Poulton v Grant

[2022] NZHC 2205

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-000813

[2022] NZHC 2205

IN THE MATTER OF

an application under Part 18 of the High Court Rules 2016

UNDER

Companies Act 1993, s 284

BETWEEN

SHANE RICHARD POULTON
Plaintiff

AND

DAMIAN MITCHELL GRANT

Defendant

Hearing (via VMR):	31 August 2022
Counsel:	NS Tabb for Plaintiff KA Cocks for Defendant
Judgment:	31 August 2022

ORAL JUDGMENT OF DOWNS J

This judgment was delivered by me on 31 August 2022 pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Waterstone Insolvency, Auckland. NS Tabb, Auckland.

POULTON v GRANT [2022] NZHC 2205 [31 August 2022]

[1]    This case concerns the reasonableness of liquidators’ remuneration up until today. The judgment is brief for reasons that will quickly become apparent.

[2]    Shane Poulton is the sole shareholder and director of a company placed in liquidation 16 April 2018. Damian Grant is one of the joint liquidators of that company.

[3]    At the beginning of the hearing, I gave a preliminary view (with counsel’s agreement). I did so because of their helpful written submissions, the amount of money involved (which is reasonably modest), and because of a judgment of the District Court involving the parties. Counsel took instructions over a brief adjournment. They returned to Court and said the parties were content with my preliminary view and would accept judgment accordingly.

[4]    With this in mind, I say a little more about the District Court decision. At the liquidators’  behest,  the  company  sued  Mr  Poulton  for  unauthorised  drawings.  It obtained judgment for $166,809.19. On 12 July 2022, Judge D J Clark concluded the company obtained the judgment irregularly, after Mr Poulton failed to file a statement of defence.1 The Judge held the company should not have obtained judgment by way of  liquidated  demand.  The  Judge  also  held  Mr  Grant  knew Mr Poulton contested the amount said to be owed by him to the company.

[5]No appeal was brought in relation to the Judge’s decision.

[6]    The liquidators’  fees  include  attendances  in  obtaining  the  judgment Judge Clark set aside, unsuccessfully resisting the application for it to be set aside, and (brief) related bankruptcy proceedings in the High Court.

[7]    On behalf of the liquidators, Ms Cocks observes Mr Grant conducted the litigation believing he was acting in the best interests of the creditors. Ms Cocks also observes the liquidators did not, at any time, act in bad faith. I record Judge Clark did not find otherwise. However, because of the Judge’s findings – which involve the parties – it follows the liquidators’ fees in relation to that litigation should be set aside.

1      JP Excavators Ltd v Poulton [2022] NZDC 12368.

[8]All of their other fees are, however, reasonable. About that, I am quite content.

Result

[9]The liquidators’ remuneration to today is approved other than attendances:

(a)in relation to obtaining judgment by liquidated demand;

(b)defending related proceedings to set that judgment aside; and

(c)related bankruptcy proceedings.

[10]   Counsel may return to me if needed, including because the precise amounts in relation to [9] are unknown.

Costs

[11]Costs lie where they fall.2

……………………………..

Downs J

2      This reflects each party has had a measure of success.