COMMISSIONER OF INLAND REVENUE v LIVINGSPACE PROPERTIES LIMITED (in rec and in liq) [2020] NZHC 1434

COMMISSIONER OF INLAND REVENUE v LIVINGSPACE PROPERTIES LIMITED (in rec and in liq)[2020] NZHC 1434 [23 June 2020]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2010-409-002323[2020] NZHC 1434UNDER the Companies Act 1993IN THE MATTER OF the liquidation of Livingspace PropertiesLimited (in rec and in liq)BETWEEN COMMISSIONER OF INLANDREVENUEPlaintiffAND LIVINGSPACE PROPERTIES LIMITED(in rec and in liq)DefendantHearing: 4 February 2020 (additional submissions filed 24 February 2020,2 March 2020, 19 May 2020 and 26 May 2020).Appearances: A Ho and B J Norling for R Walker (Applicant for review)J Moss and H M Weston for K Buxton (Respondent)Judgment: 23 June 2020JUDGMENT OF OSBORNE J[on review]This judgment was delivered by me on 23 June 2020 at 4.25 pm pursuant to Rule 11.5of the High Court RulesRegistrar/Deputy RegistrarDate:Introduction[1] Robert Walker (the liquidator) is the liquidator of Livingspace Properties Ltd(in rec and liq) (Livingspace).[2] He seeks review of an interlocutory judgment of Associate Judge Johnston (thejudgment).1 In particular, he seeks the setting aside of two orders in the judgmentwhereby:(a) he was directed to serve David Henderson, Castle Operations Ltd(Castle), Tay Operations Ltd (Tay) and RFD Finance Ltd (RFD) (herein"the non-parties") with all documents associated with the liquidator'srenewed application for the production of documents, with the right tofile notice of opposition to that renewed application and the rights toappear to oppose the application and to seek orders they may regard asappropriate with regard to confidentiality or the use to which anydocumentation produced should be put (Order A);2 and(b) the Court concluded that it has inherent jurisdiction to remove aliquidator and to entertain applications for leave to apply for suchremoval by persons who do not fall within the categories identified ins 284(1) Companies Act 1993 (the Act) (Order B).3[3] Kristina Buxton, who had made the interlocutory applications, opposes thisreview.Background[4] The background is set out in paras [1]–[20] of the judgment.[5] In May 2018, the liquidator applied for production of books, records anddocuments by Ms Buxton and for her to attend an examination. The application was1 Commissioner of Inland Revenue v Livingspace Properties Ltd [2019] NZHC 2213 [Judgment].2 At [71(b)].3 At [71(c)].made under s 266(2) of the Act. I made orders requiring Ms Buxton (in her capacityas director of RFD) to (among other things):4(a) produce originals or copies of all books, records and/or documentsrelating to the business, accounts, or affairs of Livingspace PropertiesLimited (in liq) ("the Company") in her possession or under hercontrol, including but not limited to the following matters:(i) any statement of account detailing the transactions betweenthe Company and RFD Finance Limited (RFD);(ii) any accounting records that RFD must keep as mortgagee inpossession of the Company's mortgaged land, goods oraccounts receivable required by s 160 of the Property Law Act2007;(together, the Documents)[6] Ms Buxton had two large boxes of documents delivered to the liquidator'ssolicitors on 12 July 2018. The documents were then scanned into PDF. The liquidatordeposes that they comprised 5,135 pieces of paper (with many documents comprisingmultiple pages). Of those, 5,010 documents related to the period before 5 August 2011when an affidavit of documents was filed in another proceeding relating to RFD. Theliquidator deposes that 125 pages, mostly not financial in character, related to theperiod after 5 August 2011. He deposes that very few related to the following yearduring which RFD remained in possession of the Livingspace businesses.[7] The liquidator considered it implausible that no more than 125 pages ofinformation relating to the period after 5 August 2011 were within the control ofMs Buxton. He decided to seek further directions (leave having been reserved by thejudgment to both parties to apply for further directions in relation to the orders made).5On 12 October 2018 he sought (by memorandum) further directions, including thatMs Buxton produce documents set out in a schedule containing 27 categories ofmaterial (the 27 categories).[8] On 12 November 2018 I made directions for the matter to proceed on the basisof memoranda and affidavits, with a timetable to be observed.4 Commissioner of Inland Revenue v Livingspace Properties Ltd [2018] NZHC 1232 at [38][Production judgment].5 Production judgment, above n 4, at [38(f)].[9] On 23 November 2018 an application was filed by Ms Buxton, the non-partiesand FTG Securities Ltd (FTG) seeking:(a) leave to bring an application for removal of Mr Walker as liquidator ofLivingspace, Castle, Tay and Lichfield Ventures Ltd (LichfieldVentures);(b) an order of such removal (the removal application); and(c) an order staying any further steps taken on the liquidator's s 266application and his 12 October 2018 "application", pending theoutcome of the removal application(the stay application).[10] Ms Buxton did not comply with the timetable in relation to the liquidator's 12October 2018 request for further directions, apparently taking the view that hernow-filed applications rendered that unnecessary. The liquidator duly filed a noticeof opposition to the removal and stay applications. Both parties filed evidence insupport of their positions.[11] On 23 January 2019 an amended application was filed. Ms Buxton (alone)now sought an order joining the other non-parties as defendants in this proceeding.Ms Buxton and the non-parties continued to seek a stay of the liquidator's application.They also sought (by amendment) an order that FTG be granted leave to make theremoval application, followed by an order of removal.[12] The liquidator duly filed a notice of opposition to the amended application. Yetmore evidence was filed on both sides.[13] In the meantime, the liquidator applied for a number of orders including ordersstriking out aspects of Ms Buxton's amended application. The outcome of the hearingbefore Associate Judge Andrew (the strike-out judgment) was that the Court:6(a) struck out those aspects of Ms Buxton's amended application in whichthe removal of the liquidator from that role with Castle, Tay andLichfield Ventures was sought, together with leave to seek such orders;and(b) required the applicants, if wishing to challenge the liquidator's role assuch in those other companies to file separate applications for leave toapply for his removal.Hearing of the (remaining) amended application[14] The amended application came to be heard by Associate Judge Johnston on 29-30 July 2019. The Judge directed that the issues for hearing would be:(a) joinder;(b) stay; and(c) the standing of Ms Buxton and other parties to apply for an orderremoving the liquidator.[15] In the judgment, Associate Judge Johnston referred to the "prodigious amountof material for the hearing (nine bound volumes of material, together with skeletaloutlines of submissions)", his Honour noting that "some of this material was referredto by counsel in argument".76 Commissioner of Inland Revenue v Livingspace Properties Ltd [2019] NZHC 366 [Strike-outjudgment].7 Judgment, above n 1, at [10].The ordersIssues on review – Order A:[16] Order A (above at [2(a)]) is that which directed service of the liquidator's"renewed application" upon the non-parties with right to appear in opposition.