BARTLETTS CREEK VINEYARD LTD PARTNERSHIP v MAGINNESS and BOOTH (as administrators of SACRED HILL MARLBOROUGH VINEYARDS LTD) [2021] NZHC 2295

BARTLETTS CREEK VINEYARD LTD PARTNERSHIP v MAGINNESS and BOOTH (as administrators ofSACRED HILL MARLBOROUGH VINEYARDS LTD) [2021] NZHC 2295 [2 September 2021]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2021-404-1060[2021] NZHC 2295UNDER Section 239AT and 239ADO of theCompanies Act 1993 and Part 19 of the HighCourt Rules 2016IN THE MATTER of SACRED HILL MARLBOROUGHVINEYARDS LIMITED (INRECEIVERSHIP & ADMINISTRATORSAPPOINTED)BETWEEN BARTLETTS CREEK VINEYARDLIMITED PARTNERSHIPApplicantAND TONY LEONARD MAGINNESS andJARED WAIATA BOOTH (as administratorsof SACRED HILL MARLBOROUGHVINEYARDS LIMITED)RespondentsHearing: 21 July 2021 (further submissions 26 July 2021)Appearances: B D Gustafson for the applicantE C Gellert and R A Morris for the respondentsS C D A Gollin for Westpac New ZealandJudgment: 2 September 2021JUDGMENT OF HARLAND JThis judgment was delivered by me on 2 September 2021 at 1:00 pmPursuant to Rule 11.5 High Court RulesRegistrar/Deputy Registrar Date:..Counsel/Solicitors:E C Gellert and B A Morris, Lowndes Jordan, AucklandB D Gustafson, Forty Eight Shortland, AucklandR E Kettelwell, Sharp Tudhope Lawyers, TaurangaS C D A Gollin, Minter Ellison Rudd Watts, AucklandIntroduction[1] On 18 June 2021, upon application by the administrators of Sacred HillMarlborough Vineyards Ltd (the company), the Court made an order on a withoutnotice basis extending the period within which the administrators could convene awatershed meeting by 29 days pursuant to s 239AT(3) of the Companies Act 1993 (theAct).[2] As is usual, the order reserved leave to any creditor of the company to applyon notice to vary or set aside the orders that had been made. Bartletts Creek VineyardLtd Partnership (Bartletts Creek), one of the company's 11 landlords, applied to theCourt to set aside the order, terminate the administration of the company and grant itleave under s 239ABE of the Act to bring a possession order application under theProperty Law Act 2007.[3] Bartletts Creek's application was granted a priority hearing because thereceivers had entered into an agreement to sell the company's business, including thecompany's interest in the Bartletts Creek lease, to a third party, Vinlink MarlboroughLimited (Vinlink). The priority hearing was set down before me to deal solely withthe part of the application seeking to set aside the Court's order referred to above.[4] The day before the hearing, the receivers of Sacred Hill settled the sale of thecompany's business as a going concern.[5] At the outset of the hearing, counsel for Bartletts Creek indicated that it nolonger sought to set aside the order, but it still wished to challenge the fact that theapplication by the administrators had been made without notice. Given that BartlettsCreek no longer sought to pursue its relief, the focus of the hearing shifted to whetherthe Court could entertain this argument. It was agreed that the resolution of this issuewas not one that required the Court's urgent attention.[6] The issues to be determined are therefore:(a) Can Bartletts Creek challenge the making of the Court's order giventhat it no longer seeks to set it aside?(b) If it can, was the order properly advanced by the administrators on awithout notice basis?Can Bartletts Creek challenge the making of the Court's order on a withoutnotice basis given it does not pursue its application to set it aside?[7] This question arises because as Bartletts Creek does not pursue its application,the relief it sought and the basis for its challenge has arguably been extinguished. Iwas concerned that to allow the challenge would be akin to a review of or appeal fromthe order. However Mr Gustafson submitted that he was not challenging the decisionof the Judge, who he accepted had made the orders on the basis of the informationbefore him; rather he submitted that the applicants should not have brought theapplication on a without basis notice in the first place.[8] I sought further submissions on the point.[9] Under r 7.46 of the High Court Rules 2016, a judge must determine whether awithout notice application satisfies one of the grounds outlined in r 7.46(3). If sosatisfied, the judge can make the order sought, make any order he or she thinks just inthe circumstances or dismiss the application.1 If the judge determines that theapplication cannot be properly dealt with without notice, he or she can give directionsas to service and adjourn the determination of it until after service has been affectedor dismiss the application if it has no prospect of success.2[10] Rule 7.46 is contained within pt 7, sub-pt 2 of the High Court Rules entitled"[i]nterlocutory applications and interlocutory orders". The basis for this applicationis pt 19 of the High Court Rules. Rule 19.10 imports rr 7.23 and 7.46 into proceedingscommenced by way of originating application with all necessary modifications.