Clayton v Jackson

[2020] NZHC 2666

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2020-404-001729

[2020] NZHC 2666

UNDER

the Receiverships Act 1993

BETWEEN

MARK ARNOLD CLAYTON

Plaintiff

AND

NEALE JACKSON, BRENDAN JAMES GIBSON AND GRANT GRAHAM (of CALIBRE PARTNERS)

First Defendants

AND

BANK OF NEW ZEALAND

Second Defendant

AND

PAUL ARNE PEDERSEN

Third Defendant

AND

WADE STEVEN GLASS

Fourth Defendant

Hearing:

29 September 2020

Appearances:

S R G Judd for the Plaintiff

S M Hunter QC & J Marcetic for the First Defendants

Z G Kennedy & A C van Ammers for the Second Defendant T Cooley for the Third Defendant

C A Murphy for the Fourth Defendant

Judgment:

29 September 2020

Reasons:

09 October 2020

Reissued:

12 October 2020

REASONS FOR JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 09 October 2020 and

re-delivered by me on 12 October 2020 in accordance with High Court Rules 2016, r 11.10

…………………………

Registrar/Deputy Registrar

CLAYTON v JACKSON [2020] NZHC 2666 [29 September 2020]

Introduction

[1]    Mark Clayton, the plaintiff, founded the Claymark group of companies and businesses (the Claymark business). The business is a New Zealand based wood products business with a global customer base. The most profitable part of the business is the sale of wood products to Home Depot stores in the Unites States through one of the group companies, Claymark USA Inc.

[2]    Mr Clayton established the Claymark business in 1988. He built it up over a period of more than 30 years. He says it is his life’s work.

[3]    The Bank of New Zealand (the BNZ), the second defendant, provided finance to the Claymark  business.  The  BNZ  held  security  over  most  of  the  business. Mr Clayton provided a personal guarantee to the BNZ.

[4]    On October 2018 the BNZ informed Mr Clayton that the Claymark business was in breach of covenants. Mr Clayton decided to put the Claymark business on the market by tender.   The tender process resulted in a conditional agreement, dated    29 August 2019, to sell the business to a company called NZFFP. Mr Clayton said that the purchase price was $127 million, and that if the agreement had been performed, the BNZ would have been repaid in full with a surplus of about $73 million.

[5]    The settlement date for the NZFFP agreement was 31 October 2019. Settlement did not occur then. The settlement date was extended twice, the second time to 20 December 2019.

[6]    On 4 December 2019 the BNZ appointed the first defendants as receivers over the New Zealand companies in the Claymark group. At that time the amount owing to the BNZ was approximately $54 million.

[7]    The NZFFP agreement did not settle. NZFFP terminated the agreement for non-satisfaction of a condition on 19 December 2019.

[8]    After their appointment the receivers continued to operate the Claymark business while they conducted a sale process. Mr Clayton participated in the sale process as a potential purchaser. In December 2019 he had discussions with the fourth defendant, Wade Glass, about Mr Glass supporting a bid by Mr Clayton to purchase the business from the receivers. Mr Glass signed a confidentiality deed in relation to those discussions in favour of Mr Clayton.

[9]    Mr Clayton made two non-binding offers to purchase the Claymark business. The second of these, for $60 million, was made on 28 August 2020. By then the receivers had (on 26 August 2020) entered into an agreement with the Pedersen group (a group connected to the third defendant, Paul Pedersen, and to Mr Glass) for the sale of the business and related assets. The Pedersen agreement went unconditional on  28 August 2020, the same day that Mr Clayton made his second non-binding offer. The settlement date for the sale to the Pedersen group was 30 September 2020.

[10]   Mr Clayton was disappointed that his offers were not pursued further by the receivers. He was concerned that the receivers had breached their duties to him, and that Mr Glass had breached the confidentiality deed. From late August 2020 he asked the receivers to provide him with a copy of the Pedersen agreement. They refused.

[11]   On 24 September 2020 Mr Clayton commenced this proceeding. At the same time he sought an interim injunction restraining the defendants from completing the sale, and an order requiring the receivers to provide a copy of the Pedersen agreement.

[12]   Mr Clayton also asked for an urgent hearing. This was necessary because he made his application only four working days before the agreement was due to settle. I was able to hear the application on the afternoon of 29 September 2020, the day before settlement. By then the receivers had provided a copy of the Pedersen agreement to Mr Clayton. It was for a purchase price of $59 million.

