JENKINS AND ANOR V SURECALL LIMITED (IN LIQUIDATION) AND ANOR HC DUN CIV-2006-412-000939

JENKINS AND ANOR V SURECALL LIMITED (IN LIQUIDATION) AND ANOR HC DUN CIV-2006-412-000939

Pool the liquidations under s271 because, on balance of s272 factors, the businesses in practice operated as one (common revenue account, shared management and services) and it would be inequitable to deny Surecall employees recovery, despite significant percentage prejudice to B & R employees; the actual dollar difference was modest and did not outweigh the imperative of treating the operations as one.

Citation
openlaw-d2012946_2eab_4f1f_8576_b37b7dfce13d.pdf
Parties
Plaintiff (liquidator): Paul William Gerrard Jenkins; Plaintiff (liquidator): Iain Andrew Nellies; First Defendant: Surecall Limited (in liquidation); Second Defendant: B & R Marketing Limited (in liquidation)
Court
High Court
Jurisdiction
New Zealand
Judgment Date
28 March 2007
Procedural Posture
Application Under S271 Companies Act 1993 for Pooling of Related Companies in Liquidation / Judgment on Application (hearing Concluded)
Outcome
Order pursuant to s271 Companies Act 1993 that the liquidations of Surecall Limited (in liquidation) and B & R Marketing Limited (in liquidation) proceed together as if they were one company.
Legal Topics
Pooling Order (s271), Related Companies, Preferential Employee Claims, Just and Equitable (s272)
Corporate Law Insolvency / Liquidation Employment Law Pooling Order (s271) Related Companies Preferential Employee Claims Just and Equitable (s272)

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Parties

Paul William Gerrard Jenkins

Plaintiff (liquidator)

Iain Andrew Nellies

Plaintiff (liquidator)

Surecall Limited (in liquidation)

First Defendant

B & R Marketing Limited (in liquidation)

Second Defendant

Procedural Posture

Application Under S271 Companies Act 1993 for Pooling of Related Companies in Liquidation / Judgment on Application (hearing Concluded)

Legal Issues

  1. 1 Whether the liquidations of Surecall Limited and B & R Marketing Limited should be conducted together as if they were one company under s271 Companies Act 1993
  2. 2 Whether, applying the factors in s272, it is just and equitable to make a pooling order despite prejudice to some creditors (notably B & R Marketing employees)
  3. 3 How to balance corporate separateness (s15) against the statutory exception for related companies under s271/s272

Ratio Decidendi

Pool the liquidations under s271 because, on balance of s272 factors, the businesses in practice operated as one (common revenue account, shared management and services) and it would be inequitable to deny Surecall employees recovery, despite significant percentage prejudice to B & R employees; the actual dollar difference was modest and did not outweigh the imperative of treating the operations as one.

Court Disposition

Order pursuant to s271 Companies Act 1993 that the liquidations of Surecall Limited (in liquidation) and B & R Marketing Limited (in liquidation) proceed together as if they were one company.

Orders

  • Order under s271 Companies Act 1993 that the liquidations of Surecall Limited (in liquidation) and B & R Marketing Limited (in liquidation) proceed as if they were one company
  • Costs of A J Logan (for employee creditors of B & R Marketing) to be paid and to be a priority charge on the combined assets of the defendant companies