[11] Although not the case here, ordinarily parties before the Court are seeking toset aside, vary or rescind substantive orders made without notice rather than solelyobjecting to the procedure undertaken, or there is also an underling substantiveproceeding before the Court. In this proceeding, as no interlocutory application was1 High Court Rules 2016, r 7.46(4).2 Rule 7.46(5).made by the administrators, the relief sought and granted was substantive, subject onlyto the leave order and the affected parties' appeal rights.[12] Both counsel were unable to find any case directly on point where the withoutnotice application was for substantive, not interim relief (i.e. an originatingapplication). However, I was referred to Green Way Ltd v Mutual Construction Ltd3and Haven v Lombard.4 Both cases concerned without notice interlocutoryapplications in the context of substantive proceedings and both were cases where theCourt was prepared to rescind or discharge the without notice interlocutory orderbecause of failures to comply with the rules in respect of such applications.[13] In Green Way Ltd v Mutual Construction Ltd Campbell J rescinded injunctiverelief granted on a without notice basis because the application did not include thematters required to certified by Form G32 of the High Court Rules 2016.5 Theapplication had not identified the grounds upon which it was made without notice andneither had it included certification of full and frank disclosure. Although there wasno formal application, the Court appears to have treated the matter as an interlocutoryapplication in a substantive proceeding to rescind the order under r 7.23. The topic ofjurisdiction was not dealt with by the Court, probably because it is well understoodthat interlocutory injunctive relief is subject to reconsideration by the High Court withthe jurisdiction outlined in r 7.49.[14] In Haven v Lombard, the Court discharged a without notice order because notall correspondence on a subject relevant to the order sought was before the Court.6This meant that full disclosure had not been made as required by r 7.23.[15] It is worth setting out the actual order made in this case by the Judge:ATER READING the Applicants' without notice originating application fororders extending the convening period for the watershed meeting of SacredHill Marlborough Vineyards Limited (in receivership and administratorsappointed) (the Company) dated 18 June 2021, the affidavit of Jared Waiata3 Green Way Ltd v Mutual Construction Ltd [2021] NZHC 1704.4 Haven v Lombard [2017] NZHC 1336.5 Green Way Ltd v Mutual Construction Ltd, above n 3, at [47] and [83].6 Haven v Lombard, above n 4, at [23]–[25].Booth sworn 18 June 2021, and the memorandum of counsel for theApplicants dated 18 June 2021, THIS COURT ORDERS:1. The Applicants are granted leave to commence these proceedingswithout notice;2. The convening period for the watershed meeting in relation to thevoluntary administration of the Company be extended by, 29 workingdays from 21 June 2021 until 30 July 2021 pursuant to section239AT(3) of the Companies Act 1993 (the Act).3. Advice of the orders shall be served on all creditors of the Companyby:3.1 Sending the orders to creditors by email (where an addresshas been provided to the Company) or by post to the postaladdress that has been provided to the Company (if an emailaddress has not been provided to the Company); and3.2 Posting a copy of the orders on Baker Tilly Staples Rodway'swebsite.4. Leave is reserved for any creditor of the Company to apply on noticeto vary or set aside these orders; and5. Leave is reserved to the Applicants to apply further in respect of anymodifications or ancillary issues arising out of the orders made.[16] In this case, the leave order granted by the Court was to "vary or set aside theseorders", and the orders granted encompassed the without notice order. For this reason,I agree with Ms Gellert that the High Court has jurisdiction to consider whether thewithout notice order was appropriate and whether it ought to have been made on awithout notice basis. If leave had not been granted to reconsider all the orders made,arguably the High Court would not have jurisdiction and Bartletts Creek would haveneeded to deal with any issues it had by way of appeal.[17] I am satisfied that given the wording of the orders made by the Court on18 June 2021, there is jurisdiction for this Court to reconsider whether the applicationto extend the convening period was properly advanced by the administrators on awithout notice basis.Was the order properly advanced by the administrators on a without noticebasis?[18] At this point, it is necessary to set out the background to the application toprovide context for the information that was provided to the Court to support theapplication for the order sought to extend the convening period.Background[19] Sacred Hill's business based in Marlborough involved the growing andprocuring of grapes and the operation of a substantial winery. It sold grape and wineproducts both domestically and internationally.