IB SHEPHARD AND CM DUNPHY AS LIQUIDATORS OF CARM HOLDINGS LTD (IN LIQUIDATION) V CARM HOLDINGS LIMITED (IN LIQUIDATION) AND ORS HC WN CIV-2009-485-1332

IB SHEPHARD AND CM DUNPHY AS LIQUIDATORS OF CARM HOLDINGS LTD (IN LIQUIDATION) V CARM HOLDINGS LIMITED (IN LIQUIDATION) AND ORS HC WN CIV-2009-485-1332

Given the companies were related and their affairs were so intermingled—common management and staff, pooled banking and cash flows, inter-company lending and guarantees, and inability to segregate records or run separate liquidations—and statutory service requirements were satisfied, it was just and equitable under s.271(1)(b) to order the liquidations to proceed together while preserving secured creditors' rights and preferential priorities and treating unsecured claims to rank equally.

Citation
openlaw-32cbc390_48f5_4e78_93b3_d46837e1ace4.pdf
Parties
Plaintiffs: Iain Bruce Shephard and Christine Margaret Dunphy (as liquidators); First Respondent: CARM HOLDINGS LIMITED (IN LIQUIDATION); Second Respondent: DERMAC INVESTMENTS LIMITED (IN LIQUIDATION); Third Respondent: EDPAC CONSORTIUM LIMITED (IN LIQUIDATION); Fourth Respondent: EDPAC HOLDINGS LIMITED (IN LIQUIDATION); Fifth Respondent: EDPAC INTERNATIONAL MANAGEMENT LIMITED (IN LIQUIDATION); Sixth Respondent: EDPAC MANAGEMENT LIMITED (IN LIQUIDATION); Seventh Respondent: EDPAC NIKAU LIMITED (IN LIQUIDATION); Eighth Respondent: EDPAC SG LIMITED (IN LIQUIDATION); Ninth Respondent: EDPAC SGA LIMITED (IN LIQUIDATION); Tenth Respondent: EDPAC SECURITIES LIMITED (IN LIQUIDATION); Eleventh Respondent: EDPAC VENTURES LIMITED (IN LIQUIDATION); Twelfth Respondent: EDPAC VIC CENTRAL LIMITED (IN LIQUIDATION); Thirteenth Respondent: EP NELSON LIMITED (IN LIQUIDATION); Fourteenth Respondent: EPNP1 LIMITED (IN LIQUIDATION); Fifteenth Respondent: GREECE HOLDINGS LIMITED (IN LIQUIDATION); Sixteenth Respondent: JOYCE GROUP LIMITED (IN LIQUIDATION); Seventeenth Respondent: JOYCE GROUP HOLDINGS LIMITED (IN LIQUIDATION); Eighteenth Respondent: ITALY PROPERTIES LIMITED (IN LIQUIDATION); Nineteenth Respondent: ORANGE APARTMENTS LIMITED (IN LIQUIDATION); Twentieth Respondent: ORCHARD BLOCK LIMITED (IN LIQUIDATION); Twenty First Respondent: ST. MARC GROUP LIMITED (IN LIQUIDATION)
Court
High Court
Jurisdiction
New Zealand
Judgment Date
16 September 2009
Procedural Posture
Application Under Section 271 Companies Act 1993 (pooling Order) / Judgment on Unopposed Application (hearing 14 Sep 2009; Judgment 16 Sep 2009)
Outcome
Application granted: pooling order made under s.271(1)(b) Companies Act 1993; costs reserved
Legal Topics
Pooling Order, Related Companies, Liquidation, Creditor Priorities, Intercompany Transactions
Company Law Insolvency Law Civil Procedure Pooling Order Related Companies Liquidation Creditor Priorities Intercompany Transactions

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Parties

Iain Bruce Shephard and Christine Margaret Dunphy (as liquidators)

Plaintiffs

CARM HOLDINGS LIMITED (IN LIQUIDATION)

First Respondent

DERMAC INVESTMENTS LIMITED (IN LIQUIDATION)

Second Respondent

EDPAC CONSORTIUM LIMITED (IN LIQUIDATION)

Third Respondent

EDPAC HOLDINGS LIMITED (IN LIQUIDATION)

Fourth Respondent

EDPAC INTERNATIONAL MANAGEMENT LIMITED (IN LIQUIDATION)

Fifth Respondent

EDPAC MANAGEMENT LIMITED (IN LIQUIDATION)

Sixth Respondent

EDPAC NIKAU LIMITED (IN LIQUIDATION)

Seventh Respondent

EDPAC SG LIMITED (IN LIQUIDATION)

Eighth Respondent

EDPAC SGA LIMITED (IN LIQUIDATION)

Ninth Respondent

EDPAC SECURITIES LIMITED (IN LIQUIDATION)

Tenth Respondent

EDPAC VENTURES LIMITED (IN LIQUIDATION)

Eleventh Respondent

EDPAC VIC CENTRAL LIMITED (IN LIQUIDATION)

Twelfth Respondent

EP NELSON LIMITED (IN LIQUIDATION)

Thirteenth Respondent

EPNP1 LIMITED (IN LIQUIDATION)

Fourteenth Respondent

GREECE HOLDINGS LIMITED (IN LIQUIDATION)

Fifteenth Respondent

JOYCE GROUP LIMITED (IN LIQUIDATION)

Sixteenth Respondent

JOYCE GROUP HOLDINGS LIMITED (IN LIQUIDATION)

Seventeenth Respondent

ITALY PROPERTIES LIMITED (IN LIQUIDATION)

Eighteenth Respondent

ORANGE APARTMENTS LIMITED (IN LIQUIDATION)

Nineteenth Respondent

ORCHARD BLOCK LIMITED (IN LIQUIDATION)

Twentieth Respondent

ST. MARC GROUP LIMITED (IN LIQUIDATION)

Twenty First Respondent

Procedural Posture

Application Under Section 271 Companies Act 1993 (pooling Order) / Judgment on Unopposed Application (hearing 14 Sep 2009; Judgment 16 Sep 2009)

Legal Issues

  1. 1 Whether it is just and equitable to order that the liquidations of related companies proceed together under s.271(1)(b) Companies Act 1993
  2. 2 Whether service requirements under s.271A were met
  3. 3 Effect of pooling on secured, preferential and unsecured creditors

Ratio Decidendi

Given the companies were related and their affairs were so intermingled—common management and staff, pooled banking and cash flows, inter-company lending and guarantees, and inability to segregate records or run separate liquidations—and statutory service requirements were satisfied, it was just and equitable under s.271(1)(b) to order the liquidations to proceed together while preserving secured creditors' rights and preferential priorities and treating unsecured claims to rank equally.

Court Disposition

Application granted: pooling order made under s.271(1)(b) Companies Act 1993; costs reserved

Orders

  • The liquidations of each of the respondent companies are to proceed together as if they were one company.
  • Nothing in the pooling order affects the rights of any secured creditor of any of the respondent companies.