Genetic Development (NZ) Exports Ltd Partnership (in liquidation)

[2024] NZHC 3851

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2022-419-148

[2024] NZHC 3851

UNDER

AND

the Companies Act 1993

IN THE MATTER

of the liquidation of GENETIC DEVELOPMENT (NZ) EXPORTS

LIMITED PARTNERSHIP (in liquidation)

BETWEEN

MALCOLM GRANT HOLLIS and WENDY ANN SOMERVILLE

Applicant Liquidators

AND

PURCELL BROTHERS SPV UNLIMITED COMPANY

Respondent Creditor

Hearing:	On the papers
Appearances:	BM Russell and JM Frampton for the Liquidators
Judgment:	16 December 2024

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 16 December 2024 at 4 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Lane Neave, Christchurch

RE GENETIC DEVELOPMENT (NZ) EXPORTS LIMITED PARTNERSHIP (IN LIQUIDATION) [2024] NZHC 3851 [16 December 2024]

Introduction

[1]        The liquidators of Genetic Development (NZ) Exports Ltd Partnership (in liq) (GDX LP) apply without notice for orders:

(a)seeking leave to serve a notice under s 294 of the Companies Act 1993 on Purcell Brothers SPV Unlimited Co (Purcell) outside New Zealand; and

(b)that service of the notice be deemed to have been effected on Purcell once a copy has been left at 14 Herbert Street, Dublin 2, Dublin, DO2KD76, Ireland, and emailed to two email addresses as set out in the application.

[2]        The first step where a liquidator wishes to set aside an insolvent transaction under the voidable transactions provisions in part 16 of the Companies Act is to file a notice with the Court meeting the requirements in s 294(2); and for that notice to be served.

[3]        In the comprehensive memorandum filed together with the application, counsel for the liquidators record that it is unclear whether leave is required to serve the notice abroad as the position does not appear to be settled. The liquidators say they have opted to take a cautious approach and apply for leave pursuant to r 6.30 of the High Court Rules 2016.

[4]        I record that the application is appropriately made on a without notice basis because it relates to service. The liquidators say they currently have no way to serve the application on Purcell in compliance with the High Court Rules but advise that they have instructed counsel to send the application to Purcell via email on a Pickwick basis once it is filed.

[5]        I briefly set out the background before considering whether leave is required and, if so, whether leave ought to be granted.

Background

[6]        An affidavit has been filed in support of the application by one of the liquidators, Malcolm Grant Hollis. I take the following description of the background from Mr Hollis’ affidavit.

[7]        Mr Hollis explains that GDX LP was in the business of exporting livestock by ship from New Zealand until it was put into liquidation on 5 September 2022. The intended recipient of the s 294 notice, Purcell, had been engaged by GDX LP in  May 2022 to provide access to a trade finance facility for a shipment of livestock. Mr Hollis deposes that the trade finance facility did not eventuate, and, in its place, Purcell arranged letters of assignment to allow 12 creditors of GDX LP to directly receive a share of the sale proceeds for the shipment. Mr Hollis says GDX LP instructed Purcell to receive the sale proceeds on its behalf and irrevocably assign certain amounts received from Allied Irish Banks PLC in Ireland directly to the creditors of GDX LP.

[8]        Mr Hollis records that in June 2022, during the restricted period prior to liquidation, Purcell received funds of $633,513 from the proceeds of sale of livestock from GDX LP. The liquidators consider that this payment is an insolvent transaction within the meaning of s 292 of the Companies Act and wish to file and serve a notice as required by s 294(1) of the Companies Act to begin the process for setting aside the transaction.

Is leave required under r 6.30?

[9]        Pursuant to r 6.27 of the High Court Rules 2016, if the s 294 notice is an “originating document”, then it can be served outside of New Zealand without leave provided that it falls within one of the categories in r 6.27(2).

[10]      As set out in the introduction, counsel for the liquidators say there is uncertainty about whether leave is required. This is because it is not clear whether a voidable transaction notice is an “originating document”.

