Khov v Waitotara Farms Limited

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2025-419-074

[2025] NZHC 1750

IN THE MATTER OF

AND

an application for the liquidation of Waitotara Farms Limited

UNDER

Part 16 of the Companies Act 1993

BETWEEN

STEVEN KHOV and KIERAN MICHAEL

JONES in their capacity as Receivers and managers of the GJ & EM STARK

PARTNERSHIP
Plaintiffs

AND

WAITOTARA FARMS LIMITED

Defendant

Hearing:

17 April 2025

Appearances:

AJ Steel for the Plaintiffs

No appearance for the Defendant
Mr Stark, director and shareholder of the Defendant, in person.

Judgment:

1 July 2025

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 1 July 2025 at 10 am pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:

Glaister Keegan, Auckland

KHOV v WAITOTARA FARMS LTD [2025] NZHC 1750 [1 July 2025]

Introduction

[1]                  The plaintiffs, Stephen Khov and Kieran Jones, as Receivers of the GJ & EM Stark Partnership (Receivers), have applied to liquidate the defendant company, Waitotara Farms Limited (WFL), on the basis there is serious dysfunction and deadlock impeding its operation. The Receivers submit there is no realistic alternative to liquidation.

[2]The shareholders of WFL are:

(a)Keilin Farms Limited (KFL), the majority shareholder holding

56.24 per cent;

(b)the Receivers of the GM & EJ Stark Partnership (the applicants in these proceedings), holding 43.74 per cent;

(c)Keith Stark and Linda Smiley, jointly holding one share; and

(d)Keith Stark, holding one share on his own.

[3]                  Mr Stark and Ms Smiley are the directors of both WFL and KFL and they each hold a 50 percent shareholding in KFL. Mr Stark and Ms Smiley were married but their marriage broke down in 2019.

[4]                  Ms Smiley (as both director and shareholder of WFL) supports the appointment of a liquidator.

[5]                  The Receivers record that with Ms Smiley’s support, the liquidation is effectively supported by a 72 per cent majority.

[6]                  WFL holds a single asset: approximately 70 hectares of farmland at Ohinewai, which contains three residential dwellings. It is referred to by the parties as “Top Farm”. The land was valued at $2.6 to $3 million in 2024.

[7]                  Following several years of dispute and dysfunction, the parties entered into a partial resolution and pre-mediation deed dated 30 October 2024 (Pre-Mediation Deed) agreeing to appoint Bayleys to sell the Top Farm and to attend a mediation before the Hon Raynor Asher KC. The mediation was held on 9 December 2024 and was successful with the parties signing a settlement deed on the same day (Settlement Deed). The Settlement Deed dealt with how the proceeds from the sale of Top Farm would be distributed and provided that WFL would then be liquidated. The Receivers say Mr Stark is now not complying with the terms of both the Pre Mediation and Settlement Deeds.

[8]                  No statement of defence had been filed by the time of the first call of the liquidation application on 7 April 2025. However, Mr Stark had…