Ward v Dickins

[2023] NZHC 2933

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2023-454-000060

[2023] NZHC 2933

UNDER

the Companies Act 1993

BETWEEN

MARK ALLEN MCGILLIVRAY

Plaintiff

AND

EXTREME GEAR NZ LIMITED (IN RECEIVERSHIP)

Defendant

CIV-2021-454-000076

UNDER

the Receiverships Act 1993 and the Declaratory Judgments Act 1908

IN THE MATTER OF

the validity of the appointment of a receiver to Extreme Gear NZ Limited

BETWEEN

MARK RAYMOND WARD

Plaintiff

AND

BRENT THOMAS DICKINS

First Defendant

AND

MARK ALLEN MCGILLIVRAY

Second Defendant

Hearing:

(On the papers)

Counsel:

J P Orpin-Dowell for Plaintiff in CIV-2021-454-60 and Defendants in CIV-2021-454-76

G Mason for Plaintiff in CIV-2021-454-76

Judgment:

19 October 2023

JUDGMENT OF CHURCHMAN J

MCGILLIVRAY v EXTREME GEAR NZ LIMITED (IN RECEIVERSHIP) [2023] NZHC 2933 [19 October 2023]

Background

[1]    These two proceedings are scheduled to be heard by me in the Palmerston North High Court on 24 and 25 October 2023.

[2]    The parties have now reached an overall settlement of all the issues between the issue but that settlement is conditional upon the Court making two orders:

(a)an order appointing Brent Thomas Dickins as liquidator of Extreme Gear NZ Limited (EGNZ); and

(b)an order dispensing with the requirement for the liquidation to be advertised.

Appointment of liquidator

[3]    Mr Dickins has been the receiver of EGNZ since 8 December 2016. By virtue of s 280(2)(b) of the Companies Act 1993 (“the Act”), Mr Dickins may not be appointed as liquidator without an order from this Court given that he has within the previous two years acted as receiver of EGNZ.

[4]    The Court has power under s 208(2) of the Act to permit Mr Dickins to act as liquidator if the Court is satisfied of his independence and ability to carry out his tasks professionally and effectively.1

[5]    Mr Dickins has sworn an affidavit in support of the orders sought by the parties. The affidavit deposes as to his history as receiver and do confirm that the parties have agreed to seek his appointment as liquidator on the basis that this is the most efficient and economical way for the company to be wound up given his familiarity with the company’s affairs.

[6]    The affidavit also confirms that this will be a “solvent” liquidation with the company having sufficient funds to pay all its debts including Mr Dickins’ agreed fee

1      See Southbury Insurance Limited v Black [2012] NZHC 1316 at [4].

for acting as liquidator. The affidavit also confirms Mr Dickins’ consent to being appointed as liquidator.

[7]    The contents of the affidavit, including the draft deed of settlement attached to it, satisfies me that Mr Dickins has the necessary independence and ability to carry out the role of liquidator professionally and effectively and accordingly, I appoint him liquidator.

Advertising

[8]    Relying on the decision in Island Grace (Fiji) Limited (In receivership and in liquidation) v Satori Holdings Limited (In interim liquidation) the parties submit that it is appropriate for the Court to dispense with the requirement for the liquidation to be advertised.2

[9]    The company has not traded for over nine years and all of the company’s creditors will be paid in full as part of the winding up. They note that there will be advertising of the liquidation once it commences in the usual way in accordance with s 255(2)(a) of the Act.

[10]   On the basis of the content of Mr Dickins’ affidavit, I am satisfied that this is an appropriate case to dispense with the advertising.

Outcome

[11]I make the following orders:

(a)an order under ss 241(4)(d) and 280(2) of the Act putting EGNZ into liquidation and appointing Brent Thomas Dickins as liquidator;

(b)an order dispensing with the advertising;

2      Island Grace (Fiji) Limited (In receivership and in liquidation) v Satori Holdings Limited (In interim liquidation) [2023] NZHC 219 at [118]

(c)an order vacating the hearing scheduled for 24 and 25 October 2023 on the basis that the proceedings are discontinued with no issues as to costs.

Churchman J

Solicitors:

Fitzherbert Rowe, Palmerston North for Plaintiff/Defendants G Mason, Palmerston North for Plaintiff