Legal Research
Cases
Robert Jones Holdings Ltd v McCullagh

Robert Jones Holdings Ltd v McCullagh

Link copied

Case Copied 21 October 2016 37 min read

Contents

On this page

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-003475 [2016] NZHC 2529

UNDER
Sections 292, 294 and 295 of the

Companies Act 1993

IN THE MATTER

of the liquidation of Northern Crest
Investments Limited (in liquidation)

BETWEEN

ROBERT JONES HOLDINGS LIMITED Applicant on review

AND

ANTHONY JOHN MCCULLAGH AND STEPHEN MARK LAWRENCE Respondents on review

Hearing: 17 October 2016

Counsel:

D G Chesterman for Applicant on review
B P Keene QC and L Van for Respondents on review

Judgment:

21 October 2016

JUDGMENT OF DOWNS J

This judgment was delivered by me on Friday, 21 October 2016 at 3 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:
Anthony Harper, Auckland.
B P Keene QC, Auckland.
D G Chesterman, Auckland.

ROBERT JONES HOLDINGS LTD v MCCULLAGH [2016] NZHC 2529 [21 October 2016]

Table of Contents

Para No

The case [1] The facts [5] The case for RJH [19] The proceedings before the Associate Judge [22] Clearing the decks [26] The discovery applications [32] Discovery in relation to the licence agreement and whether it was a sham [37] Disclosure applications as possible sources of evidence for solvency [41] Discovery for the purpose of challenging witness “credibility” [47] Waiver of privilege [58] Fresh evidence [71] Costs [74]

The case

[1] Mr McCullagh and Mr Lawrence are the liquidators of Northern Crest Investments Ltd, or Northern Crest for short. They have brought an action against Robert Jones Holdings Ltd, or more easily, RJH. The action alleges RJH was the beneficiary of a series of insolvent transactions between it and Northern Crest, which resulted in RJH receiving more money than it should at the expense of other unsecured creditors. The action is an originating application. It was commenced in
2013. And, it is yet to be heard.

[2] On 26 June 2015 Associate Judge Bell dismissed a suite of discovery applications and an application to set aside privilege, all brought by RJH, in relation to documents held by the liquidators.1 The Associate Judge ordered costs against RJH on an increased basis, because the Judge concluded RJH was “stalling” (my word rather than the Judge’s, but that was very much his sentiment). RJH seeks review of these decisions—the application before me.

[3] Between then and now, RJH sought and was granted leave by Duffy J to amend its notice of opposition to the substantive action and place additional evidence before me. The liquidators contend this evidence is irrelevant. And, they
invite me to receive other fresh evidence on the review application, at least some of

1 McCullagh v Robt Jones Holdings Ltd [2015] NZHC 1462, (2015) 22 PRNZ 615.

which has since been filed by RJH in the substantive action. The liquidators contend the review application should be dismissed.

[4] Against this somewhat messy backdrop, the facts remain important.2

The facts

[5] This Court placed Northern Crest in liquidation on 2 June 2011.3 Claims of unsecured creditors extend to $10,166,000. That sum does not include investors’ claims in relation…

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.

Keep reading for free

Create a free CaseChat account to read Robert Jones Holdings Ltd v McCullagh and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2016] NZHC 2529
Decision Date: 21 October 2016

CaseChat Overview and Summary

In McCullagh v Robert Jones Holdings Ltd, the liquidators of a company in liquidation brought an action against Robert Jones Holdings Ltd (RJH), alleging RJH had been the beneficiary of a series of insolvent transactions with the company, resulting in RJH receiving more money than it should. The liquidators sought to recover the amounts paid to RJH. The case was brought as an originating application and was yet to be heard. RJH had previously sought discovery of documents in the possession of the liquidators in relation to its defence of the action. These applications were dismissed by an Associate Judge. RJH sought review of these decisions. The liquidators opposed the review application and contended the review application should be dismissed. The court found that the Associate Judge had not plainly erred in dismissing the discovery applications. The Associate Judge had considered the evidence in the substantive action, but there was no error of principle, no failure to take into account relevant considerations, and no fresh material that had not been available to the Associate Judge. The discovery applications were speculative, irrelevant, or disproportionate. The application for discovery in relation to the liquidators' credibility was impermissible, as was the application for discovery of the liquidators' fees. The liquidators had waived privilege in relation to certain documents, but the extent of the waiver was limited to those documents which dealt with certain discrete factual propositions. Duffy J's order that RJH adduce fresh evidence was upheld, as was his order quashing the Associate Judge's order for costs on an increased basis.

Orders