[20] The sites upon which Sacred Hill grew the grapes necessary to produce itsproducts were leased. There were 11 different leases, one of which involved BartlettsCreek as the lessor. These leases were material to Sacred Hill's business.[21] The Sacred Hill and Bartletts Creek lease was entered into on 12 January 2017,with a final expiry date in 2051. The vineyard which is the subject of the lease isrelatively large by New Zealand standards, comprising some 94.8 hectares.[22] The lease contains a clause (cl 11.2.2) which provides that if a receiver isappointed for Sacred Hills, it is lawful for Bartletts Creek to re-enter and repossess thevineyard, thereby terminating the lease. The lease also includes a set of provisions(cl 10) outlining various rights and duties that apply when the lessee seeks to assignthe lease.[23] On 11 May 2021, Westpac New Zealand Ltd (Westpac) appointed Rees Loganand Andrew McKay as the joint and several receivers and managers of Sacred Hill.Following their appointment, the receivers continued to trade the company with theintention of selling it as a going concern.[24] Through its discussion with others, Bartletts Creek became aware that thereceivers were negotiating the assignment of the company's rights under its lease andthe other lessors' leases to Vinlink Marlborough Ltd (Vinlink). Given thisdevelopment, Bartletts Creek wished to consider the option of purchasing its leasefrom the receivers, so that it would be able to choose who would tenant the propertyfor the remainder of the lease. I infer from the material provided to me that approachesto this effect were made to the receivers by Bartletts Creek, but Bartletts Creek formedthe view that these approaches were being ignored.[25] Bartletts Creek considered there had been a breach of cl 11.2.2 of the leasebecause receivers had been appointed. On 14 May 2021, it gave notice under s 246 ofthe Property Law Act 2007 ("the PLA notice") that it would cancel the lease if thebreach was not remedied by 21 May 2021.[26] On 18 May 2021, the solicitors for the receivers wrote to the solicitors forBartletts Creek requesting that Bartletts Creek take no action to cancel the lease underthe PLA notice. The letter set out that payments under the lease were being made,there were no rental arrears or breaches of any other covenants under the lease, andthe receivers had commenced a sale process and intended to assign the lease to a"serious bidder", who had the ability to take over all the obligations under the lease.The letter indicated that the sale was being progressed urgently and expressed theopinion that cancellation of the lease was disproportionate to the breach alleged. Theletter then went on to say that if Bartletts Creek did not confirm it would take no actionunder the lease by 5pm the following day (19 May), the receivers would apply to theCourt for relief under s 253(1)(c) of the Property Law Act 2007 (the PLA).[27] On 19 May 2021, the solicitors for Bartletts Creek provided more informationabout the alleged breaches of the lease by Sacred Hill, but agreed to take no furtheraction before 22 May "at the earliest". Further discussion was invited and informationabout the prospective purchasers requested, including the ability of the shareholdersto provide security or a guarantee.[28] On 20 May 2021, the solicitors for the receivers replied, referring to theimminence of the sale at which point they could provide an update to all landlords,which might assist with the details Bartletts Creek had requested. An agreement wassought to a seven day "no action" by both parties.[29] On the afternoon of 21 May 2021, the solicitors for the receivers wrote to thesolicitors for Bartletts Creek challenging their view that Bartletts Creek was entitledto cancel the lease. The letter indicated that if Bartletts Creek wanted to do so, it wouldneed to apply to the Court for an order for possession of the land under s 244(1)(a) ofthe PLA. The solicitors for the receivers also advised that such an application wouldbe opposed, and that they would seek relief against Bartletts Creek for cancellation.[30] On 21 May 2021, Westpac resolved to place Sacred Hill into voluntaryadministration and Mr Booth and Mr Maginness were appointed as administratorsunder s 239K of the Act.7 Because of the administrators' appointment, and themoratorium that follows as a matter of law, Bartletts Creek was not able to enter intopossession of or otherwise taken action in relation to or under the lease without theadministrators written consent or the permission of the Court.8[31] On 25 May 2021, Vinlink entered into an agreement with the receivers topurchase Sacred Hill's business conditional upon the expiry of a s 119 PLA notice thathad been served on the receivers by Mr Mason, the sole director of the Sacred HillGroup.