Keet v The Hidden Valley Limited

[2016] NZHC 2089

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2016-441-105 [2016] NZHC 2089

UNDER	the Companies Act 1993
IN THE MATTER	of an application for the liquidation of The Hidden Valley Limited
BETWEEN	BERNARD ANDRIES KEET Plaintiff
AND	THE HIDDEN VALLEY LIMITED Defendant

On the papers
Counsel:	D J O'Connor for Plaintiff
Judgment:	2 September 2016

JUDGMENT OF CLIFFORD J

[1]      The  plaintiff,  Bernard  Keet,  has  filed  these  proceedings  to  wind  up  the defendant, The Hidden Valley Limited, on the just and equitable ground.  Mr Keet deposes that the company was formed after the dissolution of his marriage to Magda Hoekstra.   Mr Keet and Ms Hoekstra each hold 50 per cent of the shares of the company.  Mr Keet deposes that the company was formed to subdivide a 10 hectare property (the Keirunga Road property) title to which was, following the dissolution of the marriage, vested in Ms Hoekstra and entities associated with her as to a one-half share and in Mr Keet and his current partner, Stella Wright, as to a one-half share.

[2]      At  the  same  time  Mr  Keet  applies,  on  a  without  notice  basis  for  the appointment of Messrs Matthew Coulter and Colin Gower as interim liquidators of the defendant, and for freezing orders over certain bank accounts of Ms Hoekstra and

entities associated with her (Reflections Limited and TMF Trustee Services Limited)

KEET v THE HIDDEN VALLEY LIMITED [2016] NZHC 2089 [2 September 2016]

and  for  ancillary  orders  restraining  Ms  Hoekstra  and  Reflections  Limited  from dealing in rent monies payable to the defendant and various associated issues.

[3]      Mr Keet has provided a detailed affidavit, to which are attached extensive exhibits documenting what would appear to be a long running dispute between him and Ms Hoekstra.   Included within that affidavit, at BB and following, are recent relationship property correspondence.

[4]      Mr Keet also deposes that the defendant owes his company, K8 Limited,

$10,000.  K8 Limited, Mr Keet says, intends to serve a statutory demand against the defendant and that the defendant does not have sufficient monies to repay the loan owed.

[5]      Mr  Keet  has  also  provided  an  affidavit  sworn  by  an  accountant,  a Mr Hensman.  In my view, the affidavit from Mr Hensman adds little, as it would appear  to  be  based  on  Mr  Keets’ narrative  of,  and  categorisation  of  the  legal significance of, the affairs of The Hidden Valley Limited.

[6]      The authorities make clear that the appointment of interim liquidators on a without notice basis requires not only a good prima facie case for liquidation, but also a need for urgency and special circumstances.

[7]      I am not persuaded that, in these circumstances, an interim liquidator should be appointed on a without notice basis, or that such freezing orders should be made.

[8]      The  principal  reason  for  that  conclusion  is  the  relationship  property background to these proceedings.   Those aspects of this dispute are dealt with inadequately in counsel’s memorandum.  As recently as 13 June 2016, a lawyer then acting for Mr Keet wrote to Ms Hoekstra’s lawyers, Bay Legal, under the heading “re:  Hoekstra  and  Keet  relationship  property”.    The  previous  correspondence between those parties indicates on its face that the dispute over the Keirunga Road property is part of a larger relationship property dispute.   In my view, that itself makes proceeding on a without notice basis inappropriate.   If on notice freezing orders are considered appropriate, an urgent hearing can be arranged for that matter

to be considered.   I acknowledge that Mr Keet himself addresses the relationship property context at [52] of his affidavit. That is, in my view, insufficient, particularly in  light  of  the  content  of  the  correspondence  appended  at  BB.    Moreover,  no attention has been paid by Mr O’Connor to possible justification that Mr Hoekstra might advance.

[9]      Moreover, in the Gifford Devine letter of 14 July 2016 it is clearly recorded that the Keirunga Road property is owned by trusts associated with Ms Hoekstra on the one hand and Mr Keet on the other and that, moreover, “any rents paid for utilising the property by either Reflections Limited or the tenants of the various buildings should have been paid to the owners of the property, that is the two trusts”. I therefore have considerable difficulty in understanding the assertion that monies belonging to The Hidden Valley Limited have been stolen by Ms Hoekstra when she has not properly accounted for what would appear to be income received from the Keirunga Road property.

[10]     It may well be that Mr Keet can establish that a winding up on the just and equitable ground is appropriate.  But any such application should be made on notice.

[11]     The application for interim relief without notice is declined.

[12]     Mr Keet  or his  solicitors  should  liaise  with  the Registrar as  regards the service of the substantive winding up application.

“Clifford J”

Solicitors:

Bate Hallett, Hastings for Plaintiff