Wilding v Te Mania Livestock Ltd
[2015] NZHC 2105
•1 September 2015
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
CIV 2014-409-000899 [2015] NZHC 2105
BETWEEN TIMOTHY WILDING
First Plaintiff
AND
TE MANIA PROPERTIES LIMITED Second Plaintiff
AND
TE MANIA LIVESTOCK LIMITED First Defendant
AND
W H HOLDINGS LIMITED Second Defendant
AND
JOHN HARRINGTON Third Defendant
AND
HOONG BEE TECK Fourth Defendant
AND
WONG CHUN WIN Fifth Defendant
AND
HONG WEIGOU Sixth Defendant
Hearing: 21 August 2015 Appearances:
P J Dale for Plaintiffs
No appearance for First Defendant
R J Hopkins for Second, Fourth and Fifth Defendants
I G Hunt for Third Defendant
No appearance for Sixth DefendantJudgment:
1 September 2015
JUDGMENT OF DUNNINGHAM J
WILDING & ANR v TE MANIA LIVESTOCK LTD & ORS [2015] NZHC 2105 [1 September 2015]
Introduction
[1] Te Mania Livestock Limited (TML) is a successful Angus cattle breeding business which has built on the success of a breeding operation established by the Wilding Family. Mr Wilding, the first plaintiff, holds 40 per cent of the shares in TML and, the second, third, fifth and sixth defendants have also acquired shareholdings in TML. The shareholders are also directors, or have appointed directors, to the Board of TML.
[2] However, divisions have developed. Mr Wilding now seeks leave to commence derivative actions, in TML’s name, against:
(a) the second defendant, WH Holdings Limited (WHHL), for failing to renew a lease of farmland to TML; and
(b)the third defendant, Mr Harrington, for alleged neglect of stock while he was an employee of TML.
[3] Late last year Mr Harrington took up employment with another Angus cattle breeder, Terra Firma Land Company Limited (TFLC), which happens to be the company that WHHL now leases its land to. Mr Wilding says that this places Mr Harrington in a conflict of interest, and is in breach of Mr Harrington’s duties as a director to act in good faith and in the best interests of TML.1
[4] Proceedings have been issued to progress these and other claims. However, Mr Wilding now seeks an interim injunction removing Mr Harrington, and his partner, Ms Sarah Adams, as directors of TML, and the appointment of independent directors in their place. If granted, Mr Wilding says he, too, would step aside as a director.
[5] The first plaintiff’s application for an interim injunction is opposed by the second to fifth defendants on the basis that there is no legal basis to grant the relief sought by Mr Wilding and, even if there was, considerations of the balance of
convenience would, by some margin, favour retaining the directors.
1 Companies Act 1993, s 131.
Background facts
[6] Mr Wilding, and his wife Katie, farm in North Canterbury, near Cheviot. They are also directors of the second plaintiff, a company which owns various farm properties.
[7] The first defendant, TML, was incorporated in 1997 to own and operate an Angus stud using livestock from the Te Mania foundation herd that was started by Mr Wilding’s grandfather in 1928.
[8] One of the biggest shareholders in TML is the second defendant WHHL, a company incorporated in 1996 by the fourth and fifth defendants, Hoong Bee Teck (Mr Hoong) and Wong Chung Win (Mr Wong), who reside in Singapore. In 1997
WHHL purchased a 257 hectare property known as Lagoon Flat and TML took a lease of the Lagoon Flat property from WHHL. Adjoining the Lagoon Flat property was 17 hectares of DOC land which had an existing grazing licence associated with it, and which was also taken over by WHHL.
[9] Mr Harrington, the third defendant, was employed by TML and he became a director and shareholder in the company in February 2005.
[10] For completeness, Mr Wong, the fifth defendant, also owns a further
9.6 per cent shareholding in his own right, and Hong Weigou (Mr Hong) (who is named as the sixth defendant but maintains a neutral stance in these proceedings), owns a 15 per cent shareholding.
[11] Relationships between the Wilding family and Mr Harrington were good until approximately two years ago. Matters came to a head in 2014, when the parties fell out quite seriously. On 10 October 2014, WHHL gave notice to TML that it was terminating TML’s lease of Lagoon Flat from 31 October 2014. It then entered into an agreement to lease the Lagoon Flat farm property, including the DOC 17 hectares, to TFLC. Mr Wilding objects to this, on behalf of TML, saying WHHL is in breach of a term in the lease giving TML a right of first refusal to a new lease of the Lagoon Flat farmland when its existing lease expired.
