Petterson v Browne

[2015] NZHC 866

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV- 2014-404-000469 [2015] NZHC 866

IN THE MATTER

of Sections 292-296 and s 299 of the

Companies Act 1993

BETWEEN

DAVID ROSS PETTERSON AS LIQUIDATOR OF POLYETHYLENE PIPE SYSTEMS LIMITED (IN LIQUIDATION)

Applicant

AND

DAVID CHARLES BROWNE Respondent

CIV-2014-409-000900

IN THE MATTER             of Sections 292-296 of the Companies Act

1993

BETWEEN  DAVID ROSS PETTERSON Applicant

ANDDAVID BROWNE CONTRACTORS LIMITED

First Respondent

ANDDAVID BROWNE MECHANICAL LIMITED

Second Respondent

Hearing:	3-5 March 2015 / 27 March 2015 - further submissions
Appearances:	B Gustafson and L Van for Applicant D J C Russ for Respondents
Judgment:	29 April 2015

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

DAVID ROSS PETTERSON AS LIQUIDATOR OF POLYETHYLENE PIPE SYSTEMS LIMITED (IN LIQUIDATION) v DAVID CHARLES BROWNE [2015] NZHC 866 [29 April 2015]

Contents

Introduction  [1] Relevant facts not in dispute  [9] Claim 469 against Mr Browne

Discussion of the notices issued under s 292 and s 293  [23]

The issues to be decided  [31]

First issue: Did Mr Browne make the advance of $700,000 to

PPS on 29 August 2008?  [36]

Second issue: Does the Court have jurisdiction to make an order under s 299(1) after a secured creditor has appointed a receiver and the receiver has realised the assets of the company and made

payments to the secured creditor?  [46]

Third issue: Should the GSA granted by PPS to Mr Browne be

set aside under s 299(1)?  [53]

Conclusion on whether it is just and equitable that the charge

in favour of Mr Browne be set aside  [130]

Orders  [133]

Claim 900 against David Browne Contractors Limited and

David Browne Mechanical Limited  [135]

Under s 295, is there a discretion to make an order, or not?  [137]

Outcome  [160]

Introduction

[1]      Mr Petterson is the liquidator of Polyethylene Pipe Systems Limited (PPS). He was appointed by the High Court at Christchurch on 5 October 2009 on the application of McConnell Dowell Constructors Limited (McDow).

[2]      He has brought the subject proceedings as a result of his investigation into the affairs of the company.   The first proceeding, CIV-2014-409-469 (the 469 proceeding),  follows  service on  Mr  Browne of  two  notices  under s  294  of the Companies Act 1993 alleging, respectively, that a payment to him of $340,600 was voidable under s 292 and that a charge given to him by PPS was voidable under s

293.  Mr Browne gave a notice of objection to each notice, under s 294(3).

[3]      Mr Petterson initially sought four orders:

(a)     that the payment to Mr Browne of $340,600 by PPS is voidable under s

292 of the Companies Act 1993;

(b)that the charge granted by PPS in favour of Mr Browne under a general security agreement dated 28 July 2008 be set aside under s 293;

(c)    in the alternative, that the general security agreement be set aside under s 299; and

(d)that Mr Browne repay to PPS all amounts received by him pursuant to the general security agreement, including the sum of $340,600…