WALKER V FORBES & ORS HC CHCH CIV 2012-409-002486

WALKER V FORBES & ORS HC CHCH CIV 2012-409-002486

Section 76(2) is limited to allowing proceedings that had already begun before adjudication to continue; it does not confer jurisdiction to commence fresh proceedings post-adjudication. On the facts, the proposed compensation claim against the bankrupt is a provable debt and leave to continue that claim under s...

Source-derived case information.

Citation
openlaw-f3a0701f_69ab_45fa_b55c_9f2bea4e9fdb.pdf
Parties
First Plaintiff: Robert Bruce Walker; Second Plaintiff: Property Ventures Limited (In receivership and liquidation); Third Plaintiff: Five Mile Holdings Limited (In receivership); First Defendant: Austin John Forbes; Second Defendant: Alister Spedding Johnston; Third Defendant: Gordon Lewis Hansen; Fourth Defendant: David Ian Henderson; Fifth Defendant: Adolf De Roos; Sixth Defendant: Daniel James Godden; Seventh Defendant: PWC (sued as a firm); Eighth Defendant: Fright Aubrey Limited; Ninth Defendant: Richard Williams Gibbons
Court
High Court
Jurisdiction
New Zealand
Judgment Date
6 March 2013
Procedural Posture
Civil Directors' Duties and Insolvency / Application for Leave to Proceed Against Bankrupt (pre Trial Leave Application)
Outcome
Leave to continue proceedings against the fourth defendant for compensation refused; leave not required for declarations or prohibitory orders; parties granted leave to file submissions on availability of s 237 within ten working days and final decision reserved.
Legal Topics
Bankruptcy, Directors' Duties, Leave to Proceed, Section 76 Insolvency Act 2006, Directors and Officers Insurance, Statutory Charge
Insolvency Company Law Civil Procedure Insurance Law Bankruptcy Directors' Duties Leave to Proceed Section 76 Insolvency Act 2006 +2 more

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Parties

Robert Bruce Walker

First Plaintiff

Property Ventures Limited (In receivership and liquidation)

Second Plaintiff

Five Mile Holdings Limited (In receivership)

Third Plaintiff

Austin John Forbes

First Defendant

Alister Spedding Johnston

Second Defendant

Gordon Lewis Hansen

Third Defendant

David Ian Henderson

Fourth Defendant

Adolf De Roos

Fifth Defendant

Daniel James Godden

Sixth Defendant

PWC (sued as a firm)

Seventh Defendant

Fright Aubrey Limited

Eighth Defendant

Richard Williams Gibbons

Ninth Defendant

Procedural Posture

Civil Directors' Duties and Insolvency / Application for Leave to Proceed Against Bankrupt (pre Trial Leave Application)

Legal Issues

  1. 1 Whether s 76 of the Insolvency Act 2006 permits commencement of proceedings against an adjudicated bankrupt after adjudication
  2. 2 Whether leave should be granted to continue/commence proceedings against the bankrupt (fourth defendant)
  3. 3 Whether access to D&O insurance proceeds or alternative routes (s 237) justify allowing proceedings to continue

Ratio Decidendi

Section 76(2) is limited to allowing proceedings that had already begun before adjudication to continue; it does not confer jurisdiction to commence fresh proceedings post-adjudication. On the facts, the proposed compensation claim against the bankrupt is a provable debt and leave to continue that claim under s 76(2) is declined. Declarations or prohibitory relief concerning directors' duties do not require leave. The Court granted time for submissions on the availability of s 237 as the appropriate statutory route to resolve disputed provable claims.

Court Disposition

Leave to continue proceedings against the fourth defendant for compensation refused; leave not required for declarations or prohibitory orders; parties granted leave to file submissions on availability of s 237 within ten working days and final decision reserved.

Orders

  • Proceedings for compensation against fourth defendant under s 76(2) are not allowed to continue (leave refused)
  • No leave required to commence proceedings for declarations of breach of statutory duties or prohibition from acting as director