[12] WHHL disputes that there was an enforceable lease or, if there was, it did not contain the right of first refusal and, in any event, TML cannot have shown that it would have renewed the lease at the time it came up for renewal.
[13] Related to this is WHHL’s complaint that the Wildings obtained a new grazing licence over the DOC land in their personal names, instead of in WHHL’s, and then proceeded to have the land sown in kale. WHHL was then asked to remove its new lessee, TFLC, from the DOC land, which prompted claims from WHHL that the Wildings had breached various obligations to WHHL.
[14] Finally, Mr Wilding claims that in mid-2014, he discovered that significant numbers of stock under Mr Harrington’s care were very underweight and in poor condition, because they had been underfed. He has provided affidavit evidence, including from a vet and from a stock and station agent, attesting to the serious weight loss issues in TML’s yearling bulls and other stock. He claims that this neglect could cause losses to TML in excess of $500,000.
[15] In late 2014, Mr Harrington left TML’s employment, after having been on stress leave for a period of time, and commenced work for TFLC. TFLC took possession of Lagoon Flat on 1 November 2014, and has contracted for Mr Harrington to manage the stock on Lagoon Flat and to assist TFLC with its operations.
[16] Mr Wilding’s concern is that Mr Harrington’s involvement with TFLC places him in a position where there is a real risk of conflict with his role as a director of TML. He says these concerns are supported by a number of recent events. These include the fact that TFLC has taken up the lease of the land which Mr Wilding says should have been re-leased to TML. Mr Wilding also says that in Easter 2015, Mr Harrington and his partner, Ms Adams, visited Landsdowne Farm with the directors of TFLC, when Mr Harrington knows that the TML lease with the Landsdowne Farm expires at the end of this year, and that it is an important farm for TML’s farming operation. Mr Harrington and one of the directors of TFLC have also been inspecting farms in Hawkes Bay and this is in the knowledge that 80 per cent of TML’s clients are in the North Island. Mr Wilding says that to place an Angus stud
breeding operation there would provide TFLC with a “strategic advantage over TML”. Ms Adams and Mr Harrington have been instrumental in trying to remove TML cattle from the DOC grazing land. TFLC also moved its bull sale forward to be held the day before TML’s sale and it has been using the same genetics for the mating of the TFLC Angus herd as Mr Harrington was using during his time at TML.
[17] Finally, Mr Wilding says (and it is the subject of a separate claim by the second plaintiff in these proceedings) that the two TML lease blocks, being Lagoon Flat and Landsdowne Farm, which TFLC has now leased, or is looking at leasing, have had nearly seven times the expenditure of fertiliser applied to them by Mr Harrington than was spent on the second plaintiff’s property which was managed by Mr Harrington during the same time period.
[18] For all these reasons, Mr Wilding is of the view that Mr Harrington is assisting a competitor of TML to TML’s detriment to the point where it has become untenable that Mr Harrington, and his partner, Ms Adams, stay on the Board of TML.
The application for interim injunction
[19] The application is made by Mr Wilding in his personal capacity. He seeks orders:
(a) removing the third defendant, Mr Harrington, as a director of TML;
(b)directing that Mr Hoong and Mr Wong revoke the appointment of Sarah Adams as a director of TML, or, alternatively, directing that she be removed as a director of TML; and
(c) appointing independent directors to the board of TML on such terms as the Court deems fit, but including:
(i) an indemnity in favour of the independent directors;
(ii)an order that the independent directors be paid their reasonable remuneration out of the assets of TML; and
(iii)directing that Mr Ian McDonald remain the chairman of the executive committee of TML.
[20] The grounds on which these orders are sought are as follows:
(a) that Mr Harrington, and Mr Wong and Mr Hoong, are in breach of their obligations as directors of TML;
(b)alternatively, that by reason of Mr Harrington’s employment by TFLC and/or by its directors, he has a conflict of interest in respect of his obligations to TML;
(c) Mr Hoong and Mr Wong have appointed Mr Harrington’s partner, Ms Adams, as a director of TML and, by reason of her relationship with Mr Harrington, she has a conflict of interest in respect of TML;
(d)Mr Harrington has provided active support to a competitor of TML, namely TFLC and/or its directors; and
(e) Ms Adams has provided active support to a competitor of TML, namely TFLC and/or its directors, including swearing an affidavit in proceedings CIV-2015-409-232, brought by WHHL regarding the renewal of the licence to graze the DOC land.
