MADAGASCAR (NO.1) 2013 LTD and MADAGASCAR (NO.2) 2013 LTD EX P TUBBS [2014] NZHC 385

MADAGASCAR (NO.1) 2013 LTD and MADAGASCAR (NO.2) 2013 LTD EX P TUBBS [2014] NZHC 385

The Court exercised its discretion under s239F(2) to permit appointment of the applicants as administrators notwithstanding potential disqualification under s280(1)(ca) and (cb) because their prior engagement as investigating accountants and their relationship with the bank did not compromise independence or ability to perform the role; their prior involvement was likely to enable a quicker and more efficient administration and the interests of creditors could be protected by service of the order and reserving leave to creditors to apply to set aside the appointment.

Citation
[2014] NZHC 385
Parties
Company: Madagascar (No 1) 2013 Ltd; Company: Madagascar (No 2) 2013 Ltd; Applicant Proposed Administrator: Stephen John Tubbs; Applicant Proposed Administrator: Colin Anthony Latham Gower
Court
High Court
Jurisdiction
New Zealand
Judgment Date
6 March 2014
Procedural Posture
Application Under Companies Act 1993 S239 F and S280 Seeking Leave to Be Appointed Administrators / Ex Parte/originating Application Under Part 19 High Court Rules; Interim Order Granting Permission to Be Appointed Administrators
Outcome
Application granted: Court ordered that Stephen John Tubbs and Colin Anthony Latham Gower may be appointed administrators of Madagascar (No 1) 2013 Ltd and Madagascar (No 2) 2013 Ltd notwithstanding ss239F and 280(1)(ca) and (cb).
Legal Topics
Administration, Disqualification of Administrators, Continuing Business Relationship, Conflict of Interest, Originating Application
Company Law Insolvency Civil Procedure Administration Disqualification of Administrators Continuing Business Relationship Conflict of Interest Originating Application

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Parties

Madagascar (No 1) 2013 Ltd

Company

Madagascar (No 2) 2013 Ltd

Company

Stephen John Tubbs

Applicant Proposed Administrator

Colin Anthony Latham Gower

Applicant Proposed Administrator

Procedural Posture

Application Under Companies Act 1993 S239 F and S280 Seeking Leave to Be Appointed Administrators / Ex Parte/originating Application Under Part 19 High Court Rules; Interim Order Granting Permission to Be Appointed Administrators

Legal Issues

  1. 1 Whether s280(1)(ca) and/or s280(1)(cb) of the Companies Act 1993 disqualify the applicants from appointment as administrators
  2. 2 Whether prior provision of professional services as investigating accountants within two years compromises independence
  3. 3 Whether a continuing business relationship with the company's bank (ANZ) compromises independence

Ratio Decidendi

The Court exercised its discretion under s239F(2) to permit appointment of the applicants as administrators notwithstanding potential disqualification under s280(1)(ca) and (cb) because their prior engagement as investigating accountants and their relationship with the bank did not compromise independence or ability to perform the role; their prior involvement was likely to enable a quicker and more efficient administration and the interests of creditors could be protected by service of the order and reserving leave to creditors to apply to set aside the appointment.

Court Disposition

Application granted: Court ordered that Stephen John Tubbs and Colin Anthony Latham Gower may be appointed administrators of Madagascar (No 1) 2013 Ltd and Madagascar (No 2) 2013 Ltd notwithstanding ss239F and 280(1)(ca) and (cb).

Orders

  • Application may be made by way of originating application
  • Notwithstanding ss239F and 280(1)(ca) and (cb) Companies Act 1993 Stephen John Tubbs and Colin Anthony Latham Gower may be appointed as administrators of Madagascar (No 1) 2013 Ltd and Madagascar (No 2) 2013 Ltd