Payless Car Sales Limited (in liquidation)

[2025] NZHC 2508

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-364

[2025] NZHC 2508

UNDER

AND

the Companies Act 1993

IN THE MATTER

of the liquidation of PAYLESS CAR SALES LIMITED (in liquidation)

BETWEEN

CHAMBERLAIN AUTO SPRINGS LIMITED

Plaintiff

AND

PAYLESS CAR SALES LIMITED (in

liquidation) Defendant

Hearing:	On the papers
Attendances:	Memorandum filed by L Smart for the liquidators of the Defendant
Judgment	1 September 2025

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

[Approval of Liquidator’s Remuneration]

This judgment was delivered by me on 1 September 2025 at 11 am pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

RE PAYLESS CAR SALES LTD [2025] NZHC 2508 [1 September 2025]

Introduction

[1]                 The liquidator of Payless Car Sales Limited (in liq) (Company), Lynda Smart of Rodgers Reidy, has completed the liquidation and now applies for approval of their overall remuneration of $12,000.00.

[2]                 The memorandum filed by the liquidator sets out a summary of the liquidator’s fees by staffing category, number of hours worked and cost.

[3]                 In addition, the memorandum attaches a draft of the liquidator’s final report pursuant to s 257 prepared on the basis that all distributions have been made and the liquidator’s remuneration has been approved together with copies of the six-monthly reports following lodged with the Registrar of Companies.

[4]                 The issue I have to consider is whether the Court is satisfied that the remuneration for which approval is sought reflects the fair value of services rendered by the liquidator to the creditors of the Company.1

[5]                 In Madsen-Ries v Salus Safety Equipment Ltd (in liq) the Court of Appeal held:2

… even where there is no challenge to the liquidator’s remuneration this does not absolve the Court from the obligation to be satisfied that the remuneration approved reflects the value of the services rendered to the creditors of the company.

[6]                 The fees for which approval is sought fall within Tier 2 as categorised in Re Roslea Path Limited (in liq) as they are between $7,500 and $25,000. 3

[7]                 I briefly set out the background below before approving the remuneration as sought.

1      Re Roslea Path Limited (in liq) [2013] 1 NZLR 207 (HC) as approved in Madsen-Ries v Salus Safety Equipment Ltd (in liq) [2022] NZCA 101.

2      Madsen-Ries v Salus Safety Equipment Ltd (in liq), above n 1, at [54].

3      Re Roslea Path Limited (in liq), above n 1, at [157].

Background

[8]                 The Company was incorporated in November 2016 and operated as Cooper Tyres Penrose. The business was rebranded as Payless Tyres and Mechanical Repairs in August 2021. The business was subsequently sold in February 2022 but the liquidator records that the Company continued to sell vehicles on behalf of, and prepared vehicles for sale by, other car yards.

[9]                   The liquidation application was granted on 13 May 2022 and Geoff Brown and Lynda Smart were appointed jointly and severally as liquidators. Costs and disbursements were awarded to the petitioning creditor of $2,868.00 plus disbursements of $1,214.48 for a total of $4,082.48.

[10]             Lynda Smart became the sole liquidator following the death of Geoff Brown in March 2023.

[11]             The liquidator’s memorandum records the Company’s director advised the liquidator that the Company did not own any assets but failed to provide information requested by the liquidator. As a result the director was issued with formal notices pursuant to ss 261 and 274 of the Companies Act 1993 to deliver records, information and assets of the Company to the liquidator; and to appear before the Liquidator. The director failed to comply with these notices.

[12]             The liquidator established that the Company owned a vehicle and that the registration of this vehicle had been transferred after the date of liquidation. The liquidator records that they engaged a private investigator to assist in locating this vehicle and took other steps to recover the vehicle. Following further enquiries, the vehicle was surrendered by the director and subsequently sold at private auction.

[13]             The liquidator also investigated the ownership of other vehicles which were registered in the Company's name. The director's position was that these were all owned by other parties. In the course of her investigations, the liquidator was able to substantiate some of the explanations provided by the director but was unable to identify sufficient evidence to further pursue the remaining vehicles.

[14]             The liquidator was unable to identify any further assets owned by the Company.

[15]             The liquidator did not identify any other avenues of recovery or claims against third parties during her review of the records obtained.

[16]             The petitioning creditor, the Commissioner of Inland Revenue, was paid part of their preferential claim for court costs but no further distributions were made due to insufficient funds.

Should the liquidator’s remuneration be approved?

[17]             The liquidator has confirmed the hourly rates that have been applied and I am satisfied these are in accordance with those approved by the Court.

[18]             A summary is included in the memorandum providing a breakdown of the liquidators’ fees by activity. In total, 60 hours were spent for fees of $13,808.00.

[19]             Fees of $1,808.00 have had to be written off however due to insufficient recoveries.

[20]             The average hourly rate for the fees of $12,000.00 for which approval is sought is therefore only $200. This is at the low end of the scale.

[21]             As this is a tier 2 liquidation for the purposes of remuneration approval, I am satisfied that the memorandum and associated documents provide sufficient information.

[22]             It appears from this information that the categories of work undertaken were necessary for the winding up of the Company and that the remuneration for which approval is sought reflects the fair value of services rendered by the liquidators.

Result

[23]             For the reasons set out above, the liquidators’ remuneration of $12,000.00 (excluding GST and disbursements) is approved.

Associate Judge Sussock