Technology Holdings Limited - [2024] NZHC 1935

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2024-485-370

[2024] NZHC 1935

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

IN THE MATTER

of EFTPOS SPECIALISTS

(WELLINGTON) LIMITED (in voluntary administration)

Continued …

AND IN THE MATTER

of an application pursuant to section 239AT(3) of the Companies Act 1993 by

RYAN EATHORNE of Wellington, licenced insolvency practitioner for an order extending the convening period of the voluntary administration of TECHNOLOGY HOLDINGS LIMITED, EFTPOS

SPECIALISTS (WAIKATO) LIMITED, EFTPOS SPECIALISTS (MANAWATU) LIMITED EFTPOS SPECIALISTS

(NELSON) LIMITED, EFTPOS SPECIALISTS (OTAGO) LIMITED,

EFTPOS SPECIALISTS (AUCLKLAND) LIMITED, EFTPOS SPECIALISTS (CHRISTCHURCH) LIMITED

Applicant

Hearing: On the papers

Appearances:

J D Haig for the Applicant

Judgment:

16 July 2024

JUDGMENT OF BOLDT J

RE TECHNOLOGY HOLDINGS LTD, EFTPOS SPECIALISTS (WAIKATO) LTD, EFTPOS SPECIALISTS (MANAWATU) LTD EFTPOS SPECIALISTS (NELSON) LTD, EFTPOS SPECIALISTS (OTAGO) LTD,
EFTPOS SPECIALISTS (AUCLKLAND) LTD, EFTPOS SPECIALISTS (CHRISTCHURCH) LTD [2024] NZHC 1935 [16 July 2024]

Continued …

TECHNOLOGY HOLDINGS LIMITED (in

voluntary administration and receivership)

EFTPOS SPECIALISTS (WAIKATO)
LIMITED (in voluntary administration)
EFTPOS SPECIALISTS (MANAWATU)
LIMITED (in voluntary administration)
EFTPOS SPECILISTS (NELSON)
LIMITED (in voluntary administration)
ADVANCE EQUIPMENT SUPPLIES LIMITED (IN VOLUNTARY ADMINISTRATION)
EFTPOS SPECIALISTS (OTAGO)
LIMITED (in voluntary administration)
EFTPOS SPECIALISTS (AUCKLAND)
LIMITED (in voluntary administration)
EFTPOS SPECIALISTS (CHRISTCHURCH) LIMITED (in
voluntary administration)
EFTPOS SPECIALISTS (NORTHLAND)
LIMITED (in voluntary administration)
EFTPOS SPECIALITS (CENTRAL
OTAGO) LIMITED (in voluntary administration)
EFTPOS OTAGO LIMITED (in voluntary administration)
This judgment was delivered by me on 16 July 2024 at 10:00 am pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar

……………………………………

Introduction

[1] Technology Holdings Limited (THL) is the third largest supplier of EFTPOS terminals in New Zealand. It has 11 subsidiary companies. The subsidiaries provide sales, leasing and maintenance support for EFTPOS terminals around New Zealand.

[2] On 28 May 2024, the directors of THL resolved that it should be placed in voluntary administration. They appointed Mr Ryan Eathorne as the administrator of THL and its subsidiaries (collectively, the group).

[3] On 10 June 2024, Mr Eathorne convened and held the first meeting of the group’s creditors, as required by s 239AN of the Companies Act 1993 (the Act). Creditors confirmed Mr Eathorne as administrator, and creditor committees were formed. ASB Bank is the group’s only secured creditor.

[4] On 11 June 2024, ASB Bank appointed BDO Christchurch as receivers of THL. As a result, there was some uncertainty as to whether the administration of the group would continue. On 21 June 2024, an agreement was reached between Mr Eathorne and the receivers about the process for sale, and THL is now subject to concurrent receivership and voluntary administration.

[5] As the first creditors meeting has been convened, the next step in the voluntary administration is a watershed meeting — a meeting of the creditors to decide the future of the group and, in particular, whether to execute a deed of company arrangement under subpt…

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 Technology Holdings Limited

Details

AGLC: Technology Holdings Limited [2024] NZHC 1935
Case: [2024] NZHC 1935
Decision Date: 16 July 2024

CaseChat Overview and Summary

Technology Holdings Limited, a major supplier of EFTPOS terminals in New Zealand, found itself in a complex financial situation necessitating the appointment of Mr Ryan Eathorne as the administrator of the company and its subsidiaries. The immediate issue was the convening period for the watershed meeting of creditors, which was to decide the future of the group, and whether this period should be extended. The court had to decide whether the application for extension should proceed without notice, and if so, whether the extension was justified under the Companies Act 1993.

The court considered whether the application should proceed without notice, as Mr Eathorne had applied for. The court noted that if service on all creditors was required, it would cause undue delay. The risk of prejudice to creditors was deemed minimal as they had been advised of the potential for an extension at the first creditors meeting and would still have the opportunity to vote at the watershed meeting. The court accepted that the application met the criteria for a without notice application.

In determining whether the convening period should be extended, the court balanced the purposes of the voluntary administration regime against the need for a relatively speedy process. The court found that the complexity of the corporate structure and the need to facilitate the sale of the businesses as a going concern justified the extension. The court concluded that extending the convening period would enhance the return for unsecured creditors and was in their best interests.

The court granted the application to extend the convening period to 30 August 2024, allowed notification of the meeting to be made via Gazette notice, email, and local newspapers, directed that the Protocol between the administrator and the receivers should not be accessed without a Judge’s permission, and ordered that the costs of the application be treated as an expense of administration and paid from the accounts of Technology Holdings Limited.

Orders