Needham v Nayacakalou - [2021] NZHC 1424

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2020-419-000209

[2021] NZHC 1424

UNDER Companies Act 1993

IN THE MATTER OF

PAUANUI MOUNTAIN ESTATE LIMITED (IN LIQUIDATION)

BETWEEN

GREGORY ABE NEEDHAM

Plaintiff

AND

KELERE LUVU NAYACAKALOU

Defendant

Hearing: 1 June 2021

Appearances:

S O McAnally and L G Clarke for Plaintiff D Hayes for Defendant

Judgment:

16 June 2021

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

NEEDHAM v NAYACAKALOU [2021] NZHC 1424 [16 June 2021]

Introduction

[1] Mr Needham was the former sole director of Pauanui Mountain Estate Ltd (in liquidation) (PMEL). In my judgment of 5 March 2021,1 I refused to grant leave to Mr Needham to apply for relief under s 284 of the Companies Act 1993, challenging various decisions of the liquidator.

[2] Mr Needham now applies for leave to appeal my decision to the Court of Appeal pursuant to s 56(3) of the Senior Courts Act 2016.

[3] In opposing the application, the liquidator, Ms Nayacakalou, contends that the Court has no jurisdiction to grant the leave sought. Ms Nayacakalou says that the s 284 application was not an interlocutory application but rather, a final disposition of the proceedings for which leave is not required. Alternatively, she contends the high threshold for granting leave to appeal has not been made out.

[4]There are two issues for determination:

(a)Are the proceedings, brought under s 284 of the Companies Act 1993, “interlocutory” as defined in the Senior Courts Act and, if so, is leave required under s 56 of that Act?

(b)If I do have jurisdiction to grant leave, has the high threshold for the grant of leave been met; namely, are the interests of justice served by granting leave?

Relevant factual background

[5] The full factual background is set out in my judgment of 5 March 2021, but I record the following aspects as relevant to this application.

[6] PMEL was incorporated on 18 July 1990. Mr Needham has been the sole director since 2006.2

1 Needham v Nayacakalou [2021] NZHC 398 [Substantive Judgment].
2 Substantive Judgment, above n 1, at [2].

[7] PMEL owned a large piece of land at Pauanui. In 2012, that land was transferred to a new company called Pauanui Dream Estate Ltd. That transfer was a consequence of an arrangement entered into by PMEL with a company called Samy Trustee Ltd.3

[8] In early 2014, Mr Needham contacted Mr Nicholas Hayes at “Liquidateit Liquidations & Accountancy Services” with a view to having PMEL put into liquidation.4 Ms Nayacakalou signed a consent to act as liquidator on 9 April 2014.

[9] At the time of the liquidation in 2014, the shares of PMEL were owned by Mr Needham’s wife (as to 50 per cent) and the trustees of the Pecunia In Posterium Institutum Trust (PIT Trust) (being, at that time, Mr and Mrs Needham and Mr Anthony Banbrook, who has since died).

[10]I made the following key findings:

(a)It was arguable Ms Nayacakalou did not…

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 Needham v Nayacakalou

Details

AGLC: Needham v Nayacakalou [2021] NZHC 1424
Case: [2021] NZHC 1424
Decision Date: 16 June 2021

CaseChat Overview and Summary

In Needham v Nayacakalou, the plaintiff, Mr Gregory Abe Needham, sought leave to appeal the decision of Associate Judge P J Andrew, who had dismissed his application for relief under section 284 of the Companies Act 1993. Mr Needham, the former sole director of Pauanui Mountain Estate Limited (PMEL), challenged various decisions made by the defendant, Ms Kelere Luvu Nayacakalou, the liquidator of PMEL. The primary legal issues were whether the proceedings under section 284 of the Companies Act were interlocutory and thus required leave under section 56 of the Senior Courts Act 2016, and if so, whether the high threshold for granting such leave had been met. The court held that the proceedings were indeed interlocutory and that leave was required. However, the court found that the high threshold for granting leave had not been met, as the interests of justice would not be served by allowing the appeal. The application for leave to appeal was therefore dismissed, and the defendant was awarded costs on a 2B basis plus disbursements.

The reasoning behind the decision hinged on the interpretation of "interlocutory application" as defined in the Senior Courts Act. The court found that the application under section 284 of the Companies Act was for relief ancillary to the relief claimed in the pleadings, making it an interlocutory application. Despite the defendant's argument that the dismissal rendered the proceedings a final disposition, the court held that the leave requirement still applied because the exception under section 56(4) of the Senior Courts Act was limited to decisions striking out or dismissing proceedings or granting summary judgment. The court also determined that the high threshold for granting leave had not been met, as there was no arguable error of law or fact of sufficient importance, and the proposed appeal would not serve the interests of justice due to the near completion of the liquidation and insufficient funds available.

Orders