Pumpkin Patch Limited (in receivership and Administration) - [2017] NZHC 228

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2016-404-2957 [2017] NZHC 228

UNDER
Part 19 of the High Court Rules and Part

15A of the Companies Act 1993

IN THE MATTER OF

PUMPKIN PATCH LIMITED (In Receivership and Administrators Appointed)

TORQUAY ENTERPRISES LIMITED (In Receivership and Administrators Appointed)

PUMPKIN PATCH DIRECT LIMITED (In Receivership and Administrators Appointed)

PATCH KIDS LIMITED (In Receivership and Administrators Appointed)

Hearing: (on the papers)

Counsel:

J C Caird and J S Learner for Applicants

Judgment:

22 February 2017

JUDGMENT (NO. 2) OF HEATH J

This judgment was delivered by me on 22 February 2017 at 9.30am pursuant to
Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar

Solicitors:
Simpson Grierson, Auckland

Re Pumpkin Patch Ltd [2017] NZHC 228 [22 February 2017]

The application

[1] Administrators of a number of companies of (what has been called) the

Pumpkin Patch Group1 (the Group) have applied on a without notice basis for orders:

(a) Permitting them to be appointed as either liquidators or deed administrators of each of the companies in administration, and

(b)Varying the terms on which notice of the orders should be given to each known creditor, if creditors are asked to consider a Deed of Company Arrangement (DOCA) at forthcoming watershed meetings, to be held under s 239AJ(b) of the Companies Act 1993 (the Act).

[2] I am satisfied that the applications are properly made without notice. The orders sought include a provision entitling any interested person to apply to discharge any of them, if necessary. In that situation, I shall grant leave for the application to be made without notice.

Background

[3] Pumpkin Patch Ltd, Pumpkin Patch Originals Ltd, Torquay Enterprises Ltd, Pumpkin Patch Direct Ltd and Patch Kids Ltd were each put into voluntary administration on 26 October 2016. The previous day, Duffy J had made an order entitling the proposed administrators, Messrs Grenfell and McElhinney, to be appointed notwithstanding that their firm had a prior and continuing business relationship with the companies’ major secured creditor.

[4] Following a resolution of the board of directors of each company, Messrs Grenfell and McElhinney (both of whom are based in Auckland) were appointed as joint and several administrators of each of the five companies. Mr Hayes, who is based in Sydney, was also appointed as a joint and several administrator in respect of Pumpkin Patch Originals Ltd. That company operates in both New Zealand and Australia.

[5] On the same day that administrators were appointed, 26 October 2016, Messrs Jackson and Gibson were appointed by ANZ Bank New Zealand Ltd and/or Australia and New Zealand Banking Group Ltd (ANZ) as joint and several receivers and managers of each of the companies.

[6] In respect of the five companies in administration:

(a) Pumpkin Patch Ltd is the parent company. It is the ultimate beneficial owner of shares in the remaining companies. While listed on the New Zealand Stock Exchange, trading in its shares was suspended following the appointment of administrators.

(b) Pumpkin Patch…

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 Pumpkin Patch Limited (in receivership and Administration)

Details

AGLC: Pumpkin Patch Limited (in receivership and Administration) [2017] NZHC 228
Case: [2017] NZHC 228
Decision Date: 22 February 2017

CaseChat Overview and Summary

Administrators of the Pumpkin Patch Group of companies applied for orders that would permit them to be appointed as liquidators or deed administrators of each of the companies in administration, and that would vary the terms on which notice of the orders should be given to each known creditor, if creditors are asked to consider a Deed of Company Arrangement at forthcoming watershed meetings. The court was required to determine whether the administrators' applications were properly made without notice and whether it should grant permission for the administrators to be appointed as liquidators or deed administrators. The court was also required to determine whether it should vary the terms on which notice of the orders should be given to each known creditor, if creditors are asked to consider a Deed of Company Arrangement at forthcoming watershed meetings. The court found that the applications were properly made without notice and granted the applications. The court found that the continuing business relationship between the administrators' firm, McGrathNicol, and the secured creditor of each company, ANZ, was not sufficient to disqualify the existing administrators from acting in the role of either liquidators or deed administrators. The court also found that it was appropriate to make an order varying the terms on which notice of the orders should be given to each known creditor, if creditors are asked to consider a Deed of Company Arrangement at forthcoming watershed meetings. The court made orders granting leave for the applications to be made on a without notice basis, permitting the administrators to be appointed as liquidators or deed administrators of each of the companies in administration, varying the terms on which notice of the orders should be given to each known creditor, if creditors are asked to consider a Deed of Company Arrangement at forthcoming watershed meetings, and granting leave to any person who can demonstrate a sufficient interest to apply or modify or discharge these orders on appropriate notice being given to the applicants.

Orders