McCullagh v Robt. Jones Holdings Ltd - [2016] NZHC 263

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-3475 [2016] NZHC 263

UNDER
Sections 292, 294, 295 and 296 of the

Companies Act 1993

IN THE MATTER OF

the liquidation of NORTHERN CREST INVESTMENTS LIMITED (in liquidation)

BETWEEN

ANTHONY JOHN MCCULLAGH AND STEPHEN MARK LAWRENCE Applicants

AND

ROBT. JONES HOLDINGS LIMITED Respondent

Hearing: 1 December 2015

Counsel:

B P Keene QC & L Van for Applicant
D Chesterman for Respondent

Judgment:

24 February 2016

JUDGMENT OF DUFFY J

This judgment was delivered by me on 24 February 2016 at 3.00 pm pursuant to
Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar

Solicitors:
Gillespie Young Watson, Lower Hutt
Anthony Harper, Auckland

Counsel:
Brian Keene QC, Auckland
Damian Chesterman, Auckland

MCCULLAGH & LAWRENCE v ROBT. JONES HOLDINGS LTD [2016] NZHC 263 [24 February 2016]

[1] The liquidators of Northern Crest Investments Ltd (in liquidation) (Northern Crest) are bringing an originating application under part 19 of the High Court Rules to set aside payments made by that company to the respondent Robert Jones Holdings Ltd (RJH) for being voidable transactions under s 292 of the Companies Act 1993 (the Act). RJH opposes this application.

[2] RJH has applied against the liquidators for particular discovery and for the setting aside of privilege claims. Those applications were dismissed by Associate Judge Bell.1 RJH has filed a High Court review of the Associate Judge’s decision.

[3] Before this Court RJH has sought to amend its notice of opposition to the originating application brought by the liquidators and for leave to adduce further evidence in support of its application for High Court review of Associate Judge Bell’s decision. The liquidators oppose those interlocutory applications.

[4] The issues for the Court to determine are: (a) whether it has jurisdiction to permit amendment of the notice of opposition, and if it does whether to grant such permission; and (b) whether leave should be granted to RJH to adduce further evidence in its High Court review.

Amendment of notice of opposition

[5] The liquidators argue that mandatory requirements imposed by s 294(4) of the Act preclude this Court from allowing any amendment of RJH’s notice of opposition.

[6] Section 294(4) requires full particulars to be set out in a creditor’s notice of objection which must be served within 20 working days after receipt of a liquidator’s notice to set aside a payment to a creditor. Once that period expires a creditor is not entitled to raise fresh grounds of objection. Here the liquidators rely on Richelieu Investments Ltd v Monk Trust Investments Ltd2 where Master Faire considered an
application for leave by the liquidator to amend a notice issued under the equivalent

1 McCullagh and Lawrence v Robt. Jones Holdings Limited [2015] NZHC 1462.
2 Richelieu Investments Ltd v Monk Trust Investments Ltd (2004) 9 NZCLC 263, 526.

provision to s 294(4) under the earlier legislation.3 Under the earlier statutory regime a recipient of a liquidator’s notice was required to apply to the Court for…

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: [2016] NZHC 263
Decision Date: 24 February 2016

CaseChat Overview and Summary

McCullagh and Lawrence are liquidators for Northern Crest Investments Ltd (in liquidation) (Northern Crest), a company that is the subject of liquidation proceedings. They are seeking to set aside payments made by Northern Crest to Robt. Jones Holdings Ltd (RJH) for being voidable transactions under s 292 of the Companies Act 1993. RJH opposes the liquidators' application. The issues before the Court are whether it has jurisdiction to permit amendment of RJH’s notice of opposition and if it does, whether to grant such permission; and whether leave should be granted to RJH to adduce further evidence in its High Court review of Associate Judge Bell’s decision. The Court found that the amendments to RJH’s notice of opposition were necessary to determine the real controversy and would not cause injury or prejudice to the liquidators. Therefore, the Court granted RJH leave to amend its notice of opposition. The Court also found that it was in the interests of justice for the further evidence, which RJH seeks to adduce, to be admitted at the review hearing. Therefore, the Court granted RJH leave to adduce further evidence in its High Court review of Associate Judge Bell’s decision.
Final orders: RJH may amend its notice of opposition in accordance with the findings in [27] and [28] herein. RJH may adduce further evidence for the review of Associate Judge Bell’s decision as sought in its application dated 6 August 2015. As the successful party RJH is entitled to costs. If the parties cannot agree on the quantum of costs they should file costs memoranda within 15 working days of the delivery of this judgment.

Orders