HAN & ANOR v KUAN YAP & ASSOCIATES LTD & ANOR [2018] NZHC 222

HAN & ANOR v KUAN YAP & ASSOCIATES LTD & ANOR [2018] NZHC 222

There was a good prima facie case for liquidation and special urgency: the directors' deadlock had materially jeopardised the business, income and client relationships, and there was a real risk of imminent loss of asset value; accordingly an interim liquidator (Grant Reynolds) should be appointed under s246 to preserve assets pending the substantive hearing.

Citation
[2018] NZHC 222
Parties
First Plaintiff: David Weiguang Han; Second Plaintiff: Cynthia May; First Defendant: Kuan Yap & Associates Limited; Second Defendant: Kuan Cheong Yap
Court
High Court
Jurisdiction
New Zealand
Judgment Date
22 February 2018
Procedural Posture
Application for Liquidation and Related Counterclaim Under the Companies Act 1993 / Hearing for Appointment of Interim Liquidator Under S246; Substantive Liquidation Application Pending
Outcome
Interim liquidator appointed to preserve company assets pending further order of the Court
Legal Topics
Interim Liquidator Appointment, Just and Equitable Winding Up, Directors' Deadlock, Section 246 Companies Act 1993, Section 174(2)(a) Share Buyout Counterclaim
Company Law Insolvency Civil Procedure Interim Liquidator Appointment Just and Equitable Winding Up Directors' Deadlock Section 246 Companies Act 1993 Section 174(2)(a) Share Buyout Counterclaim

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Parties

David Weiguang Han

First Plaintiff

Cynthia May

Second Plaintiff

Kuan Yap & Associates Limited

First Defendant

Kuan Cheong Yap

Second Defendant

Procedural Posture

Application for Liquidation and Related Counterclaim Under the Companies Act 1993 / Hearing for Appointment of Interim Liquidator Under S246; Substantive Liquidation Application Pending

Legal Issues

  1. 1 Whether an interim liquidator should be appointed under s246 to preserve company assets pending a liquidation hearing
  2. 2 Whether there is a prima facie case for liquidation on just and equitable grounds arising from a director deadlock
  3. 3 Whether the company's assets and business goodwill were in jeopardy and urgent special circumstances existed

Ratio Decidendi

There was a good prima facie case for liquidation and special urgency: the directors' deadlock had materially jeopardised the business, income and client relationships, and there was a real risk of imminent loss of asset value; accordingly an interim liquidator (Grant Reynolds) should be appointed under s246 to preserve assets pending the substantive hearing.

Court Disposition

Interim liquidator appointed to preserve company assets pending further order of the Court

Orders

  • Grant Reynolds of Reynolds & Associates Limited is appointed as interim liquidator of Kuan Yap & Associates Limited until further order of the Court
  • Remuneration approved prospectively: interim liquidator $300 per hour plus GST; associates $200 per hour plus GST; administration and support staff $120 per hour plus GST