[13]   At the end of the hearing I dismissed Mr Clayton’s application for an injunction, with reasons to follow. These are my reasons.

Mr Clayton’s substantive claims

[14]   Mr Clayton makes three substantive claims, each of which was said to support his application for an interim injunction.

[15]   The first claim is against the receivers, alleging breach of duties that they owed to Mr Clayton as guarantor under ss 18 and 19 of the Receiverships Act 1993, and at common law and in equity. These are the duty to exercise their powers in good faith and for proper purposes and with reasonable regard to the interests of Mr Clayton (provided this was consistent with acting in the best interests of the BNZ), and the duty to obtain the best price reasonably obtainable as at the time of sale.

[16]The alleged breaches of these duties by the receivers are that they:

(a)failed or refused to consider the offers put forward by Mr Clayton;

(b)failed to consult with or consider the interests of Mr Clayton; and

(c)entered into the Pedersen agreement.

[17]   The second claim is against the BNZ. Mr Clayton alleges that the BNZ acted unjustly or oppressively in terms of the Credit Contracts and Consumer Finance Act 2003 (the CCCFA). The allegedly unjust or oppressive conduct is the BNZ’s refusal of Mr Clayton’s offers, its failure to properly consider Mr Clayton’s position, and its failure to engage with him to reach agreement or to instruct the receivers to do so.

[18]   The third claim is against Mr Pedersen and Mr Glass. Mr Clayton alleges that Mr Glass received confidential information from Mr Clayton, and that Mr Glass agreed to work exclusively with Mr Clayton to prepare an offer to purchase the Claymark business from the receivers. Mr Clayton alleges that Mr Glass used the confidential information, and otherwise acted against the interests of Mr Clayton, by entering into a consortium with Mr Pedersen, which led to the Pedersen agreement. Mr Clayton says that in so doing Mr Glass breached duties of confidence and fiduciary duties, and that Mr Pedersen received the benefit of those breaches. Mr Clayton claims

that, accordingly, Mr Pedersen and Mr Glass hold the benefit of the Pedersen agreement on constructive trust for Mr Clayton.1

[19]   Mr Clayton’s statement of claim does not identify or particularise the confidential information that he allegedly provided to Mr Glass. In his affidavit in support of the interim injunction application, Mr Clayton says he provided Mr Glass with “material information, regarding the business including the due diligence report completed by Deloittes”. There is no further identification of that due diligence report.

Mr Clayton’s application for an interim injunction

[20]   Mr Clayton sought an interim injunction restraining the defendants from proceeding with settlement of the Pedersen agreement (or any contract to sell any of the business or assets of the Claymark group) until further order of the Court. He also sought an order directing the defendants to provide him with a copy of the Pedersen agreement and with all documents relating to the negotiation of that agreement. That order was not pursued at the hearing, the receivers having provided a copy of the Pedersen agreement to Mr Clayton on 25 September 2020.

Interim injunctions: the legal framework

[21]   The approach to determining an application for an interim injunction is well settled. The Court follows a three-step approach, assessing:2

(a)whether there is a serious question to be tried;

(b)the balance of convenience; and

(c)where the overall justice lies.

1      Mr Clayton also alleges that  an Australian financier received  confidential  information from  Mr Clayton, and that the financier used that information against Mr Clayton’s interests by entering into a consortium with Mr Pedersen, leading to the Pedersen agreement. The financier is not a defendant. There is no evidence before the Court of the financier having any involvement with the Pedersen group, and Mr Clayton did not pursue this at the hearing.

2      Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (CA) at 142, recently re-affirmed in Intellihub Ltd v Genesis Energy Ltd [2020] NZCA 344.

[22]   Only if there is a serious question to be tried does the Court need to consider the balance of convenience and where overall justice lies.

Is there a serious question to be tried?

[23]I will examine this element in relation to each of Mr Clayton’s three claims.

Claim against receivers

[24]   There is no dispute that the receivers owed Mr Clayton the duties in ss 18 and 19 of the Receiverships Act.3 The dispute is over alleged breach of those duties.

[25]   In short, Mr Clayton alleges that the receivers breached their duties in three ways. The first is that the receivers did not obtain the best price for the Claymark business at the time of sale. The second is that the receivers failed to properly consider Mr Clayton’s offers. The third is that the receivers, in entering into the Pedersen agreement, failed to properly consider the interests of Mr Clayton.

