Grant v Pandey - [2014] NZHC 559

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-000648 [2014] NZHC 559

UNDER Section 266 of the Companies Act 1993

IN THE MATTER OF the liquidation of Capital Hospitality
Holdings Limited (in liquidation)

BETWEEN DAMIEN GRANT and STEVEN KHOV as liquidators of CAPITAL HOSPITALITY HOLDINGS LIMITED (IN LIQUIDATION)
Applicants

ANDPRAKASH PANDEY First Respondent

C P HOTELS LIMITED Second Respondent
C P INVESTMENTS LIMITED Third Respondent
C P CARPARKS LIMITED Fourth Respondent
intituling cont'd …

Hearing: On the papers

Judgment: 25 March 2014

JUDGMENT OF COURTNEY J

This judgment was deliveredy by Justice Courtney on 25 March 2014 at 3.30 pm
pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date………………………….

GRANT & OR v PANDEY & ORS [2014] NZHC 559 [25 March 2014]

C P PROPERTY INVESTMENTS LIMITED
Fifth Respondent

C P ASSET MANAGEMENT LIMITED Sixth Respondent

J D RAI & SONS LIMITED Seventh Respondent

ASIA PACIFIC HOTEL INVESTMENTS LIMITED
Eighth Respondent

RAISONS PACIFIC INVESTMENTS LIMITED
Ninth Respondent

BABOO MAHENDRA PRATAP RAI Tenth Respondent

CAPITAL INVESTMENTS CORPORATION LIMITED Eleventh Respondent

[1] In my decision 12 December 2013 I determined applications brought by the liquidators of Capital Hospitality Holdings Limited (in liquidation) (CHH) under s
266(1) and (2) of the Companies Act 1993.1 I determined both applications in the

liquidators’ favour, making orders under s 266(1) that Prakash Pandey and Baboo Rai attend the liquidators’ offices for an interview and orders under s 266(2) requiring the respondents to produce records and documents relating to CHH.

[2] The liquidators have sought costs on either a 2B or 2C basis as if the applications were originating applications brought under Part 19 of the High Court Rules. The respondents resist costs being awarded on that basis on the ground that the application was an interlocutory application and should attract the time band for interlocutory steps under the third schedule.

[3] The liquidators also seek an uplift of 50 per cent to reflect the lack of merit in

the respondents’ opposition to the applications, which the respondents resist.

Should the applications be treated as originating applications or interlocutory applications for the purposes of costs?

[4] Under r 31.35 of the High Court Rules sub-part 2 of Part 7 (relating to interlocutory applications and orders) applies to a company in respect of which a liquidator has been appointed under s 241(2)(c) of the Companies Act 1993. However, that provision does not apply to any application to which Part 18 or 19 of the High Court Rules apply.

[5] Under r 19.4 a liquidator may seek directions of the Court by way of an originating application. It is not required to be brought in that way, however, and Mr Hucker, for the respondents, has submitted that, because the applications in this case were brought as interlocutory applications pursuant to Part 7, they are not to be treated as originating applications for the purposes of costs. Mr Hucker does not accept that the decision in Grant & Khov v Stinson, on which…

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 Grant v Pandey

Details

AGLC: Grant v Pandey [2014] NZHC 559
Case: [2014] NZHC 559
Decision Date: 25 March 2014

CaseChat Overview and Summary

The High Court of New Zealand considered an application for costs brought by the liquidators of Capital Hospitality Holdings Limited (in liquidation) against several respondents, including Prakash Pandey and other associated companies. The liquidators sought costs on the basis of either originating or interlocutory applications under Part 19 of the High Court Rules. The respondents argued that the applications should be treated as interlocutory steps under the third schedule of the High Court Rules, rather than as originating applications. The central legal issue was whether the liquidators' application for directions under s 266 of the Companies Act 1993 should be treated as an originating application for costs purposes, despite being brought as an interlocutory application. The Court concluded that the nature of the application and the opposition to it warranted treating the application as if it had been brought as an originating application, thereby justifying a departure from a strict reading of the rules. The Court also found that an uplift of 50% in costs was appropriate due to the respondents' unmeritorious arguments and the time wasted in pursuing them.

The Court awarded costs on a 2B basis, as if the application had been brought as an originating application, and granted an uplift of 50%. The Court also granted additional costs and disbursements for an application for substituted service on one of the respondents. The liquidators were awarded costs of $28,059, plus disbursements of $50 for the filing fee, and an additional $2,189 in costs and $200 in disbursements for the substituted service application.

Orders