Zhang v Kamal - [2017] NZHC 2120

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2017-404-773 [2017] NZHC 2120

UNDER Section 284 of the Companies Act 1993

IN THE MATTER OF

the liquidation of ELT RECYCLCING (NZ) LIMITED (IN LIQUIDATION)

BETWEEN

JUN ZHANG AND ORS Applicants

AND

IMRAN MOHAMMED KAMAL First Respondent

PETER GEORGE ADAMS Second Respondent

CORPORATE & PRESTIGE LTD Third Respondent

ROD OTTER Fourth Respondent

Hearing: (on the papers)

Counsel:

S W Greer for Applicants
P G Adams, in person, Second Respondent
P G Adams, as director, and with leave, for Third Respondent
No appearance by or on behalf of First and Fourth Respondents

Judgment:

1 September 2017

JUDGMENT (NO. 2) OF HEATH J

This judgment was delivered by me on 1 September 2017 at 2.00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

ZHANG AND ORS v KAMAL [2017] NZHC 2120 [1 September 2017]

The applications

[1] Mr Adams and Corporate & Prestige Ltd each apply for an order recalling my judgment of 15 August 2017,1 or for a stay of that judgment pending appeal. The application is opposed by those in whose favour the judgment was given (whom I shall call the Zhang interests).

Background

[2] On 15 August 2017, I resolved an application brought by the Zhang interests for leave to apply under s 284(1)(g) of the Companies Act 1993 for an order declaring that Mr Kamal’s appointment as liquidator of ELT Recycling NZ Ltd was invalid. Mr Kamal had been appointed as a result of a series of steps taken by Mr Adams, on behalf of himself and his company, Corporate & Prestige Ltd. A number of ancillary orders were sought to restore the status quo that existed before those steps were undertaken.

[3] Without going into the detail (all of which is set out fully in my judgment of

15 August 2017), for the reasons given in that judgment I made the following orders:2

[57] …

(a) I grant leave for the Zhang interests to apply for an order under s 284(1)(g) of the Act, and make an order declaring that Mr Imran Kamal was invalidly appointed as the liquidator of ELT Recycling on 11 April 2017.

(b) I make an order terminating the liquidation of ELT Recycling, with immediate effect.

(c) I make orders:

(i) Declaring that all resolutions of ELT Recycling and documents registered with the Registrar of Companies during the period 5 to 25 August 2016 are invalid and shall be removed from the Register of Companies.

1 Zhang v Kamal [2017] NZHC 1943.
2 Ibid, at paras [57] and [58].

(ii) Declaring that the appointment of Mr Otter as administrator of ELT Recycling was invalid and of no effect.

(iii) Rectifying the Register of Shares for ELT Recycling by removing the issue of 225 new shares on 5
August 2016 to Corporate & Prestige.

(iv) Declaring that Corporate & Prestige holds no shares in ELT Recycling.

(v) Declaring that Corporate & Prestige is not a secured creditor of ELT Recycling.

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 Zhang v Kamal

Details

AGLC: Zhang v Kamal [2017] NZHC 2120
Case: [2017] NZHC 2120
Decision Date: 1 September 2017

CaseChat Overview and Summary

The High Court of New Zealand was presented with two applications from Imran Mohammed Kamal, Peter George Adams, and Corporate & Prestige Ltd, seeking to recall or stay the judgment of Heath J dated 15 August 2017. This judgment granted the Zhang interests leave to apply for an order under s 284(1)(g) of the Companies Act 1993 to declare that Kamal's appointment as liquidator of ELT Recycling NZ Ltd was invalid, and made several ancillary orders to restore the status quo. The applicants opposed these orders, but the court found in favour of the Zhang interests. The legal issues before the court involved the criteria for recalling a judgment and the factors to be considered when granting a stay pending appeal. The court found that the judgment had already been sealed, and therefore the recall application was dismissed. Even if the court had jurisdiction to entertain the recall application, none of the three criteria identified by Wild CJ in Horowhenua County v Nash (No 2) had been met. Additionally, the stay application was dismissed because there was no evidence of an appeal having been filed, and even if the court had jurisdiction to consider it, the application was hopeless. The court found that none of the issues raised by the applicants would justify a stay. The court dismissed the applications and awarded costs to the Zhang interests against Adams and Corporate & Prestige on a 1A basis.

The court's decision highlights the importance of following the proper procedures for appealing a judgment and the limited circumstances in which a judgment may be recalled or stayed pending appeal. The court also emphasized the need for parties to provide evidence of an appeal having been filed before seeking a stay. Additionally, the court found that the applicants had not demonstrated that any appeal had a prospect of success. The court's decision ensures that the Zhang interests can continue to pursue their claims against Adams and Corporate & Prestige without being unduly delayed by the applicants' unsuccessful attempts to recall or stay the judgment.

Orders