Heath v Irvine

[2013] NZHC 1745

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2011-404-7818 [2013] NZHC 1745

BETWEEN  A L HEATH, J P MELTZER and L J HAYWARD and others

Plaintiffs

ANDR M IRVINE AND OTHERS First Defendants

G J BRACKNELL AND OTHERS Second Defendants

BDO NEW ZEALAND LIMITED Third Defendant

CIV 2013-404-1745

BETWEEN  A M CHAPMAN AND OTHERS Applicants

ANDJ P MELTZER, A L HEATH and L J HAYWARD

Respondents

M J F LUXTON Intended Respondent

J A LOWTHER Intended Respondent

G J BRACKNELL, J J GOSSE and R M IRVINE

Intended Respondents

CIV 2012-404-225

BETWEEN  DEIRDRE DOHERTY Plaintiff

ANDRONALD McGREGOR IRVINE and others

Defendants

HEATH and others v  IRVINE and others [2013] NZHC 1745 [11 July 2013]

CIV 2012-404-3551

BETWEEN  BLUE CHIP NEW ZEALAND LTD (IN LIQUIDATION) AND OTHERS Plaintiffs

ANDBDO SPICERS (A FIRM) Defendant

Hearing:                   11 July 2013

Counsel:                  B Keene QC for Messrs Heath, Meltzer and Hayward, liquidators of Blue Chip companies

D Grove for A M Chapman and D Doherty
D Turnbull for MJ F Luxton and J A Lowther
W Robertson for BDO New Zealand Ltd and BDO Spicers
D C S Morris and R P Chandra for Messrs Irvine, Bracknell and
Gosse
A Barker forA A Murray

Judgment:                11 July 2013

(ORAL) JUDGMENT OF HEATH J

[1]      These proceedings arise out of the collapse of companies within the Blue Chip group.   For present purposes, I refer to those companies as the “Blue Chip” companies.  Messrs Heath, Meltzer and Hayward were appointed as liquidators of most of the companies.

[2]      The present proceedings all involve, or are related to, attempts to recoup money for the investors in the failed Blue Chip scheme, by taking proceedings against former directors of the companies and their auditors.

[3]      A number of case management conferences have been held over the last year or so to ready the proceedings for hearing  It became clear that a significant obstacle to the progression of the claims was a lack of funding.  Significant time was allowed for the liquidators of the Blue Chip companies to obtain funding.  When that proved impossible, application was made to have replacement liquidators appointed, on the basis that they may be able to obtain the requisite funds to pursue the litigation.  The question whether it was appropriate for the Court to approve the appointment of replacement liquidators was deferred for later consideration.

[4]      The parties have now had an opportunity to confer.  They are agreed that the proceedings can now be resolved on a consent basis.

[5]      In order to achieve that goal, the following directions will be made:

(a)      The   liquidators’  proceedings   (CIV   2011-404-7818)   against   the directors and the auditors is not pursued.   An application has been made by Mr Luxton, one of the directors, to have the proceeding struck out.  In the circumstances in which the existing liquidators find themselves that application is granted unopposed.  The proceeding is struck out against each defendant.

(b)Ms Chapman and Mr Cox applied to have replacement liquidators appointed so that the liquidators’ proceedings could continue (CIV

2013-404-1745).   Because the proposed liquidators are unwilling to take over the proceeding, their application is dismissed by consent.

(c)      Ms Doherty brought proceedings against the directors, on behalf of a consortium of investors (CIV 2012-404-225).   She does not wish to pursue that proceeding.  By consent, the proceeding is dismissed

(d)Some of the  Blue  Chip  companies  brought  a  separate proceeding against the auditors (CIV 2012-404-3551).  It names the auditors in a different manner, to  reflect an objection put forward in its earlier proceeding.  It is not to be pursued.  It too is dismissed, by consent.

[6]      Although there are some parties who have not taken steps during the course of the case management proceedings, namely, Mr Bryers, Mr Bell, Mr Flowerday and Mr Mellor, the balance of the parties are agreed that the orders made today will be made on the basis that costs lie where they fall.

[7]      Given that the remaining parties have elected not to take any steps in the proceeding, I do not consider that any order for costs should be made in respect of them.  In respect of all of the proceedings determined today, there will be no order as to costs.

[8]      I thank counsel for their assistance.

P R Heath J