[17] The issues raised on review are whether the Associate Judge erred by:(a) treating the request for further directions as a fresh interlocutoryapplication akin to an application for a non-party discovery;(b) failing to have regard to the finality of Order A by reason of the doctrineof res judicata and a privity of interest between Ms Buxton and the non-parties; and(c) failing to consider and apply the test in Capital and Merchant FinanceLtd (in rec and in liq) v Perpetual Trust Ltd when considering whetherto join non-parties or to grant intervener status.8Issues on review – Order B[18] Order B (above at [2(b)]) is that in which the Associate Judge held that theCourt has inherent jurisdiction to remove a liquidator and to entertain applications forleave to apply for removal by persons who fall outside the classes identified in s 284(1)of the Act.[19] The fundamental issue in relation to Order B is whether the Court has inherentjurisdiction to remove a liquidator.8 Capital and Merchant Finance Ltd (in rec and in liq) v Perpetual Trust Ltd [2014] NZHC 3205.The review jurisdiction[20] Transitional provisions in the Senior Courts Act 2016 operate so as to entitleMs Buxton to have the judgment reviewed in this Court under s 26P Judicature Act1908 and r 2.3 High Court Rules 2016.9[21] As the Associate Judge's decision was a reasoned one, following a defendedhearing, the approach is essentially appellate.10 The review proceeds as a rehearing.11[22] I adopt (summarised) the commentary in McGechan on Procedure.12 Thestarting point is the Associate Judge's decision. The applicant has the burden ofpersuading the Court that the decision was wrong – that it rested on unsupportablefindings of fact and/or applied wrong principles of law. The Court will apply theapproach in Austin, Nichols & Co Inc v Stichting Lodestar, which involves the Courtmaking its own assessment as to whether the original decision is wrong.13Order A – production of documentsThe reasoning in the judgment[23] The background to Order A lies in this Court's 2018 order (under s 266 of theAct), requiring Ms Buxton (as director of RFD) to produce records of Livingspace inher possession or control. The production judgment reserved leave to the parties toapply for further directions.14 There then followed sequentially Ms Buxton'sproduction of records and the liquidator's request for further directions.15[24] The liquidator's request for further directions was met by the November 2018cross-application by Ms Buxton, Mr Henderson and four others, for a stay of the s 2669 Senior Courts Act 2016, sch 5, cl 11.10 Perriam v Wilkes [2014] NZHC 2192 at [4]; Andrew Beck and others McGechan on Procedure(online ed, Thomson Reuters) at [HR2.3.02(1)(a)].11 High Court Rules 2016, r 2.3(4)(a).12 Andrew Beck and others, above n 10, at [HR2.3.02(1)(a)].13 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [16];Burmeister v O'Brien [2008] 3 NZLR 842 (HC) at 29.14 Above at [7].15 Above at [6]–[7].process.16 That cross-application was overtaken by the amended application(summarised at [11] above).[25] In turning to the joinder application, Associate Judge Johnston referred to thehistory of the difficult relationship between the liquidator and Mr Henderson, notingthat the decision in Henderson v Walker contained "a more extensive exposition of thedifficult relationship".17[26] His Honour then identified what he described as the applicants' legitimateinterests in the documentation sought:[27] The applicants' claims to some sort of proprietary or possessory rightsto the relevant documentation are unchallenged. I am therefore prepared toproceed on the basis that the applicants have legitimate interests in thedocumentation sought. It is unnecessary for the Court to reach any view as tothe likelihood or otherwise of Mr Walker using any documentation to whichhe obtains access for collateral purposes. It is enough for the Court toconclude — as I have — that the applicants have a legitimate interest in thedocumentation.[27] Associate Judge Johnston analysed the procedural regimes concerningnon-parties under r 4.56 and pt 31 High Court Rules.18 His Honour concluded:[36] Regardless of whether these applications are determined under r 4.56or pt 31, the presence of Mr Henderson, Castle Operations, Tay Operationsand FDR Finance is not necessary to dispose of the liquidator's applicationfor an order for the disclosure of additional documentation. Whilst I accept,for present purposes, that they may have legitimate interests in relation to thedocumentation sought, and that they are entitled to be heard both as to whetherthe liquidator should be entitled to the relevant documentation and as to anyconstraints to be imposed upon him, they can be heard without being joinedas parties to the proceeding.[37] The situation here appears to me to be akin to an application fordiscovery against a non-party. In such applications, a non-party against whomdiscovery is sought does not become a party to the proceeding. He, she or itis, however, entitled to be heard in relation to the application. The point isthat party status is not necessary in order for the court to allow a non-partyagainst whom discovery is sought to be heard.[38] I decline the applications of Mr Henderson, Castle Operations, TayOperations and FDR Finance for orders joining them as parties to this16 Above at [10].17 Judgment, above n 1, at n 3, citing Henderson v Walker [2019] NZHC 2184.18 At [28]–[36].proceeding. However, I propose to order that they have a right of audiencefor the purposes of the application relating to the provision of documentation.His Honour omitted FTG from the order as its inclusion was no longer sought.19[28] Therefore, as summarised (I consider correctly) by Mr Moss, AssociateJudge Johnston held that the non-parties were entitled to be heard without beingformally joined to the proceeding as they had legitimate interests in the material soughtby the liquidator. The legitimate interest, in his Honour's finding, was theirproprietary interest in the documentation.Non-parties' case[29] In support of the cross-application for joinder, Mr Moss produced to AssociateJudge Johnston a table relating to the 27 categories sought by the liquidator. Mr Mossincluded in the table a column headed "Documents belonged to". In that column heattributed ownership of the documents sought by the liquidator to a particular entity,having regard to the wording of the liquidator's category. The first two entries inMr Moss' table serve to illustrate the entire table:No. Documents sought Documents belong to1. Statement of accountdetailing the transactionsbetween RFD andLivingspaceRFD2. General ledgers of Tayand Castle for period16/9/10 – 6/8/12Tay and Castle[30] In his synopsis, Mr Moss submitted:Only the documents belonging to RFD could have been covered by theoriginal production order of Associate Judge Osborne. The parties with aproprietary right to documents applied for joinder because they thought thatwas the appropriate mechanism in which to be heard in relation to whether thedocuments should be produced and whether quarantining orders should be putin place to protect certain documents of a confidential/privileged nature.[31] Mr Moss submitted that the Associate Judge's dual decision – finding joinderto be unnecessary but entitling the non-parties to be served and heard – was correct by19 At [39].reason of the non-parties' ownership of the documents and thus their right to contesttheir production.