[32] On 26 May 2021 Bartletts Creek received a letter from the administratorsadvising that the receivers were currently "trading while a sales process is completedto try and sell the business and/or substantially all its assets. Any expressions ofinterest in acquiring the business and/or its assets are to be directed to the Receivers'office".[33] The letter also referred to the date for the first statutory creditors meetingscheduled to be held on 2 June 2021 and to the second statutory creditors meeting (thewatershed meeting) required under ss 239AS–239ABB of the Act. The lettersummarised the requirements of these sections, including that the watershed meetingmust be convened within 25 working days after the date of the administrators'appointment, being the convening period of 20 days (required under s 239AT(2)) plusthe five days after the convening period (required under s 239AV). The letter did not7 Companies Act 1993, s 238K.8 Sections 239ABD and 239ABG.refer to the additional provision in s 239AT(3) which states that the administratorscould apply to the Court to extend the convening period before or after it has expired(s 239AT(4)).[34] The first creditors meeting was convened by the administrators on 2 June 2021.It appears that Bartletts Creek chose not to attend the meeting. The Minutes refer to astatement from the receivers that was read to the meeting recording that the receivershad agreed to sell the business and assets of Sacred Hill to Vinlink with settlement inmid-July, the actual date of which was to be communicated in due course and thedetails of which were confidential at that time.[35] On 3 June 2021, the directors of the general partner of Bartletts Creek wrote toVinlink requesting certain information including financial information so that it couldconsider whether it would agree to the assignment of its lease to Vinlink. The letterasked for confirmation about whether the lease had in fact been assigned and notedthe expectation that the receivers would seek consent to the assignment from BartlettsCreek. No reply was received to this letter.[36] On 17 June, Bartletts Creek's solicitors wrote to Vinlink confirming thereceivers had advised of Vinlink's proposed purchase of Sacred Hill, which wouldinclude the assignment of their lease. This letter essentially repeated the request forthe information sought by the directors in their letter of 3 June.[37] On 18 June 2021, the administrators applied to the Court for orders on awithout notice basis to extend the convening period for the watershed meeting from21 June until 30 July 2021, a period of 29 days. The application included (among otherthings), a request for an order for leave to be reserved to any creditor to apply to theCourt on notice to vary or set aside the orders. The application was accompanied byan affidavit by Mr Booth, which annexed the minutes of the first creditors meeting on2 June, Bartletts Creek's PLA notice,9 the letter from Bartletts Creek's solicitors of24 May 2021, the letter from the administrators' solicitors of 27 May 2021 and the9 There was also another PLA notice dated 19 May 2021 issued by another lessor (Mt RoyalVineyard Investments Ltd), but this lessor took no further steps after issuing the notice.letter of 18 June 2021 from the receivers' solicitors outlining the details of theproposed sale and supporting the application by the administrators.[38] On the same day (18 June 2021), Lang J made orders in terms of the applicationon a without notice basis. The orders were served on Bartletts Creek and others inaccordance with the Judge's directions on 21 June 2021.[39] On 1 July 2021, Bartletts Creek made an application to the Court to set asideLang J's orders and the administrators filed a notice of opposition to it on 12 July 2021.[40] On 11 July 2021, the receivers filed their first report in the Companies Office.One of the matters referred to in that report was the then conditional sale of thecompany as a going concern to Vinlink.[41] On 15 July 2021, the Vinlink agreement became unconditional.[42] On 16 July 2021, Vinlink's solicitors sent a letter to Bartletts Creek's solicitorsrelating to the proposed settlement on 19 July, raising among other things whetherBartletts Creek was unreasonably withholding consent to the assignment of the lease.The response was that although the information provided was being assessed, consentto the assignment was not forthcoming at that stage.