[26]   These allegations all relate to the sale process undertaken by the receivers. I will come to that process in a moment. I first note that Mr Judd, who appeared for Mr Clayton, highlighted the difference between the sale price that Mr Clayton had achieved in the sale that he negotiated to NZFFP (which Mr Clayton says was $127 million) and the sale price that the receivers negotiated under the Pedersen agreement ($59 million). I place no weight on that difference. First, as Mr Hunter QC, who appeared for the receivers, pointed out, the sale price in the NZFFP agreement was expressed to be “$70,000,000, as adjusted pursuant to this Agreement”. Mr Clayton did not explain how his figure of $127 million was calculated. Secondly, as Mr Hunter also noted, the NZFFP agreement was conditional on the board of directors of NZFFP approving the completion of the purchase “in its sole discretion”. There was little to distinguish it from an option. Thirdly, as if to emphasise the conditionality of the agreement, it provided for a deposit of only $1. Fourthly, the NZFFP agreement had

3      It is not necessary to consider the extent to which the receivers also owed duties at common law or in equity. Mr Clayton did not rely, in bringing his application, on there being common law or equitable duties wider in scope than the duties in ss 18 and 19 of the Receiverships Act.

been entered into under very different conditions from the Pedersen agreement: pre- receivership, and pre-COVID-19.

[27]   As I said to Mr Judd at the hearing, a more realistic comparator to the Pedersen agreement is Mr Clayton’s second (non-binding) offer made in late August 2020. This was for a price of $60 million. Nominally that appeared to be $1 million more than the receivers achieved. But in substance Mr Clayton’s offer would have produced net proceeds lower than those the receivers were to achieve from the Pedersen sale. This is because Mr Clayton’s offer would have required the receivers to repay bank debt of about $6 million (owing by Claymark USA Inc), producing net proceeds of

$54 million. The Pedersen agreement, by contrast, left that bank debt with the purchaser.

[28]   Mr Clayton could be expected to know more about the Claymark business than anyone. Yet the receivers have managed to obtain a better effective price for the business than Mr Clayton appears to have been willing to pay. This suggests that the receivers have discharged their duty, under s 19 of the Receiverships Act, to obtain the best price reasonably obtainable at the time of the sale.

[29]   This impression is reinforced by a review of the process undertaken by the receivers to market and sell the Claymark business. Mr Jackson, one of the receivers, made an affidavit describing the sale process. Most of what Mr Jackson deposes to was documented. His affidavit shows that a professional, extensive, thorough, and careful sale process was followed.   At the hearing there was no suggestion that     Mr Clayton disputed anything that Mr Jackson said about that process.

[30]   Moreover, at the hearing there was none of the criticism of the sale process that one usually hears in an application for an interim injunction to restrain a sale by a mortgagee or receiver. There was no allegation that the receivers had not properly marketed the business, that they had failed to deal with prospective purchasers appropriately, that they had provided incorrect or insufficient information to prospective purchasers, or that there had been any other deficiency in the sale process.

[31]   Mr Clayton’s criticisms are more limited. The first criticism is that the receivers failed to consider the offers that he had put forward. In my view Mr Clayton did not establish any case, let alone a seriously arguable one, for this complaint. The affidavit evidence shows that:

(a)As a result of distributing an information flyer in January 2020, the receivers identified 33 interested parties to whom they sent an Information Memorandum on 5 February 2020. Those 33 parties were asked to submit non-binding indicative offers by 6 March 2020.

(b)By 6 March 2020 the receivers received 12 non-binding indicative offers. One was from Mr Clayton (for $45 million, plus a further amount to be agreed for some related assets). Six of the prospective purchasers, including Mr Clayton, were invited to proceed to the next stage of the sale process.

(c)The next stage of the sale process included a due diligence data room and Q&A facility. The receivers set a date for final binding offers to be made. That date, after extensions were made as a result of COVID-19 restrictions, became 17 June 2020.

(d)Four bidders made final binding offers by 17 June 2020. Mr Clayton was not one of them.

(e)The receivers considered that the Pedersen offer, which was at $59 million, represented the best value. The Pedersen group asked for further due diligence, and to be given exclusivity while they conducted the due diligence. The receivers gave the Pedersen group preferred bidder status (the right to complete at $59 million), but no exclusivity. The receivers therefore retained the right to talk to other interested parties.

(f)On 31 July 2020 Mr Clayton wrote to the receivers raising some concerns about the sale process. The receivers responded on 3 August

2020. They explained that there was a preferred bidder, but no exclusive arrangement with that bidder. They said that if Mr Clayton wished to have a binding offer considered by the receivers, he should make one. They added: “We emphasise however that time is of the essence. The sales process is advancing.”

