Norrie v Sutich - [2013] NZHC 2823

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-2847 [2013] NZHC 2823

UNDER Companies Act 1993

IN THE MATTER of an aplication under s.266 for the Production of Documents and Examination Orders re Pakiri Investments Limited (in liquidation)

BETWEEN MARK HECTOR NORRIE AND PATRICIA van der WENDE as Joint and Several Liquidators of PAKIRI INVESTMENTS LIMITED (IN LIQUIDATION) of Greenpark Road, Auckland
Applicant

ANDIGOR SUTICH First Respondent

LARRIE NEWMAN Second Respondent
CONTINUED OVERLEAF Hearing: 24 September 2013

(on papers)

Appearances: Mr M H Norrie as Liquidator for Pakiri Investments Limited
Mr R B Hucker for Fourth and Fifth Respondent
(on papers) Judgment: 25 October 2013
JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE [on Costs]

This judgment was delivered by me on
25.10.13 at 4 pm, pursuant to

Rule 11.5 of the High Court Rules. Registrar/Deputy Registrar

Date……………

NORRIE AND Anor as Joint and Several Liquidators of PAKIRI INVESTMENTS LIMITED (IN LIQUIDATION) of Greenpark Road, Auckland v SUTICH & ORS [2013] NZHC 2823 [25 October 2013]

ANDRAJENDRAN RAVIKULAN Third Respondent

ANDEVAN JAMES READ Fourth Respondent

ANDARRON GLYN JUDSON Fifth Respondent

[1] The liquidators sought orders under s 266 of the Companies Act 1993 for production of documents and examination of the directors of Pakiri Investments Limited (in liquidation). One of the parties that was served with the application, the fourth respondent, was out of the jurisdiction. The fourth respondent filed a protest to jurisdiction.

[2] The liquidators have now decided that they will not take steps to set aside the protest to jurisdiction. They say they do not have the financial resources to fund litigation of that kind.

[3] The fourth respondent seeks an order that the liquidators pay the costs in respect of the protest to jurisdiction. The liquidators oppose the making of any order for costs. They assert that they are not liable to make an order for costs. However, in the decision of Mana Property Trustee Limited v James Developments Limited1; after noting that a non-party to litigation such as a liquidator is not at a risk of a costs award other than exceptional circumstances the Court noted

It is different when the liquidator is required, or chooses, to bring a proceeding or application in his or her own name, for example an application to set aside an insolvent transaction under s 292 of the Companies 1993, which is a right given to the liquidator and not to the company in liquidation. In such a case, if the liquidator is unsuccessful, he or she may be exposed to a costs award personally – whether or not he or she is able to obtain reimbursement from available company assets – as happened for example in [authority redacted].

[4] In Hart v Stiassny3 the liquidators had taken steps to set aside an insolvent transaction but the liquidators withdrew before the trial, considering that it would be not be “cost effective” to continue. Randerson J followed the decision of Oliver J in Re Wilson Lovatt &…

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 Norrie v Sutich

Details

AGLC: Norrie v Sutich [2013] NZHC 2823
Case: [2013] NZHC 2823
Decision Date: 25 October 2013

CaseChat Overview and Summary

The case of Norrie and Anor as Joint and Several Liquidators of Pakiri Investments Limited (in liquidation) v Sutich and ors [2013] NZHC 2823 involved a dispute under the Companies Act 1993, where the liquidators sought orders for the production of documents and examination of the directors of the company. The case was heard by Associate Judge J.P. Doogue. The liquidators aimed to obtain information from the directors, particularly the fourth respondent, who was out of the jurisdiction. The fourth respondent filed a protest to jurisdiction, arguing against the court's authority. The liquidators decided not to pursue setting aside the protest, citing a lack of financial resources. The fourth respondent then sought an order for the liquidators to pay costs related to the protest to jurisdiction, which the liquidators opposed.

The central legal issue before the court was whether the liquidators could be held liable for costs associated with the protest to jurisdiction, given their decision not to pursue setting it aside. The court considered whether the liquidators' decision to bring the application was responsible and whether it was within their duties to attempt to obtain information from the directors. The court referred to previous cases that established that liquidators could be personally liable for costs if they bring proceedings and are unsuccessful, but their responsible actions could mitigate the amount of costs awarded.

The court concluded that the liquidators acted responsibly in attempting to obtain information from the directors, including the fourth respondent. The decision to bring the application was not inherently irresponsible due to the fourth respondent's absence from the jurisdiction. The court found no impropriety in the liquidators' actions, allowing it to decline making an order for costs or to consider it when determining the quantum of costs. The court accepted the calculation of costs by Mr. Hucker and reduced the amount by 33.3 percent, considering the reasonableness of the liquidators' actions and the need for partial reimbursement to the fourth respondent.

The court also corrected an oversight in the original judgment, amending the orders to include the fifth respondent as well. The final orders required the liquidators to pay the costs associated with the protest to jurisdiction, but with a reduction of 33.3 percent, reflecting the court's assessment of the circumstances.

Orders