[43] On 20 July 2021 (the day before the hearing before me), settlement of theVinlink agreement occurred. The assets of Sacred Hill, including the assignment ofthe 11 leases, was therefore affected by virtue of s 240 of the PLA. This meant thatVinlink became Bartletts Creek's tenant. One of counsel for the administrators'arguments at this hearing was that Bartletts Creek's application was unfoundedbecause it no longer has an interest in the administration of Sacred Hill. Although thatmay be correct, it was not argued in any detail before me.The law[44] The voluntary administration regime is contained within Part 15A of the Act.The stated statutory purpose of the regime is to maximise the chances of a companyor its business continuing in existence, or if that is not possible, to maximise thechances of a better return from the company's creditors and shareholders than wouldresult from the company's immediate liquidation.10[45] As referred to above, one of the key features of the administration regime isthat there is a stay on any actions against the company and its property during theperiod of the administration, which is called the moratorium.11 This prevents anyowner or lessor from recovering property that was used or occupied by the companyand from beginning or continuing proceedings against the company.12 Themoratorium lasts for the duration of the voluntary administration.[46] The administration regime has been described as providing a company withbreathing space "during which the administrator can assess and investigate thecompany's situation, continue to run the business if appropriate, and put together aproposal for the company's future."13[47] The administrators are required to take certain steps under Part 15A onceappointed, which includes convening a first meeting of creditors and then "a watershedmeeting" within "the convening period" (being 20 working days after the date onwhich the administrators are appointed and including any period of extension).14[48] At least five working days prior to the watershed meeting, the administratorsare required to give written notice of the meeting to as many of the company's creditorsas reasonably practicable and advertise the meeting by publication in the Gazette.15The notice must contain:16(a) a report from the administrators about the company's business,property, affairs and financial circumstances and any other mattermaterial to the creditors' decisions to be considered at the meeting; and10 Companies Act, s 239A.11 Section 239ABG.12 Sections 239ABD and 239ABE.13 Heath and Whale on Insolvency (online ed, LexisNexis) at [17.6].14 Companies Act, s 239AT(2).15 Sections 239AU(1) and 3(1)(a).16 Section 239AU(3).(b) a statement setting out the administrators' opinion (with reasons)regarding whether it would be in the creditors' interest for:(i) the company to execute a deed of company arrangement(DOCA); or(ii) the administration to end; or(iii) the company to be placed in liquidation.[49] At the watershed meeting, creditors can resolve to do any of the three thingsset out in s 239ABA, which are to be included in the statement from theadministrators.17[50] Under s 239AT(3), the administrators can apply to the Court to extend theconvening period. This is what occurred here, which resulted in Lang J's decision.The arguments and discussion[51] Mr Gustafson argued that the application to extend the convening periodshould never have been brought on a without notice basis as it did not fit into any ofthe five categories for doing so set out in r 7.23(2). These same grounds are outlinedin r 7.46(3) regarding when the judge may determine that an application can properlybe dealt with without notice.[52] Rule 7.23(2) provides:7.23 Application without notice(2) An application without notice may be made only—(a) on 1 or more of the following grounds:(i) that requiring the applicant to proceed on notice wouldcause undue delay or prejudice to the applicant:(ii) that the application affects only the applicant:17 Section 239ABA.(iii) that the application relates to a routine matter:(iv) that an enactment expressly permits the application tobe made without serving notice of the application:(v) That the interests of justice require the application tobe determined without serving notice of theapplication; and(b) if the applicant has made all reasonable inquiries and taken allreasonable steps to ensure that the application and supportingdocuments contain all material that is relevant to theapplication, including any defence that might be relied on byany other party and any facts that would support the positionof any other party.[53] The without notice application does not refer to any of the grounds in r 7.23(2)specifically, although it does refer to Part 19 of the High Court Rules 2016 whichincorporates this provision. The only reference to the without notice aspect of theapplication is at paragraph [2.13] where it says: "[i]t is in the interests of justice, andof the speedy and inexpensive determination of this proceeding, that the originatingapplication be determined on a without notice basis."[54] In addition, the application refers to Mr Booth's affidavit in which he outlinesmatters relevant to the without notice aspect of the application in paragraphs [27] and[28]. In these paragraphs he says:[27] Mr Maginness and I request that the application be determined on awithout notice basis because, given the number of creditors with an interest inthe application, it would be expensive and impractical for us to proceed onnotice to all creditors. It would also cause unnecessary delay and prejudice,in light of the fact that the convening period currently expires this comingMonday.