Petterson v Gothard (No 3) - [2012] NZHC 666

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2011-404-7069 [2012] NZHC 666

IN THE MATTER OF HURLSTONE EARTHMOVING LTD (IN RECEIVERSHIP AND IN LIQUIDATION), RIVER ISLAND SHINGLE COMPANY LTD (IN RECEIVERSHIP AND IN LIQUIDATION), NEW ZEALAND POLLUTION ENGINEERING LTD (IN RECEIVERSHIP AND IN
LIQUIDATION) AND HAYES EARTHMOVING SERVICES LTD (IN RECEIVERSHIP AND IN LIQUIDATION)

BETWEEN DAVID ROSS PETTERSON Applicant

ANDPETER JAMES GOTHARD AND RYAN REGINALD EAGLE
Respondents

Hearing: 2 March 2012

Counsel: B Gustafson for Applicant
M Kersey and S C Vickers for First Respondents

Judgment: 4 April 2012

JUDGMENT (NO. 3) OF HEATH J

This judgment was delivered by me on 4 April 2012 at 4.00pm pursuant to Rule 11.5 of the High
Court Rules
Registrar/Deputy Registrar

Solicitors:
Lowndes Jordan, PO Box 5966, Auckland
Russell McVeagh, PO Box 8, Auckland
Counsel:
B Gustafson, PO Box 1297, Shortland Street, Auckland

PETTERSON V GOTHARD AND EAGLE HC AK CIV 2011-404-7069 [4 April 2012]

Contents

Introduction [1] Background [3] Legal principles: ss 261 and 262 Companies Act 1993 [9] The requests for documents [14] The application under s 37 of the Receiverships Act [24] The issues [28] Service of the “notice of failure” [29] Did the liquidator use the correct mechanism to
obtain the documents? [43]

Did the receivers comply with the s 261(1) request? [57] Was the s 261 request “oppressive”? [60] Orders [64]

Introduction

[1] Section 261 of the Companies Act 19931 confers a number of powers on a liquidator to enable him or her to obtain access to the company’s documents and information about its affairs.2 The section envisages that a liquidator may seek documents from a receiver of the company.3

[2] In this case, there are four companies, each of which is in receivership and in liquidation. The liquidator has required the receivers to deliver certain documents to him. The receivers have not provided the documents requested. The liquidator takes the view that the receivers have failed to comply with his requirements. As a result, orders compelling the receivers to provide the documents are sought, under s 37 of
the Receiverships Act 1993.4

Background

[3] Hurlstone Earthmoving Ltd (Hurlstone) was placed in receivership on 13 July

2011 by the holder of a general security agreement, GE Finance and Insurance (GE).

1      Set out at para [9] below.
2      Companies Act 1993, s 261(2)(e).
3      Ibid, s 261(1) (“any other person”) and (2)(e).
4      It would also have been open to make an application under s 266 of the Companies Act 1993.
See Carrow Holdings Ltd (in liquidation) v Sadiq HC Auckland CIV 2007-404-2855, 5 June
2008 (Heath J) at paras [18]–[358.

Although Hurlstone was incorporated in New Zealand, Messrs Gothard and Eagle of Ferrier Hodgson (a firm of insolvency practitioners based in Sydney), were appointed as receivers. On 13 July 2011, GE put three of Hurlstone’s subsidiaries, River Island Single Co Ltd, Hayes Earthmoving Services Ltd and New Zealand Pollution Engineering Ltd, into receivership. Mr Gothard and Mr Eagle were also appointed as receivers…

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 (No 3)

Details

AGLC: Petterson v Gothard (No 3) [2012] NZHC 666
Case: [2012] NZHC 666
Decision Date: 4 April 2012

CaseChat Overview and Summary

Petterson v Gothard [2012] NZHC 666 involves a dispute between the liquidator of four companies and the receivers of the companies regarding the production of documents. The liquidator sought documents under s 261 of the Companies Act 1993, which the receivers refused to provide. The liquidator then made an application under s 37 of the Receiverships Act 1993 to compel the receivers to produce the documents. The key issues in the case were whether the notice of failure to comply was validly served, whether the liquidator used the correct mechanism to obtain the documents, whether the receivers complied with the s 261 request, whether the request was oppressive, and what orders should be made. The court held that the notice of failure to comply was validly served, the liquidator used the correct mechanism to obtain the documents, the receivers did not comply with the s 261 request, the request was not oppressive, and the time for compliance with the s 261 request should be extended. The court ordered the receivers to deliver the required documents to the liquidator by a specified date, with the possibility of invoking s 262 of the Companies Act if the documents were required for the purpose of the receivership. The liquidator was required to pay any invoiced expenses for providing the copies of the documents.

Orders