Jackson v Grant - [2022] NZHC 2113

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-2460

[2022] NZHC 2113

UNDER The Receiverships Act 1993

IN THE MATTER

of the receivership of Ormiston Rise Limited (in receivership and in liquidation) and

Ormiston Rise Development Limited (in receivership and in liquidation)

BETWEEN

NEALE JACKSON and GRANT GRAHAM

as Receivers of Ormiston Rise Limited (in receivership and liquidation)

First Applicant

…/cont.

Hearing: 19 August 2022

Appearances:

S Hunter QC and D Friar for the first and second applicants

R Hollyman QC and A Peat for the first and second respondents D Chisholm QC and S Hawksworth for the third and fourth respondents

Judgment:

24 August 2022

JUDGMENT OF GORDON J

This judgment was delivered by me on 24 August 2022 at 4 pm, pursuant to
r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Counsel:  Solicitors:
S Hunter QC, Auckland  Bell Gully, Auckland
R Hollyman QC, Auckland  Simpson Grierson, Auckland
A Peat, Auckland  A Botterill, Waterstone Insolvency D Chisholm QC, Auckland

JACKSON v GRANT [2022] NZHC 2113 [24 August 2022]

NEALE JACKSON and GRANT
GRAHAM as Receivers of Ormiston Rise Development Limited (in receivership and liquidation)
Second Applicant

AND DAMIEN GRANT as Liquidator of
Ormiston Rise Limited (in receivership and liquidation)
First Respondent
DAMIEN GRANT as Liquidator of Ormiston Rise Development Limited (in receivership and liquidation)
Second Respondent
ARENA ALCEON NZ CREDIT PARTNERS, LLC
Third Respondent
QUAESTOR ADVISORS, LLC
Fourth Respondent

[1]This is an application for discovery.

[2] The substantive application is an originating application brought by the first and second applicants Neale Jackson and Grant Graham as receivers for Ormiston Rise Ltd (in receivership and liquidation) (ORL) and Ormiston Rise Development Ltd (in receivership and liquidation) (ORDL) respectively.

[3] In the substantive application the receivers are seeking declarations as to the proper amount of the secured debt owed by ORL and ORDL.

[4] The receivers filed their originating application after the first and second respondents, Damien Grant as liquidator of ORL and ORDL respectively, raised concerns over the increase in the level of debt during the receivership.

[5] The liquidator now seeks discovery of certain categories of documents. The application is opposed by the receivers and by the third and fourth respondents Arena Alceon NZ Credit Partners, LLC (Arena) and Quaestor Advisors, LLC (Quaestor) respectively. Arena provided funding to ORL and ORDL through Quaestor, which is the secured creditor. I will refer to Arena and Quaestor together as the lender.

Background

[6] A brief factual background giving rise to the receivership and liquidation is as follows.

[7] ORL and ORDL were incorporated for the purpose of purchasing and developing land at Murphy’s rise in South Auckland (land). The development of the land related to the construction of a four stage residential development of over 700 houses. ORL purchased the land for the development in 2019 and in early 2020 it incorporated a wholly-owned subsidiary ORDL to undertake the work on the development (development).

[8] ORL’s purchase of the…

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 v Grant

Details

AGLC: Jackson v Grant [2022] NZHC 2113
Case: [2022] NZHC 2113
Decision Date: 24 August 2022

CaseChat Overview and Summary

This case is an application for discovery made by the liquidator of Ormiston Rise Limited (ORL) and Ormiston Rise Development Limited (ORDL) as part of an originating application concerning the proper amount of the secured debt owed by ORL and ORDL. The receivers of the companies opposed the application for discovery and the lenders, Arena Alceon NZ Credit Partners, LLC (Arena) and Quaestor Advisors, LLC (Quaestor), also opposed the application in part. The Court was required to decide whether the documents sought by the liquidator would be capable of supporting their case or adversely affecting the case of the receivers and lenders and whether the discovery would be appropriate and proportionate. The Court held that limited discovery should be ordered in relation to certain categories of documents. Firstly, documents relating to the negotiation and meaning of the "Final Interest Payment" as set out in the Facility Agreements should be discovered by Arena and Quaestor to the liquidator. Secondly, the receivers were directed to discover their development budget, the monthly certification reports from the engineer reviewing the civil works undertaken, and the monthly reports from the Quantity Surveyor. Lastly, Arena and Quaestor were to discover all documents relating to the decisions taken to incur the Preservation Costs and the reasons for and the necessity of incurring the Preservation Costs which remain in dispute. The Court reserved costs for later determination.

Orders