(g)On 10 August 2020 Mr Clayton’s financier sent an email to the receivers stating that Mr Clayton would be submitting an indicative (not binding) offer the next day. No such offer was submitted until 28 August 2020.

(h)On 26 August 2020 the receivers entered into the Pedersen agreement.

(i)On 28 August 2020 the receivers informed Mr Clayton that they had entered into the Pedersen agreement, which they expected to go unconditional in a few days. Three hours later Mr Clayton submitted his second non-binding indicative offer. Two hours after that the Pedersen group advised the receivers that the Pedersen agreement was now unconditional.

[32]   Mr Clayton made two non-binding indicative offers.  The first was made by  6 March 2020. The receivers responded to this offer by inviting Mr Clayton to proceed to the next stage of the sale process. Mr Clayton can have no complaint about that. The second offer was made on 28 August 2020. By then it was too late for the receivers to be able to give it consideration, as they had already become bound to the Pedersen agreement (and, as I have already noted, there is no other criticism of the sale process that led to that agreement). Mr Clayton’s criticism requires the Court to accept the proposition that the receivers’ ss 18 and 19 duties required them, on receipt of his second (and still non-binding) offer, to breach their binding contract with the Pedersen group. That would likely have led to a lower ultimate recovery, almost certainly in breach of (rather than compliance with) their ss 18 and 19 duties.

[33]   Mr Clayton’s second criticism, as developed by Mr Judd at the hearing, is more nuanced. It is that the particular circumstances of this case required the receivers to

consult with Mr Clayton before they entered into the Pedersen agreement. It was submitted that the receivers should have told Mr Clayton what the Pedersen offer was, and then given Mr Clayton the opportunity to match (or better) it. The particular circumstances that Mr Judd relied on were that Mr Clayton was the founder of the Claymark group, that it was his life’s work, and that the only way in which Mr Clayton could pay the amount owing on his guarantee (there being an expected shortfall of about $6–8 million) was if he purchased the business from the receivers.

[34]   I do not accept that this submission is seriously arguable. Section 18(3) of the Receiverships Act requires receivers to exercise their powers “with reasonable regard to the interests of” various persons, including a guarantor such as Mr Clayton, but only to the extent consistent with the receivers’ duties under ss 18(1) and (2). The power that the receivers were exercising in this case was the power of sale. A receiver will, when exercising a power of sale, have “reasonable regard to” a guarantor’s interest by taking steps to obtain the best price reasonably obtainable for the secured property (rather than just taking steps to sell the property for whatever is owing to the secured party).4 In so doing the receiver may well have to consider any offers made by the guarantor, but that will only be because the guarantor is a prospective purchaser. The events that I have set out at [31] show that the receivers did have reasonable regard to Mr Clayton’s interests.

[35]   The duty to have “reasonable” regard to the guarantor’s interests cannot oblige a receiver to provide a guarantor with some sort of preferential treatment, such as a right of first refusal. Not only does that go beyond “reasonable” regard, but the duty in s 18(3) is owed to a potentially large number of people. A receiver cannot give each of them preferential treatment.

[36]   A separate reason for rejecting this submission as seriously arguable is that the duty in s 18(3) applies only to the extent consistent with the duties in ss 18(1) and (2). Section 18(2) requires receivers to exercise their powers in a manner that they believe, on reasonable grounds, to be in the interests of (here) the BNZ. The supposed duty on

4      I appreciate that this duty is separately set out in s 19. But that just reflects the fact that the s 19 duty has its origins as a specific manifestation of a receiver’s (or mortgagee’s) equitable duty to exercise a power of sale in good faith: Downsview Nominees Ltd v Fist City Corporation Ltd [1993] 1 NZLR 513, [1993] AC 295 (PC).

the receivers to provide Mr Clayton with a right of first refusal would not have been consistent with the receivers’ duty to the BNZ under s 18(2). The supposed duty, if it applied, must have applied from the outset of the sale process. Such a duty would have dissuaded other prospective purchasers from engaging in the sale process, and would likely have deflated the price obtained.

[37]   I therefore conclude that Mr Clayton’s case against the receivers is not seriously arguable.

Claim against the BNZ

[38]   Mr Clayton alleges that the BNZ’s conduct was unjust or oppressive in terms of the CCCFA. The alleged conduct is:

(a)accepting the Pedersen agreement;

(b)refusing Mr Clayton’s offers;

(c)refusing to engage with Mr Clayton to reach agreement; and

(d)failing to properly consider Mr Clayton’s position.