[32] Mr Moss submitted that the right of the non-parties to be heard on the requestfor production of these documents is particularly pertinent in this case because of whatMr Moss described as "Robert Walker's history of misusing documents belonging toDavid Henderson or his associated companies in breach of his duties as a liquidator".Mr Moss referred in particular to findings of Thomas J in Henderson v Walker.20 MrMoss submitted there must be serious doubt as to Mr Walker's intentions in relationto the documents sought. In the absence of evidence from the liquidator as to hisintentions with the information, Mr Moss submitted that it seems very likely that theliquidator intends to use the documents for collateral attacks on the non-parties.Liquidator's grounds of opposition[33] The liquidator, by his notice of opposition to the joinder application, assertedthat there was no basis for adding Mr Henderson and the four others as parties. Theliquidator cited four reasons:(a) the Court's 2018 order and the liquidator's request for further directionsrelate solely to Ms Buxton, that is to her examination and hercompliance with the production order;(b) the non-parties ought not to be joined as Ms Buxton is the sole director,controller and possessor of the documentation and the information thatthe liquidator seeks;(c) the presence of the non-parties before the Court is not necessary toadjudicate on and settle all questions involved as Ms Buxton is the soledirector, controller and possessor of the documentation and theinformation sought; and20 Henderson v Walker, above n 17.(d) the non-parties are not the subject of and do not have an interest in theoutcomes of the production order (including the request for directions)as they are neither creditors, shareholders, directors or other entitledpersons of Livingspace.Liquidator's submissions[34] For the liquidator, Mr Ho submitted that the Associate Judge had erred inmaking directions in relation to the non-parties for three reasons:(a) his Honour had treated the further directions sought by the liquidator asa fresh interlocutory application, when it was not;(b) the Associate Judge had failed to consider the effect of the Court'sproduction order and the application of the doctrine of res judicata toMs Buxton and her privies as considered in Shiels v Blakeley and ReadyMark Ltd v Grant;21 and(c) The Associate Judge had failed to apply the law pertaining to theconferral of rights of intervention and audience on interested parties, assummarised in Capital and Merchant Finance Ltd.22[35] Mr Ho then expanded upon those three topics.Treating the request for further directions as a fresh interlocutory application[36] Mr Ho identified the liquidator's request for further directions, made on12 October 2018, as a request made pursuant to leave reserved in the Court's 2018production order. Mr Ho in particular referred to a minute which I issued on12 November 2018, in which I recorded:23[9] Furthermore, the content of Mr Neil's 12 October 2018 memorandummakes plain the fact that the liquidator is seeking compliance with the Court'sorders of 29 May 2018, which were the subject of leave reserved to apply for21 Shiels v Blakeley [1986] 2 NZLR 262 (CA); Ready Mark Ltd v Grant [2012] NZCA 445.22 Capital and Merchant Finance Ltd (in rec and liq) v Perpetual Trust Ltd, above n 8.23 Commissioner of Inland Revenue v Livingspace Properties Ltd (in liq) HC Christchurch CIV-2010-409-2323, 12 November 2018.further directions. The Court did not anticipate a further interlocutoryapplication at that point. What is happening is that the orders made on theoriginal application are being revisited. It is for the Court in this context todetermine its own procedure in the interests of securing a just, speedy, andinexpensive determination. That can be done in this case by properlyconsidered and drafted memoranda and supporting evidence.[37] Mr Ho noted that Associate Judge Johnston had treated the liquidator'smemorandum request as an "application for an order for the disclosure of additionaldocumentation".24 Mr Ho accordingly submitted that Order A appears to have beenbased on the Judge's misapprehension that the request for further directions was aninterlocutory application. Mr Ho submitted that, as it was not such an interlocutoryapplication, there was no scope for the non-parties to oppose the further directionswhich Order A expressly permitted them to do.[38] Mr Ho further submitted that Order A was in any event unnecessary as thearguments which Ms Buxton wishes to raise could be raised without notices ofopposition from the non-parties.Res judicata[39] Mr Ho alternatively submitted that the doctrine of estoppel per rem judicatamapplies in this case. Mr Ho invoked the Court of Appeal's judgment inShiels v Blakeley as establishing two principles applicable in this case:25(a) where a court has pronounced a final judicial decision over the partiesto, and the subject matter of the litigation, the parties are estopped fromdisputing or questioning the decision on its merits; and(b) the same principle applies to any privy to such litigation, a personbecoming a privy when there is a community or privity of interestbetween that person and the party.[40] In light of these principles, Mr Ho first referred to the position of RFD (one ofthe non-parties which Ms Buxton sought to have joined). Upon the liquidator's initial24 Judgment, above n 1, at [36].25 Shiels v Blakeley, above n 21, at 266.application for a production order against Ms Buxton as director of RFD, theproduction judgment referred to 12 grounds of opposition advanced by Ms Buxton.26One of those grounds of opposition was that the documents sought were the "internaldocuments of RFD". That was a ground specifically addressed in the productionjudgment and dismissed.27[41] Mr Ho identified that part of Associate Judge Johnston's judgment in whichMr Moss' schedule of documents (exemplified in Table A above) was referred to. HisHonour recorded that the sole basis upon which the other parties whose joinder wassought was that "the documents that Mr Walker has sought under the FurtherDirections application belong and relate to them rather than Ms Buxton".28[42] Mr Ho submitted that there would be no material difference between theargument to be advanced by the non-parties and the arguments previously advancedby Ms Buxton.[43] Mr Ho then turned to the relationship between Ms Buxton and the non-parties.He noted that Ms Buxton, as well as being sole director of RFD, is sole director ofCastle and Tay which are fully owned subsidiaries of RFD. Mr Ho submitted thatthere was, as between Ms Buxton and the non-parties, such "mutuality of interest"identified by the Court of Appeal in Shiels v Blakeley as leads the Court to find theparties estopped from seeking to re-argue existing orders.29[44] Mr Ho submitted that the outcome here should have been the same as that inReady Mark Ltd v Grant.30 Ready Mark had sought judgment against Ms Grant for asum allegedly owing for renovation work carried out on a property she owned. ReadyMark was controlled by Ms Grant's former husband who was its sole director.Ms Grant opposed Ready Mark's summary judgment application on the basis that theclaim was determined as part of the valuation of relationship property in the Family26 Production judgment, above n 4, at [18].27 At [30]–[31].28 Judgment, above n 1, at [25].29 Shiels v Blakeley, above 21, at [268].30 Ready Mark Ltd v Grant, above n 21.Court. The Court of Appeal dismissed an appeal from the judgment which haddismissed a summary judgment application.