Jackson - CBL Corporation Limited - [2018] NZHC 368

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KOTI MATUA O AOTEAROA TAMAKI MAKAURAU ROHE

CIV-2018-404-000361

[2018] NZHC 368

BETWEEN
NEALE JACKSON and BRENDON

JAMES GIBSON as Administrators of CBL CORPORATION LIMITED AND OTHER COMPANIES

Applicants

Hearing: 8 March 2018

Appearances:

D Friar and N Moffatt for the Applicants, by telephone

Judgment:

8 March 2018

JUDGMENT OF HINTON J

This judgment was delivered by me on 8 March 2018 at 5.00 pm pursuant to Rule 11.5 of the High Court Rules

…………………………………………………………………… Registrar/Deputy Registrar

Counsel/Solicitors:
Bell Gully, Auckland

CBL Corporation Ltd & Others [2018] NZHC 368 [8 March 2018]

[1] On 23 February 2018, Neale Jackson and Brendon James Gibson, insolvency practitioners and partners in the firm of KordaMentha in Auckland were appointed as administrators of eleven New Zealand registered companies within the CBL Group.1

[2] They apply on a without notice basis to extend the time period for notice to terminate employment contracts from 9 March 2018 to 30 June 2018 under s 239Y of the Companies Act 1993. They also apply under s 239ADO for orders that the administrators’ personal liability under s 239ADH(1) in respect of proposed funding arrangements with ANZ Bank New Zealand Limited will not extend beyond the value of the companies’ available assets.

[3] Mr Jackson has filed an affidavit in support of the application and Mr Friar has signed a memorandum in support.

[4] CBL Corporation is the holding company for a specialist insurance and reinsurance group focused on credit and financial risk. It is a listed company, with dual listings on the NZX and ASX, although trading in its shares is currently suspended on both exchanges.

[5]The other companies in the administration are subsidiaries in the CBL Group.

[6] Overall, the CBL Group is comprised of 40 registered companies across a number of jurisdictions, namely New Zealand, Australia, Singapore, England and Wales, Ireland, France, Denmark and Luxembourg.

[7] The administration of the companies is in its very early days. I am advised that it will be extremely complex. Clearly it will be challenging.

[8] The administrators say that from their experience a sale of the businesses and assets of the businesses in the CBL Group as a going concern, will lead to the best outcome for creditors of the company. There is a substantial amount of work that needs to occur before a sales process can commence.

1 The documents refer to 11 companies, but list only 10.

[9] Given the time involved in performing this work, the administrators intend to make an application prior to 23 March 2018 under s 239AT(4) of the Act to extend the convening period for the watershed meeting that is required under the Act. The administrators anticipate that they will be seeking an extension until 30 June 2018 to enable them to perform the tasks required to be in a position to create a report and recommendation to creditors for purpose of the watershed meeting.

[10] The administrators say that during the period…

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 Jackson - CBL Corporation Limited

Details

AGLC: Jackson - CBL Corporation Limited [2018] NZHC 368
Case: [2018] NZHC 368
Decision Date: 8 March 2018

CaseChat Overview and Summary

Neale Jackson and Brendon James Gibson, as administrators of several companies within the CBL Group, applied to the High Court of New Zealand to extend the time period for terminating employment contracts and to limit their personal liability under proposed funding arrangements. The administrators sought an extension of the notice period for terminating employment contracts to ensure that employees could continue working until a potential sale of the businesses as a going concern could be achieved. They also sought to limit their personal liability under the funding arrangements to the available assets of the companies, in line with an agreement with ANZ Bank New Zealand Limited.

The court considered the administrators' intention to sell the businesses as a going concern and the need to continue operations with minimal disruption. While the court acknowledged the administrators' goal in principle, it noted that the employees had not been adequately informed of the application. The court ordered a short-term extension of the notice period and directed a further telephone conference to allow the administrators to file material on the employees' position. Regarding the funding application, the court found that limiting the administrators' personal liability to the companies' available assets aligned with the objectives of the Companies Act 1993 and would not prejudice ANZ Bank, which had already agreed to the limitation.

The court granted the administrators' applications, subject to certain conditions. The notice period for terminating employment contracts was extended to 22 March 2018, with the administrators intending to seek a further extension. The court also ordered that the administrators' personal liability under the funding arrangements would not extend beyond the value of the companies' available assets, except as agreed with ANZ Bank. Leave was granted to any interested party to apply to modify or discharge the orders, and the administrators' costs of the application were deemed an expense of their duties. A further judicial telephone conference was scheduled to address any modifications or ancillary issues arising from the orders.

Orders