STEPHEN MARR MANAGEMENT LIMITED v BOUTIQUE HAIR & BEAUTY LIMITED (In Receivership & In Liquidation) [2018] NZHC 341

STEPHEN MARR MANAGEMENT LIMITED v BOUTIQUE HAIR & BEAUTY LIMITED (In Receivership & In Liquidation) [2018] NZHC 341

The Court held that Mrs Hibbs possessed and validly exercised a power of attorney on behalf of CGCL when appointing Smart and Brown as liquidators; the freezing order applied to Mr Hibbs' shares in CGCL but did not prohibit the attorney's act or extend to render CGCL's appointment of liquidators a breach; there was...

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Citation
[2018] NZHC 341
Parties
Plaintiff / Creditor: Stephen Marr Management Limited; Defendant / Company in Liquidation and Receivership: Boutique Hair & Beauty Limited (In Receivership & In Liquidation); Applicant / Liquidator: Lynda Jane Smart; Applicant / Liquidator: Geoffrey Sebastian Eric Brown; Respondent / Opposing Creditor Company: Hansa Limited (In Liquidation); Liquidator of Hansa Limited / Respondent: Damian Grant; Liquidator of Hansa Limited / Respondent: Stephen Khov; Sole Shareholder of Boutique Hair & Beauty Limited / Grantor of Power of Attorney: Cameron Gladstone Commercial Limited; Related Party / Subject of Freezing Order and 99% Shareholder of CGCL: Paul Clifford Hibbs
Court
High Court
Jurisdiction
New Zealand
Judgment Date
7 March 2018
Procedural Posture
Companies Act 1993 Applications: Declaration Under S 284(1)(g) and Interlocutory Application to Set Aside Voluntary Liquidation / High Court (christchurch) Hearing and Judgment on Validity of Liquidators' Appointment; Interlocutory Application Dismissed; Declaration Granted
Outcome
Application under s 284(1)(g) granted; validity of appointment of Lynda Jane Smart and Geoffrey Sebastian Eric Brown as liquidators of Boutique Hair & Beauty Limited confirmed; interlocutory application by Stephen Marr Management Limited dismissed; costs reserved
Legal Topics
Validity of Appointment of Liquidators, Power of Attorney by Company, Freezing Orders/assets Injunctions, Directors' Disqualification, Receivership Vs Liquidation, S 284(1)(g) Companies Act
Companies Law Insolvency Law Civil Procedure Property Law Remedies (freezing Orders) Validity of Appointment of Liquidators Power of Attorney by Company Freezing Orders/assets Injunctions +3 more

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Parties

Stephen Marr Management Limited

Plaintiff / Creditor

Boutique Hair & Beauty Limited (In Receivership & In Liquidation)

Defendant / Company in Liquidation and Receivership

Lynda Jane Smart

Applicant / Liquidator

Geoffrey Sebastian Eric Brown

Applicant / Liquidator

Hansa Limited (In Liquidation)

Respondent / Opposing Creditor Company

Damian Grant

Liquidator of Hansa Limited / Respondent

Stephen Khov

Liquidator of Hansa Limited / Respondent

Cameron Gladstone Commercial Limited

Sole Shareholder of Boutique Hair & Beauty Limited / Grantor of Power of Attorney

Paul Clifford Hibbs

Related Party / Subject of Freezing Order and 99% Shareholder of CGCL

Procedural Posture

Companies Act 1993 Applications: Declaration Under S 284(1)(g) and Interlocutory Application to Set Aside Voluntary Liquidation / High Court (christchurch) Hearing and Judgment on Validity of Liquidators' Appointment; Interlocutory Application Dismissed; Declaration Granted

Legal Issues

  1. 1 Whether the power of attorney granted by CGCL to Mrs Hibbs was valid when used to appoint liquidators
  2. 2 Whether the appointment of liquidators by CGCL breached the existing freezing order against Mr Hibbs
  3. 3 Whether any breach of the freezing order would invalidate the liquidators' appointment

Ratio Decidendi

The Court held that Mrs Hibbs possessed and validly exercised a power of attorney on behalf of CGCL when appointing Smart and Brown as liquidators; the freezing order applied to Mr Hibbs' shares in CGCL but did not prohibit the attorney's act or extend to render CGCL's appointment of liquidators a breach; there was no evidence that the CGCL shareholding in BHBL had any value that was diminished by the liquidation; Smart and Brown took legal advice, acted in good faith and there was no evidence of lack of independence, therefore the appointment was valid and confirmed under s 284(1)(g).

Court Disposition

Application under s 284(1)(g) granted; validity of appointment of Lynda Jane Smart and Geoffrey Sebastian Eric Brown as liquidators of Boutique Hair & Beauty Limited confirmed; interlocutory application by Stephen Marr Management Limited dismissed; costs reserved

Orders

  • Declare under Companies Act 1993 s 284(1)(g) that the appointment of Lynda Jane Smart and Geoffrey Sebastian Eric Brown as liquidators of Boutique Hair & Beauty Limited is valid
  • Dismiss the interlocutory application by Stephen Marr Management Limited in CIV-2017-409-835