Hyndman v Newson - [2014] NZHC 2513

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2014-409-000474 [2014] NZHC 2513

BETWEEN
IAN BRUCE HYNDMAN

Applicant

AND

KEVIN DESMOND NEWSON as liquidator for Gibbston Downs Wines Limited (in liquidation)

Respondent

Hearing: 13 October 2014

Appearances:

J Moss for Applicant
K P Sullivan for Respondent

Judgment:

13 October 2014

JUDGMENT OF ASSOCIATE JUDGE OSBORNE
as to removal of a liquidator

[1] The applicant seeks an order removing the respondent (Mr Newson) as liquidator of Gibbston Downs Wines Limited (in liquidation) (Gibbston) and appointing Wayne John Deuchrass or the Official Assignee in his place.

Gibbston’s liquidation

[2] The Court put Gibbston into liquidation on the application of Property Ventures Limited (in receivership and in liquidation) (Property Ventures). Gibbston had incurred debts exceeding $1,500,000 to Property Ventures through inter entity advances.

[3] Gibbston had been unsuccessful in having a statutory demand set aside. Immediately following the failure of Gibbston’s appeals, this Court made an order

HYNDMAN v NEWSON as liquidator for Gibbston Downs Wines Limited (in liquidation) [2014] NZHC 2513 [13 October 2014]

appointing Mr Newson as interim liquidator of Gibbston.1 A week later the Court made an order putting Gibbston into liquidation, with Mr Newson appointed as liquidator.2

[4] At the time Gibbston was put into liquidation an issue arose, not as to whether Gibbston would be put into liquidation, but as to who should be its liquidator or liquidators.

[5] The liquidators of Property Ventures (Robert Walker and John Scutter) had proposed that one of their own number, John Scutter, be appointed as liquidator. Alternatively they proposed that Mr Newson be appointed as liquidator.

[6] Counsel for Gibbston submitted that in the interests of actual and apparent independence and impartiality, Mr Newson ought not to be appointed. At the time of the hearing as to an interim liquidation, counsel for Gibbston had proposed that the Official Assignee be appointed but it was established at the time that the Assignee at Christchurch would have limited capacity to take any steps on interim appointment. At the hearing as to the final liquidation order, counsel for Gibbston submitted the names of Wayne Deuchrass and Ian Nellies as appropriate liquidators.

[7] It appeared to be common ground between counsel that all the suggested liquidators were suitably experienced in liquidation work although, as I will return to, Mr Newson suggested that he may have better qualifications to carry out this particular liquidation.

[8] Counsel for Gibbston made an overarching submission at the liquidation hearing questioning Mr Newson’s ability to act independently and impartially. Counsel made four further and specific submissions about aspects of Mr Newson’s conduct and location which I did not find compelling in their own right. One of the specific concerns raised was as to whether Mr Newson was too closely aligned to
Messrs Walker and Scutter as liquidators of Property Ventures, as the substantial

1 Property Ventures Limited (in receivership and in liquidation) v Gibbston Downs Wines Limited
[2014] NZHC 510.
2 Property Ventures Limited (in receivership and in liquidation)…

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 Hyndman v Newson

Details

AGLC: Hyndman v Newson [2014] NZHC 2513
Case: [2014] NZHC 2513
Decision Date: 13 October 2014

CaseChat Overview and Summary

In Hyndman v Newson, Ian Bruce Hyndman, the director of Gibbston Downs Wines Limited (Gibbston), sought the removal of Kevin Desmond Newson as liquidator of Gibbston and his replacement with Wayne John Deuchrass or the Official Assignee. Newson had been appointed liquidator by the Court when Gibbston was put into liquidation following an application by Property Ventures Limited. The central legal issue was whether the Court should remove Newson as liquidator due to his undisclosed close relationship with Robert Walker, the liquidator of Property Ventures. This relationship included co-ownership of assets through family trusts and Newson's defence of Walker at a disciplinary hearing, which undermined his claimed impartiality.

The Court found that Newson's close relationship with Walker, evidenced by their shared trusteeships and Newson's public defence of Walker, rendered him unfit for the role of liquidator. The Court concluded that had it known the true nature of their relationship at the time of appointment, it would not have appointed Newson. The Court exercised its jurisdiction under s 284 of the Companies Act 1993 to remove Newson and appointed Deuchrass in his place, noting that Deuchrass had no such disqualifying relationships. The Court also ordered Newson to provide Deuchrass with a report on the liquidation's current state and an orderly file of documents, while awarding Hyndman costs against Newson on a 2B basis, subject to the proceeds of the liquidation.

Orders