[45] Both Associate Judge Christiansen and the Court of Appeal upheld thatargument – Ready Mark was clearly the privy of Mr Grant and was bound by theconsequences of the outcome in the Family Court affecting Mr Grant. Ready Markwas estopped from bringing the renovation work claim independently of the FamilyCourt's determination.31[46] Mr Ho submitted that if the principles in Shiels v Blakeley and Ready Mark Ltdare applied, as they should be on the facts of this case, then the only purpose ofinvolving the non-parties would be to relitigate the production order. In Mr Ho'ssubmission, the doctrine of estoppel produces (as identified in Shiels v Blakeley) the"fair and just result" that the non-parties, as Ms Buxton's privy, cannot relitigate theproduction order.Conferral of intervention rights under Capital and Merchant Finance[47] Mr Ho further submitted that the Associate Judge had erred in conferring rightsof intervention and audience upon the non-parties as "interested parties". Hesubmitted that the Court, by allowing the non-parties to file a notice of opposition andbe heard in opposition, had in fact made the non-parties parties to the proceeding withostensible rights of appeal, an outcome which Mr Ho submitted was inconsistent withhis Honour's declining to join the non-parties as parties to the proceeding.[48] Mr Ho submitted that the appropriate test to be applied was that in Capital andMerchant Finance Ltd, where Thomas J identified seven "propositions" in relation tothe joinder of interveners and interested parties.32 Thomas J took these propositionsfrom the authorities:[41] The following propositions can be distilled from the authorities on thejoinder of interveners/interested parties:31 Ready Mark Ltd v Grant HC Auckland CIV-2010-404-8264, 17 June 2011 at [64]; Ready Mark Ltdv Grant, above n 21, at [22], [38].32 Capital and Merchant Finance Ltd (in rec and in liq) v Perpetual Trust Ltd, above n 8.(a) An applicant must show that its legal rights against orliabilities in relation to the subject matter will be directlyaffected. Commercial, financial, or reputational interests inthe outcome will only be sufficient in exceptionalcircumstances.(b) If the intending intervener's presence before the Court willnot improve the quality of information before the Court, thatwill count heavily against its addition to the proceedings.(c) A relevant consideration is the extent to which the proposedintervener can rely on one of the parties to protect its rightsand obligations.(d) If either party would be prejudiced by the intervention, or ifthe intervention would create an impression of partiality, theapplication will not be granted.(e) In cases where development of the law is likely, theapplication is more likely to be granted if the proposedintervener has special expertise to assist the Court on widerpublic policy issues.(f) The underlying issue is whether it would be unjust toadjudicate on the matter in dispute without the intervenerbeing heard. Several of the factors mentioned above tie intothis issue.(g) Where intervention is justified, the degree of participationgranted to the intervener should be the minimum necessary toprotect the intervener's interests.[49] Mr Ho submitted, by reference to the Capital and Merchant Financeprinciples, that Order A ought not to have been made. This was, he said, because:(a) the legal rights and liabilities of the non-parties were not affected bythe further directions sought;(b) the non-parties' presence would not improve the quality of informationbefore the Court;(c) the non-parties could rely on Ms Buxton to protect their rights andobligations;(d) Ms Buxton would not be prejudiced by the exclusion of the non-parties;(e) this was not a case where the law was likely to be developed; and(f) it would not be unjust to adjudicate on the matters in dispute withoutthe non-parties being heard.Submissions for Ms BuxtonNo separate interlocutory application?[50] For Ms Buxton, Mr Moss referred to Mr Ho's proposition that there was notan interlocutory application (whether "renewed" or otherwise) for the non-parties tooppose. Mr Moss characterised that submission as a "form over substance" argumentwhich should be rejected having regard to what the liquidator is now seeking.[51] Mr Moss referred also to Associate Judge Andrew's strike-out judgment(above at [13] and n 6). In the introduction to the strike-out judgment, his Honourrecorded (in relation to this matter) that "the liquidator filed an application (bymemorandum) seeking directions for what he says are Ms Buxton'snon-compliance".33[52] Mr Moss described the documents sought through the liquidator'smemorandum as:a significant number of new categories of documents which were neitherapplied for before Associate Judge Osborne nor made the subject of theproduction orders.[53] Mr Moss correctly pointed to the extent to which the documents sought relatedto other parties (in relation to which Ms Buxton had not been ordered to providedocuments).[54] In the alternative, Mr Moss submitted that even were the Court to find that theliquidator's request is a continuation of the production order, rather than a furtherdirections application, the Court was still entitled to give the non-parties a right to beheard on that matter. Mr Moss invoked an observation I made in a minute on12 November 2018 identifying the right of the Court in this context to determine itsown procedure.3433 Strike-out judgment, above n 6, at [3].34 Commissioner of Inland Revenue v Livingspace Properties Ltd (in liq), above n 23, at [9].Res judicata[55] Mr Moss first submitted that the liquidator's res judicata argument waspremature when the only consideration at present is that the non-parties have beengiven the right to be heard.[56] Mr Moss submitted, in any event, that authorities such as Shiels v Blakeley aredistinguishable because the present is not a situation where the non-parties are seekingto be heard on a final judicial decision.35[57] Mr Moss referred to the six requirements of res judicata estoppel referred to inSpencer Bower and Handley: Res Judicata.36 This list of requirements was cited bythe Court of Appeal with implicit approval in Butcher v Body Corporate 342525.37The six requirements are as follows:(i) the decision was judicial in the relevant sense;(ii) it was in fact pronounced;(iii) the tribunal had jurisdiction over the parties and the subject matter;(iv) the decision was —(1) final;(2) on the merits;(v) it determined a question raised in the later litigation; and(vi) the parties are the same or their privies, or the earlier decision was inrem.[58] Mr Moss submitted that the liquidator's res judicata argument fails for fivereasons:(a) the further directions sought by the liquidator constitute a newapplication;35 Shiels v Blakeley, above n 21.36 K R Handley Spencer Bower and Handley: Res Judicata (4th ed, Butterworths, London, 2009) at[1.02] (footnote omitted).37 Butcher v Body Corporate 342525 [2018] NZCA 19 at [43]–[62].(b) the parties are not the same, each of the non-parties being their ownentities. The production order relates to Ms Buxton. The thirdrequirement in Butcher – jurisdiction over the parties and the subjectmatter – is missing;(c) the non-parties are not seeking to re-argue the issue determined in theearlier litigation, namely the production order, which was directed toMs Buxton in her capacity as a director of RFD. The non-parties seekto be heard only in relation to 27 fresh categories;(d) in terms of the fourth requirement in Butcher – finality – the productionorder was not final in that leave was reserved for further directions; and(e) in terms of the sixth requirement – privity – there is not a mutuality ofinterest between Ms Buxton and the non-parties because the furtherdirections sought relate to them individually. Each has their owncharacteristics and interests (such as in relation to confidentiality).