Petterson v Gothard - [2012] NZHC 1378

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2011-404-7069 [2012] NZHC 1378

IN THE MATTER OF HURLSTONE EARTHMOVING LIMITED (IN RECEIVERSHIP AND LIQUIDATION)

BETWEEN DAVID ROSS PETTERSON Applicant

ANDPETER JAMES GOTHARD AND RYAN REGINALD EAGLE
First Respondents

ANDCOMMISSIONER OF INLAND REVENUE
Second Respondent

CIV 2011-404-7387

AND BETWEEN PETER JAMES GOTHARD AND RYAN REGINALD EAGLE
Applicant

ANDDAVID ROSS PETTERSON Respondent

Hearing: (on the papers)

Counsel: B Gustafson for Mr Petterson (liquidator)
M Kersey and S C Vickers for Messrs Gothard and Eagle (receivers) Judgment: 19 June 2012
JUDGMENT (NO. 4) OF HEATH J

This judgment was delivered by me on 19 June 2012 at 10.00am pursuant to Rule 11.5 of the High
Court Rules
Registrar/Deputy Registrar

PETTERSON V GOTHARD AND EAGLE HC AK CIV 2011-404-7069 [19 June 2012]

[1] Mr Petterson, as liquidator of Hurlstone Earthmoving Ltd (in receivership and in liquidation) seeks an order for costs against Messrs Gothard and Eagle (as receivers of Hurlstone) in respect of applications heard before me in December 2011 and March 2012. They gave rise to three judgments, delivered on 16 and 21
December 2011 and 4 April 2012 respectively.

[2] My judgments of 16 and 21 December 2011 arose out of cross applications by the liquidator and receivers for directions concerning the proper application of s 30 of the Receiverships Act 1993.[1] My judgment of 4 April 2012 was delivered following an application by the liquidator under s 37 of the Receiverships Act, designed to compel the receivers to provide documentary evidence to the liquidator that had been sought by a formal request under s 261 of the Companies Act 1993.[2]
The request under s 261 was made to obtain documents to verify calculations made by the receivers in apportioning costs incurred between circulating and non- circulating assets, for the purposes of s 30 of the Receiverships Act.

[1] Eagle and Gothard v Petterson HC Auckland CIV 2011-404-7387, 16 December 2011 and

Eagle and Gothard v Petterson HC Auckland CIV 2011-404-7387, 21 December 2012.

[2] Petterson v Gothard and Eagle [2012] NZHC 666.

[3] The liquidator asks that I reserve costs on the applications heard on 16 and 21

December 2012, pending receipt of all information ordered to be supplied under s 261 of the Act. However, he seeks costs to be fixed on the s 37 application, in which the liquidator was largely successful.

[4] The receivers contend that costs on the s 30 applications have already been fixed, as a result of my direction that the liquidator’s costs be met out of the liquidation fund, with the receivers’ costs being met out of the fund available to them.[3]

[3] Eagle and Gothard v Petterson HC Auckland CIV 2011-404-7387, 16 December 2011 at para

[73].

[5] In relation to the s 37 application, the receivers submit that costs should be awarded to the liquidator only on a 2B basis, for an interlocutory application. The
increased costs sought by the liquidator are said to be unjustifiable.

[6] The issues in…

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 Petterson v Gothard

Details

AGLC: Petterson v Gothard [2012] NZHC 1378
Case: [2012] NZHC 1378
Decision Date: 19 June 2012

CaseChat Overview and Summary

The case of Petterson v Gothard concerns a dispute between David Ross Petterson, the liquidator of Hurlstone Earthmoving Ltd, and Peter James Gothard and Ryan Reginald Eagle, the receivers of the same company. The dispute revolves around applications made by both parties to the High Court of New Zealand, Auckland Registry, seeking directions and enforcement of statutory provisions. The first set of applications, heard in December 2011, involved cross-applications under section 30 of the Receiverships Act 1993, while the second application, heard in March 2012, involved an application by the liquidator under section 37 of the Receiverships Act, designed to compel the receivers to provide documentary evidence. The liquidator sought costs against the receivers for these applications, arguing that they were largely successful in their applications.

The legal issues that the court had to decide included whether costs should be apportioned between the liquidation and receivership funds and whether costs should be awarded to the liquidator on a 2B basis for the interlocutory application. The receivers argued that costs on the section 30 applications had already been fixed, and that increased costs sought by the liquidator were unjustifiable. The court had to determine the appropriate allocation of costs between the parties, considering the success of each party's applications and the nature of the legal proceedings.

The court ruled that the costs of the section 30 applications should not be revisited, as the issue could be addressed once the documents sought under section 261 of the Companies Act were provided. The court found that the liquidator was largely successful in obtaining orders for the production of documents under section 37, and thus, the liquidator was entitled to costs on that application. The court ordered that costs be awarded to the liquidator on a 2B basis, payable out of the receivership fund, with reasonable disbursements to be fixed by the Registrar. The court made this order on an interim basis, reserving leave for the liquidator to seek an increase in those costs should he consider it appropriate after reviewing all information provided under the section 261 request.

Orders