[21] The application is made in reliance upon the applicable law applying to interim injunctions found in Klissers Farmhouse Bakery v Harvest Bakers,2 r 7.5 of
the High Court Rules3 and ss 131, 137, 164 and 169 of the Companies Act 1993.
2 Klissers Farmhouse Bakery Ltd v Harvest Bakers [1985] 2 NZLR 140.
3 It is presumed they mean r 7.53 of the High Court Rules.
[22] The application is made in the context of the existing proceedings filed by Mr Wilding and his farm company TMPL. Those proceedings plead five causes of action. They are:
(a) a claim for an order pursuant to s 165 of the Companies Act 1993 granting leave to Mr Harrington to bring proceedings in the name of and on behalf of TML, in relation to the alleged breach of lease by WHHL by failing to offer TML the first right to lease the land when the lease came up for renewal (“the WHHL lease claim”);
(b)a claim for an order pursuant to s 165 of the Companies Act 1993 granting leave to Mr Wilding to bring proceedings in the name of and on behalf of TML in relation to the claim against Mr Harrington for breaches of his obligations, as an employee, to manage TML’s stock. This was described as a counterclaim against Mr Harrington in the Employment Relations Authority (ERA) as, at that time, Mr Harrington had issued proceedings in the ERA claiming unpaid salary entitlements. That claim has now been settled leaving only the claim by TML for losses flowing from stock neglect (the Harrington stock neglect claim);
(c) a claim by Mr Wilding alleging breach of duty by Mr Harrington, Mr Wong and Mr Hoong, related to their alleged support of TFLC, and by Ms Adams as the appointee of Mr Wong and Mr Hoong because of her personal relationship with Mr Harrington and because she swore an affidavit in support of a claim that the DOC grazing licence had been validly assigned to TFLC. In this cause of action Mr Wilding seeks judgment for an unspecified sum and an order directing the removal of Mr Harrington and Ms Adams as directors of TML, and appointing independent directors in their place;
(d)a claim by Mr Wilding that there has been a breach of the shareholders agreement, and where the relief sought is that TML issue a transfer notice pursuant to cl 15 of the shareholders agreement
offering for sale the shares owned by the second to fifth defendants;
and
(e) a claim by TMPL against TML for breaches of its lease agreements with TMPL, including failure to fertilise land leased off TMPL and in respect of which judgment is sought for an amount totalling approximately $400,000.
[23] The application for interim injunction reflects the relief sought in the third pleaded cause of action. However, it also relies on the facts giving rise to the first two causes of action to support the claim that the named directors are in positions of conflict, because they would not support TML pursuing the WHHL lease claim or the Harrington stock neglect claim, when Mr Wilding says there is clear evidence that bringing such proceedings is justified.
Legal principles applying to interim injunctions
[24] The legal principles applying to applications for interim injunctions are well known. In order to succeed a plaintiff must show: 4
(a) there is a serious issue to be tried;
(b)that the balance of convenience favours the making of the orders sought; and
(c) in considering all matters, the overall justice favours the making of the orders sought.
[25] I have set out the plaintiffs’ various claims in these proceedings because, in looking at whether there is a serious question to be tried, the proceeding itself must
be capable of supporting a claim for a perpetual injunction, or other sufficient
4 Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (CA).
equitable relief. As Lord Diplock said in Siskina (Owners of Cargo Lately Laden on
Board) v Distos Compania Naviera S.A.5
A right to obtain an interlocutory injunction is not a cause of action. It cannot stand on its own. It is dependent upon there being a pre-existing cause of action against the defendant arising out of an invasion, actual or threatened by him, of a legal or equitable right of the plaintiff for the enforcement of which the defendant is amenable to the jurisdiction of the Court. The right to obtain an interlocutory injunction is merely ancillary and incidental to the pre-existing cause of action.
[26] In the present case, only the third cause of action seeks the removal of Mr Harrington and Ms Adams as directors. While it does not plead the statutory provision relied on to support the claim for their removal, the application for an interim injunction cites ss 131, 137, 164 and 169 of the Companies Act 1993. I consider each of these in turn as an arguable basis for the relief sought.
Section 164
[27] Section 164 of the Companies Act 1993 provides:
(1) The Court may, on an application under this section, make an order restraining a company that, or a director of a company who, proposes to engage in conduct that would contravene the constitution of the company or this Act … from engaging in that conduct.
