Yen v Pronk

[2025] NZHC 2764

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2025-404-1021

[2025] NZHC 2764

UNDER

the Companies Act 1993, section 250

IN THE MATTER OF

an application to terminate the liquidation of WYMOUNT PROPERTY SERVICES

LIMITED (IN LIQUIDATION)

BETWEEN

TILI ROMONA YOUNG YEN
Applicant

AND

KEATON PRONK

and
DANIEL WEIDAN ZHANG

Liquidators of McDonald Vague Limited Respondents

Hearing:

15 September 2025

Appearances:

No appearance for the Applicant

Isaac Eustace-Smith for the Respondents

Judgment:

23 September 2025

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Application to terminate a liquidation]

The judgment was delivered by me on 23 September 2025 at 3:00pm

Pursuant to Rule 11.5 of the High Court Rules 2016

………………………………………………..

Registrar/Deputy Registrar

Solicitors:

Loo & Koo (Jennifer Wickes / Bibiana Lee), Newmarket, Auckland, for the Applicant

Haigh Lyon (Benedict P Molloy / Isaac R W Eustace-Smith), Auckland, for the Respondent

YEN v PRONK [2025] NZHC 2764 [23 September 2025]

Application

[1]    Ms Tili Yen (Ms Yen) has applied to terminate the liquidation of Wymount Property Services Limited (in liquidation) (the Company), which was put into liquidation by Body Corporate 355711 (the Body Corporate) on 5 February 2025.

[2]    The Company has one secured creditor, ASB Bank, and several unsecured creditors.

[3]    The liquidators, Keaton Pronk and Daniel Zhang (the Liquidators), oppose the application. They claim the Company has not paid the creditors in full or made satisfactory provision for the creditors, nor has the Company obtained the consent of the creditors to the order. The Liquidators also claim their costs have not been paid or secured and that it is not just or equitable for the liquidation to be terminated.

Background

[4]    Ms Yen is the sole shareholder and director of the Company. She claims that the Company is not insolvent and owns a property in Manurewa, against which a mortgage is registered by ASB Bank. She deposes that as at 31 March 2025 the amount owed by the Company is $36,779.89 and she is in a position to pay the amounts owing to the Body Corporate, other creditors and the Liquidators’ fees in order to have the liquidation terminated.

[5]    Ms Yen says the only reason the Company was placed into liquidation was because she inadvertently ignored correspondence from the Body Corporate’s solicitors prior to the liquidation.

Legal principles

[6]    Section 250 of the Companies Act set out the general statutory regime for termination orders in relation to a company’s liquidation.

[7]    Section 250 of the Companies Act confers broad discretion on the Court and provides that the Court may make an order terminating the liquidation of a company if it is satisfied that it is just and equitable to do so.

[8]    The following matters are generally considered to be necessary pre-conditions to the termination of a liquidation:1

(a)All creditors had been paid in full, or satisfactory provision has been made for them to be paid in full, or they consent to the application;

(b)the liquidators’ costs have been fully paid or secured; and

(c)all shareholders consent or would be no worse off than if the liquidation had proceeded to its conclusion.

[9]    In Bunting v Buchanan2 it was noted that the Court’s starting point is to consider whether the above principles have been met and, if not, whether there are any exceptional circumstances that warrant the making of an order even if those principles are not fully satisfied.

Submissions for Ms Yen

[10]Ms Yen did not file any submissions nor did she appear at the hearing.

Submissions for the Liquidators

[11]   It is the Liquidators’ position that while it is for Ms Yen to satisfy the Court that the general preconditions have been met, the Liquidators consider that these preconditions have not been satisfied and therefore it would be inappropriate to terminate the liquidation.

1      Re Bell Block Lumber Ltd (in liq) (1992) 6 NZCLC 67,690 (HC) and Foundation Securities (NZ) v Direct Labour Services Ltd (in liq) CIV-2005-404-4391, 22 August 2007 at [20], citing Bell Block Lumber Ltd (in liq).

2      Bunting v Buchanan [2012] NZHC 766 at [47].

Payment of creditors

[12]   Mr Pronk, for the Liquidators, has affirmed that ASB Bank is claiming to be owed $38,251.53 in respect of the Mortgage, and $16,252.08 for an overdrawn bank account. His affidavit confirms that the ASB Bank will not oppose the termination provided that its loan and mortgage remain in place.

