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…

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: [2018] NZHC 500
Decision Date: 22 March 2018

CaseChat Overview and Summary

The case of Walker v Property Venture Limited (in liquidation) involved Robert Walker and John Scutter, who were appointed as liquidators of Property Venture Limited (PVL). The applicants sought approval for Mr Scutter’s resignation as liquidator. Mr Walker was appointed sole liquidator of PVL in 2010 and later appointed Mr Scutter as joint liquidator in 2013 due to the large scale of the litigation against PVL directors and auditors. The applicants settled the claims and sought approval for Mr Scutter’s resignation. The court had to decide whether Mr Scutter’s resignation could be approved and if Mr Walker could continue as the sole liquidator. The court found that Mr Scutter’s resignation should be approved as the reasons for his appointment were no longer relevant, and the practical benefits of having two liquidators had diminished. The court approved Mr Scutter’s resignation and ordered that Mr Walker remain as the sole liquidator.

Orders