Walker v Gibbston Water Services Ltd - [2013] NZHC 2933

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2012-409-002834 [2013] NZHC 2933

UNDER Section 284 of the Companies Act 1993

IN THE MATTER of Gibbston Water Holdings Limited (in liquidation)

BETWEEN ROBERT BRUCE WALKER as liquidator of Gibbston Water Holdings Limited Applicant

ANDGIBBSTON WATER SERVICES LTD First Respondent

ANDCASTLEREAGH PROPERTIES LTD Second Respondent

ANDKRISTINA LOUISE BUXTON Third Respondent

ANDCANTERBURY LEGAL SERVICES LTD Fourth Respondent

Hearing: 16 September 2013

Appearances: K Sullivan for Applicant
J Moss for Respondents

Judgment: 7 November 2013

JUDGMENT OF ASSOCIATE JUDGE OSBORNE
on liquidator's Companies Act applications

WALKER v GIBBSTON WATER SERVICES LTD [2013] NZHC 2933 [7 November 2013]

Castlereagh – Castlereagh Properties Ltd

CLS – Canterbury Legal Services Ltd

Equitable – Equitable Property Holding Ltd

FTG - FTG Trustee Services Ltd

Mr Henderson – David Ian Henderson

Mr Smith – Grant Smith of Canterbury Legal Services Ltd

Mr Walker – the liquidator – Robert Bruce Walker as liquidator of Gibbston

Water Holdings Ltd

RFD – RFD Investments Ltd (in receivership and in liquidation) Water Holdings – Gibbston Water Holdings Ltd
Ms Buxton – Kristina Louise Buxton

Water Services – Gibbston Water Services Ltd

Mr Marshall – Denis William Anson Marshall as director of Gibbston Water

Services Ltd

[1] Robert Walker, as liquidator of Gibbston Water Holdings Ltd, seeks a number of orders and directions relating to that and other companies.

[2] A focus of the various parties’ concerns originally lay in water rights granted by the Otago Regional Council to Gibbston Water Services Ltd.

[3] Consequently, transactions involving Water Holdings and Water Services have come to the liquidator’s attention. His application as filed would require the Court to consider those transactions in detail.

[4] The nature of issues raised by the respondents by cross-application1 led counsel to agree to having the competing applications initially heard on the basis of a series of questions:

A: Was the liquidation of Water Holdings valid?

(i)Was RFD Investments Ltd the shareholder of Water Holdings at the time of a shareholders’ resolution to place Water Holdings in liquidation?

(ii) Did the receivers of RFD validly exercise a right over the

Water Holdings shares when making the resolution? B: If the liquidation of Water Holdings was valid:
(i)Was Canterbury Legal Services Ltd’s fee note to Water Holdings for legal services on the transfer of Water Services’ shares from Water Holdings to Castlereagh Properties Ltd
valid?

1 See below [32]–[33].

(ii)If so, should the liquidator have called a creditors’ meeting on the appointment and/or is he compelled to call a meeting now at the request of CLS?

Factual background

[5] The water rights are held by Water Services. Water Services, with a number of the companies relevant to this proceeding, was associated with David Ian Henderson as part of or connected to his Property Ventures group. Other companies so connected were Water Holdings, Castlereagh, RFD (now in receivership and liquidation) and FTG Trustee Services Ltd.

[6] The entire shareholding in Water Services was held by Water Holdings. Until

2010, the entire…

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: [2013] NZHC 2933
Decision Date: 7 November 2013

CaseChat Overview and Summary

Robert Walker, as liquidator of Gibbston Water Holdings Ltd, brought an application to the High Court of New Zealand for orders relating to the liquidation of Gibbston Water Holdings Ltd and the transfer of shares in Gibbston Water Services Ltd. The respondents, including Castlereagh Properties Ltd, Canterbury Legal Services Ltd, Kristina Louise Buxton, and RFD Investments Ltd, opposed the application and sought their own orders. The court had to decide whether the liquidation of Gibbston Water Holdings Ltd was valid and whether the liquidator had the authority to reject the proof of debt filed by Canterbury Legal Services Ltd. The court found that the liquidation was valid, and the liquidator was entitled to reject the proof of debt based on the conflict of interest of Canterbury Legal Services Ltd in acting for both parties in the transaction. The court also confirmed that the liquidator had validly dispensed with the holding of a meeting of creditors. The costs of the proceeding were reserved, and the remaining applications of the liquidator were adjourned for mention at a later date.

Orders