(2) An application may be made by—
(a) The company; or
(b) A director or shareholder of the company; or
(c) An entitled person.
(3) If the Court makes an order under subsection (1) of this section, it may also grant such consequential relief as it thinks fit.
(4) An order may not be made under this section in relation to conduct or a course of conduct that has been completed.
(5) The Court may, at any time before the final determination of an application under subsection (1) of this section, make, as an interim order, any order that it is empowered to make under that subsection.
5 Siskina (Owners of Cargo Lately Laden on Board) v Distos Compania Naviera S.A. [1979] ACT
210 (HL) at 256.
[28] At first glance, this section looks to have some utility. Mr Wilding, as a shareholder, is entitled to make an application for an injunction under this section. Furthermore, in JJ International Ltd v Streetsmart Ltd,6 the Court held that the s 164 jurisdiction is independent and the Court is not confined to the usual considerations in equity in deciding whether to grant an injunction. Instead, s 164 is able to be exercised for the purposes of the 1993 Act. However, s 164 only applies prospectively, to prevent future conduct by a company or a directive that would contravene the company’s constitution or the Act. It cannot work retrospectively or
punitively. That said, Mr Wilding appears to invoke it in the context of this application, to address future conduct by these directors in continuing to oppose the issue of proceedings against Mr Harrington and WHHL, and in their involvement with TFLC.
[29] However, while flexible, I do not consider that s 164 can be read so broadly as to give scope to remove a director because of the risk that he or she would engage in impugned conduct, as it only allows orders “restraining” a director. The word “restrain” means to keep in check or under control or within bounds.7 Giving that word its ordinary and actual meaning, it only allows the Court to control future conduct by a director which would breach the Act or the Constitution. It does not
give the power to remove the director altogether, which could prevent him or her carrying out even lawful functions.
[30] In the absence of any scope under s 164 to remove a director for such misconduct, an application for an injunction to achieve that outcome, in reliance on that section, does not raise a serious question to be tried.
Section 169
[31] Section 169(1) provides that “a shareholder or former shareholder may bring an action against the director for breach of a duty owed to him or her as a shareholder”. It then goes on, at s 169(3), to specify three duties which are owed to
shareholders by directors, none of which are relevant in the present case. Critically, it
6 JJ International Ltd v Streetsmart Ltd (2005) 9 CLC 263, 784 (HC).
7 Tony Deverson and Graeme Kennedy (ed) The New Zealand Oxford Dictionary (Oxford
University Press, Oxford, 2005) at 958.
also expressly states that the duties of directors set out in ss 131 and 137 are “duties owed to the company and not to shareholders”. To the extent that the application for interim relief made by Mr Wilding relies on those sections, it cannot satisfy the test of whether there is a serious question to be tried, because no such duty is owed to Mr Wilding as a shareholder.
Sections 131 and 137
[32] For completeness, there is no application for leave under s 165 to bring derivative proceedings on behalf of TML, citing a breach of directors’ duties under ss 131, or 137. The s 165 applications only relate to the WHHL lease claim, and to the Harrington stock neglect claim.
[33] I am therefore satisfied that, in the case as currently pleaded, there is no jurisdiction to grant an interim injunction of the type sought, as there is no claim in which that relief could be sought by Mr Wilding. That means the application falls at the first hurdle of whether there is a serious question to be tried.
Balance of convenience
[34] While I could leave the matter there, it is also important to consider the balance of convenience and overall justice issues. This is in anticipation of the possibility that Mr Wilding could apply under s 165 to bring a derivative claim on behalf of TML pleading breach of directors’ duties to the company.
[35] Anticipating this, the defendants sought to persuade me that there was no serious question to be tried in that case either. In this regard, the defendants referred to Professor Watts’ recent text, Directors’ Powers and Duties,8 and to Equity and
Trusts in New Zealand,9 both of which express doubt over whether a director would
be in breach of the fiduciary duties he owes to the company, by being involved with a competing company. In particular Professor Watts observes that “[t]he case law is
surprisingly unsettled on issues that arise out of a director ’s accepting appointment
8 Peter Watts, Directors’ Powers and Duties (2nd ed, LexisNexis, Wellington, 2015).
9 Andrew Butler (ed) Equity and Trusts in New Zealand (2nd ed, Thomason Reuters, Wellington,
2009).
as a director of a competing company”.10 The defendants argued that it must, logically, be even more doubtful that a director is in breach of the duties he or she owes to the company if he or she simply accepts employment with a competing company. That is particularly so in this case where the employment commenced in late 2014 with Mr Wilding’s knowledge, but the application for injunction was only made in May 2015.