[13]   Mr Pronk has advised that the Company also has the following unsecured creditors:

(a)Body Corporate 355711, owed $12,702.22 in relation to the Manurewa property, and an additional $3,692.62 (GST inclusive) for “applicant creditors costs”;

(b)Inland Revenue, owed $91,699.03 (of which $32,301.01 is preferential debt);

(c)Watercare, owed $552.75; and

(d)Auckland Council; $470.36.

[14]   Mr Pronk advises that the unsecured creditors have not consented to termination of the liquidation and have not been paid in full.

[15]   As of 8 September 2025, McDonald Vague Limited, who employ the Liquidators, have incurred fees of $19,351.20 (excluding GST), plus disbursements of

$732.10. McDonald Vague also engaged Haigh Lyon Lawyers Limited, whose costs as of 8 September 2025 are $13,595.76 (excluding GST, office expenses and disbursements).

[16]   The Liquidators have advised that they have on several occasions provided Ms Yen with a breakdown of the funds required to meet creditors’ claims, together with reasonable fees and costs required for the Liquidators to consent to termination of the liquidation . No funds have been provided by Ms Yen.

[17]   The Liquidators requested on 25 July 2025 that Ms Yen deposit $40,000 into their trust account to secure the Liquidators reasonable fees and costs (including legal fees). No funds have been provided by Ms Yen.

Public interest

[18]   The Liquidators submit that there is a public interest in the liquidation not being terminated for the following reasons:

(a)The Company has incurred various debts and has failed to pay the creditors’ claims or confirm that it has made provision for those claims. On the evidence available, it is not clear or certain that the Company would be able to pay its debts and trade solvently if the liquidation was terminated. Accordingly, there is a risk that should the liquidation be terminated, those debts would not be repaid to the prejudice of the known creditors of the Company;

(b)termination in such circumstances would send an undesirable message that a liquidation could be reversed in circumstances where the creditors’ claims and liquidators’ fees have not been paid or secured;

(c)in attempting to enter into a payment arrangement with Inland Revenue, it appears on the information available Inland Revenue was not informed the Company was in liquidation at the time of entering into the arrangement. Once Inland Revenue discovered the Company was in liquidation, the Inland Revenue cancelled the arrangement. In the event the Inland Revenue was not told the Company was in liquidation when the payment arrangement was sought, this raises some commercial morality concerns.

Exceptional circumstances

[19]Ms Yen has not filed affidavits in reply, or her submissions which were due on

1 September 2025. Accordingly, no evidence has been provided by Ms Yen

establishing that exceptional circumstances exist which would justify the liquidation being terminated.

The Court’s just and equitable discretion

[20]   As noted in Re Bell Block Lumber Ltd,3 the Court is not likely to exercise its discretion to terminate the liquidation unless all creditors’ claims have been paid or provided for, the liquidators’ costs have been paid or secured, and no undue prejudice would be caused to the shareholders by reason of an early termination.

[21]   The Liquidators have advised that the creditor claims have not been paid or provided for and the liquidators’ fees have not been paid or secured. Ms Yen, as sole shareholder of the Company, has consented to the liquidation.

Result

[22]   In my view, Ms Yen’s application for an order terminating the liquidation of the Company should be dismissed. The reasons for this view are:

(a)The creditors have not been paid in full and no satisfactory arrangements have been made by Ms Yen to secure their payment in full;

(b)the Liquidators’ costs have not been provided for or secured;

(c)there are no exceptional circumstances justifying terminating the liquidation notwithstanding the usual preconditions for a termination are not met.

Orders

[23]I make the following orders:

3      Above, n 1.

(a)Ms Yen’s application to terminate the liquidation of the Company is dismissed;

(b)Counsel for the Liquidators is to file a memorandum as to costs within 10 working days of the date of this judgment. Ms Yen is to file any reply memorandum as to costs within 5 working days of receipt of counsel for the Liquidators’ memorandum. A decision as to costs will then be made on the papers.

…………………………………

Associate Judge C B Taylor