Financial Markets Authority v Arena Capital Limited
[2015] NZHC 1156
•27 May 2015
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV-2015-409-000294 [2015] NZHC 1156
BETWEEN FINANCIAL MARKETS AUTHORITY
Applicant
AND
ARENA CAPITAL LIMITED First Respondent
JIMMIE KEVIN MCNICHOLL Second Respondent
LANCE JAMES RYAN
AKA LANCE JARED THOMPSON OR LANCE JACK THOMPSON
Third Respondent
DIANNE CAROL THOMPSON AND MAYBURN TRUSTEES LIMITED Fifth Respondent
Hearing: 27 May 2015 (By way of telephone conference) Appearances:
J S Cooper and D Robinson for Applicant
B Russell for First and Second Respondents
No Appearance for Third, Fourth and Fifth RespondentsJudgment:
27 May 2015
JUDGMENT OF GENDALL J
[1] On 22 May 2015 the applicant filed in this Court an interlocutory application for orders appointing receivers and managers of the first respondent, Arena Capital Limited (Arena Capital).
[2] Before me today at the telephone hearing of this application Ms Cooper appeared as counsel for the applicant and Mr Russell appeared as counsel for the first and second respondents. There was no appearance for the third, fourth and fifth
respondents.
FINANCIAL MARKETS AUTHORITY v ARENA CAPITAL LIMITED [2015] NZHC 1156 [27 May 2015]
[3] It was confirmed before me by Ms Cooper that this application and the surrounding documents were served on each of the first, second, third, fourth and fifth respondents and no response has been received from the third, fourth and fifth respondents. In addition, she confirms that Mr Ryan and Ms Thompson, the third and fourth respondents, have advised that they have no involvement of any kind with Arena Capital Limited and therefore no interest in this proceeding.
[4] Mr Russell for the first and second respondents has confirmed today that neither Arena Capital, nor Mr McNicholl, the second respondent, oppose the present application and they are in fact comfortable with the appointment of Mr Graham and Mr Jackson as receivers and managers of Arena Capital. Indeed Mr Russell confirmed that his instructions from the second respondent, Mr McNicholl, are that he wishes to co-operate fully with the receivers and managers once they are appointed.
[5] The present application is made under s 522 Financial Markets Conduct Act
2013 and follows an earlier application from the applicant for asset preservation orders which were made.
[6] The application (for orders to appoint Mr Graham and Mr Jackson of Korda Mentha as receivers and managers over the assets of Arena Capital) is advanced on the grounds that these orders are necessary and desirable to protect the interests of investors in Arena Capital. It is noted from the application that the appointment of receivers and managers is sought as a matter of urgency to enable steps to be taken to trace funds, deal with the assets of the company and to make payments which may be necessary. These are steps which are said to be necessary but which might otherwise be prevented by the existing asset preservation orders. In particular it is noted that payment of wages of any staff of Arena Capital, if this is found to be necessary and appropriate, and completion of any outstanding transactions by Arena Capital which may also be necessary and are appropriate, could be undertaken once receivers and managers are appointed.
[7] Ms Cooper for the applicant confirms that Mr Graham and Mr Jackson have confirmed they are willing to accept appointment on the terms outlined in the application.
[8] In weighing up all these matters and the material before the Court, I am satisfied that the appointment sought of Mr Graham and Mr Jackson as receivers and managers of Arena Capital is necessary and appropriate here in terms of s 523(h) Financial Markets Conduct Act 2003 and appropriate orders will follow.
[9] These orders are made also having regard to the particular matters outlined in the Memorandum from counsel for the applicant filed in this proceeding on 15 May
2015.
[10] For all these reasons the application before me succeeds. [11] Orders are now made as follows:
(a) With immediate effect and until further order of the Court appointing Grant Graham and Neale Jackson to act jointly and severally as receivers and managers of all of the property of Arena Capital Limited with the following powers:
(i)To take possession of all the property including money, bank accounts, vehicles, documents, records and any other property of any description;
(ii)All powers, rights and privileges that Arena Capital Limited has under any contract, statute or otherwise;
(iii)All powers of the members in general meeting and of the board of directors of Arena Capital Limited;
(iv)All the powers conferred on a liquidator of a company by s 269 of the Companies Act 1993 in the same manner as if the receivers were the liquidator of a company being wound up
under that Act, and all the provisions of that section shall apply in respect of the disclaimer of any property of the corporation as if that property was property of a company to which that section applied;
(v)All the powers conferred on a liquidator of a company by s 261 of the Companies Act 1992 in the same manner as if the receivers were the liquidator of a company being wound up under that Act;
(vi) All the powers of a receiver under the Receiverships Act 1993;
(vii)For the avoidance of doubt, the powers shall include the power to undertake investigations within and outside New Zealand and to engage such specialist forensic assistance and expert advice as shall be necessary to identify, recover, preserve, manage and realise the property of Arena Capital Limited;
(b)That pursuant to the appointment made in (a) above, Grant Graham and Neale Jackson as receivers and managers may:
(i)At all times act jointly and severally under one administration in such manner as in their discretion shall best and most economically perform their respective responsibilities as receivers and managers;
(ii)Be reimbursed for their reasonable fees and costs relating to the performance of their respective responsibilities as receivers and managers out of the property of Arena Capital Limited;
(iii)Be fully indemnified by and out of the assets of Arena Capital Limited in respect of all losses or liabilities which may be sustained or incurred by reason of exercising the powers conferred under these orders provided that such losses or
liabilities are not attributable to their dishonesty, negligence or deliberate breach of duty.
(c) For the avoidance of doubt, the interim orders preserving assets made on 15 May 2015 and varied on 21 May 2015 shall not apply to any conduct by Grant Graham and Neale Jackson acting in their capacity as receivers and managers pursuant to the appointment made by these orders and shall not restrict any person from delivering or transferring any money or other property belonging to any of the respondents to them.
(d)Grant Graham and Neale Jackson shall immediately on appointment investigate and report to this Court by written report within
15 working days or such other period as this Court may on their application allow:
(i)Whether any relevant person not subject to their receivership should in their opinion have a receiver appointed;
(ii)Whether Arena Capital Limited should in their opinion be released from their receivership;
(iii)Whether in their opinion the powers granted by this order should be varied modified or extended in any way and if so in what way;
(e) The Financial Markets Authority shall within 5 working days of the filing of the report by Grant Graham and Neale Jackson either apply for such orders arising from the report as it considers appropriate or shall advise the Court by memorandum that it does not intend to do so.
(f) Leave is reserved for any party to approach the Court further on
24 hours’ notice if additional directions may be required or other
matters arise.
...................................................
Gendall J
Solicitors:
Jennifer Cooper, Auckland
Financial Markets Authority
Lane Neave, Christchurch
Copy to 3rd, 4th and 5th Respondents
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