Higgs Construction Limited v Hansen
[2020] NZHC 2839
•29 October 2020
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2020-409-444
[2020] NZHC 2839
UNDER the Companies Act 1993 IN THE MATTER
of the liquidation of FOUR AVENUES PROPERTY GROUP LIMITED
(in liquidation)
BETWEEN
HIGGS CONSTRUCTION LIMITED
Applicant
AND
GORDON LEWIS HANSEN
Respondent
Hearing: 29 October 2020 Appearances:
K W Clay for the Applicant
No appearance for the Respondent
Judgment:
29 October 2020
JUDGMENT OF ASSOCIATE JUDGE LESTER
This judgment was delivered by me on 29 October 2020 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar 29 October 2020
HIGGS CONSTRUCTION LIMITED v HANSEN [2020] NZHC 2839 [29 October 2020]
[1] In this proceeding the applicant (as creditor) seeks an order pursuant to s 256(1)(a) of the Companies Act 1993 (the Act) requiring the respondent, Mr Hansen, as liquidator of Four Avenues Property Group Limited (in liquidation), to produce the accounts and records of the company to the applicant.
[2]The respondent’s position is essentially that he will abide the Court’s decision.
[3] The application was necessary because under s 256(1)(a)(ii) of the Act, a creditor is only entitled to inspect the records of the company in liquidation if the Court so orders. Accordingly, it is necessary for the Court to determine it is appropriate to make such an order.
[4] As a preliminary issue, the applicant has sought to use the originating application procedure.
[5] An application for an order under s 256 of the Act is not one that may be brought as of right under the originating application procedure and so leave is required. I am satisfied this is a proper case for leave to be granted. The application is not one where full pleadings are required to identify the issues. Nor is it an application where interlocutory applications or discovery are required. It is appropriate that a cost-effective means is adopted in bringing the matter before the Court. Leave is granted accordingly.
[6] The applicant has recently issued proceedings in this Court against two defendants who were directors of Four Avenues Property Group Ltd (in liquidation). This application is brought for the purpose of obtaining documents for use in that separate proceeding.
[7] Leave will not be given to a creditor to access the records of the liquidation or the accounts and records of the company in liquidation unless there is good reason to allow access. The applicant is required to put up a concrete reason why inspection should be granted.
[8] I am satisfied a concrete reason has been demonstrated as with proceedings being on foot which put in issue the management of the company in liquidation, of necessity, recourse will have to be had to the records of the company.1 I test my conclusion by asking whether, if an application for non-party discovery was made in the directors’ duty proceeding, such an application would be likely to succeed. I am satisfied that it would. All parties to the directors’ duty litigation will need access to the company’s records.
[9] Accordingly, I am satisfied it is appropriate there be an order that the respondent produce the accounts and records of Four Avenues Property Group Ltd (in liquidation), being all documents (of the liquidation and of the company) as set out in s 256(1)(a) of the Companies Act 1993.
[10] I further order that the applicant is to meet the reasonable costs and disbursements of the respondent in providing the documents in the preceding order.
[11] I direct the respondent is to produce the records within 15 working days (that is by Friday 20 November 2020, taking into account the public holiday).
[12] Leave is reserved for the respondent to seek further time should 15 working days prove inadequate. Leave is reserved generally should further issues arise.
[13] For the avoidance of doubt, nothing in these orders requires the liquidator to produce documents for which the liquidator could claim privilege.
Associate Judge Lester
Solicitors:
{mds} Law, Christchurch
Copy to counsel:
K W Clay, Barrister, Christchurch
1 See Levin v Lawrence [2013] NZCA 394, (2013) 11 NZCLC 98-018.
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