[59] Mr Moss submitted in conclusion that each entity has a right to be heard onwhether the documents sought from them individually should be produced.Right of intervention under Capital and Merchant Finance[60] Mr Moss noted that the liquidator's submissions to Associate Judge Johnstonhad included the proposition that the non-parties' application for joinder could moreproperly be considered as an application to intervene in Ms Buxton's applications.Mr Moss rejected that proposition as what the non-parties wish to do is to be heard inrespect of the liquidator's application (not Ms Buxton's applications). The non-partieswish to be heard, Mr Moss says, because it is the liquidator who has sought theirdocuments (without making an application against them).[61] Mr Moss submitted that Capital and Merchant Finance is in any eventdistinguishable – the present case involves a party "having its documentsinterrogated", whereas Capital and Merchant Finance concerns rights ofintervention.38 Mr Moss submitted that, to the extent that Capital and MerchantFinance might be relevant, it is for the overriding principle that the applicant mustshow that its legal rights in relation to the subject matter will be directly affected.Mr Moss submits that is the case here because any action the liquidator takes inrelation to the documents sought will almost certainly directly affect the non-parties.AnalysisScope of the production judgment[62] This hearing and judgment are evidence of the extent to which the liquidationof Livingspace, ordered almost 10 years ago, has become mired in applications,cross-applications, and wide-ranging legal argument. For the resolution of the presentarguments, the production order made almost two years ago is of central importance.It is not nearly so wide in its scope as the arguments advanced by the parties (and theircounsel) would appear to assume.[63] The production order against Ms Buxton was made under s 266 of the Act, butthe starting point lies in s 261 of the Act as orders may be made under s 266 only wherea person has failed to comply with a requirement under s 261.The statutory regime[64] Section 261 of the Act empowers a liquidator to obtain documents of thecompany in liquidation from its director or other persons, and in particular provides:261 Power to obtain documents and information(1) A liquidator may, from time to time, by notice in writing, require adirector or shareholder of the company or any other person to deliverto the liquidator such books, records, or documents of the company inthat person's possession or under that person's control as theliquidator requires.38 Capital and Merchant Finance Ltd (in rec and in liq) v Perpetual Trust Ltd, above n 8.[65] Section 266 of the Act gives the Court powers in relation to the obtaining ofdocuments and other information relating to the business, accounts, or affairs of thecompany in liquidation. Section 266 provides:266 Powers of court(1) The court may, on the application of the liquidator, order a person whohas failed to comply with a requirement of the liquidator under section261 to comply with that requirement.(2) The court may, on the application of the liquidator, order a person towhom section 261 applies to—(a) attend before the court and be examined on oath or affirmationby the court or the liquidator or a barrister or solicitor actingon behalf of the liquidator on any matter relating to thebusiness, accounts, or affairs of the company:(b) produce any books, records, or documents relating to thebusiness, accounts, or affairs of the company in that person'spossession or under that person's control.(3) Where a person is examined under subsection (2)(a),—(a) the examination must be recorded in writing; and(b) the person examined must sign the record.(4) Subject to any directions by the court, a record of an examinationunder this section is admissible in evidence in any proceedings underthis Part, section 383, subpart 6 of Part 8 of the Financial MarketsConduct Act 2013, or section 44F of the Takeovers Act 1993.The basis of the liquidator's application for the production order[66] The liquidator's focus was on a period from 2010 to 2012 when RFD was inpossession of Livingspace's property. The liquidator wished to identify and realiselegal claims that may belong to Livingspace from that period.[67] From December 2014, Ms Buxton has been the director of RFD. This led theliquidator (unsuccessfully) to invoke s 261 of the Act in order to obtain directly fromMs Buxton RFD's documents relating to the affairs of Livingspace and, subsequently,to make the application to the Court for a production order under s 266 of the Act(combined with an application for an order also under s 266 that Ms Buxton beexamined on oath).[68] The application for production of documents was focused on RFD's records.The liquidator applied for an order that Ms Buxton:39(b) Produce originals or copies of all books, records and/or documentsrelating to the business, accounts, or affairs of the Company in MsBuxton's possession or under her control, including but not limited tothe following matters:(i) Any statement of account detailing the transactions betweenthe Company and RFD Finance Limited (RFD);(ii) Any accounting records that RFD must keep as mortgagee inpossession of the Company's mortgaged land, goods oraccounts receivable required by s 160 of the Property Law Act2007;(together, Documents)[69] The Court, immediately after the order identifying the documents to beproduced by Ms Buxton, made additional orders including that:40(a) Ms Buxton produce the documents to the liquidator in a definedmanner;(b) Ms Buxton provide to the liquidator details of her reasonable out ofpocket expenses; and(c) the liquidator promptly thereafter pay Ms Buxton's expenses.[70] The Court additionally reserved leave in relation to two matters –(a) Ms Buxton had leave to request, in relation to any documents to beproduced, the Court's direction designed to protect RFD's legitimatecommercial sensitivity or confidentiality in relation to any document;and39 Production judgment, above n 4, at [3].40 At [38(b)-(d)].(b) leave was reserved to the parties to apply for further directions inrelation to the orders at [38(a)–(d)], being those broadly summarised at[68]-[69] above.[71] These orders were sealed and were not the subject of appeal.[72] To summarise the position to that point, the liquidator, under s 261 of the Act,had sought from Ms Buxton as director of RFD such books, records or documents ofthe company as were in her possession or under her control. Following Ms Buxton'sdefault, the liquidator, by applying on notice under s 266 of the Act, obtained theproduction order which (inter alia) required Ms Buxton to produce documents relatingto the business of Livingspace within her possession or under her control and identified(without limiting the order to these categories) the statement of account of transactionsbetween Livingspace and RFD and the accounting records that RFD had been requiredto keep as mortgagee in possession. The ambit of the production order is furtherexplained in the leave which was reserved to Ms Buxton, which was for the purposesof protecting the legitimate commercial sensitivity or confidentiality of documents ofRFD.[73] At no point of the production judgment did the Court contemplate that theproduction order would cover the documents of companies other than Livingspace andRFD (whether or not Ms Buxton was an office holder or otherwise a representative ofthat other entity).