Ruapehu Alpine Lifts Limited - [2022] NZHC 2738

AND [ ]

Defendant

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-001993

[2022] NZHC 2738

UNDER Part 19 of the High Court Rules 2016 and Part 15A of the Companies Act 1993

IN THE MATTER OF

Ruapehu Alpine Lifts Limited (Administrators Appointed)

BETWEEN

JOHN HOWARD ROSS FISK and RICHARD JOHN NACEY of

PriceWaterhouseCoopers as administrators of Ruapehu Alpine Lifts Limited (Administrators Appointed)
Applicants

Hearing: On the papers

Counsel:

L Sizer for the Applicants

Judgment:

21 October 2022

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 21 October 2022 at 9.45 a.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Buddle Findlay, Auckland

RE RUAPEHU ALPINE LIFTS LTD [2022] NZHC 2738 [21 October 2022]

[1] The applicants, John Fisk and Richard Nacey (Administrators) are administrators of Ruapehu Alpine Lifts Limited (the Company), in administration under Part 15A of the Companies Act 1993 (the Act). The Administrators apply for orders extending the period before which a watershed meeting must be convened, extending the period for giving notice of termination of employment contracts, and modifying the service requirements for notices under the Act. The Administrators also request permission to commence the proceeding by way of originating application.

[2] The Company operates the Whakapapa and Tūroa ski fields on the slopes of Mount Ruapehu in the central North Island. It is a nationally and regionally significant business. It is one of the largest employers in the Ruapehu region and operates within the Tongariro National Park (a UNESCO Dual World Heritage Area). The ski fields (and Ruapehu generally) are of major significance to local iwi and subject to Te Tiriti o Waitangi claims and co-governance arrangements.

[3] The Administrators were appointed on 11 October 2022 by director resolution. The Company’s present financial difficulties appear to be related to COVID-19 and lack of snow resulting in significantly reduced patronage.

[4]The Administrators face two immediate deadlines:

(a)Under s 239AT(2) of the Act, they must convene a watershed meeting within 20 working days of their appointment, namely 9 November 2022, unless the Court extends the convening period under s 239AT(3) of the Act.

(b)Under s 239Y, the Administrators will be personally liable to pay employees’ wages and salaries under a contract of employment, unless they give notice of termination under s 239Y(3) within 14 days of their appointment, namely 25 October 2022, unless the Court extends that period under s 239Y(4).

[5]The Administrators apply to extend both time periods to 9 May 2023.

Application to extend time for the watershed meeting

[6] The voluntary administration provisions are set out in Part 15A of the Act. The objects of voluntary administration are explained in s 239A:

The objects of this Part are to provide for the business, property, and affairs of an insolvent company, or a company that may in the future become insolvent, to be administered in a way that -

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.

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Details

Case: [2022] NZHC 2738
Decision Date: 21 October 2022

CaseChat Overview and Summary

The matter before the High Court of New Zealand involved Ruapehu Alpine Lifts Limited, a company in administration, represented by administrators John Fisk and Richard Nacey. The Administrators sought extensions to the convening period for a watershed meeting, the period for giving notice of termination of employment contracts, and modifications to the service requirements for notices under the Companies Act 1993. They also sought permission to commence the proceeding by way of an originating application.

The court examined the statutory framework governing voluntary administration and the principles established in previous cases regarding extensions of time for convening watershed meetings and terminating employment contracts. The court considered the unique circumstances of the Company, including its complex corporate structure, numerous stakeholders, and the potential impact of COVID-19 on its financial situation. The court granted the requested extensions, emphasising the importance of allowing the Administrators adequate time to properly investigate the Company's affairs, consult with stakeholders, and formulate a plan for the Company's future. The court also found that extending the notice period for terminating employment contracts would promote continuity of employment relationships and minimise disruption for employees.

In addition, the court addressed the Administrators' request to modify the service requirements for notices under the Companies Act 1993. The court accepted the Administrators' submissions that electronic notice would be an efficient and effective method of communicating with the Company's creditors, particularly given the large number of creditors and the complexity of the administration process. The court granted the requested modification with retrospective effect, allowing the Administrators to give notice by electronic means for the first creditors' meeting.

The court made orders extending the convening period for the watershed meeting to 9 May 2023, extending the period for giving notice of termination of employment contracts to the same date, and permitting the Administrators to give notices and other documents by electronic means. The court also granted leave to apply to modify or discharge the orders and required the Administrators to advertise the orders and post copies on their website. Finally, the court ordered that the Administrators' reasonable costs of the application would be paid out of the Company's assets.

Orders