Stanley Tallwood Group - [2019] NZHC 2395

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1997

[2019] NZHC 2395

UNDER Part 19 of the High Court Rules and sections 286(4) and 280 of the Companies Act 1993

IN THE MATTER

of the liquidations of the companies constituting the Stanley Tallwood Group

EX PARTE

CRAIG ALEXANDER SANSON and JOHN HOWARD ROSS FISK

Applicants

Hearing: On the papers

Appearances:

G Neil and L Hui for Applicants

Judgment:

20 September 2019

JUDGMENT OF LANG J

[on without notice application for orders under ss 280 and 286(4) of the Companies Act 1993]

This judgment was delivered by me on 20 September 2019 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

In the matter of the STANLEY TALLWOOD GROUP [2019] NZHC 2395 [20 September 2019]

[1] On 5 September 2019 ten companies in what has become known as the Stanley Group1 of companies were placed in liquidation by special resolution of their respective shareholders. Mr Damien Grant of Waterstone Insolvency was appointed as liquidator.

[2] A meeting of creditors is scheduled to take place on 25 September 2019. At this meeting creditors of the companies will vote on whether to confirm Mr Grant’s appointment as liquidator or to replace him.

[3] The applicants, Mr Craig Sanson and Mr John Fisk, are insolvency practitioners practising with the national and international business services firm PricewaterhouseCoopers (PwC). Creditors of companies in the Stanley Group have asked Messrs Sanson and Fisk to accept nomination as replacement liquidators at the creditor’s meeting. The applicants have made enquiries to determine whether they would find themselves in a position of conflict of interest if they were to be appointed as liquidators. This has resulted in them discovering that PwC has a continuing business relationship with 14 companies who are secured creditors of companies in the Stanley Group. PwC also supplies services to related entities of these creditors.

[4] The applicants do not consider the relationship between PwC and the secured creditors would result in them being subject to a conflict of interest if they were to be appointed as replacement liquidators at the creditors meeting. In order to enable them to be considered for that position, they now seek an order under ss 280 and 286(4) of the Act that they may be appointed as liquidators of the companies if that should be the wish of the creditors.

1 Stanley Group Ltd (Stanley Group), incorporated on 23 December 2009; Stanley Construction (Auckland) Ltd (Stanley Auckland), a wholly owned subsidiary of Stanley Group; Stanley Construction (Waikato) Ltd (Stanley Waikato), a wholly owned subsidiary of Stanley Group’ Stanley Ecobuild Ltd (Stanley Ecobuild), a wholly owned subsidiary of Stanley Group Stanley Modular Ltd (Stanley Modular), a wholly owned subsidiary of Stanley Group; Tallwood Holdings Ltd (Tallwood Holdings), incorporated on 10 April 2018. The shareholders are Forest Group Ltd and Stancotwo Ltd; Tallwood Projects Ltd (Tallwood Projects), a wholly owned subsidiary of Tallwood Holdings; Tallwood Design…

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 Stanley Tallwood Group

Details

AGLC: Stanley Tallwood Group [2019] NZHC 2395
Case: [2019] NZHC 2395
Decision Date: 20 September 2019

CaseChat Overview and Summary

Craig Alexander Sanson and John Howard Ross Fisk, both insolvency practitioners practising with PricewaterhouseCoopers (PwC), have applied to the High Court of New Zealand for leave to act as liquidators of the companies that make up the Stanley Group, following a meeting of creditors scheduled for 25 September 2019. The applicants have been nominated by creditors of the companies in the Stanley Group to act as replacement liquidators, but they have discovered that PwC has a continuing business relationship with 14 companies that are secured creditors of companies in the Stanley Group. The applicants seek an order under sections 280 and 286(4) of the Companies Act 1993 that they may be appointed as liquidators if that should be the wish of the creditors. The court must decide whether the relationship between PwC and the secured creditors would result in a conflict of interest if the applicants were to be appointed as liquidators.

The court found that the applicants were unlikely to be compromised by the existing relationship between PwC and the secured creditors. The court noted that the companies’ creditors would make the ultimate decision as to who the liquidators of the companies should be, and that they had the ability to explore any issues that they perceived to arise out of the relationship between PwC and the companies’ secured creditors at the creditors meeting. The court also found that PwC had not acted for, or provided advice to, any of the companies in the Stanley Group or to the directors or shareholders of those companies, and that no services provided by PwC to the secured creditors had related in any way to the companies in the Stanley Group or the directors of those companies. The court accepted that both Mr Fisk and Mr Sanson had the requisite experience and qualifications to assume the role as liquidators of the companies in the Stanley Group.

The court made an order granting leave for the proceeding to be commenced by way of originating application, and an order under sections 280 and 286(4) of the Act that Messrs Sanson and Fisk may be appointed to act as joint and several liquidators of the companies listed in the schedule to the originating application. The court reserved the issue of costs at this stage.

Orders