Peter Hume, a partner at K&L Gates and solicitor for the applicants.

[6]                  The applicants request that the application proceed without any requirement for formal service on Tamarind as required under r 24.56(2)(b) of the High Court Rules 2016, or for notification to Tamarind of any order made under art 17(4) of sch 1 to the ICBA. The applicants also submit that notice need not be given to creditors of Tamarind as the interests of creditors will be appropriately protected by reserving leave to apply to set aside or vary the orders within three working days of serving the sealed orders on any creditors.

The Law

[7]                  Article 15 of sch 1 to the ICBA provides that a foreign representative may apply to the High Court for recognition of a foreign proceeding in which the representative has been appointed. Such an application needs to be accompanied by:

(a)a certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or

(b)a certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or

(c)any other evidence acceptable to the Court of the existence of the foreign proceeding and of the appointment of the foreign representative; and

(d)a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative.

[8]                  Article 17 provides that a foreign proceeding shall be recognised if it is a proceeding within the meaning of art 2(a), if the foreign representative applying for recognition is a person or body within the meaning of art 2(d), if the application meets the requirements of art 15(2), and if it has been submitted to the High Court.

[9]Article 2(a) defines a foreign proceeding as:

… a collective judicial or administrative proceeding in a foreign state, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation.

[10]Article 2(d) defines a foreign representative as:

… a person or body, including one appointed on an interim basis, authorised in a foreign proceeding to administer the reorganisation or the liquidation of the debtor’s assets or affairs, or to act as a representative of the foreign proceeding.

[11]              Article 17(2)(a) provides that a foreign proceeding shall be recognised as a foreign main proceeding if it is taking place in the State where the debtor has the centre of its main interests.

[12]              Under art 21(1)(e) of sch 1 to the ICBA, the High Court, upon recognition of a foreign proceeding, may, where necessary to protect the assets of the debtor or the interests of the creditors, entrust the administration or realisation of all or part of the debtor’s assets located in New Zealand to the foreign representative or another person designated by the Court.

Application for recognition

[13]              Having considered the memorandum and affidavits filed in support of the application, it is clear that the applicants have complied with the requirements of arts 15 and 17 of sch 1 of the ICBA. The Australian proceeding is a collective proceeding in a foreign state, as it arises under Australia’s Corporations Act 2001, and concerns the assets and affairs of Tamarind being subject to control or supervision by Australian courts for the purpose of liquidation. Creditors’ voluntary liquidations have been recognised as foreign main proceedings by the Court previously, namely in Sheahan.1 I adopt the same approach.

[14]              The applicants are also foreign representatives as they were clearly authorised to administer the liquidation of Tamarind’s assets or affairs, due to their appointment as liquidators by special resolution of the shareholders on 16 April 2020. I accept the useful outline of the powers of liquidators in Australia set out in Mr Hume’s affidavit.

1      Re Sheahan HC Auckland CIV-2011-404-1623, 20 May 2011, Courtney J.

[15]              The  documents  required  under  art  15(2)  and  17(1)(c)  are  annexed  to  Mr Byrnes’ affidavit, namely a certified copy of the minutes of the shareholders’ meeting that resolves the appointment of the liquidators and a certified copy of the notification of appointment of an external administrator.

[16]              The Australian proceeding is a foreign main proceeding. The Company Extract annexed to Mr Byrnes affidavit shows the head office address to be in Docklands, Victoria, Australia. Under art 16(3) of the ICBA, Tamarind’s registered office is presumed to be the centre of its main interests. There is no evidence to the contrary, so I am satisfied this is the case.

[17]              Additionally, I am satisfied that pursuant to r 24.56(2)(b) of the High Court Rules the application can proceed without service on Tamarind, given the applicants are its agents and representatives as liquidators. I note that a similar decision was reached in the case of Re Sheahan in similar circumstances.2

Application for relief

[18]              I am satisfied that the relief sought by the applicants, namely to entrust them to administer and realise Tamarind’s assets in New Zealand, is necessary to protect the assets of Tamarind. As discussed, the purpose behind this application is to enable the applicants to join the JV Entities’ proceedings concerning the claims made by MBIE and IRD. These claims obviously affect the realisation  of  Tamarind’s  assets  in New Zealand.

Decision

[19]              Formal service on Tamarind is dispensed with pursuant to r 24.56(2)(b) of the High Court Rules.

[20]The application is granted and orders for relief made in the terms sought.

2      Sheahan, above n 1, at [7].

[21]              Leave is reserved for the applicants to apply to the Court in the event that further orders pursuant to art 21(1) of sch 1 to the ICBA are required to discharge their duties.

[22]              Leave is reserved to any creditors to apply to set aside, vary, modify or terminate the orders sought, provided that such application is made within three working days of the date of the sealed orders being served on the creditor.

Churchman J

Solicitors:

Buddle Findlay, Wellington for Applicants