[36] However, in the context of an interim application, I cannot rule out the possibility of a director being in breach of duties under ss 131 and 137 through taking up employment in a competing company. Such inquiries will inevitably be fact-specific and depend on considerations such as the extent of confidential information the director is privy to in their role as a director, and the responsibilities they hold as an employee of the competing company. It seems at least possible that a director with senior managerial responsibilities in the competing company, and who is in direct communication with the competing company’s directors, may be in a position where the director has a conflict of interest and may be unable to properly discharge the duties he or she owes, as a director, to the primary company.
[37] Therefore, assuming that hypothetical situation, I go on to consider whether the balance of convenience favours making the orders sought. In my assessment, it does not.
[38] A primary consideration when considering where the balance of convenience lies is whether, if the plaintiff were to succeed at trial, he would be: 11
“Adequately compensated by an award of damages for the loss he would have sustained as a result of the defendants continuing to do what was sought to be enjoined between the time of application and the time of the trial. If damages in the measure recoverable at common law would be an adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff’s claim appeared to be at that stage.”
[39] In the present case, if the third defendant and Ms Adams are in breach of their duties to TML and are unlawfully supporting a competing company to advance in the
10 At page 162.
11 American Cyanamid Co v Ethicon Ltd [1975] AC 396 (HL) at 408B – C.
world of Angus stock breeding to the detriment of TML, I would accept the loss to
TML would be difficult to quantify in damages.
[40] However, looking at the issue practically, I bear in mind that the defendants have a vested interest in maintaining the value of TML because of their continuing role as shareholders. If the present impasse cannot be resolved, then TML will be liquidated, or one group of shareholders will purchase the other out. Indeed, there is, at cl 18.4 in the Shareholders Agreement, a “Russian Roulette” procedure whereby, in a dispute between shareholders, a shareholder, or a group of shareholders, can notify the company of the price at which those notifying shareholders are prepared to offer for sale their shares in TML. The remaining shareholder or shareholders can then buy at that price within a specified period of time. If they do not, then the notifying shareholders, in turn, can purchase the other shareholders’ shares.
[41] Mr Harrington, WHHL and Mr Wong have, in fact, made an offer to that effect on 24 July 2015 (albeit on the basis that certain other debts are resolved at the same time, being Mr Wilding and TMPL’s current account debts, a bailed livestock debt, and an ERA consent judgment payable to Mr Harrington). Mr Wilding has not responded to that offer in the specified timeframe.
[42] The point of setting this out is that there are reasons to believe that the likelihood of TML’s value being eroded by Mr Harrington’s involvement with TFLC, is less than would be the case where a defendant or defendants have no vested interest in avoiding damage to the plaintiff. Hence, the defendants have invested significantly in TML and yet may be obliged to sell their interest in it. That means they have some reason to ensure the value of TML is maintained and so the risk of damage to TML is lessened.
[43] In terms of the claims relating to the defendants’ failure to pursue to the WHHL lease claim, or the Harrington stock neglect claim, the balance of convenience clearly does not require the injunction to be granted. Mr Wilding already has in place his application to progress these claims on behalf of TML under s 165 of the Companies Act. That process provides a far more appropriate mechanism for advancing those claims than does the removal of the named directors.
[44] Furthermore, in considering the balance of convenience, I note the unusual nature of the remedies sought. The only case counsel could direct me to where directors had been removed on an interim basis was in WEL Energy Group Ltd v Hawkins.12 In that case however, the majority of shareholders had already voted to consider a motion for the directors’ removal and the directors were, in any case, to resign at the next annual meeting in two months time, so the order simply
implemented what was inevitable. The present case is quite different.
[45] In my view, it is unsurprising that removal of directors on an interim basis is virtually unheard of. There is clearly a risk of prejudice to shareholders if directors who have been appointed because of their skill and experience are removed. In the present case, Mr Hoong, one of the Singaporean directors of WHHL, which has a
25.24 per cent shareholding in TML, records that WHHL appointed Sarah Adams to be WHHL’s alternative director in TML. Mr Hoong gives evidence that he has “a great respect and trust for her business instincts” and that she has provided a great deal of assistance to WHHL’s directors by pointing out “many historical accounting errors in the TML accounts”. He says:
“If Sarah’s appointment was revoked, I do not know who else I could appoint to fulfil this role. I do not think there is anybody with a better knowledge of the company and the industry. I also note Sarah is not being paid to undertake this role.”.
