Platform Homes Limited v Grant - [2021] NZHC 3492

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-002005

[2021] NZHC 3492

UNDER Companies Act 1993, s 239AM and Part 19 of the High Court Rules

IN THE MATTER OF

The administration of ORMISTON RISE LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION)

BETWEEN

PLATFORM HOMES LIMITED, CSL MANAGEMENT LIMITED and PATHWAY REALTY LIMITED

Applicants

AND

DAMIEN MITCHELL GRANT

Respondent

Hearing:
15 November 2021

Further submissions: 23 November 2021 (from Applicants)

Counsel:

D L Bennington for Applicant A S Botterill for Respondent

Judgment:

16 December 2021

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 16 December 2021 at 1.00 pm
pursuant to r 11.5 of the High Court Rules Registrar / Deputy Registrar Date…………………………

PLATFORM HOMES LTD v GRANT [2021] NZHC 3492 [16 December 2021]

Introduction

[1]Ormiston Rise Ltd (ORL)1 is in receivership and liquidation.

[2] On 25 August 2021, ORL was placed into voluntary administration pursuant to s 239I of the Companies Act 1993. Mr Damien Grant, the respondent, of Waterstone Insolvency, was appointed the voluntary administrator.

[3] The applicants, Platform Homes Ltd, CSL Management Ltd and Pathway Realty Ltd,2 are unsecured creditors of ORL. The applicants’ directors were previously directors of ORL and their directorships only ceased shortly before the watershed meeting.

[4] On 29 September 2021, Mr Grant convened a watershed meeting. The outcome of the meeting were resolutions that ORL be placed in liquidation; that Mr Grant be confirmed as liquidator; and that the administration of the company should end.

[5] Mr Grant disregarded the applicants’ votes at the meeting on the grounds that they were related creditors under s 239AM of the Companies Act. The applicants now apply for orders pursuant under that section that their votes be counted and not disregarded as related creditors’ votes.

[6] Mr Grant does not oppose the application and indicates he will abide the Court’s decision.

[7] The issue before me is whether I should decline to determine the application on the basis that the alleged matter at issue is moot; or whether there is a live, tangible and concrete dispute which the Court can properly determine.3

1      ORL.
2      I refer to the applicants respectively as Platform Homes; CSL; and Pathway Realty.
3      In my minute of 15 November 2021, issued following the hearing on 12 November 2021, I directed the applicant to file submissions addressing the issue of whether there is a live and tangible dispute which the Court could properly determine. I have since received a memorandum from the applicants dated 23 November 2021 addressing that issue.

Background facts

[8] On 7 May 2021, Quastor Advisors Ltd LLC appointed Neal Jackson and Grant Graham of Calibre Partners as joint and several receivers of ORL under a general security deed.

[9]The current shareholders of ORL are Foundation Developments Ltd, as to a

70.5 per cent share; Alcon NZ Credit Partners SPV, LLC (Arena), as to a 19.5 per cent share; and…

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 Platform Homes Limited v Grant

Details

AGLC: Platform Homes Limited v Grant [2021] NZHC 3492
Case: [2021] NZHC 3492
Decision Date: 16 December 2021

CaseChat Overview and Summary

The applicants, Platform Homes Limited, CSL Management Limited, and Pathway Realty Limited, sought to challenge the decision of the respondent, Damien Mitchell Grant, as the liquidator of Ormiston Rise Limited, to disregard their votes at a watershed meeting. The applicants were unsecured creditors of Ormiston Rise Limited and were previously connected to the company through their directors. The central issue was whether the applicants' votes should be counted, or if they were correctly disregarded as related creditors under s 239AM of the Companies Act 1993.

The court considered whether there was a live, tangible, and concrete dispute which it could properly determine. The applicants argued that they were no longer related creditors as their directorships had ended five days prior to the watershed meeting. The court noted that the applicants' votes would not have affected the outcome of the meeting and that the applicants were seeking a declaration rather than any further orders. The court found that there was no live controversy remaining for it to determine, as the resolutions passed at the watershed meeting had not been disputed by the applicants. Furthermore, there was no evidence to suggest that a declaration would have any real utility or practical impact on the applicants' rights. For these reasons, the court declined to determine the application.

The court dismissed the applicants' application for orders pursuant to s 239AM(1) and (2) of the Companies Act 1993. However, the court noted that the applicants could file a fresh application if a live controversy arose in the future.

Orders