[39]   Mr Clayton says that this conduct prevented him from redeeming the securities that the BNZ held from the Claymark business.

[40]   I find that Mr Clayton’s claim against the BNZ is not seriously arguable.    Mr Clayton does not make any complaint about the BNZ’s decision to appoint receivers, nor about the BNZ’s choice of receivers. He complains only about the sale process and its outcome. I have found that it is not seriously arguable that the receivers breached any duties to Mr Clayton in undertaking that sale process. The BNZ’s only role was to approve the receivers’ recommendation of the sale to the Pedersen group.5 Given that the receivers’ recommendation was a result of a sale process in which the receivers discharged their duties to Mr Clayton, I cannot see any basis on which the

5      The BNZ also exercised, as mortgagee, a power to sell some properties related to the Claymark business. There was no evidence that the BNZ had acted unjustly or oppressively in doing so.

BNZ’s acceptance of that recommendation could be regarded as unjust or oppressive. I accept the submissions of Mr Kennedy, who appeared for the BNZ, as to why it is not tenable to argue that the BNZ’s acceptance was oppressive. Indeed, at the hearing, Mr Judd did not suggest that, if the claim against the receivers was not seriously arguable, the claim against the BNZ nonetheless could be.

[41]   I note two other points for completeness. First, Mr Clayton argued not only that the BNZ’s conduct was unjust or oppressive, but that that conduct prevented him from redeeming the securities that the BNZ held from the Claymark business. I do not accept this. The conduct that Mr Clayton complains about concerned the sale process. Even if I had found that it was seriously arguable that something had gone wrong in that process, that would not have prevented Mr Clayton from redeeming the securities. Redemption merely involves repaying the debt secured. It is quite distinct from paying, as purchaser, an agreed purchase price for assets that a receiver (or a secured creditor) is selling in exercise of a power of sale under the securities.   If   Mr Clayton had had the means to repay the debt, he could have done so at any time (prior to the receivers entering into the Pedersen agreement).

[42]   Secondly, Mr Kennedy also submitted that the BNZ was not liable for the receivers’ conduct. This was because the receivers were the agents of the Claymark business, not the agents of the BNZ. Mr Kennedy submitted that where the receiver is not the agent of the secured creditor, the default position is that the secured creditor is not liable for the conduct of the receiver unless the secured creditor has seriously intervened in the conduct of the receivership. He said that there had been no such interference here. I accept that the receivers were not the agents of the BNZ,6 and that the default position is as submitted by Mr Kennedy.7 But that default position is concerned with liability under the general law. It does not necessarily follow that the same position applies under the CCCFA. This is not a matter that I have to decide, and I have not explored it further.

6      This the default rule: Receiverships Act 1993, s 6(3). The securities confirmed, rather than reversed, this default rule.

7      Standard Chartered Bank Ltd v Walker [1982] 3 All ER 938 (CA); and Peter Blanchard and Michael Gedye The Law of Private Receivers of Companies in New Zealand (LexisNexis, Wellington 2008) at [2.06].

Claim against Mr Pedersen and Mr Glass

[43]   The claim against Mr Pedersen and Mr Glass is based on an alleged duty of confidence and an alleged fiduciary duty owed by Mr Glass to Mr Clayton. This claim was addressed only briefly in Mr Clayton’s written submissions, and not at all in   Mr Judd’s oral submissions at the hearing.

[44]   I find that this claim is not seriously arguable. As to the duty of confidence, Mr Clayton relies on a confidentiality deed signed by Mr Glass. That deed provides for mutual obligations between Mr Glass and Mr Clayton. It provides for Mr Clayton to  sign it.   After Mr  Glass signed and  returned the deed, the parties acted  as if   Mr Clayton would also have to sign it.  He never did.   It is unlikely that it bound   Mr Glass.

[45]   Even if the deed bound Mr Glass, Mr Clayton’s affidavit is vague as to what information he provided to Mr Glass. Mr Glass’s affidavit is more detailed. He accepts that he received some information from Mr Clayton, such as an Information Memorandum dated March 2019 that Mr Clayton had prepared when attempting to sell the business. But he also explains that he had obtained the later Information Memorandum prepared by the receivers, and had then had access to the information contained in the comprehensive data room, while conducting due diligence. Mr Glass says that he used the more up to date and detailed information from the receivers, not any information that he received from Mr Clayton, in bidding with Mr Pedersen for the Claymark business.