[11]“Originating document” is relevantly defined in r 6.27(1) as:

a document that initiates a civil proceeding … which under these rules is required to be served but cannot be served in New Zealand under these rules.

[12]      A “proceeding” is defined in r 1.3 as “any application to the court for the exercise of the civil jurisdiction of the court other than an interlocutory application”. “Civil” is defined as non-criminal.

[13]      I do not consider that a voidable transaction notice falls within the definition of an “originating document” for several reasons:

(a)Like a bankruptcy notice, a s 294 notice although filed in the Court “does not, by itself, trigger any process for the exercise of the court’s civil jurisdiction.”1 Failure to comply with a s 294 notice may lead to the filing of an originating application to set aside the transaction but does not by itself trigger any process for the exercise of the civil jurisdiction of the Court.2

(b)Rule 31.38 of the High Court Rules requires a s 294(1) notice to be filed in the registry of the court where the order putting the company into liquidation was made, under the same liquidation file number (even though the heading of the notice is different). But if an application is made to set aside the voidable transaction under s 294(5) or for orders under s 295, following service of the notice, then the application is brought by way of originating application under a new CIV number.

(c)The definition of “originating document” refers to a document which “under these rules” is required to be served. A s 294(1) notice is required to be served by s 294(1)(b) of the Companies Act rather than the High Court Rules. This is by contrast to any originating application that follows a s 294(1) notice under either ss 294(5) or 295 of the Companies Act. Rule 19.1 of the High Court Rules expressly requires such an application to be made by way of originating application and  r 19.10, that service is to be in accordance with r 7.22.

1      Westpac New Zealand Ltd v Boulton [2014] NZHC 693 at [12].

2      Bond Cargo Ltd v Chilcott (1999) 13 PRNZ 629 (HC) at 633.

[14]Rule 6.30 then provides:

6.30     Service of other documents outside New Zealand

Any document other than an originating document required by any rule to be served personally may be served abroad with the leave of the court, which may be given with any directions that the court thinks just.

[15]      Rule 6.30, similarly to the definition of “originating document”, refers to a document which is “required by any rule to be served”. A s 294(1) notice is required by s 294(1)(b) of the Companies Act to be served  and  not  by  any  rule  of  the High Court Rules.   This contrasts with a bankruptcy notice which is required by      r 24.9(4) of the High Court Rules to be served.

[16]      The Companies Act itself provides for service on companies of documents in legal proceedings in s 387 and otherwise in s 388, but both these provisions only apply to New Zealand companies as a result of the definition of “company” in s 2 of the Companies Act.

[17]      Sections 389 and 390 provide for service of documents in legal proceedings, and otherwise, on overseas companies  but  only  where  service  is  effected  in  New Zealand.

[18]      There are no provisions in the Companies Act, however, for service on overseas companies overseas (rather than in New Zealand). This is presumably because the service rules applying must be those applying in the country in which service is effected.3

[19]      Here, as the High Court Rules do not require service of the s 294(1) notice, service is simply to be in accordance with the law of the country where service is to be effected — in this case Ireland. Any challenge to jurisdiction can then be made in the usual way.

[20]      I therefore decline to grant leave to serve Purcell in Ireland because I do not consider that r 6.30 applies. Leave is not otherwise required.

3      See discussion in another context in Heavylift Cargo Airlines Pty Ltd v The District Court at Manakau HC Auckland CIV-2006-404-6068, 7 March 2007 at [13]–[15].

Are further directions as to service appropriate?

[21]      No evidence is given of the service requirements on companies in Ireland so I decline to make any service directions, as service in accordance with such directions will not be effective if they are inconsistent with the Irish service requirements.4

Result

[22]      The application for leave pursuant to r 6.30 of the High Court Rules to serve a s 294(1) notice on Purcell in Ireland is declined. Service is to be effected in accordance with the requirements for service on a company in Ireland.

Associate Judge Sussock

4      Heavylift Cargo Airlines Pty Ltd v The District Court at Manakau, above n 3 at [20]. This is also the case for originating documents under r 6.32(4) of the High Court Rules 2016.