BIG TREE NURSERIES LTD (IN REC) v BIG TREE NURSERIES LIMITED (IN REC) [2019] NZHC 1721

BIG TREE NURSERIES LTD (IN REC) v BIG TREE NURSERIES LIMITED (IN REC) [2019] NZHC 1721

The companies were found insolvent under s4 (liabilities far exceeding assets) and there was no sufficiently compelling reason to refuse liquidation; the receiver had express authority under the GSAs and statutory recognition under the Receiverships Act to bring the applications in the companies' names, and liquidation was ordered to allow proper investigation of director conduct and protect creditors' interests.

Citation
[2019] NZHC 1721
Parties
Applicant/defendant (by Receiver Kevin John Whitley): Big Tree Nurseries Limited (in receivership); Applicant/defendant (by Receiver Kevin John Whitley): Paddy Hannan Contracting Limited (in receivership); Applicant/defendant (by Receiver Kevin John Whitley): Resource Technologies Limited (in receivership); Applicant/defendant (by Receiver Kevin John Whitley): Drogue Construction Limited (in receivership); Trustee/shareholder (respondent): Patrick Hannan; Trustee/shareholder (respondent): Kevin Spicer
Court
High Court
Jurisdiction
New Zealand
Judgment Date
22 July 2019
Procedural Posture
Application Under Companies Act 1993 for Liquidation / Hearing and Judgment (application Heard 10 July 2019; Judgment Delivered 22 July 2019)
Outcome
Applications granted; four companies placed into liquidation and liquidators appointed
Legal Topics
Liquidation Under S241, Just and Equitable Winding Up, Receiver Powers Under GSA and Receiverships Act, Investigation of Director Conduct, Costs Orders Against Trustees
Company Law Insolvency Law Receivership Law Environmental/resource Management Law Liquidation Under S241 Just and Equitable Winding Up Receiver Powers Under GSA and Receiverships Act Investigation of Director Conduct +1 more

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Parties

Big Tree Nurseries Limited (in receivership)

Applicant/defendant (by Receiver Kevin John Whitley)

Paddy Hannan Contracting Limited (in receivership)

Applicant/defendant (by Receiver Kevin John Whitley)

Resource Technologies Limited (in receivership)

Applicant/defendant (by Receiver Kevin John Whitley)

Drogue Construction Limited (in receivership)

Applicant/defendant (by Receiver Kevin John Whitley)

Patrick Hannan

Trustee/shareholder (respondent)

Kevin Spicer

Trustee/shareholder (respondent)

Procedural Posture

Application Under Companies Act 1993 for Liquidation / Hearing and Judgment (application Heard 10 July 2019; Judgment Delivered 22 July 2019)

Legal Issues

  1. 1 Whether each company is insolvent within s4 of the Companies Act 1993
  2. 2 Whether it is just and equitable to liquidate under s241(4)
  3. 3 Whether the receiver had power to bring liquidation proceedings

Ratio Decidendi

The companies were found insolvent under s4 (liabilities far exceeding assets) and there was no sufficiently compelling reason to refuse liquidation; the receiver had express authority under the GSAs and statutory recognition under the Receiverships Act to bring the applications in the companies' names, and liquidation was ordered to allow proper investigation of director conduct and protect creditors' interests.

Court Disposition

Applications granted; four companies placed into liquidation and liquidators appointed

Orders

  • Each of the four defendant companies is placed into liquidation (timed at 10:35 am on 10 July 2019)
  • Mr Steven Khov and Mr Kieran Jones are appointed as liquidators of all four defendants with terms and rates as per their consents dated 9 July 2019