Honk Land Limited v Global Partners (Oceania) Ltd HC Auckland CIV 2004-404-657

[2005] NZHC 1283

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2004-404-657

BETWEEN  HONK LAND LIMITED

Plaintiff

AND  GLOBAL PARTNERS (OCEANIA) LTD

Defendant

Hearing:         24 February 2005 Appearances: B Burt for plaintiff

B Bhanabhai for defendant Judgment: 24 February 2005

(ORAL) JUDGMENT OF ASSOCIATE JUDGE FAIRE

[on application for putting company into liquidation]

Solicitors:Chapman Tripp, PO Box 2206, Auckland for plaintiff Dyer Whitechurch, PO Box 5547, Auckland for defendant

HONK LAND LTD V GLOBAL PARTNERS LTD HC AK CIV 2004-404-657 24 February 2005

[1]                 The plaintiff applies to the Court for an order that the defendant company be put into liquidation.

[2]                 The proceeding first came before the Court on 15 April 2004 and has had, since that time, a number of adjournments. The adjournments were  granted to  enable a compromise with creditors to be investigated. A compromise covering a period was entered into. As a result the proceedings were stayed until 3 November 2004. The proceedings were further stayed until today’s date.

[3]                 There is, as at today, no extant proposal and therefore no specific reason, having regard to s 203 of the Companies Act 1993, why the matter could not proceed today. Mr Bhanabhai, however, seeks an adjournment to the next list before myself, which is 31 March 2005.

[4]                 The purpose of that adjournment is to allow creditors to consider  an extension of the compromise proposal. The proposal, I am told, involves funding being provided to the defendant from a related company. Mr Bhanabhai advised me that the funding would be in the form of a loan and is not for services rendered or on account of any liability to the defendant by the funder. He further advises me that if the funding is obtained it is anticipated that the creditors would be paid in full. He  has been authorised by his client to say that if the funding could not be put in place by 30 April 2005 no further proposal would be advanced.

[5]                 I am, today, confronted with, from the creditors point of view, a request to proceed today so that a liquidator could be appointed to investigate whether there are any worthwhile avenues available to recover assets for the benefit of creditors. No specific information is able to be advanced today on that matter. There can not be any criticism of the plaintiff for that.

[6]                 Against that position, however, I have been given evidence of the postal  votes cast in support of an extension to the proposal. Those votes are required to be returned by 1 March 2005. What has been returned shows that a substantial number of creditors have voted in support of extending the proposal. That suggests an adjournment should be granted.

[7]                 Mr Burt has raised a concern and that is that the creditors voting in support may well have some ulterior motive. I am not in a position to make any judgment on that today. When I consider the history of the file to date, however, I can understand that the creditors might want to allow this defendant some further time in the hope that their debts can be paid, rather than being left in the position of having to  possibly appoint a liquidator and then funding an investigation into the affairs of the company and then pursuing some third party debts in the event that that third party may have a liability to the defendant.

[8]                 Faced with that, I have reached the view that an adjournment should be granted to the Companies List at 10am on 31 March 2005. I make it plain in adjourning the case that I rely on Mr Bhanabhai’s advice that no extension to the compromise would be sought by the defendant company beyond 30 April 2005.

[9]I reserve costs on the appearance today.

JA Faire Associate Judge