GRANT AND KHOV AS LIQUIDATORS OF NZ PROPERTIES HOLDING LTD (IN LIQ) V CP ASSET MANAGEMENT LIMITED HC AK CIV-2012-404-005014

GRANT AND KHOV AS LIQUIDATORS OF NZ PROPERTIES HOLDING LTD (IN LIQ) V CP ASSET MANAGEMENT LIMITED HC AK CIV-2012-404-005014

The Court dismissed the s245A challenge because the alleged prejudice to the dissenting creditors was speculative and not shown to be unreasonably likely when balanced against the related creditors' benefits and other available safeguards; exercising its s243(7) discretion the Court appointed the proposed liquidators because they were independent, supported by the majority of creditors, capable of being funded for an initial investigation, and the incumbents' confrontational approach had been counterproductive.

Citation
openlaw-379dcb3f_106d_45b5_9c88_696dbf6841e1.pdf
Parties
Applicant (liquidator): Damien Grant; Applicant (liquidator): Steven Khov; First Respondent (creditor): CP Asset Management Limited; Second Respondent (creditor): Asia Pacific Hotel Investments Limited; Third Respondent (creditor): CP Retail Holdings Limited; Fourth Respondent (creditor): Raisons Pacific Investments Limited; Fifth Respondent (creditor): South Island Hotel Investments Limited; Sixth Respondent (creditor): Yeil C & M Limited; Seventh Respondents (judgment Creditors): Brian and Bridgit Lawrence
Court
High Court
Jurisdiction
New Zealand
Judgment Date
18 December 2012
Procedural Posture
Application Under Companies Act 1993 Ss 243(7) and 245 A; Part 19 High Court Rules / High Court Judgment (first Instance)
Outcome
Application under s245A dismissed; application under s243(7) to appoint replacement liquidators granted
Legal Topics
Liquidator Removal and Replacement, Related Creditors Voting (s245 A), Creditor Meeting Procedures, Preliminary Liquidation Investigations and Funding, Court Discretion on Appointment of Liquidators (s243(7))
Insolvency Company Law Civil Procedure Liquidator Removal and Replacement Related Creditors Voting (s245 A) Creditor Meeting Procedures Preliminary Liquidation Investigations and Funding Court Discretion on Appointment of Liquidators (s243(7))

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Parties

Damien Grant

Applicant (liquidator)

Steven Khov

Applicant (liquidator)

CP Asset Management Limited

First Respondent (creditor)

Asia Pacific Hotel Investments Limited

Second Respondent (creditor)

CP Retail Holdings Limited

Third Respondent (creditor)

Raisons Pacific Investments Limited

Fourth Respondent (creditor)

South Island Hotel Investments Limited

Fifth Respondent (creditor)

Yeil C & M Limited

Sixth Respondent (creditor)

Brian and Bridgit Lawrence

Seventh Respondents (judgment Creditors)

Procedural Posture

Application Under Companies Act 1993 Ss 243(7) and 245 A; Part 19 High Court Rules / High Court Judgment (first Instance)

Legal Issues

  1. 1 Whether the creditors' resolution to replace the liquidators should be set aside under s245A of the Companies Act 1993
  2. 2 Whether the votes of related creditors determined the outcome and caused unreasonable prejudice to dissenting creditors
  3. 3 Whether the Court should appoint proposed liquidators under s243(7) having regard to independence, resources, creditor wishes, competence and speed

Ratio Decidendi

The Court dismissed the s245A challenge because the alleged prejudice to the dissenting creditors was speculative and not shown to be unreasonably likely when balanced against the related creditors' benefits and other available safeguards; exercising its s243(7) discretion the Court appointed the proposed liquidators because they were independent, supported by the majority of creditors, capable of being funded for an initial investigation, and the incumbents' confrontational approach had been counterproductive.

Court Disposition

Application under s245A dismissed; application under s243(7) to appoint replacement liquidators granted

Orders

  • Application to set aside the creditors' resolution under s245A dismissed
  • Aaron Heath and Michael Lamacraft appointed as liquidators of NZ Properties Holding Limited (in liquidation) pursuant to s243(7)