West v Grant

[2014] NZHC 1880

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-462 [2014] NZHC 1880

IN THE MATTER	of the Companies Act 1993
AND
IN THE MATTER	of the liquidation Meadowlane Limited (in Liquidation)
BETWEEN	BRUCE GILBERT WEST Applicant
AND	DAMIEN GRANT and STEVEN KHOV Respondents

Hearing:	5 August 2014
Appearances:	R B Hucker for Applicant B J Norling and J K Boparoy for Respondents
Judgment:	11 August 2014

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 11 August 2014 at 12 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date: ...................................

Solicitors:           Hucker & Associates, Auckland

Copy for:           Waterstone Insolvency, Auckland

WEST v GRANT [2014] NZHC 1880 [11 August 2014]

[1]      The Respondents (“Liquidators”) seek review of a judgment of an Associate

Judge dated 23 May 2014.1

[2]      The Liquidators are the liquidators of Meadowlane Limited (in liquidation)

(“Meadowlane”).

[3]      On or about 15 October 2012, Mr West, the Applicant, lodged a proof of debt in Meadowlane’s liquidation, contending that he was a creditor in respect of employment entitlements.

[4]      In February 2014 the Liquidators rejected Mr West’s proof of debt.2   Mr West is a former chief executive of Meadowlane.   The Liquidators consider that at the time of liquidation Mr West agreed to his employment and/or entitlements being transferred to International Entertainment (Aust) Pty Ltd (“Australian company”) and that, as a result, Mr West is not a creditor in Meadowlane’s liquidation.   The Liquidators also submit that they requested information from Mr West going to these issues  and  only  rejected  his  proof  of  debt  when  that  information  was  not forthcoming.

[5]      The Associate Judge gave Mr West leave to apply to the Court to reverse the Liquidators’ decision,3 together with leave to commence his proceeding by way of an originating application.4  The Liquidators seek review of the latter decision.

[6]      The Associate Judge’s decision was given in the exercise of his discretion, made after hearing from the Liquidators, and is fully reasoned. Counsel for the Liquidators informed me, and this was accepted by counsel for Mr West, that the affidavit evidence was not before the Court when the application was heard. Regardless, in my view this review must proceed by way of rehearing,5 meaning that it is for the Liquidators to establish that the Associate Judge acted on a wrong principle or failed to take into account some relevant matter or took into account

some irrelevant matter.

1      West v Grant [2014] NZHC 1104.

2      Bundle of Documents Volume One, at 226.

3      Companies Act 1993, s 284.

4      High Court Rules, r 19.5.

5      Rule 2.3(4).

[7]      The Liquidators’ case is that this is a proceeding in which they will require discovery, and possibly also to interrogate Mr West.  They cannot take these steps as of right under the originating application procedure, but only by order of the Court.

[8]      I   accept   the   Liquidators’  submission   that   the   originating   application procedure is not open to a creditor as of right and that the appropriateness of the procedure  may  vary  from  case  to  case.    It  is  also  clear  that  they  will  require discovery.

[9]      I am not persuaded, however, that a ground of review is made out.   It is apparent  that  the Associate  Judge  was  conscious  of  the  Liquidators’ view  that discovery would be necessary but also of the requirement that the High Court Rules (“Rules”) be applied so as to bring about the just, speedy and efficient disposal of the proceeding.  The Associate Judge considered the originating application procedure would best serve that end.   In my view, that decision was not based on a wrong principle nor is it open to review on another ground.

[10]     There is provision in the Rules for the Liquidators to apply for directions as to discovery and any other steps they consider necessary.  On the evidence to which counsel  for  the  Liquidators  referred  me  (not  before  the Associate  Judge)  I can appreciate that they may well require discovery because communications relevant to the issues in the proceeding will be in the possession, power or control of Mr West and/or the Australian company.   Indeed, counsel for Mr West acknowledged that Mr West, and possibly also the Australian company, are likely to be ordered to give discovery.    At  the  hearing  before  me  matters  were  left  on  the  basis  that  the Liquidators would advise counsel for Mr West of the categories of documents they seek, and that matters would proceed from there.

[11]     None of this, however, detracts from the decision the Judge reached.  It was open to the Judge to grant leave as he did.   I dismiss this application for review accordingly.  Costs follow the event and are payable by the Liquidators to Mr West on a 2B basis.

..................................................................

M Peters J