IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2010-409-000123
[2022] NZHC 2994
UNDER
the Companies Act 1993
IN THE MATTER
of the liquidation of Property Ventures Ltd and others
BETWEEN
KEVIN JOHN WHITLEY as liquidator of PROPERTY VENTURES LTD
(In Liquidation) Applicant
AND
MEREDITH CONNELL (sued as a firm) Respondent
Hearing:
7 September 2022 and telephone conference with Counsel on 26 October 2022
Counsel:
J Moss for Applicant
M J Hodge for Respondent
Judgment:
16 November 2022
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 16 November 2022 at 11.00 am pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
WHITLEY v MEREDITH CONNELL [2022] NZHC 2994 [16 November 2022]
Table of Contents
Para No
Background
[7]
Mr Whitley’s reasons for making this application
[22]
The positions taken by Mr Walker and Mr Scutter`
[27]
Meredith Connell’s evidence and the files
[30]
Mr Whitley’s position in relation to the files
[36]
Sections 261 and 266 of the Companies Act
[40]
Do the Meredith Connell files belong to PVL or Mr Walker?
[48]
Privilege
[69]
Lien
[79]
The breadth and purpose of the orders sought
[89]
A genuine investigative purpose?
[93]
The allegation of an ulterior purpose
[100]
The orders are unnecessary, unreasonable or oppressive
[106]
Abuse of process
[110]
Fee accounts, trust account records and time records
[115]
Remuneration
[120]
Result
[126]
[1] Robert Walker was formerly the liquidator of Property Ventures Ltd (in liq) (PVL) and subsidiary companies. John Scutter was a co-liquidator of PVL for a period between 2013 and 2018. Kevin Whitley is the recently appointed liquidator of PVL and several subsidiaries (the PVL companies).1
[2] Meredith Connell is a law firm that acted upon the instructions of Mr Walker in matters concerning PVL and its subsidiaries.
[3] In reliance upon s 261 of the Companies Act 1993 (the Act), Mr Whitley has required Meredith Connell to deliver to him files and other documents where Meredith Connell acted upon the instructions of Mr Walker as liquidator of PVL and associated companies. Meredith Connell has not provided any documents. Mr Whitley applies for orders under ss 261 and 266 of the Act that Meredith Connell provide the files and documents to him.
[4]The application seeks orders:
1.1that the respondent, Meredith Connell, comply with the s 261 notices issued to them by the applicant dated 5 October 2021, 24 November 2021 and 7 December 2021;2
1.2requiring that the respondent to produce any books, records or documents relating to the business or affairs of Property Ventures Limited (in liq) (PVL) that is in their possession or control (the documents).
[5] Meredith Connell holds several files but contends they belong to Mr Walker and not the PVL companies. It argues the Court’s power to order it to produce documents relating to the PVL companies, but not belonging to them, can only be exercised under s 266(2) of the Act. It says this requires consideration of…
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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AGLC
Whitley v Meredith Connell [2022] NZHC 2994
Case
[2022] NZHC 2994
Decision Date
CaseChat Overview and Summary
The High Court of New Zealand considered an application by Kevin Whitley, the liquidator of Property Ventures Ltd and its subsidiaries, against Meredith Connell, a law firm that had acted for the former liquidator, Robert Walker. Meredith Connell refused to provide documents to Whitley, arguing that the files belonged to Walker and not the companies, and that Whitley had an ulterior purpose in seeking them. The Court held that Meredith Connell's files related to the liquidator's duties and therefore belonged to the companies. The Court also found that Meredith Connell could not assert a lien over the files, and that Whitley had a genuine purpose in seeking the documents to enable him to carry out his duties as liquidator. The Court ordered Meredith Connell to review the relevant files and provide the documents relating to the companies' business, accounts or affairs to Whitley, along with its trust account records and fee accounts. The Court declined to order reimbursement of Meredith Connell's costs and expenses.