[46] It is clear there is a risk of an adverse effect on the Singaporean directors of WHHL if Ms Adams, a director in whom they have trust and confidence, is forced to be replaced by an independent director.
[47] That leads to the next concern about the injunction sought. The defendants are critical of the nebulous nature of the proposal for replacement. They point out that no substitute directors have been nominated let alone with the experience and qualifications of either Mr Harrington or Ms Adams. Furthermore, any alternate directors would need to be paid, and this would be a further cost to TML. The defendants go on to say that, without any information on who the proposed independent directors might be, and whether they would accept the appointment, the
Court is faced with an uncertain outcome and may have to be involved in further
12 WEL Energy Group Ltd v Hawking [2001] 3 NZLR 374 (HC).
supervisory steps in order to manage the transition from the current Board of
Directors to one with three directors.
[48] I accept that the uncertainty about who is to replace the existing directors, and on what terms, including at what cost to TML, is unsatisfactory. Nevertheless, if all other considerations pointed to the replacement of the current directors, I acknowledge that could be managed and the costs would not necessarily be significant given the significantly greater costs TML is incurring in the litigation generated by the current shareholder disputes. However, in light of all the other considerations, it is yet another fact weighing against the application to remove the directors.
[49] Finally, but importantly, in considering the balance of convenience, I have to consider whether the current situation is so untenable that it cannot be allowed to continue. I do not see that is the case. First, it seems that, despite all these difficulties, TML has managed to function, if unhappily, since Mr Harrington’s departure as manager. The Board has established an Executive Committee comprised of Ms Adams, Mr Harrington, Mr Wilding and Mr McDonald (an independent director appointed by Mr Hoong). The Executive Committee meets once a month and approves TML’s payments. TML also employs the Wilding Family to run the Angus breeding operation. The Board itself is still able to function, agreeing on such matters as appointing lawyers and auditors. Indeed, after some difficulties, it managed Mr Harrington’s ERA claim, by appointing independent lawyers to advise TML on that, and in due course reaching resolution.
[50] In respect of the concern that confidential information could be released to Mr Harrington, who could use that in his role as an employee for TFLC in breach of his duty as a director of TML, I accept that can be managed and that risk does not justify granting the interim injunction.
[51] For all these reasons, I am satisfied, by some margin, that even if there was a serious question to be tried, the balance of convenience does not justify the replacement of the directors on an interim basis.
Timetabling issues
[52] Despite my above findings, the situation is clearly unhappy and it needs to be brought to a head. Mr Dale urged me, if I could not see my way clear to granting the injunction sought, to instead bring on the hearing of the s 165 applications as soon as possible. At present, they are scheduled to be heard in June 2015 along with WHHL’s claim to have TML liquidated on the grounds of shareholder oppression and/or that it is just and equitable. In his view, the proceeding to wind up TML which has been made by WHHL, needs to be determined after the litigation is resolved. He said that the s 165 applications would not require significant hearing time or evidence and if they could be heard this year, then the need for the injunction sought would fall away.
[53] The defendants opposed that course of action, saying that if leave is granted under s 165 that is only the very first step in what is likely to be long and acrimonious proceedings. There would be no advantage in hearing the s 165 applications late this year, when there is no prospect of the proceedings which might commence as a consequence, being resolved before WHHL’s winding up application is heard in mid-2016.
[54] I accept that simply hearing the s 165 applications this year is unlikely to do anything to advance the proceedings, unless, of course, they are declined in full. However, even then, there is a prospect of an appeal which may not be resolved by mid-2016. Accordingly, I do not see that the parties would be any more advanced than they are now in resolving those issues when the claim for winding up the company is heard.
[55] I therefore see no reason to review the current timetabling, but that does not preclude it being revisited if circumstances change, or new issues come to light.
Conclusion
[56] The application for interim injunction is declined. In accordance with rr 14.2
and 14.8 of the High Court Rules the defendants are entitled to costs on the interlocutory application, to be fixed on a 2B basis.
Dunningham J
Solicitors:
Paul Dale (Auckland)
Wynn Williams (Christchurch) Lane Neave (Christchurch)
Young Hunter (Christchurch)
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