Grant v Stinson - [2013] NZHC 325

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV2008-404-008244 [2013] NZHC 325

UNDER The Companies Act 1993

IN THE MATTER OF Grastin Investments Limited (previously Coldmaster Industries Limited (in Liquidation)

BETWEEN DAMIEN GRANT AND STEVEN KHOV LIQUIDATORS OF GRASTIN INVESTMENTS LIMITED (IN LIQUIDATION)
Applicants

ANDGRANT ERROLL STINSON Respondent

Hearing: On the papers

Counsel: R M Dillon for applicants
R B Hucker for respondent

Judgment: 26 February 2013

COST JUDGMENT OF ASSOCIATE JUDGE ABBOTT

This judgment was delivered by me on 26 February 2013 at 5 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:
R M Dillon, Queen City Law, PO Box 6908, Wellesley Street, Auckland
R B Hucker, Hucker & Associates, PO Box 3843, Shortland Street, Auckland

DAMIEN GRANT AND STEVEN KHOV LIQUIDATORS OF GRASTIN INVESTMENTS LIMITED (IN LIQUIDATION) V GRANT ERROLL STINSON HC AK CIV 2008-404-008244 [26 February 2013]

[1] The applicants, Damien Grant and Steven Khov, are the liquidators of Grastin Investments Ltd. The respondent, Grant Stinson, is the sole director of that company.

[2] The liquidators applied for an order requiring Mr Stinson to be examined, and to produce documents regarding the records and affairs of the company. They sought these orders so as to establish the activities of the company as the sole trustee of a trading trust established by the respondent. Mr Stinson opposed the application on several grounds, including that the liquidators were wanting to examine him to gain evidence for a case they intended to bring against him, and that the documents they were seeking were not documents of the company, but rather were documents of the trust for which the company was a corporate trustee.

[3] The application has been resolved, but there is a dispute between the parties over costs, with each side claiming to be the successful party. The liquidators seek scale costs on the basis of a successful originating application (because they achieved what they were seeking in the application) together with a 50% uplift on the basis that Mr Stinson acted unreasonably and unmeritoriously in opposing and then delaying the outcome. Mr Stinson takes issue with the liquidators’ entitlement (contending that he has been successful because the liquidators did not achieve what they originally sought) and says that he should therefore receive scale costs together with a 50% uplift because the liquidators made serious allegations of misconduct (attempting to hide information and breaching his duties as a director) without providing any substantiation. He also says that, in any event, the liquidators’ claim is overstated because this was an interlocutory application.

General background

[4] Grastin Investments Ltd was incorporated on 13 December 2005. On 14

December 2005 Mr Stinson (as settler) established a trading trust named the Crawford-Stinson Trading Trust. Grastin was named as the (corporate) trustee. In January 2006 Grastin, as trustee for the trading trust, took a loan from the Bank of New Zealand (referred to as a business and farming loan). The loan was guaranteed

by Mr Stinson, the…

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 Stinson

Details

AGLC: Grant v Stinson [2013] NZHC 325
Case: [2013] NZHC 325
Decision Date: 26 February 2013

CaseChat Overview and Summary

The applicants, Damien Grant and Steven Khov, liquidators of Grastin Investments Ltd, applied to the High Court for an order requiring Grant Stinson, the sole director of Grastin, to be examined and to produce documents relating to the records and affairs of the company. The application was made in order to establish the activities of the company as the sole trustee of a trading trust established by Mr Stinson. The application was opposed by Mr Stinson on several grounds, including that the liquidators were seeking to gain evidence for a case they intended to bring against him and that the documents they were seeking were not documents of the company, but rather were documents of the trust for which the company was a corporate trustee. The matter was resolved by agreement between the parties. The dispute between the parties is over costs, with each side claiming to be the successful party. The liquidators seek scale costs on the basis of a successful originating application together with a 50% uplift on the basis that Mr Stinson acted unreasonably and unmeritoriously in opposing and then delaying the outcome. Mr Stinson takes issue with the liquidators’ entitlement, contending that he has been successful because the liquidators did not achieve what they originally sought. He says that he should therefore receive scale costs together with a 50% uplift because the liquidators made serious allegations of misconduct without providing any substantiation. He also says that, in any event, the liquidators’ claim is overstated because this was an interlocutory application. The liquidators brought this application to obtain information to help them carry out their statutory duties, and in particular to help them to determine whether there were any potential avenues of recovery for creditors. The Court found that the liquidators were successful in their application, and were therefore entitled to costs on a scale 2B basis. The Court declined the liquidators’ claim for increased costs.

Orders