[46]   Given Mr Glass’s evidence, and the lack of any detail from Mr Clayton as to what information he provided to Mr Glass that was confidential (or remained confidential once the receivers had provided their own information), there was no tenable foundation before me for allegations that either (i) Mr Glass had been provided with confidential information or (ii) Mr Glass had used that confidential information in bidding with Mr Pedersen for the Claymark business.

[47]   As to the claimed fiduciary duty, the basis for such a duty was not explained to me. From the pleading the basis appears to be that Mr Glass was somehow committed to working exclusively with Mr Clayton on any purchase of the Claymark business.

It is not clear to me that that would found a fiduciary duty. In any case, there was no evidential foundation for the claimed exclusivity.

[48]   For completeness, I record that even if I had found there to be a serious question against Mr Glass, it would not necessarily have followed that there was a serious question that the other defendants should be enjoined from completing the sale. There was no allegation that any of those other defendants knew that Mr Glass was allegedly breaching confidence or breaching a fiduciary duty.

Where does the balance of convenience lie?

[49]   Given my finding that Mr Clayton has not shown that there is a serious question to be tried, it is not necessary for me to address, in detail, the balance of convenience. I was, and remain, firmly of the view that the balance was tipped firmly against granting the interim injunction. I will express my reasons briefly:

(a)Damages are likely to be an adequate remedy for Mr Clayton for the alleged breaches. I appreciate that Mr Clayton has an emotional attachment to the business. But he was prepared to sell it in 2019.

(b)Damages are unlikely to be an adequate remedy for the defendants if an injunction were granted but Mr Clayton’s claims ultimately fail. He already faces a significant liability under his guarantee. It was common ground at the hearing that he does not have the means to meet that liability.

(c)An interim injunction would have led to considerable disruption to the Claymark business. The receivers had, in anticipation of settlement on 30 September 2020, arranged for various contracts with suppliers, shippers, customers and financiers to end on that date. Similar arrangements had been made with hundreds of employees. The receivers had no arrangements to continue the business beyond that date.

(d)If an interim injunction had been granted, there would have been a risk that the Pedersen agreement would never settle.

Overall justice

[50]   It is likewise unnecessary for me to address, in any detail, where the overall justice lies. For much the same reasons as I have outlined in relation to the balance of convenience, in my view it would not have been just to grant interim injunctive relief. In addition to the factors I have just outlined, Mr Clayton’s delay in bringing this application counted against an interim injunction. I appreciate that Mr Clayton complains about the delay in the receivers providing him with a copy of the Pedersen agreement.8 Indeed, in written submissions Mr Judd said that if the Pedersen agreement had been provided in early September 2020 “it may be that this application for an injunction would not have been filed”. But Mr Clayton knew from early September that the receivers’ position was that they would not disclose the agreement. There was no explanation for his leaving his application until just a few days before the settlement date.

Result and costs

[51]   For the reasons set out, I declined to grant the interim injunction sought by Mr Clayton at paragraph 1(b) of his application dated 24 September 2020. The orders sought by Mr Clayton at paragraphs 1(a) and 1(c) were moot by the time of the hearing.

[52]If the parties are unable to agree costs, I invite submissions as follows:

(a)Defendants by 5.00 pm 28 October 2020. Submissions are not to exceed five pages (excluding cover page and any schedule of costs) for each defendant.

(b)Plaintiff by 5.00 pm 11 November 2020. Submissions are not to exceed ten pages (excluding cover page and any schedule of costs).

8      The receivers’ position is that they were entitled to withhold this from Mr Clayton. Mr Clayton disagrees. It is not necessary for me to address that dispute.

[53]   To encourage agreement, or at least some measure of agreement, I express the following provisional views:

(a)Each defendant is entitled to costs.

(b)Category 2 is appropriate.

(c)Band C is appropriate for the preparation of oppositions (including affidavits). Band B is appropriate for the preparation of submissions.

(d)I would allow for any second counsel.

Campbell J

Solicitors/Counsel:

McVeagh Fleming Auckland Chapman Tripp, Auckland Brookfields, Auckland

Kitchener Chambers, Auckland

Stephen Hunter QC, (Shortland Chambers), Auckland Simon Judd, Barrister, Auckland

A C van Ammers, Barrister, Auckland Z G Kennedy, Barrister, Auckland

C A Murphy, Barrister, Auckland