Warren Metals Limited v Grant - [2013] NZHC 263

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-005190 [2013] NZHC 263

UNDER Section 72 of the District Courts Act 1947

IN THE MATTER OF an appeal of a decision of the Auckland
District Court

BETWEEN WARREN METALS LIMITED Appellant

ANDDAMIEN GRANT AND STEVEN KHOV Respondents

Hearing: 13 December 2012

Counsel: SS Khan and JE Riddle for Appellant
RM Dillon for Respondents

Judgment: 20 February 2013

JUDGMENT OF ASHER J

This judgment was delivered by me on Wednesday, 20 February 2013 at 5pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:
Fortune Manning, DX CP 21503, Auckland.
Email: shafraz.khan@fortunemanning.co.nz and jenna.riddle@fortunemanning.co.nz
Queen City Law, DX CP 24080, Auckland. Email: ross@queencitylaw.co.nz

WARREN METALS LTD V GRANT AND KHOV HC AK CIV-2012-404-005190 [20 February 2013]

Introduction

[1] On 6 August 2012, Judge DM Wilson QC struck out by oral judgment the claim of Warren Metals Ltd against Damien Grant and Steven Khov, on the basis that the District Court had no jurisdiction to hear the case. This occurred at the outset of the trial before the giving of evidence. Warren Metals Ltd appeals that decision.

[2] The respondents, Messrs Grant and Khov, are liquidators. The Judge found that because they were acting as liquidators when they carried out the acts that were the subject of the claim they could not be sued in the District Court. The core issue is whether this conclusion was correct.

Lead up to the dispute

[3] Briefs of evidence were exchanged prior to the trial and have been referred to extensively in the course of submissions. Accordingly, the facts that are the subject of the dispute (as yet unproven) have been set out, and I draw them largely from the brief of Warren Halloran.

[4] The arrangements that led to the claim go back to 1993. The appellant Warren Metals Ltd (“Warren Metals”) was, at that point in time, trading with a William Conway and various of his companies. Mr Conway’s companies still trading in 2008 are the companies that are now in liquidation.

[5] The business conducted between Warren Metals and Mr Conway’s companies was that of obtaining and dealing in scrap metal. William Conway and his companies would pay cash to obtain metal from the public. It would be held in their premises. They would then on-sell the metal to Warren Metals who would dispose of it largely by export. For some of the collected metal to be useable and transportable by Warren Metals, it needed to be compressed.

[6] Warren Halloran is the principal of Warren Metals. In his brief, he outlines how he arranged manufacture of a light gauge metal press for Warren Metals in
1994. In April 2008, it was arranged that he would leave it with William Conway at

his business premises and where it would be used to convert metal into a compressed state. At the time Warren Metals had staff processing the metal at Mr Conway’s premises. It was arranged between them that the…

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.

Continue reading Warren Metals Limited v Grant

Details

AGLC: Warren Metals Limited v Grant [2013] NZHC 263
Case: [2013] NZHC 263
Decision Date: 20 February 2013

CaseChat Overview and Summary

Warren Metals Limited appealed a decision of the Auckland District Court which struck out their claim against Damien Grant and Steven Khov, the liquidators of several companies. The District Court had found it lacked jurisdiction to hear the case, as the acts complained of were carried out by the liquidators in their capacity as such. The core issue on appeal was whether the District Court was correct to find it lacked jurisdiction. The High Court found that the District Court had jurisdiction to hear Warren Metals' claims. The Court held that sections 248 and 284 of the Companies Act did not bar the personal claims being brought against the liquidators. The claims against the liquidators related to property that Warren Metals asserted it owned, and the liquidators' alleged unlawful interference with that property. The Court held that the District Court could hear those claims under ordinary common law principles. The appeal was therefore allowed, the order striking out the proceedings was set aside, and the proceedings were ordered to be heard in the District Court. The Court also ordered that the costs in favour of the respondents against the appellant be quashed, and proposed making an order for costs and reasonable disbursements in the appellant's favour.

Orders