Halifax New Zealand Limited
[2018] NZHC 3390
•18 December 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-002756
[2018] NZHC 3390
UNDER Part 15A of the Companies Act 1993 IN THE MATTER OF
HALIFAX NEW ZEALAND LIMITED
(Administrators appointed)
AND
an application by PHILIP ALEXANDER QUINLAN, MORGAN JOHN KELLY and
STEWART MCCALLUM as joint and several administrators of HALIFAX NEW ZEALAND LIMITED
Hearing: On the papers Judgment:
18 December 2018
JUDGMENT OF WYLIE J
[Without notice application to extend convening period for watershed meeting]
This judgment was delivered by Justice Wylie On 18 December 2018 at 2.00pm
Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar
Date:…………………………
Solicitors/counsel:
Chapman Tripp, Auckland
RE HALIFAX NEW ZEALAND LIMITED [2018] NZHC 3390 [18 December 2018]
[1] The applicants, Messrs Quinlan, Kelly and McCallum, were appointed as joint and several administrators of an Australasian company, Halifax Investment Services Pty Limited (the parent company), on 23 November 2018. On 27 November 2018, they were appointed as joint and several administrators of Halifax New Zealand Limited (Halifax NZ). The parent company owns seventy per cent of the shares in Halifax NZ.
[2] Pursuant to s 239AT(1) of the Companies Act 1993, the administrators have a period of 20 working days after the date of their appointment to convene a watershed meeting of creditors to decide the future of the company, and in particular, to decide whether the company and the administrators should execute a Deed of Company Arrangement. In the case of Halifax NZ, the administrators are required to provide notices and reports relating to the watershed meeting by 3 January 2019. The watershed meeting must be held on or by 10 January 2019.
[3] The administrators are concerned that if they are required to convene the watershed meeting by 3 January 2019, they will not be in a position to give a meaningful account of the administration, or to adequately inform Halifax NZ’s creditors of the options available to them.
[4] Section 239AT(3) provides that the Court may, on the administrators’ application, extend the convening period (i.e. the period of 20 working days after the date of their appointment). Messrs Quinlan, Kelly and McCallum have applied, without notice, to extend the convening period for Halifax NZ. They have done so on a without notice basis, because attending to service is considered to be impracticable in the available timeframe.
[5] The Court has considered several applications under s 239AT(3). It has identified various factors which can be taken into account when the Court is presented with applications of this kind.1
1 See, for example, Re Gourmet Food Holdings New Zealand Ltd [2012] NZHC 3606; Re Nylex (New Zealand) Ltd HC Auckland CIV-2009-404-1217, 11 March 2009.
[6] In the present case, affidavits have been filed by Mr Kelly and also by Mr Gibbs who is the sole director of Halifax NZ. I am satisfied as follows:
(a)The business of Halifax NZ is complex. Essentially, it provides online platforms for investor trading in derivatives;
(b)The businesses of Halifax NZ and of the parent company are interconnected;
(c)There are some 3,800 investors utilising the services of Halifax NZ;
(d)The investors are the main creditors of Halifax NZ. It will take some time to work out each investor’s position. Funds may be subject to statutory trusts and resolving entitlements to money held in statutory trusts may require direction from the Court. Some investors have traded through platforms with interactive brokers. Those brokers may be financially sound. Others have traded in products that expose them to the parent company;
(e)The position of Halifax NZ will be affected by the position of the parent company. It will take some time for the administrators to fully understand the parent company’s position;
(f)The convening period for the parent company has been extended until 29 March 2019 by order of Gleeson J in the Federal Court of Australia;
(g)The first meeting of creditors of Halifax NZ has been held. The creditors affirmed Messrs Kelly, Quinlan and McCallum as administrators of the company. Creditors were informed of the proposed application at the meeting, and no objection was raised. A creditors’ committee was formed. On 13 December 2018, Mr Kelly held a telephone conference with members of the creditors’ committee, having first given committee members a copy of the draft application and a draft memorandum of counsel. The committee expressed its
support for the extension. One member of the committee – who was not a party to the telephone conference – did object to the application on the basis that he did not consider that enough information had been given to the company’s creditors. The administrators, however, have deposed that the matters raised by this creditor were ventilated with other committee members during the conference, and that ultimately, the committee expressed its support for the extension;
(h)Halifax NZ has only three employees. They will continue to be paid throughout the administration. As a result, they are not prejudiced by the application. They have been consulted and they do not object;
(i)The administrators have deposed that all suppliers who make supplies to the company during the administration will be paid in full; and
(j)The proposal to extend the convening period has been put to the Financial Markets Authority. It has not raised any objection to the application.
[7] I am satisfied that it is appropriate to deal with the application on a without notice basis and that an extension to the convening period for the watershed meeting of Halifax NZ should be ordered. As noted, an extension to 29 March 2019 has been made by order of the Federal Court of Australia in respect of the parent company and it is sensible that the dates should align. The administrators believe that this period will enable them to more fully investigate both the parent company and Halifax NZ, and to make a proposal to creditors.
[8] Accordingly, I make an order extending the convening period for the watershed meeting of Halifax NZ to 29 March 2019.
[9] It is also appropriate to require the applicants, within three working days of the date of these orders, to give notice of the making of these orders to each known creditor of Halifax NZ, by:
(a)placing a copy of the orders on the website maintained by the applicants at clients of Halifax NZ who use the electronic trading platforms provided by Halifax NZ to the publication of the orders on the applicants’ website via a message published on those electronic trading platforms;
(c)sending a hyperlink to the orders by email to the email address of each creditor at such email address as is recorded in the books and records of Halifax NZ;
(d)where an email address is not recorded in the books and records of Halifax NZ, but a postal address is recorded, sending by post the orders to the postal address of each creditor at such postal address as is recorded in the books and records of Halifax NZ; and
(e)advertising once in The New Zealand Herald, in accordance with s 3(1)(b) of the Companies Act.
[10] I so order, and I direct that notice of these orders will be effectively served on each known creditor of Halifax NZ by the applicants taking the above steps. Any other document to be served on creditors in this proceeding, or required to be sent to creditors pursuant to Part 15A of the Companies Act, may be served/sent effectively in accordance with the above directions, para [9](a) – (d).
[11] Leave to apply is granted to any person who can demonstrate a sufficient interest to modify or discharge the above orders upon appropriate notice being given to the applicants.
[12] Leave is reserved to the applicants to apply further in respect of any ancillary issues arising out of the orders which I have made.
[13] I also direct that the costs of this application are to be an expense incurred by the applicants in carrying out their duties as administrators of Halifax NZ.
Wylie J
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