[74] The leave reserved to the parties under [38(f)] of the production judgment wasexpressly "to apply for further directions in relation to the orders in paragraph [38(a)–(d)]". The reservation of leave could not be read as applying to an entity other thanLivingspace or RFD, not being the subject of any consideration in the judgment.[75] At [81] below, I return to a discussion of the further directions sought by theliquidator as they relate to any documents of the non-parties other than RFD. At thispoint, it is necessary to focus on RFD alone.Requested further directions affecting RFD's documents[76] It was common ground between counsel that the production order was directedat Ms Buxton in her capacity as sole director of RFD. At the 2018 hearing, Ms Buxton(in her evidence and through counsel) took as grounds of opposition matters intendedto protect the interests of RFD. Those related particularly to RFD's "internaldocuments" and the need for restrictions to protect matters of RFD's commercialsensitivity and confidentiality.41[77] Contrary to Mr Moss's submission, the production order obtained by theliquidator against Ms Buxton was a final decision of this Court pursuant to s 266 ofthe Act.[78] That leaves the question as to whether RFD was in terms of Shiels v Blakeleya privy in interest so as to be estopped from putting its own arguments forward at alater date.[79] While it was recognised by the Court of Appeal in Shiels v Blakeley that thedegree or nature of the link between the two parties in question is scarcely definable,the touchstone will usually be the community or mutuality of interest between thetwo.42 Mr Moss's submissions in relation to mutuality of interest did not focus onRFD. Rather, his submission was that the non-parties are their own entities with theirown structures and businesses and may take different positions in relation todocuments. That submission cannot be applied on the facts to Ms Buxton and RFD.They plainly adopted a community or mutuality of interest approach to the 2018application. The orders made were specifically tailored to protect the proprietary andconfidentiality interests of RFD.[80] It will produce a fair and just result as between the liquidator on the one handand Ms Buxton and RFD on the other that RFD be estopped from pursuing an outcomeinconsistent with the production order.41 Production judgment, above n 4, at [30]–[31].42 Shiels v Blakeley, above n 21, at 268.Non-parties other than RFD[81] That leaves for consideration Mr Ho's submission that the remainingnon-parties – Mr Henderson, Castle and Tay – were (in the making of the productionorders) privies in interest with Ms Buxton.[82] That is plainly not so. The interests of those other non-parties were not touchedupon in the production judgment. If there had been some focus in the 2018 applicationon the documents of Castle or Tay which were controlled by Ms Buxton, there mayhave been some basis for an argument based on privity. But the mere fact that MsBuxton was the sole director of Castle and Tay (as well as RFD) does not connectCastle and Tay to the 2018 application in a way that makes it fair and just to estopthem from asserting their interests at this point. The same applies to Mr Henderson'sinterests – it is insufficient in relation to the 2018 application to constitute a "mutualityof interest" that he and Ms Buxton are husband and wife.Recapping[83] It is appropriate to recap at this point. The production order binds Ms Buxtonand, through the doctrine of estoppel per rem judicatam, RFD. The production orderrequired that Ms Buxton produce the documents identified in the order. Those weredocuments relating to the business, accounts or affairs of Livingspace in Ms Buxton'spossession or under her control including particularly two categories of documents ofRFD.[84] The leave reserved under [38(f)] of the production judgment was for furtherdirections "in relation to the orders in [38(a)-(d)]". The liquidator was not therebyreserved leave to apply for orders against other entities (either directly or throughMs Buxton as a director). The s 266 procedure was available to the liquidatorprecisely because Ms Buxton had failed to comply with a notice (under s 261)requiring production of records of Livingspace, including RFD's accounting records.There is no suggestion that the liquidator has made a parallel s 261 application inrelation to the records of Castle, Tay or Mr Henderson which, if not complied with,would have triggered the liquidator's right to seek orders as to examination and/orproduction under s 266 of the Act. Understandably, the legislation makes a prior(unfulfilled) request under s 261 a prerequisite to an order under s 266, but that stephas not been taken by the liquidator in relation to the documents of Castle, Tay orMr Henderson.A supplementing procedure goes off the rails[85] Of the 27 categories of documents sought by the liquidator in his request forfurther directions, the table presented by Mr Moss identifies nine categories asinvolving exclusively RFD documents, three categories involving both RFD andLivingspace documents and an additional two categories as involving Tay and Castledocuments (as well as RFD and Livingspace documents). One category is shown asinvolving Livingspace documents alone.[86] One further category involved documents of Ms Buxton personally and ofLivingspace (as well as documents of Mr Henderson and Mr Hyndman).[87] By reason of the production order and the estoppel per rem judicatam whichapplies to RFD documents, the production order applied to those 16 categories ofdocuments to the extent they were the documents of Livingspace, RFD and/orMs Buxton personally.[88] From the outset of Ms Buxton's opposition to the request for further directions,it has been her consistent position that the request should be treated as a freshapplication.[89] The remaining categories of documents sought by the liquidator (withownership variously attributed to Tay, Castle, Spinach Design Ltd, AFB Treasury Ltd,Mr Henderson and Mr Hyndman) fell outside the compass of the leave reserved to theparties to request further directions. In that sense, it already was (as Mr Mosssubmitted) in substance a fresh application.[90] Accordingly, at that point it was not open to the liquidator to pursue thedocuments of the non-parties (other than RFD) through a request for further directions.If the liquidator wished to pursue such documents, it ought as a matter of jurisdictionto have been through either of two productions:(a) a fresh s 261 notice to the non-parties (and for Ms Buxton in hercapacity as a director of one of the companies) followed if necessaryby an application under s 266(1) of the Act against those non-parties,directed to their documents; or(b) an application made and served upon the non-parties under s 266(2)(b)of the Act.[91] It was at the point of the liquidator requesting further directions, however, thatthe process went off the rails as regards the non-parties. This could never have beena successful application against the non-parties (other than RFD) under s 266(1) of theAct because they were not persons, in terms of s 266(1), who had failed to complywith the requirements of the liquidator under s 261 of the Act. To the extent that theliquidator sought further directions purportedly under the original production order, itwas not appropriate to pursue a document held or controlled by people or entities otherthan Ms Buxton.