Scutter v Architectural Window Solutions Limited (in liquidation) - [2022] NZHC 2046

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV 2022-485-374

[2022] NZHC 2046

UNDER Subpart 2A of the Construction Contracts Act 2002

IN THE MATTER OF

the liquidation of Architectural Window Solutions Limited

BETWEEN

JOHN MARSHALL SCUTTER as

liquidator of ARCHITECTURAL WINDOW SOLUTIONS LIMITED (IN
LIQUIDATION)
Applicant

AND

ARCHITECTURAL WINDOW SOLUTIONS LIMITED (IN

LIQUIDATION)

Respondent

Hearing: 15 August 2022

Counsel:

K Dixit for Applicant

No appearance for Respondent

Judgment:

17 August 2022

JUDGMENT OF MALLON J

Introduction

[1] The applicant, John Scutter, as liquidator of Architectural Window Solutions Limited (in Liquidation) (AWS) seeks orders appointing himself as receiver and manager of a retention fund AWS holds for its retention creditors. He also seeks orders allowing him to deduct from the retention fund his reasonable costs and expenses relating to the management and administration of the retention fund, including the costs reasonably incurred in the present application.

SCUTTER v ARCHITECTURAL WINDOW SOLUTIONS LIMITED (IN LIQUIDATION) [2022] NZHC 2046
[17 August 2022]

Background

[2] AWS was a specialist aluminium window solutions company. It designed and manufactured aluminium window joinery for large commercial buildings. It commenced operations in 2002 and operated throughout New Zealand.

[3] AWS was placed into liquidations by shareholders resolution on 24 March 2022. Mr Scutter was appointed the sole liquidator. His appointment was confirmed at a creditors’ meeting on 14 April 2022 called for that purpose.

[4] AWS subcontracted some of the work, particularly for installation. It deducted retention monies from the subcontractors in accordance with its commercial construction contracts and the Construction Contracts Act 2002.

[5] Mr Scutter has set aside $200,000 in his trust account to meet the claims of the subcontractors. There are eight subcontractors (retention creditors) who have made a claim from the retention fund.

[6] On 8 April 2022 Mr Scutter wrote to the retention creditors explaining his proposal to be appointed as receiver and manager, how he proposed to carry out his role and the fees he would charge against the retention fund. He received unanimous support from the retention creditors for his appointment.

The application

[7] On 30 June 2022 Mr Scutter filed his originating application. The application seeks the following substantive orders:

1.2Mr Scutter be appointed receiver and manager of the Retention Fund.

1.3That the Retention Fund is held by [AWS] on trust in accordance with ss 18A to 18I of the Construction Contracts Act 2002 (the CCA) for the subcontractors who:

(a)had a contract that was recorded in [AWS’] retention tracing system as being entered into with [AWS] after 31 March 2017; and

(b)for whom [AWS] subsequently transferred a portion of the retention moneys related to their contracts to the Retention Fund; and

(c)for whom retention moneys did not cease to be retention moneys pursuant to s 18C(3) of the CCA.

1.4As receiver Mr Scutter may determine and pay valid claims on the Retention Fund, including by way of interim distribution, in accordance with the terms of the…

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 Scutter v Architectural Window Solutions Limited (in liquida... 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: [2022] NZHC 2046
Decision Date: 17 August 2022

CaseChat Overview and Summary

In the High Court of New Zealand, the case of Scutter v Architectural Window Solutions Limited (in liquidation) was heard. John Marshall Scutter, acting as the liquidator of Architectural Window Solutions Limited (AWS), sought to be appointed as the receiver and manager of a retention fund held by AWS. Scutter aimed to deduct his reasonable costs and expenses related to managing the retention fund from it. AWS, already in liquidation, did not contest the application.

The primary legal issue the court had to decide was whether Scutter should be appointed as the receiver and manager of the retention fund and if he could deduct his reasonable costs and expenses from it. The court had to consider the appropriateness of appointing Scutter in light of his role as liquidator and the support of the retention creditors.

The court found that appointing Scutter as the receiver and manager was within the court's inherent power and was appropriate given his familiarity with the company and the support from the retention creditors. The court noted that this approach had been taken in previous cases. The court approved the costs and legal fees incurred by Scutter, allowing him to deduct these from the retention fund. The court also granted leave for Scutter and the retention creditors to apply for further directions if necessary.

The court's final order was that Scutter be appointed as the receiver and manager of the retention fund, with the right to deduct his reasonable costs and expenses from it. The court also approved the costs and legal fees incurred by Scutter to date.

Orders