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Dalton v Mackley

Dalton v Mackley

Case [2021] NZHC 2329 7 September 2021

Unconscionable Conduct

Restitution

Insolvency Law

Commercial Law

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-000760

[2021] NZHC 2329

UNDER the Companies Act 1993

IN THE MATTER

of the liquidation of Carbon Group Limited (in liquidation)

BETWEEN

SIMON DALTON and MATTHEW PETER KEMP

Applicants

AND

NEIL MACKLEY

Respondent

Hearing: 2 August 2021 (by AVL)

Appearances:

K Kommu for Applicants

B J Norling and C T Zhang for Respondent

Judgment:

7 September 2021

INTERIM JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 7 September 2021 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

DALTON v MACKLEY (Interim Judgment) [2021] NZHC 2329 [7 September 2021]

[1] The applicants are the liquidators of Carbon Group Ltd (in liq) (Carbon Group), having been appointed by shareholders resolution on 9 February 2021. They are in dispute with the respondent (Mr Mackley) over ownership of certain assets they say Carbon Group purchased from Mr Mackley prior to liquidation. They want to take possession of the assets but Mr Mackley will not allow it.

[2] The applicants seek a ruling from the Court to determine the dispute. The means they have chosen is an application for directions under s 284(1)(a) of the Companies Act 1993. It provides the Court may on the application of the liquidator (and certain others) give directions in relation to any matter arising in connection with the liquidation. Although framed as an application for directions, the applicants ask the Court to rule that Carbon Group owns the assets and to order Mr Mackley to deliver up the assets to them. Specifically, the orders sought are the following:

(a)A direction that the following assets, as set out in the purchase order from the Company to the Respondent dated 27 April 2015, are owned by the Company:

(i)Air Compressor;

(ii)Heavy Duty Motorcycle Lift;

(iii) 1975 Ducati 750GT (B5BWA) (7AT05708X13754315);

(iv) 1995 Bimota BB1 (BB1-00084);
(v)Lambretta D150 (1);
(vi)Lambretta D150 (2);
(vii)Vespa 90SS;
(viii)Italjet Formula 125 (ZJTFR2000T0080033); and
(ix)Various tools
(together the “Assets”);

(b)within 2 working days of the above direction being made, that the Assets be handed up by the Respondent to the Applicants, free of any encumbrances, to an address nominated by the Applicants in Auckland.

[3] The application was to be heard on 2 August 2021. Shortly before the hearing, Mr Mackley raised the issue whether the Court can make the orders sought under

s 284(1)(a). On 29 July 2021, Powell J made a direction that the hearing on 2 August 2021 would address only the following issue:

whether the Court has jurisdiction under s 284(1)(a) of the Companies Act 1993 to grant directions of the scope and nature sought by the applicants.

[4] The word “jurisdiction” can be used in several senses.1 I understand the question I am to answer is whether, properly interpreted, the orders sought by the applicants are ones the Court may make under s 284(1)(a) of the Companies Act in the circumstances…

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 Dalton v Mackley

Details

AGLC: Dalton v Mackley [2021] NZHC 2329
Case: [2021] NZHC 2329
Decision Date: 7 September 2021

CaseChat Overview and Summary

Dalton and Kemp, the liquidators of Carbon Group Limited, sought a ruling from the Court to determine their dispute with Mr Mackley over ownership of certain assets. The Court was required to decide whether the orders sought by the applicants are ones that can properly be made under s 284(1)(a) of the Companies Act 1993. The Court also needed to determine whether the proceeding should be regularised and treated as if it was commenced in the correct manner. The Court found that the orders sought by the applicants are not ones that can properly be made under s 284(1)(a) of the Companies Act 1993 in the circumstances of this case. The Court also found that it is in the interests of justice the proceeding be regularised. The Court will hold a teleconference with Counsel before making any formal orders and timetable directions consequent upon that finding. The purpose of the teleconference is to consider the orders that should be made to regularise the proceeding, to timetable the proceeding to a hearing, and to determine the issue of costs.

Orders