Go to Collection Limited

[2022] NZHC 3140

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-548

[2022] NZHC 3140

UNDER

Part 19 of the High Court Rules 2016 and Part 15A of the Companies Act 1993

IN THE MATTER

of GO TO COLLECTION LIMITED

AND

An application by MALCOLM

GRANT HOLLIS and JOHN HOWARD ROSS FISK

Applicants

Hearing:	(On the papers)
Counsel:	K Paterson and M Powell for Applicants
Judgment:	28 November 2022

REASONS JUDGMENT OF ASSOCIATE JUDGE LESTER

RE GO TO COLLECTION LTD [2022] NZHC 3140 [28 November 2022]

[1]                 The applicants sought orders that notwithstanding ss 239F, 239ACD and 280 of the Companies Act 1993 (the Act) they may be appointed as administrators and/or liquidators and/or deed administrators of Go To Collection Limited (the company). On 22 November 2022 I made the orders sought with a Reasons Judgment to follow.

[2]                 The orders were necessary because Messrs Hollis and Fisk are members of PricewaterhouseCooper (PWC). Other members of that firm have provided services to one of the directors of the company in her capacity as a trustee of four trusts. Neither the applicants or PWC have provided professional services to the company’s directors, as directors, or to the company’s shareholders.

[3]                 In addition, the applicants sought a number of orders designed to make their appointment more efficient in terms of providing for service of their appointment by email, the mechanics of how creditors are to be served if there is no known email address, and the use of video link for meetings if necessary.

[4]                 Further, leave was sought for this application to be brought by way of originating application on a without notice basis.

Reasons for orders

[5]                 As to the last application, applications of this type have in the past been brought by way of originating application and I agree that it was appropriate to use the originating application procedure in this case.

[6]                 Again, it is common for these applications to be made without service to the creditors. As Cooke J noted in Re Sommerville, the position of creditors is appropriately dealt with by giving creditors leave to apply to set aside the applicant’s appointments and the orders sought here give creditors that opportunity.1

[7]                 At the end of the day, the delay and extra expense involved in this application being dealt with on notice were not warranted. The creditors retain the right to challenge the appointment of the applicants if they wish. The creditors may vote to

1      Re Sommerville [2019] NZHC 1189 at [4].

have the applicants removed at a creditors’ meeting or they may vote for an alternative administrator at the watershed meeting or, if the applicants are appointed liquidators, the creditors may propose alternative liquidators.

[8]                 Essentially, whether there should be an order that the applicants are not disqualified from being appointed turns on whether they are conflicted.2

[9]                 The connection between PWC and the company is, if not tenuous, then hardly strong. Both applicants are professional insolvency practitioners. They are members of a large international accounting firm with its own strict procedures and policies in place in respect of conflicts. Both applicants are known to the Court and I was satisfied there was no risk of a lack of independence or concern about the applicants’ ability to carry out their tasks professionally and effectively.

[10]              I again note that the applicants do not have any connection with the director of the company who received advice as a trustee through another of PWC’s partners.

[11]              As to the mechanics of serving creditors, the applicants sought an order that they may give notice under pt 15A of the Companies Act 1993 by posting a copy of the notice on the PWC website, emailing those entitled to the notice at the address normally used by the company and, where there is no email address, by ordinary post.

[12]              In 2016, the Court endorsed the use of email in Re Pumpkin Patch Ltd (in receivership and administrators appointed).3 The use of email has, if anything, increased since that time.

[13]              I was satisfied that the use of email with a backup of ordinary post was appropriate when making the orders on 22 November 2022.

[14]              As to the use of video link for creditors’ meetings, such an order will promote the interests of creditors as it will give creditors from different parts of the country the ability to attend meetings at little, if any, cost.

2      Fisk v Fargher Construction Ltd [2018] NZHC 441 at [24] applied in Re Sommerville, above n 1.

3      Re Pumpkin Patch Ltd (in rec and administrators appointed) [2016] NZHC 2771.

[15]              Finally, the applicants sought an order that the file not be searched given its commercially sensitive nature until after the applicants’ appointment as administrators to the company. The order was sought to apply until the applicants were in fact appointed administrators.

[16]              An interim order that the file not be searched without leave of a High Court Judge was made on 22 November 2022. That order is now lifted given the applicants were appointed voluntary administrators on 24 November 2022.

Conclusion

[17]              Given the connection of PricewaterhouseCooper to the director of the company was indirect, that the applicants personally had no connection with the company or its directors or shareholders, along with their experience, I made orders they could accept appointment. The remaining orders make the process of dealing with creditors of the company more efficient both as to the speed of communications and by achieving costs savings without creating any prejudice to them.

Costs

[18]No order as to costs was sought. Accordingly, there is no order as to costs.

Associate Judge Lester

Solicitors:

Buddle Findlay, Christchurch

Copy to:
M G Hollis and J H R Fisk as Liquidators