Jackson v Wynyard Group Ltd (in liq) - [2018] NZHC 1283

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-113

[2018] NZHC 1283

BETWEEN
NEALE JACKSON and GRANT ROBERT GRAHAM

Applicants

AND

WYNYARD GROUP LIMITED (IN LIQUIDATION)

Respondent

Hearing: 31 May 2018

Appearances:

S D A Gollin and Y J Lee for the Applicants J C Caird and J S Learner for the Respondent

Judgment:

31 May 2018

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:
MinterEllisonRuddWatts (S Gollin), Auckland, for the Applicants
Simpson Grierson (J C Caird/Julia S Learner), Auckland, for the Respondent

JACKSON and GRAHAM v WYNYARD GROUP LIMITED (IN LIQUIDATION) [2018] NZHC 1283 [31 May 2018]

[1] The liquidators of Wynyard (NZ) Ltd apply under s 284 of the Companies Act 1993 for directions whether the claim made by its holding company, Wynyard Group Ltd (also in liquidation), should be admitted. The claim is for $171,010,268.43. The liquidators say that, after paying preferential creditors and secured creditors, they hold
$851,564.00.1 Third party creditors of Wynyard (NZ) Ltd come to $6,962,424.00. If the claim by Wynyard Group Ltd is also admitted, the total claims will come to
$177,972,693.00. The liquidators estimate that each creditor would receive a distribution of just under half a cent in the dollar. If the claim of Wynyard Group Ltd is rejected in its entirety, the distribution to unsecured creditors of Wynyard (NZ) Ltd will be approximately 12 cents in the dollar. If the claim of Wynyard Group Ltd is accepted, there will be a distribution to it which will allow it to pay all its third party creditors, said to be $423,089.00, plus an allowance for interest, and there will be a surplus available to shareholders, estimated to be $363,430.00.

[2] The liquidators say that there is also a possible intermediate position: that the claim of Wynyard Group Ltd will be admitted only for $141,323,888.00. That will turn in part on the effect of a document dated 23 February 2016 called a “support letter”. If the claim for $141,323,888.00 is accepted, they estimate that there will be a distribution to the unsecured creditors of Wynyard (NZ) Ltd of $0.0057 in the dollar. That will result in a partial distribution to the third party creditors, plus a distribution to the Wynyard Group Ltd. Its third party creditors will be paid in full and there will be surplus for shareholders. While the liquidators have sought a range of directions, the question comes down to whether the claim by Wynyard Group Ltd should be admitted—in its entirety or in part.

[3] Wynyard Group Ltd was the holding company for the Wynyard group of companies, which operated globally in developing, distributing, marketing and selling software. Its products were used for risk management, intelligence and investigations

1 This and the following amounts are estimates that are subject to contingencies.

in the finance, government, and national infrastructure sectors. The group operated in New Zealand, Australia, Dubai, Canada, the United Kingdom and the United States.

[4] Wynyard (NZ) Ltd is…

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: [2018] NZHC 1283
Decision Date: 31 May 2018

CaseChat Overview and Summary

Jackson v Wynyard Group Ltd (in liq) involved the liquidators of Wynyard (NZ) Ltd seeking directions from the court regarding the admission of a claim made by its holding company, Wynyard Group Ltd, which was also in liquidation. The claim by Wynyard Group Ltd amounted to $171,010,268.43, and the liquidators of Wynyard (NZ) Ltd argued that if the claim was admitted, the distribution to unsecured creditors would be significantly reduced. The central issue was whether the payments made by Wynyard Group Ltd to Wynyard (NZ) Ltd should be treated as loans or capital contributions. The court held that the payments made before 23 February 2016 were repayable loans, as they had not been capitalised and were treated as such in the financial statements. The support letter dated 23 February 2016 allowed for the capitalisation of future advances but did not apply retrospectively. As a result, the claim by Wynyard Group Ltd was to be admitted in full. The court directed that the claim for $171,010,268.43 should be admitted under s 303 of the Companies Act. The liquidators of Wynyard (NZ) Ltd were entitled to recover their costs from the assets of Wynyard (NZ) Ltd, and the liquidators of Wynyard Group Ltd were entitled to recover their costs from the assets of Wynyard Group Ltd.

Orders