Walker v Property Venture Limited (in liquidation)

[2018] NZHC 500

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2018-485-149

[2018] NZHC 500

UNDER

section 284(1)(a) of the Companies Act 1993

IN THE MATTER OF

the liquidation of Property Venture Limited (in liquidation)

BETWEEN

ROBERT BRUCE WALKER AND JOHN MARSHALL SCUTTER

Applicants

AND

PROPERTY VENTURE LIMITED (IN LIQUIDATION)

Respondent

Hearing:	On the papers
Counsel:	K Francis for Applicants
Judgment:	22 March 2018

JUDGMENT OF CLARK J

Introduction

[1]    The applicants, Robert Walker and John Scutter, are liquidators of Property Ventures Ltd (in liq) (PVL). In their capacity as liquidators they have filed an originating application for an order approving Mr Scutter’s resignation.

Context

[2]    Mr Walker was appointed sole liquidator of PVL on 27 July 2010. In that capacity, in November 2012, Mr Walker issued proceedings against directors and auditors of PVL and a valuation firm engaged to value the property portfolio of PVL. The claim was against 10 defendants and sought recovery in excess of $100 million.

WALKER AND SCUTTER v PROPERTY VENTURE LIMITED (IN LIQUIDATION) [2018] NZHC 500

[22 March 2018]

Given the nature and scale of the trading of PVL and the  work to be undertaken    Mr Walker sought the appointment of an additional liquidator.

[3]Mr Scutter was appointed joint and several liquidator of PVL on 4 June 2013.

[4]    The plaintiffs have recently settled. The 12-week trial which was to commence on 12 February 2018 has been vacated and a notice of discontinuance has been filed. Two liquidators are no longer thought to be necessary and Mr Scutter wishes to retire as a liquidator. Mr Walker consents to continuing as sole liquidator of PVL.

Decision

[5]    The High Court exercises a supervisory jurisdiction over liquidations and is required to intervene when it is appropriate to do so.1 As Mr Francis, counsel for the applicants, observes s 283(2) of the Companies Act 1993 seems inapplicable to this context. Section 283 provides for the resignation of a liquidator by the appointment of another as successor. Here, it is not proposed to replace Mr Scutter.

[6]    Section 284 of the Companies Act confers on the Court powers to make orders supervising the conduct of a liquidation. Under s 284(1)(a) the Court may “give directions in relation to any matter arising in connection with the liquidation”.

[7]    The applicants have proceeded by way of originating application on notice to the respondent. Part 19 of the High Court Rules governs the kinds of proceedings that may be brought by way of originating application. Rule 19.4 makes it clear that when liquidators seek directions they may do so by way of originating application. Accordingly, there is no procedural impediment standing in the way of this application.

[8]    As to the substance it is apparent to me from the overall context, supported by the affidavit evidence of Mr Walker and Mr Scutter, that the application should be granted:

1      Levin v Lawrence [2012] NZHC 1452 at [54].

(a)Mr Scutter was appointed to assist Mr Walker. The matter giving rise to the need for joint liquidators, namely the PVL litigation, is at an end.

(b)When Mr Walker applied to the Court for Mr Scutter’s appointment he was conscious of the potential delay and cost that would result from any incapacity, illness for example. I accept that with the conclusion of the PVL litigation this factor, and its potential impact on creditors who had agreed to contribute to the funding of the litigation, has significantly less relevance.

(c)Despite Mr Scutter’s appointment as joint liquidator the day to day conduct of the liquidation has been undertaken by Mr Walker.

(d)The practical benefits of having two liquidators from the same office working together no longer apply. Mr Scutter and Mr Walker operate separate business and now live in different cities.

(e)Mr Walker deposes to being unaware of any adverse effect Mr Scutter’s retirement might have on creditors or shareholders.

(f)Mr Scutter wishes to retire and has tendered a notice to that effect.

Result

[9]The following orders are made:

(a)Mr Scutter’s resignation is approved. He is discharged from holding office as joint and several liquidator of PVL.

(b)Mr Walker is to remain as sole liquidator.

Karen Clark J

Solicitors:

Meredith Connell, Auckland