[92] But, at that point, Ms Buxton sought to protect the interests of the non-partiesby seeking to have them joined, a step which Associate Judge Johnston refused,instead directing service of all documents on the non-parties who would have the rightto file a notice of opposition and to appear.[93] As a result, the parties now have a situation where, in relation to the existingproceedings which are concerned with the documents of Livingspace and RFD overwhich Ms Buxton has control, three non-parties are to have rights to be heard and, asMr Ho submits, would therefore have consequential appeal rights.Outcome to this point[94] Ms Buxton's application in relation to the non-parties was specifically forjoinder under r 4.56 High Court Rules.[95] Albeit for reasons which differ from those of the Associate Judge, I concludethat his Honour was correct not to make an order of joinder.[96] In relation to RFD, that is because RFD is estopped per rem judicatam frompursuing a procedure which does not comply with that laid out in the production order.Matters of protecting RFD's confidentiality interests thereunder are for Ms Buxton totake up. She has that ability through the leave reserved.[97] As regards the other non-parties, their joinder to the proceeding cannot beregarded as necessary to adjudicate on and settle all questions involved in theproceeding.43 Were they to be joined, it would be for the purpose of responding to theexpanded orders sought against Ms Buxton in relation to such documents as she (orsomeone else on behalf of each non-party) deposes is the property of the non-partyalone (and not that of Livingspace). But joinder for that purpose is unnecessary if, asis the case, the leave reserved to seek further directions in relation to the productionorder does not extend to the documents of the non-parties or to Ms Buxton in hercapacity as director of those non-parties. The position concerning any documents ofMr Henderson is at one remove again – it cannot be asserted that Ms Buxton has anygovernance or legal control over Mr Henderson.[98] The Associate Judge declined to join the non-parties as parties because heviewed the request for further directions as it affected them as being akin to anapplication for discovery against a non-party, in which event the non-party does notbecome a party to the proceeding itself.44[99] His Honour might equally have declined the application for the reasonidentified above, namely that the non-parties' joinder was unnecessary.[100] Associate Judge Johnston nevertheless adopted the alternative course ofgranting the non-parties a right to be heard (after service of the documents upon them).His Honour did so because he accepted, "for present purposes, that they may havelegitimate interests in relation to the documentation sought".45[101] I am satisfied, albeit for reasons not advanced in the liquidator's opposition,that the orders in relation to service and right of audience were unnecessary, for the43 High Court Rules 2016, r 4.56(1)(b)(ii).44 Judgment, above n 1, at [37].45 At [36].same reason that an order of joinder was unnecessary. The liquidator's request forfurther directions confirming any documents of the non-parties could not be grantedunder the umbrella of the production judgment. It would require a different procedure.[102] It had, from the beginning, been a central proposition of Ms Buxton's crossapplications that the majority of documents now sought by the liquidator go beyondthe existing Court order. In his submissions in support of joinder, Mr Moss similarlysubmitted that the liquidator's request for further directions was not "a continuance ofthe production order". While that submission identified the very conclusion I havereached above, the submissions at the hearing before me did not further engage withthat issue, counsel instead turning to a discussion on the merits of joinder (with theapparent assumption for the time being that the liquidator's "application" was valid).[103] As the issues before the Court for the time being are as between the liquidatorand Ms Buxton (as cross-applicant) and any question of invalidity is capable of beingdetermined now as between those two parties, it would be an unnecessary enlargementof the proceeding to have entities other than Ms Buxton (the respondent party to theproduction order) appearing and being heard.[104] In these circumstances, after I had reserved and was reflecting on thisjudgment, I invited developed submissions from counsel as to whether the Courtcould, under the umbrella of the production order, make extended directions affectingthe documents of the non-parties. I received such additional submissions as recordedat the start of this judgment. I have taken those submissions into account in reachingthe determination at [101] above. The submissions for the liquidator and Ms Buxtonrespectively may be summarised as:Liquidator[105] For the liquidator, Mr Norling correctly identified that the production orderwas made with reference to the wording of s 266(2)(b) of the Act, the liquidator'sapplication having been made under s 266.[106] Mr Norling then drew a distinction between an order under s 266(2) –focusing on records relating to the business accounts, or affairs of the company(emphasis added) – and an order made under s 266(1) which, by its relationship to s261, focuses on records of the company (emphasis added).[107] Mr Norling submitted that as the concept involved in documents relating tothe business, accounts, or affairs of the company is broader than the concept ofdocuments of the company, the documents which Ms Buxton was directed to producedid not need to fall within the description of "company records".[108] Turning to the requirements of notice, Mr Norling submitted that the Court'spowers under s 266(2) do not depend on the existence of a prior notice under s 261 ofthe Act. Nor (alternatively if the Court were to reject that submission) was there arequirement to issue a notice to any non-parties specifically as the Court had grantedorders under s 266 against Ms Buxton. Mr Norling stated that the liquidator was onlyseeking from Ms Buxton such documents as were in her possession or under hercontrol which "might relate or belong to other entities".[109] Mr Norling recorded the liquidator's acceptance that he had not served as 261 notice on any of the non-parties, explaining that the liquidator had been unawareof those entities' involvement with Livingspace at the time. Mr Norling noted that theproduction order reserved provision for Ms Buxton to apply for confidentialityprotection for any specific documents that could contain information of third parties.Mr Norling submitted that Ms Buxton should have utilised this reservation in order toprotect any confidentiality and that it was not open to the non-parties to do so inrelation to a production order not addressed to them.[110] The liquidator invokes the doctrine of res judicata as an importantconsideration, submitting that Ms Buxton is attempting to relitigate matters previouslydetermined.Ms Buxton[111] For Ms Buxton, Mr Moss raised two preliminary matters.[112] First Mr Moss noted correctly that there was a focus in the liquidator'ssubmissions on the original production order. Mr Moss submitted that such detractedfrom the proper focus upon the extent to which the additional orders sought by theliquidator went well outside the scope of the original production order, seeking thedocuments of non-parties, not held by Ms Buxton in her capacity as director of RFD.