Needham v Nayacakalou

[2021] NZHC 398

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2020-419-000209

[2021] NZHC 398

UNDER

The Companies Act 1993

IN THE MATTER OF

PAUANUI MOUNTAIN ESTATE LIMITED (IN LIQUIDATION)

BETWEEN

GREGORY ABE NEEDHAM

Plaintiff

AND

KELERA LUVU NAYACAKALOU

Defendant

Hearing:	11 February 2021
Appearances:	S McAnally for Plaintiff D Hayes for Defendant
Judgment:	5 March 2021

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

NEEDHAM v NAYACAKALOU [2021] NZHC 398 [5 March 2021]

Introduction

[1]                 The plaintiff was the former sole director of Pauanui Mountain Estate Ltd (in liquidation) (PMEL). He makes application for leave to apply for the following relief under s 284 of the Companies Act 1993 (Companies Act):

(a)A declaration that the defendant, Kelera Nayacakalou, was not validly appointed as liquidator of PMEL, or if she was, the office of liquidator became vacant in May 2018 when the defendant ceased acting as liquidator due to incapacity;

(b)A declaration that the actions the defendant has purported to take as liquidator are of no effect;

(c)An order that the decision of the defendant, purportedly as liquidator of PMEL, to retain $100,000 for her own remuneration and expenses, be reversed;

(d)An order that Mr Simon Dalton and Mr Matthew Kemp, insolvency practitioners of Auckland, be appointed to act jointly and severally as liquidators of PMEL;

(e)In the event that the Court declines to make the orders at [a] – [c] above, an order fixing the remuneration of the defendant, as liquidator, to a reasonable amount.

Factual background

[2]                 PMEL was incorporated on 18 July 1990. Mr Needham has been the sole director since 2006. At the time of 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 Posterum Institutum Trust (being at that time, Mr and Mrs Needham, and Mr Anthony Banbrook, who has since died) (PIT Trust).

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

[4]                 PDEL is owned as to 60 per cent by Samy Trustee Ltd.  Its sole director  is Mr John Samy. That position was only established after litigation in this Court. Immediately after incorporation of PDEL, Mr Needham registered a transfer of 550 shares to himself so as to become the majority shareholder. He then caused himself to be appointed as the director and later (in May 2015) to have a relative, Mr Richard Needham, likewise appointed.1

[5]                 Both the transfer and the appointments were challenged in proceedings in this Court in 2016. In Samy Trustee Ltd v Pauanui Dream Estate Ltd,2 Fogarty J held that the merits were overwhelmingly “in favour of the plaintiff, Samy Trustee Ltd” and that the defendant’s argument “was hopeless”. Fogarty J ordered Samy Trustee Ltd had legal title to the…