Logan v Bishop - [2024] NZHC 46

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-904

[2024] NZHC 46

BETWEEN
LARISSA HELEN LOGAN and RHYS

JAMES CAIN as liquidators of BF7 Trading Limited
Applicants

AND

SPENCER MCKENZIE GILLINGHAM BISHOP

First Respondent

RAYMOND VINCENT BISHOP

Second Respondent

Hearing: 23 November 2023

Appearances:

AJ Steel for the Applicants

RB Hucker and MW Swan for the Respondents

Judgment:

16 February 2024

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 16 February 2024 at 4 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Martelli Yaqub Lawyers Limited, Auckland Molloy Hucker, Wellington

LOGAN v BISHOP [2024] NZHC 46 [16 February 2024]

TABLE OF CONTENTS

Introduction  [1]
Factual background  [9]
Section 266 of the Companies Act 1993  [27]
Is there jurisdiction in this case?  [35]
Are Spencer and Raymond people described in s 261?  [36] Does the proposed examination or production of documents relate to BF7's business, accounts or affairs?  [38]
Does the Trusts Act 2019 prevent the orders sought?  [40]
Respondents’ submissions  [40]
Discussion  [48]

Should the discretion be exercised to order production or examination or both?

[77]

Are the orders sought reasonably necessary for the discharge of the liquidators’
functions and duties?  [78]
Would the orders impose unnecessary and unreasonable burdens on the respondents?     [80]
Are there alternative legal procedures which are available to the liquidator?    [82] What is the nature of the proposed proceedings (if any are contemplated) and would the respondents be more vulnerable to future claims as a result?  [87] Are the respondents former officers or employees of BF7?  [90]
What is the nature and significance of the information sought and the public
interest in the information?  [91]
Conclusion on exercise of discretion  [94]
Result  [97]
Costs  [98]

Introduction

[1] The liquidators of BF7 Trading Limited (in liq) (BF7) have applied for orders against Spencer and Raymond Bishop for the production of documents relating to the indebtedness of the trustees of the Bishop Family Trust (Trust) to BF7 and the names and details of the trustees, and for examination before a court.

[2] The Court has the power under s 266 of the Companies Act 1993 to make production and examination orders on the application of liquidators against people to whom s 261 of the Companies Act applies. Orders may only be made however where the information or documents sought relates to any matter "relating to the business, accounts, or affairs” of the company in liquidation, here BF7.

[3] There is no question that Spencer and Raymond are people to whom s 261 applies as Spencer is a director and both Spencer and Raymond are shareholders of

BF7.1 However, they oppose the liquidators’ application on the basis that the documents and information sought do not relate to BF7 but instead the Trust and that even if they do, the Trusts Act 2019 and privacy concerns ought to prevent orders being made.

[4] The liquidators submit in response that 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 Logan v Bishop

Details

AGLC: Logan v Bishop [2024] NZHC 46
Case: [2024] NZHC 46
Decision Date: 16 February 2024

CaseChat Overview and Summary

The High Court of New Zealand, Auckland Registry, was asked to decide whether the liquidators of BF7 Trading Limited could require Spencer and Raymond Bishop to provide documents and information relating to the indebtedness of the Bishop Family Trust to BF7, and to be examined about this. The Bishops opposed the application, arguing that the information sought did not relate to the business, accounts, or affairs of BF7, and that privacy concerns or the Trusts Act 2019 would prevent the orders being made. The Court found that it had jurisdiction to make the orders as the information sought related to the business, accounts, or affairs of BF7. The Court then exercised its discretion to make the orders, finding that they were reasonably necessary for the liquidators to discharge their functions and duties, would not impose unnecessary and unreasonable burdens on the respondents, and there were no alternative legal procedures available. The Court also considered that the nature and significance of the information sought, and the public interest in the information, supported making the orders. The Court therefore ordered the Bishops to produce documents and be examined on oath relating to the indebtedness of the trustees of the Trust to BF7 and the trustees' names and contact details, with an opportunity to redact any information that BF7 would not have been aware of. The Court reserved the right to return to court if the orders required amendment or clarification or issues arose in relation to the categorisation of the documents themselves. The liquidators were granted costs.

Orders