FORESTLANDS, EX PARTE JACKSON [2018] NZHC 2583

Parties

Procedural Posture

Application for Directions Under the Companies Act 1993 Relating to Liquidators' Reporting and Service / Originating Application Dealt With on the Papers; Judgment and Orders Made

Legal Issues

1. 1 Whether the Court should modify or exempt liquidators' statutory reporting obligations under ss 255(2)(c)(ii), 255(2)(d) and 257(1) of the Companies Act 1993 to permit electronic service to creditors/shareholders for whom the liquidators hold email addresses
2. 2 Whether the substantive application could properly be heard without notice to thousands of creditors and shareholders
3. 3 Whether any order permitting electronic service would unfairly prejudice creditors or shareholders and whether costs of the application should be treated as liquidation expenses

Ratio Decidendi

Given the large number of shareholders, the significant and recurring cost of postal distribution, the existence of email contact details for many shareholders, statutory powers to modify reporting and service requirements, and the urgency of the first report deadline, the Court granted the liquidators' application to modify ss255 and 257 to permit electronic service by email with a link to a website for those shareholders/creditors for whom email addresses are held, allowed the substantive application to proceed without notice, and imposed safeguards (service by s391 methods where no email exists and leave for affected parties to apply within 15 working days) to prevent prejudice.

Court Disposition

Application granted; orders made in terms of the applicants' substantive request (paragraph 21(1)(a)-(f)) and leave granted to commence application without notice

Orders

• Leave granted to commence the substantive originating application under Part 19 on a without‑notice basis
• Requirements of ss255(2)(c)(ii), 255(2)(d) and 257(1) of the Companies Act 1993 are modified so that where the liquidators hold an email address for a creditor or shareholder they are not required to send that creditor or shareholder hard copy liquidators' reports and may instead send an email with a link to a...