Gair v Scaife - [2023] NZHC 3638

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2023-485-774

[2023] NZHC 3638

UNDER section 284 of the Companies Act 1993 and pt 19 of the High Court Rules

IN THE MATTER

of Shazwal Investments Ltd (in liquidation)

BETWEEN

HEATH LESLIE GAIR as liquidator of Shazwal Investments Ltd

First Applicant

SHARON MARGARET SCAIFE (NEE WOODLEY)

Second Applicant

AND

WARREN BRENT SCAIFE

Respondent

Hearing: 11 December 2023

Appearances:

E J Horner and A D Goble for the Applicants D P MacKenzie for the Respondent

Judgment:

12 December 2023

JUDGMENT OF ASSOCIATE JUDGE SKELTON

[1] The first applicant applies by way of originating application under ss 283 and 284 of the Companies Act 1993 for the following orders/directions:

(a)that the first applicant was validly appointed as liquidator of Shazwal Investments Ltd (in liq) (the Company) on or about 19 September 2023;

GAIR v SCAIFE [2023] NZHC 3638 [12 December 2023]

(b)that the first applicant is entitled to be reimbursed out of the Company assets for his costs incurred in the liquidation up until the filing of this application;

(c)in the alternative to the direction sought at (a) above, an order appointing the first applicant as liquidator of the Company; and

(d)an order that the costs and disbursements of this application are met by the respondent.

[2] The second applicant applies for orders in the same terms as [1(c)] and [1(d)] above.

Procedural background

[3] The originating application was filed on 28 November 2023. On 29 November 2023, I granted an urgent hearing on the basis that it is just in all the circumstances to do so, with the hearing to be scheduled for the week commencing 18 December 2023.1

[4] Subsequently, the Registry advised that the matter could not be scheduled to be heard in the week of 18 December 2023. On 30 November 2023, I issued a further minute scheduling the matter for a two-hour urgent hearing at 10 am on 11 December 2023. On the basis of the urgency of the matter, and under r 1.19 of the High Court Rules 2016, I shortened the period for the respondent to file any notice of opposition and affidavit in support, requiring these to be filed and served by 5 pm on Wednesday 6 December 2023. The applicants were required to file and serve submissions by
5.00 pm on Thursday 7 December 2023, and the respondent was required to file and serve his submissions by 5 pm on Friday 8 December 2023.2

[5] On 5 December 2023, the applicants made an urgent interlocutory application for substituted service. I was satisfied that an order for substituted service should be made, and an order was made such that the respondent was treated as having been

1 Gair v Scaife HC Wellington CIV-2023-485-774, 29 November 2023 (Minute of Associate Judge Skelton).
2 Gair v Scaife HC Wellington CIV-2023-485-774, 30 November 2023 (Minute of Associate Judge Skelton).

served with all relevant documents, including my minutes dated 29…

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 Gair v Scaife

Details

AGLC: Gair v Scaife [2023] NZHC 3638
Case: [2023] NZHC 3638
Decision Date: 12 December 2023

CaseChat Overview and Summary

The High Court of New Zealand, Wellington Registry, was tasked with determining the validity of the appointment of a liquidator for Shazwal Investments Ltd, a company facing insolvency. The dispute arose between Heath Leslie Gair, appointed liquidator, and Warren Brent Scaife, the respondent, over the legitimacy of Gair's appointment and the subsequent handling of the company's assets, particularly its properties. The court was required to decide whether Gair was validly appointed as liquidator under sections 241(2)(a) and 122(1) of the Companies Act 1993, and whether the assets of the company should be managed in a specific manner pending resolution of a relationship property dispute.

The court examined the Companies Register and other evidence to confirm that Sharon Margaret Scaife, the second applicant and Gair's co-applicant, was the sole shareholder of the company at the time of the special resolution appointing Gair as liquidator. The court found that the special resolution was valid as it was signed by the sole shareholder, satisfying the statutory requirements. The court did not make findings on Scaife's allegations of a constructive trust over the company's properties and shares, as Scaife had not provided any supporting documentation. The court did, however, direct that any net proceeds from the sale of the company's properties, after paying the costs of liquidation and admitted creditor claims, should be held in a trust account until the resolution of the relationship property dispute between Scaife and Scaife. This decision was made to ensure that the interests of all parties were protected during the liquidation process.

The court concluded that Gair was validly appointed as liquidator on 19 September 2023 and granted the orders sought by the applicants. The court also directed that Gair be reimbursed for his costs incurred in the liquidation up until the filing of the application. The court further directed that any net sale proceeds from the properties be held in a trust account pending resolution of the relationship property dispute. The court indicated that costs would be awarded to the applicants on a 2B basis and that the parties should endeavour to agree on costs. If they could not agree, the matter would be determined on the papers.

Orders