FATUPAITO and KEENE v STEWART [2021] NZHC 1679

FATUPAITO and KEENE v STEWART [2021] NZHC 1679

The Court has jurisdiction under s 266 to order the respondent (a sole director/shareholder) to attend for examination and produce company books concerning matters relating to the business, accounts and affairs of the company even though proceedings against him are extant; the liquidators demonstrated the examination and production are reasonably necessary to fulfil their statutory duties given the respondent's non-cooperation; the examination is not oppressive and any risk to limitation defences can be mitigated by an undertaking limiting use of the examination record as an acknowledgment under the Limitation Act.

Citation
[2021] NZHC 1679
Parties
Applicant / Liquidator: Vivian Judith Fatupaito; Applicant / Liquidator: Elizabeth Helen Keene; Respondent / Sole Director and Shareholder: Evan Kerry Stewart
Court
High Court
Jurisdiction
New Zealand
Judgment Date
6 July 2021
Procedural Posture
Companies Act Application for Court Ordered Examination and Production of Documents / High Court Interlocutory Application Under Ss 261 and 266 (judgment on Application)
Outcome
Application granted
Legal Topics
Liquidator Powers, Examination of Directors, Production of Company Records, Asset Tracing, Limitation Defence, Statutory Demand
Companies Law Insolvency Civil Procedure Tax Law Evidence Liquidator Powers Examination of Directors Production of Company Records +3 more

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Parties

Vivian Judith Fatupaito

Applicant / Liquidator

Elizabeth Helen Keene

Applicant / Liquidator

Evan Kerry Stewart

Respondent / Sole Director and Shareholder

Procedural Posture

Companies Act Application for Court Ordered Examination and Production of Documents / High Court Interlocutory Application Under Ss 261 and 266 (judgment on Application)

Legal Issues

  1. 1 Whether the High Court has jurisdiction under s 266 to order a person who is a director/shareholder and against whom proceedings exist to be examined and to produce company documents
  2. 2 Whether an order for examination and production is reasonably necessary for the liquidators to discharge their statutory duties
  3. 3 Whether the order would impose an unreasonable burden or be oppressive

Ratio Decidendi

The Court has jurisdiction under s 266 to order the respondent (a sole director/shareholder) to attend for examination and produce company books concerning matters relating to the business, accounts and affairs of the company even though proceedings against him are extant; the liquidators demonstrated the examination and production are reasonably necessary to fulfil their statutory duties given the respondent's non-cooperation; the examination is not oppressive and any risk to limitation defences can be mitigated by an undertaking limiting use of the examination record as an acknowledgment under the Limitation Act.

Court Disposition

Application granted

Orders

  • Order under s 266(2)(a) and (b) that Evan Kerry Stewart attend before the High Court at Christchurch on 10 August 2021 at 10:00am to be examined on oath or affirmation by counsel on any matter relating to the business, accounts or affairs of Eversons International Limited (in liquidation)
  • Order that Mr Stewart produce by 27 July 2021 any books, records or documents relating to the business, accounts or affairs of the company in his possession or control