Wagner v B Property Group Ltd - [2023] NZHC 1898

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2023-425-22

[2023] NZHC 1898

BETWEEN
KURT BRADLEY WAGNER

Applicant

AND

B PROPERTY GROUP LIMITED

Respondent

Hearing: 17 July 2023

Appearances:

S P Pope and V V Kumar for Applicant P W G Ahern for Respondent

Judgment:

20 July 2023

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 20 July 2023 at 3 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

[1]On 31 May 2022, the applicant, Mr Kurt Bradley Wagner, invested

$10,000,000 in the respondent company, B Property Group Ltd (BPGL). The funds were invested on the understanding they would be used to develop a hotel in Wanaka.

[2] Mr Wagner subsequently became concerned about the lack of progress and, in March 2023, he made an information request under s 178 of the Companies Act 1993

WAGNER v B PROPERTY GROUP LIMITED [2023] NZHC 1898 [20 July 2023]

(the Act). Despite reminders of that request, and despite assurances that the requested information would be provided, no information was supplied.

[3] On 5 May 2023, this application for provision of information under s 178 of the Act was served on BPGL. However, that did not resolve matters. It was only on 11 July 2023 that some documents were supplied in response to the request. These were:

(a)a business plan for 2023;

(b)a profit and loss statement dated 31 March 2023; and

(c)a balance sheet dated 31 March 2023.

[4] However, Mr Wagner says these documents do not fulfil the request he has made under s 178 and contain insufficient detail and information to enable him to understand how the funds he has invested in BPGL have been applied. He therefore seeks orders requiring BPGL to supply the information he has requested.

[5]At issue is whether orders should be made in the terms sought by the applicant.

Background

[6] In February 2022, Mr Andrew McIntosh, the sole director of BPGL at the time, provided Mr Wagner with an Information Memorandum describing an opportunity to invest in the development of the Kitea Hotel in Wanaka. Mr Wagner entered into a Subscription Agreement with BPGL under which he invested $10,000,000 in BPGL and became a 50 per cent shareholder of that company. The Subscription Agreement explained that BPGL had been established to own and operate a hotel at 67 Brownstown Street, Wanaka, New Zealand.

[7] Following a visit to New Zealand in December 2022, Mr Wagner became concerned about the lack of apparent progress with the hotel and wanted to know how the funds he had invested in BPGL had been applied.

[8] On 16 March 2023, Mr Wagner requested the following information from BPGL under s 178 of the Act:

(a)BPGL’s balance sheet as at that date;

(b)any relevant bank statements since Mr Wagner’s investment in 2022;

(c)the last financial year’s financial statements/annual report;

(d)the current business plan; and

(e)any other document which evidenced how Mr Wagner’s investment…

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: [2023] NZHC 1898
Decision Date: 20 July 2023

CaseChat Overview and Summary

In the High Court of New Zealand, Kurt Bradley Wagner sought to compel B Property Group Ltd to provide him with financial information about the company, following an investment of $10,000,000 into the company. Wagner had invested in the company under the understanding that the funds would be used to develop a hotel in Wanaka. Wagner subsequently became concerned about the lack of progress and requested information under s 178 of the Companies Act 1993. Despite reminders and assurances, no information was supplied. Wagner filed an application for provision of information under s 178 of the Act. BPGL provided some documents but Wagner argued that they did not fulfil the request and contained insufficient detail. The central issue was whether orders should be made in the terms sought by the applicant. Section 178 of the Act provides a framework for shareholders to request information from a company. The information must be provided within 10 working days unless there are good reasons for refusing the request. The court found that no proper reasons existed for BPGL to fail to comply with the request for information under s 178. The court concluded that the orders sought by the applicant should be made, albeit with minor adjustments. The court made orders that BPGL supply various information to Wagner within 10 working days of the order, except where otherwise specified. The applicant has leave to apply for further information. The applicant will seek an order for costs against McIntosh personally, and the court made directions accordingly.

Orders