FORRESTERS NOMINEE COMPANY LTD & HUBBARD CHURCHER TRUST MANAGEMENT LIMITED HC TIM CIV-2011-476-000642

FORRESTERS NOMINEE COMPANY LTD & HUBBARD CHURCHER TRUST MANAGEMENT LIMITED HC TIM CIV-2011-476-000642

Because the refined overpayment calculations showed recoverable sums were relatively small and pursuing clawback would be uneconomic and disproportionate (approximately 1.54% of the fund), the court exercised its discretion to abandon the clawback requirement; it also approved the use of the NZX annual return for distribution calculations and fixed 31 March 2007 as the start date for allocation of surplus assets, and directed a timetable to resolve costs issues promptly.

Citation
openlaw-b3f34dd8_77c8_4e09_92a0_d2a27a086c0a.pdf
Parties
Company Under Statutory Management: Forresters Nominee Company Ltd; Company Under Statutory Management: Hubbard Churcher Trust Management Limited; Statutory Managers: Richard Grant Simpson, Trevor Francis Thornton and Graeme Carson McGlinn; Interested Party (costs Applicant/subject of Costs Order): Mrs Hubbard
Court
High Court
Jurisdiction
New Zealand
Judgment Date
4 December 2012
Procedural Posture
Statutory Management Under the Corporations (investigation & Management) Act 1989 / Further Reserved Judgment Resolving Post Judgment Directions and Procedural Matters
Outcome
Court ordered abandonment of the clawback direction, adopted the NZX annual return for distribution calculations, fixed 31 March 2007 as the starting point for allocation of surplus assets, reserved leave for further applications, and directed a timetable for submissions on Mrs Hubbard's costs.
Legal Topics
Statutory Management, Clawback of Interim Distributions, Allocation of Surplus Assets, Rate of Return for Distributions, Payment of Party Costs
Corporations Law Insolvency and Statutory Management Civil Procedure Costs Statutory Management Clawback of Interim Distributions Allocation of Surplus Assets Rate of Return for Distributions +1 more

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Parties

Forresters Nominee Company Ltd

Company Under Statutory Management

Hubbard Churcher Trust Management Limited

Company Under Statutory Management

Richard Grant Simpson, Trevor Francis Thornton and Graeme Carson McGlinn

Statutory Managers

Mrs Hubbard

Interested Party (costs Applicant/subject of Costs Order)

Procedural Posture

Statutory Management Under the Corporations (investigation & Management) Act 1989 / Further Reserved Judgment Resolving Post Judgment Directions and Procedural Matters

Legal Issues

  1. 1 Whether to require clawback of interim overpayments resulting from an interim distribution
  2. 2 What rate of return should be used in calculating investor returns for distribution purposes
  3. 3 What starting date should be adopted for allocation of surplus assets

Ratio Decidendi

Because the refined overpayment calculations showed recoverable sums were relatively small and pursuing clawback would be uneconomic and disproportionate (approximately 1.54% of the fund), the court exercised its discretion to abandon the clawback requirement; it also approved the use of the NZX annual return for distribution calculations and fixed 31 March 2007 as the start date for allocation of surplus assets, and directed a timetable to resolve costs issues promptly.

Court Disposition

Court ordered abandonment of the clawback direction, adopted the NZX annual return for distribution calculations, fixed 31 March 2007 as the starting point for allocation of surplus assets, reserved leave for further applications, and directed a timetable for submissions on Mrs Hubbard's costs.

Orders

  • Paragraph [113](b) of the earlier judgment deleting the clawback direction (clawback abandoned)
  • Adopt NZX annual return on an annual basis as the rate of return for calculation of investor returns