[28] In addition, the interests of creditors are sufficiently protected by:(28.1) requiring that the creditors are informed of the application andorders in the manner set out at paragraph 26.2 above; and(28.2) allowing the creditors to apply on notice to the Court to modifyor set aside the orders made.[55] I agree with Mr Gustafson that the only grounds relevant to the administrators'application to extend the convening period on a without notice basis would have beenr 7.23(2)(i) and (v). Certainly, the aspect of undue delay and prejudice (r 7.23 (2)(i))were covered by Mr Booth in [27] and the interests of justice ground (r 7.23 (2)(v))was covered inferentially, albeit obliquely, in both paragraphs. The memorandum ofcounsel accompanying the application referred to the urgency of the application beinglinked to the expiry of the convening period the next day (at [3]) and the without noticeaspect of it (at [33]).Were there grounds to make the order under r 7.23(2)(a)(i)?[56] As outlined above, this ground focuses on undue delay and prejudice to anapplicant. Mr Booth's affidavit dealt with this in relation to the number of creditorswith an interest in the application, but he only refers specifically to 10 leases. The totalnumber of creditors (approximately 143) are referred to in counsel's memorandum.[57] Mr Gustafson argued that r 7.23(2)(i) could not be satisfied because theadministrators were aware by 8 June 2021 that the convening period would end beforethe sale by the receivers settled. Mr Gustafson referred to the circular sent to creditorson 8 June which referred to the Vinlink settlement occurring in mid-July, whereas theexpiration of the convening period was 21 June 2021.[58] As at 8 June, Mr Gustafson submitted, it would have been apparent to theadministrators that to prevent Bartletts Creek from applying to the Court for apossession order or peaceably taking possession after the convening period expired,the administrators would need to apply for an extension to it. Mr Gustafson submittedthat:(1) if the administrators had concluded they needed to extend theconvening period at this time, the circular should have advised thecreditors that is what they intended to do;(2) there is no explanation as to why the administrators delayed bringingthe application to 18 June, one working day before the conveningperiod expired, or decided that no party should be named as arespondent, even on a Pickwick basis; and(3) because of the above, and in the absence of any explanation for thedelay in bringing the application, there can be no argument thatproceeding with notice would cause undue delay or prejudice to theadministrators.[59] He therefore submitted that the grounds outlined in r 7.23 (2)(i) could not bemet by the administrators. Furthermore, he submitted that the above informationought to have been before the Court.[60] Ms Gellert's submissions maintained the administrators' position outlined inher memorandum in support of the without notice order. This position was alsoreferred to in Mr Booth's affidavit that service on all 143 creditors would have causedundue delay and prejudice and potentially jeopardised the sale of the Sacred Hill as agoing concern.[61] Although this ground appears compelling because of the number of creditorsinvolved, it is not in fact as strong as the interests of justice ground, which I addressbelow, and was not as well articulated in the documents presented to the Court insupport of the without notice application. This is because, as Mr Gustafson rightlynotes, in this electronic age service is often not difficult and an application can bemade for time to be abridged if needed. Despite this observation, the administratorsstill had to apply for orders in relation to service in this way, so it was important forthe Court to understand the extent of the task with reference to the number of creditorsinvolved.[62] As to whether there was prejudice to the applicant, with the benefit of hindsightit is hard to see how this aspect was made out, especially given that the documentsfiled did not explain the reason for the delay in filing the application until just beforeit was due. However, in my view, the more significant ground advanced was theinterests of justice ground, which I address next.Were there grounds to make the order under r 7.23(2)(a)(v)?[63] The arguments in respect of both grounds were intermingled, however the mainargument for Mr Gustafson seemed to be that it cannot be in the interests of justice foran administrator to wait until the last minute to apply without notice for an extensionof time to the convening period knowing that this would prevent a creditor (in thiscase Bartletts Creek) from relying on the fact that the moratorium would end and thatcreditor would be able to exercise certain rights thereafter. In this case the right relatedto the lessor's purported right to choose its tenant, a right that the receiver, aided bythe administrators, was attempting to override by effectively extending the processesprovided for under the Act by selling the business to a third party (Vinlink). It wassuggested that the administrators knew Bartletts Creek would oppose an applicationto the Court on notice for the extension of time. Mr Gustafson submitted that "[i]tcannot be in the interests of justice that an applicant can rely on r 7.23(2)(a)(v) whenit suspects that an interested party would oppose the application if served."