Jindal v Davies - [2022] NZHC 3181

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-002280

[2022] NZHC 3181

UNDER Companies Act 1993 and Part 19 of the High Court Rules 2016

IN THE MATTER OF

An application under s 284

BETWEEN

GAUTAM JINDAL

Applicant

AND

KEVIN JOHN DAVIES

Respondent

Hearing: 19 September 2022

Appearances:

Applicant self-represented

J K Mahuta-Coyle for Respondent

Judgment:

1 December 2022

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 1 December 2022 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Langford Law, Wellington

J K Mahuta-Coyle, Wellington

JINDAL v DAVIES [2022] NZHC 3181 [1 December 2022]

Introduction

[1] Gautam Jindal is the sole director and shareholder of Orange Capital Limited (in liquidation) (Orange Capital). Kevin John Davies is the liquidator of Orange Capital.

[2] Mr Jindal alleges that Mr Davies has acted unreasonably as liquidator of the company and his actions are damaging to Mr Jindal and the company’s creditors. He seeks a direction from the Court under s 284 of the Companies Act 1993 that Mr Davies promptly either accept or reject the creditor claims. Further, that Mr Davies be directed to provide a list of all the company documents in his possession.

[3] Mr Jindal also alleges that a report filed by the previous liquidator, Imran Kamal, should be rectified by Mr Davies because it contains false and defamatory statements about him.

[4] Mr Davies abides the decision of the Court on the report issue, as he was not in office at the time the report was filed and did not author it. He opposes the other directions sought by Mr Jindal. He submits that none of Mr Jindal’s claims are arguable, and he has brought this application in bad faith.

Background

[5] Orange Capital was a company that apparently conducted business trading commodities. Prior to its liquidation, it caused one of its clients, Adon Holdings Ltd (Adon), to suffer losses of approximately $96,000, of which Orange Capital agreed it was liable for some $80,000. Adon has filed a creditor’s claim for this amount.

[6] On 27 June 2017, Orange Capital entered voluntary liquidation. Mr Kamal was appointed as liquidator. The six-monthly liquidator’s reports issued by him have asserted that since 12 January 2018, there are six unsecured creditor claims against the company totalling $132,446.16.

[7] After assessing the company’s position, Mr Kamal applied for summary judgment against Mr Jindal in respect of an overdrawn shareholder’s current account.

On 31 May 2021, the District Court granted the application, determining that Mr Jindal’s net indebtedness to Orange Capital was $68,680,03.1

[8] In July 2021, Mr Kamal was disqualified from acting as liquidator due to failing to be accredited as an insolvency practitioner by RITANZ.2 Mr Jindal had been dissatisfied with Mr Kamal’s conduct and wrote to him later that month asking him to resign as liquidator of Orange Capital. He says that he queried 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 Jindal v Davies

Details

AGLC: Jindal v Davies [2022] NZHC 3181
Case: [2022] NZHC 3181
Decision Date: 1 December 2022

CaseChat Overview and Summary

In Jindal v Davies, Gautam Jindal, the sole director and shareholder of Orange Capital Limited (in liquidation), filed an application under s 284 of the Companies Act 1993 seeking directions from the Court in relation to the conduct of the liquidation by Kevin John Davies, the liquidator. Jindal alleged that Davies had acted unreasonably and that his actions were damaging to Jindal and the company’s creditors. Jindal sought a direction that Davies promptly accept or reject the creditor claims, a direction to provide a list of all the company documents in his possession, and that a report filed by the previous liquidator, Imran Kamal, be rectified as it contained false and defamatory statements about Jindal. Davies opposed Jindal’s application, arguing that Jindal’s claims were not arguable and were brought in bad faith. The Court considered whether Jindal should be granted leave to make the application and whether it was appropriate for the Court to make the directions. The Court held that Jindal’s application for leave to make the application and his application for directions were dismissed. Jindal’s concerns about the liquidator’s conduct were not sufficient to justify the Court interfering with the current liquidator’s conduct of the liquidation. The Court found that Jindal’s application had the flavour of a fishing expedition and that his concerns were at least in part informed by his misunderstanding concerning the ASB claim, which Davies had comprehensively addressed. The Court also found that Jindal had not presented “a good reason” for inspection of the company documents and that the appropriate course for Jindal to take was to bring proceedings against Kamal as the author of the statements in question.

Orders