Grant v CP Asset Management Limited - [2012] NZHC 3488

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-005014 [2012] NZHC 3488

UNDER sections 243(7) and 245A of the Companies Act 1993 and Part 19 of the High Court Rules

IN THE MATTER OF the liquidation of NZ Properties Holding
Limited (in Liquidation)

BETWEEN DAMIEN GRANT AND STEVEN KHOV AS LIQUIDATORS OF NZ PROPERTIES HOLDING LIMITED (IN LIQUIDATION) Applicant

ANDCP ASSET MANAGEMENT LIMITED First Respondent

ANDASIA PACIFIC HOTEL INVESTMENTS LIMITED
Second Respondent

ANDC P RETAIL HOLDINGS LIMITED Third Respondent

ANDRAISONS PACIFIC INVESTMENTS LIMITED
Fourth Respondent

ANDSOUTH ISLAND HOTEL INVESTMENTS LIMITED Fifth Respondents

ANDYEIL C & M LIMITED Sixth Respondents

ANDBRIAN AND BRIDGIT LAWRENCE Seventh Respondents

Hearing: 6 December 2012

Appearances: B J Norling for Applicants
R B Hucker and D Lang Siu for First to Sixth Respondents
G A Keene for Seventh Respondents

GRANT AND KHOV AS LIQUIDATORS OF NZ PROPERTIES HOLDING LTD (IN LIQ) V CP ASSET MANAGEMENT LIMITED HC AK CIV-2012-404-005014 [18 December 2012]

Judgment: 18 December 2012

JUDGMENT OF VENNING J

This judgment was delivered by me on 18 December 2012 at 2.15 pm, pursuant to Rule 11.5 of the
High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: Waterstone Insolvency, Auckland Hucker & Associates, Auckland Pidgeon Law, Solicitors, Auckland

Copy to: G A Keene, Auckland

Introduction

[1] The applicants are the current liquidators (the current liquidators) of NZ Properties Holding Limited (in liquidation) (NZ Properties). They apply to this Court for the following orders:

(a) that the creditors’ resolution passed on 15 August 2012 that they be replaced as liquidators be set aside; and, in the alternative

(b)that Aaron Heath and Michael Lamacraft (the proposed liquidators) be appointed as replacement liquidators of NZ Properties.

[2] The application that the resolution be set aside is opposed by the first to sixth respondents. It is supported by the seventh respondents. Similarly, the first to sixth respondents support the appointment of the proposed liquidators. The seventh respondents oppose that application.

Background

[3] NZ Properties was known as CP Holdings Limited until 9 November 2011. It was placed into liquidation by order of this Court on 23 March 2012. The current liquidators were appointed.

[4] Prior to its liquidation NZ Properties was part of a group of companies operated by the CP Group. Charles and Prakash Pandey are the key persons behind the CP or “Pandey” Group.

[5] NZ Properties was put into liquidation on the application of the seventh respondents Mr and Mrs Lawrence. Lawrence Riverside Limited, a company controlled by Mr and Mrs Lawrence, formerly leased a motel in Rotorua from NZ Properties. Lawrence Riverside and the Lawrences took proceedings against NZ Properties and Capital Hospitality Holdings Ltd (Capital Hospitality). Mr and Mrs Lawrence ultimately obtained judgment against NZ Properties for $1,040,662

together with interest and costs. They also obtained judgment against Capital

Hospitality for a lesser sum.

[6] Following the liquidation of NZ Properties the current liquidators held a meeting pursuant to s 243(1)(b) of the Companies Act 1993 (the Act) for the purpose of resolving whether…

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.

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Details

Case: [2012] NZHC 3488
Decision Date: 18 December 2012

CaseChat Overview and Summary

In the High Court of New Zealand, the case of Grant v CP Asset Management Limited and others involves the liquidation of NZ Properties Holding Limited. The current liquidators, Damien Grant and Steven Khov, sought orders to set aside a creditors' resolution to replace them as liquidators, and to appoint new liquidators instead. This application was opposed by the first to sixth respondents, who were related entities, but supported by the seventh respondents, Mr and Mrs Lawrence. The central issue was whether the resolution to replace the current liquidators was contrary to the interests of creditors and prejudicial to the interests of those who opposed it, as required by section 245A of the Companies Act 1993. The Court found that the current liquidators failed to satisfy the test under section 245A(1)(c), and therefore dismissed the application to set aside the resolution. The Court then considered the application to appoint the proposed liquidators under section 243(7) of the Act, taking into account factors such as independence, resources, wishes of creditors, competence, and speed of the liquidation. The Court concluded that it was appropriate to appoint the proposed liquidators, Aaron Heath and Michael Lamacraft, in place of the current liquidators, subject to the first to fifth respondents providing sufficient funds for a preliminary investigation. The Court reserved the issue of costs for further submissions if the parties were unable to agree.

Orders