[64] Mr Gustafson submitted as well that the other ground put forward by theadministrators for extending the convening period was that they needed to makefurther inquiries about whether to propose a DOCA. He submitted that the applicantshould have disclosed what they envisaged these investigations to be and any possibleDOCA matters should have been fully detailed and disclosed when the application wasmade without notice.[65] Ms Gellert submitted that it was appropriate for the application to proceed ona without notice basis because without extending the convening period and therebythe moratorium, the sale of the company as a going concern was likely to have beenjeopardised. She highlighted the steps taken to try and resolve the issue of the BartlettsCreek lease and she noted that an application to the Court for a possession order couldhave been brought by Bartletts Creek earlier in any event.[66] The sale of the company as a going concern was a key issue and was identifiedas such in the documents filed in support of the without notice application. The lettersbetween the lawyers identified above in relation to Bartletts Creek's issues wereannexed to Mr Booth's affidavit. The Judge was well able to assess this aspect againstthe statutory provisions, not only in relation to the making of without noticeapplications, but also in relation to the relevant provisions of the Companies Act andthe case law concerning applications for extensions of time for the convening periodwhich were referred to in counsel's supporting memorandum.[67] Although not expressed as such, the Judge's findings about the justice of thecase were set out at [4]–[7] of his decision, where he said that if the watershed meetingwas held on 21 June 2021 and the creditors voted to place the company intoliquidation, the value of the company's business as a going concern would be reduced.The Judge was therefore satisfied that terminating the existing moratorium at that stagewas likely to disrupt the receivers' efforts to realise the assets of the company in thecreditors' interests.[68] Having reviewed the documents, there is nothing I can see that would havechanged the result of the assessment had the application proceeded on notice.[69] I am persuaded that the applicant presented enough grounds to support itsapplication to enable the Court to determine the application without notice. Despitethis finding, in my view the application and supporting documents could and shouldhave identified and more specifically addressed the grounds in r 7.23(2)(a). Thereason for delay in applying to the Court for an extension to the convening period alsocould and should have been addressed on the facts of this case. I am less convincedthat more information about the DOCA was needed, given that in this case the keypoint related to the sale of the business as a going concern, which as Lang J acceptedwas a benefit to all creditors.[70] In the end however, Bartletts Creek's complaint about the process relates to itssituation, whereas the wider view relates to all creditors. Bartletts Creek was the onlylessor who was unhappy about the proposed sale, and its position was revealed to asufficient extent to the Court in the documents filed. Its actual rights were notinfringed by the making of the order without notice as it could nonetheless have filedan application for an order for possession and advanced its position in that way. HadBartletts Creek done this, there would however, have been an argument about whetherwhat it contended was a breach of the lease.Result[71] The application by Bartletts Creek to set aside or vary the order by Lang J isdismissed. The challenge by Bartletts Creek to the administrators bringing theapplication without notice fails and is also dismissed.[72] It is likely that the remaining two orders sought relating to terminating theadministration and granting leave for an order for possession have been overtaken byevents as well. Counsel for the applicant is to file a memorandum confirming theposition within 5 working days of this judgment.[73] The administrators of Sacred Hill Marlborough Vineyards Ltd are successfuland are therefore entitled to costs. They seek increased costs, but it is my view that2B costs are appropriate, together with disbursements as fixed by the Registrar. Theparties are to confer on quantum and try to reach agreement. If agreement cannot bereached, brief memoranda may be filed by the respondents within 15 working days ofthis judgment and by the applicant within 20 working days.____________________Harland J