Waimate Investments Ltd (in liquidation) v O'Dea CA196/03

Waimate Investments Ltd (in liquidation) and others appealed against a decision by the Master of the High Court in New Plymouth who declined to grant directions under s 258 of the Companies Act 1955 to allow the liquidators of the first and third appellants to bring a proceeding against the respondent. The appellants sought the directions to protect the liquidators from being ordered to pay costs if the proceeding was unsuccessful. The respondent opposed the application and the Master declined to exercise her discretion in favour of the appellants. The appellants appealed from that decision and submitted the Master should have exercised her discretion in their favour. The appellants submitted the Master should have made directions to the liquidators as to whether the proceeding should be prosecuted having regard to certain factors. The Court of Appeal held the appellants' position was misconceived. It was not for the Court to proffer advice, give an assurance or determine that the proceeding was proper. It was for the liquidators to make their own determination on legal advice. The appeal was dismissed with the respondent to be entitled to his costs in the sum of $3,000 together with his reasonable disbursements to be fixed by the Registrar if not agreed.