KEET v THE HIDDEN VALLEY LIMITED [2016] NZHC 2089

KEET v THE HIDDEN VALLEY LIMITED [2016] NZHC 2089 [2 September 2016]IN THE HIGH COURT OF NEW ZEALANDNAPIER REGISTRYCIV-2016-441-105[2016] NZHC 2089UNDER the Companies Act 1993IN THE MATTER of an application for the liquidation of TheHidden Valley LimitedBETWEEN BERNARD ANDRIES KEETPlaintiffAND THE HIDDEN VALLEY LIMITEDDefendantOn the papersCounsel: D J O'Connor for PlaintiffJudgment: 2 September 2016JUDGMENT OF CLIFFORD J[1] The plaintiff, Bernard Keet, has filed these proceedings to wind up the defendant, The Hidden Valley Limited, on the just and equitable ground. Mr Keet deposes that the company was formed after the dissolution of his marriage to Magda Hoekstra. Mr Keet and Ms Hoekstra each hold 50 per cent of the shares of the company. Mr Keet deposes that the company was formed to subdivide a 10 hectare property (the Keirunga Road property) title to which was, following the dissolution of the marriage, vested in Ms Hoekstra and entities associated with her as to a one-half share and in Mr Keet and his current partner, Stella Wright, as to a one-half share.[2] At the same time Mr Keet applies, on a without notice basis for the appointment of Messrs Matthew Coulter and Colin Gower as interim liquidators of the defendant, and for freezing orders over certain bank accounts of Ms Hoekstra and entities associated with her (Reflections Limited and TMF Trustee Services Limited)and for ancillary orders restraining Ms Hoekstra and Reflections Limited from dealing in rent monies payable to the defendant and various associated issues.[3] Mr Keet has provided a detailed affidavit, to which are attached extensive exhibits documenting what would appear to be a long running dispute between him and Ms Hoekstra. Included within that affidavit, at BB and following, are recent relationship property correspondence.[4] Mr Keet also deposes that the defendant owes his company, K8 Limited, $10,000. K8 Limited, Mr Keet says, intends to serve a statutory demand against the defendant and that the defendant does not have sufficient monies to repay the loan owed.[5] Mr Keet has also provided an affidavit sworn by an accountant, a Mr Hensman. In my view, the affidavit from Mr Hensman adds little, as it wouldappear to be based on Mr Keets' narrative of, and categorisation of the legalsignificance of, the affairs of The Hidden Valley Limited.[6] The authorities make clear that the appointment of interim liquidators on a without notice basis requires not only a good prima facie case for liquidation, but also a need for urgency and special circumstances.[7] I am not persuaded that, in these circumstances, an interim liquidator should be appointed on a without notice basis, or that such freezing orders should be made.[8] The principal reason for that conclusion is the relationship property background to these proceedings. Those aspects of this dispute are dealt with inadequately in counsel's memorandum. As recently as 13 June 2016, a lawyer then acting for Mr Keet wrote to Ms Hoekstra's lawyers, Bay Legal, under the heading "re: Hoekstra and Keet relationship property". The previous correspondencebetween those parties indicates on its face that the dispute over the Keirunga Road property is part of a larger relationship property dispute. In my view, that itself makes proceeding on a without notice basis inappropriate. If on notice freezing orders are considered appropriate, an urgent hearing can be arranged for that matterto be considered. I acknowledge that Mr Keet himself addresses the relationship property context at [52] of his affidavit. That is, in my view, insufficient, particularly in light of the content of the correspondence appended at BB. Moreover, noattention has been paid by Mr O'Connor to possible justification that Mr Hoekstramight advance.[9] Moreover, in the Gifford Devine letter of 14 July 2016 it is clearly recorded that the Keirunga Road property is owned by trusts associated with Ms Hoekstra onthe one hand and Mr Keet on the other and that, moreover, "any rents paid forutilising the property by either Reflections Limited or the tenants of the various buildings should have been paid to the owners of the property, that is the two trusts".I therefore have considerable difficulty in understanding the assertion that monies belonging to The Hidden Valley Limited have been stolen by Ms Hoekstra when she has not properly accounted for what would appear to be income received from the Keirunga Road property.[10] It may well be that Mr Keet can establish that a winding up on the just and equitable ground is appropriate. But any such application should be made on notice.[11] The application for interim relief without notice is declined.[12] Mr Keet or his solicitors should liaise with the Registrar as regards the service of the substantive winding up application."Clifford J"Solicitors:Bate Hallett, Hastings for Plaintiff