ISAC (NZ) Limited v Managh - [2012] NZHC 1911

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2011-441-396 [2012] NZHC 1911

IN THE MATTER OF the Companies Act 1993

AND

IN THE MATTER OF the liquidation of Gambling Helpline
Limited (in liquidation)

BETWEEN ISAC (NZ) LIMITED Applicant

ANDJOHN MANAGH Respondent

Hearing: 26 July 2012 (Heard at Napier)

Counsel: R.B. Hucker - Counsel for Applicant
M.J.S. Macfarlane - Counsel for Respondent and for Non-Party the
Trustees of the Lifeline Auckland Trust

Judgment: 2 August 2012

JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

This judgment of Associate Judge Gendall was delivered by the Registrar on 2
August 2012 at 3.30 pm under r 11.5 of the High Court Rules.

Solicitors: Hucker & Associates, Solicitors, PO Box 3843, Shortland Street, Auckland
Sainsbury Logan & Wiliams, Solicitors, PO Box 41, Napier

ISAC (NZ) LIMITED V J MANAGH HC NAP CIV-2011-441-396 [2 August 2012]

Introduction

[1] Before the Court is an application by the applicant for further and better discovery on the part of the respondent liquidator and/or alternatively an order for non-party discovery against a third party, the trustees of the Lifeline Auckland Trust (Lifeline Trust).

[2] Mr Hucker appeared as counsel for the applicant and Mr Macfarlane appeared as counsel for both the respondent liquidator and the Lifeline Trust.

[3] The application specifically seeks particular discovery of the following documents:

... the minutes of the Board of Lifeline Trust and the reports of the Chief Executive
Officer to the Board in the period from 1 April 2010 to 1 July 2011 ...

[4] The application is opposed by the respondent and also by Lifeline Trust as the non-party.

Background Facts

[5] The respondent is the liquidator of Gambling Helpline Limited (in liquidation) (Gambling Helpline), a company which was placed into voluntary liquidation by shareholders’ resolution on 25 March 2011.

[6] The sole shareholder of Gambling Helpline which passed this shareholders’

resolution for liquidation is the Lifeline Trust.

[7] The substantive proceeding before the Court seeks to set aside a decision of the respondent as liquidator declining to admit a Proof of Debt from the applicant in the liquidation of Gambling Helpline.

[8] That Proof of Debt relates to a contract dated 2 March 2011 headed “IT Services Supply Agreement” (the IT Contract) which was purported to be entered into on behalf of Gambling Helpline with the applicant only some 3 weeks prior to its liquidation. The contract in question deals with the provision of IT services by

the applicant to Gambling Helpline. The IT contract was for a 27 month period expiring 30 June 2013. At clause 11.2 the IT Contract contained a termination clause. This provided that, in the event of early termination of the contract, the applicant as IT provider could require Gambling Helpline to pay 100% of the “fixed charges” that would otherwise have been payable under the contract from the date of its termination to the 30 June 2013 end of the term together with 30% of any “anticipated charges” for that period.

[9] The Proof of Debt…

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.

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Details

Case: [2012] NZHC 1911
Decision Date: 2 August 2012

CaseChat Overview and Summary

In the High Court of New Zealand, Napier Registry, the case of ISAC (NZ) Limited v Managh [2012] NZHC 1911 dealt with an application by ISAC (NZ) Limited for further and better discovery against the respondent, John Managh, and a non-party, the Trustees of the Lifeline Auckland Trust. The substantive proceeding sought to set aside a decision of the respondent as liquidator of Gambling Helpline Limited (in liquidation) declining to admit a Proof of Debt from ISAC in the liquidation of Gambling Helpline. The Proof of Debt related to a contract for IT services between ISAC and Gambling Helpline, and the applicant claimed damages for early termination of the contract. The application sought particular discovery of specific documents from the respondent and non-party. The court found that the application against the respondent failed as the documents sought were not in his control. However, the application for non-party discovery against the Lifeline Trust succeeded, with the court ordering the Trust to provide specific documents for inspection by the applicant. The court awarded costs to the respondent and the applicant against the Lifeline Trust on the application for non-party discovery.

Orders