[113] Secondly, Mr Moss objected to Mr Norling's inclusion of a four pagechronology in his additional submissions, expressly pursuant to instructions from theliquidator. I accept Mr Moss' objection to the late introduction of that material, whichwas not material invited by the Court. It did not in any event assist in relation to thespecific matters on which the Court sought additional assistance.[114] Mr Moss noted that in terms of the record the production order was madeagainst Ms Buxton under s 266 of the Act upon the basis that she had failed to complywith a s 261 notice. Further, that the order had been made against Ms Buxton in hercapacity as director of RFD. Mr Moss adopted the Court's tentative conclusion that,as the non-parties had not been given notice under s 261 of the Act let alone failed tocomply with such notice, s 266(1) of the Act was not engaged and had no applicationto the non-parties.[115] In Mr Moss' submission, the only basis upon which the Court could then makeorders relating to the production of documents, relating to the business accounts oraffairs of the company under s 266, was in terms of s 266(2)(b) of the Act (which hadbeen invoked as against Ms Buxton through the production order). But in relation tothe non-parties, the liquidator had not made and served an application upon those non-parties under s 266(2). The liquidator had instead purported to rely upon the previousapplication made and served upon Ms Buxton alone.[116] Mr Moss noted, as I have found, that a significant number of the documents inthe 27 categories sought by the liquidator are not documents belonging to RFD. Hesubmitted as I found that only some of the additional documents sought belong to RFDand fall within the scope of the original production order.[117] Against that background Mr Moss submitted the Court has three availableoptions:(a) option 1 – to proceed to a hearing of the additional directionsapplication as it currently stands;(b) option 2 – to strike out the additional directions application asmisconceived, invoking r 15.1 High Court Rules; or(c) option 3 – to stay all or part of the proceeding, pursuant to r 15.1(3)High Court Rules, providing say 10 working days to the liquidatorto file an amended application seeking only such documents fromMs Buxton as fall within the scope of the original production order.Mr Moss submitted that the most appropriate course was for the entire request foradditional directions to be struck out (leaving as the only outstanding matter theremoval application).Outcome[118] For the reasons I have given at [95]–[101] above, the review application willbe allowed to the extent of rescinding the service and audience directions becausethere is no realistic prospect that the further directions sought can be made under theproduction order so as to affect the documents of the non-parties (other than RFD).The production order was not made against Ms Buxton other than in her capacity as adirector of RFD.[119] To the extent that the liquidator under the cover of further directions wasseeking the documents of other non-parties, such a request was clearly outside thescope of the leave reserved. For the documents of any other non-party to become thesubject of a court order would have required an application made against that party,on notice, under s 266 of the Act.[120] In the context of the present review, this is not an appropriate time to engagewith Mr Moss' second option, by which the request for further directions would bestruck out entirely. I accept that Mr Moss' third option is the appropriate course – therequest for further directions will be stayed for a period of 20 working days to enablethe liquidator to file an amended request for further directions limited to suchdocuments as are in Ms Buxton's possession or under her control in her capacity asdirector of RFD and as relate to the business, accounts, or affairs of Livingspace.The removal of the liquidatorThe application[121] Ms Buxton and the non-parties applied for leave for FTG to bring anapplication to remove Mr Walker as liquidator of Livingspace, and if granted, for anorder of removal.[122] For standing, the applicants asserted that they are each the subject ofMr Walker's applications in the liquidation. In the case of Mr Henderson, it wasadditionally asserted that he is a former director of "the companies". For the Court'sjurisdiction to make such orders, FTG invoked ss 280 and 284 of the Act. Additionally,the inherent jurisdiction of the Court to supervise the conduct of liquidators as officersof the Court was relied on by all applicants.[123] The application was opposed by the liquidator. In relation to standing, heasserted that none of the applicants has standing under s 284(1) of the Act as none isa creditor, shareholder, director or other entitled person in terms of the definition ins 2 of the Act. The liquidator also opposed the application on substantive grounds.The limited removal issue before the Associate Judge[124] The hearing of the removal application before the Associate Judge was limitedto the question of the standing of Ms Buxton and the non-parties to apply for an orderof removal.[125] His Honour concluded that the Court has inherent jurisdiction to removea liquidator and to entertain applications for leave to apply for such removal bypersons who do not fall within the categories identified in s 284(1) of the Act.46[126] Associate Judge Johnston first considered the position of FTG specifically, asit was claimed for FTG that it was a "creditor" of Livingspace in terms of s 284 of theAct. His Honour examined the evidence adduced.47 His Honour was not satisfiedthat FTG is a creditor of Livingspace with entitlement to seek leave under s 284(1) ofthe Act.48[127] His Honour then considered the Court's inherent jurisdiction.49[128] Associate Judge Johnston expressly recognised that the inherent jurisdictionmay be excluded where Parliament has clearly and unambiguously prescribed theCourt's jurisdiction in relation to a particular area of substantive law.50[129] His Honour, however, found a number of matters pointed to the subsistence ofthe inherent jurisdiction in relation to the removal of liquidators –(a) the language used by Parliament in pt 16 of the Act suggests that roomwas deliberately left for the Court to continue exercising its supervisoryrole where necessary;51(b) that it is an area where the Court must retain broad jurisdiction inpreventing misconduct by its officers (a liquidator being an officer ofthe Court);52(c) the interests of Mr Henderson, who was a director of Livingspace untilabout two weeks before its liquidation, are not likely to be less affected46 Judgment, above n 1, at [71(c)].47 At [50]–[57].48 At [58].49 At [59]–[69].50 At [63].51 At [64], citing s 284(2) Companies Act 1993.52 At [64].than those of a person who qualifies as a "director" under s 284(1) ofthe Act;53 and(d) where allegations of misconduct are made, the Court should not trifleover the standing of the party bringing the complaint, with the Courtable to prevent floodgate issues by entertaining only properly foundedallegations.54[130] These matters led Associate Judge Johnston to conclude that the Court hadinherent jurisdiction to entertain applications for leave to apply for the removal ofa liquidator, including by persons who do not fall within the categories identified ins 284(1) of the Act.55[131] In reaching this conclusion, his Honour referred to the conclusion of Heath Jin ANZ National Bank Ltd v Sheahan, that Parliament did not, in enacting s 284(1) ofthe Act, intend to exclude the Court's inherent jurisdiction.56 His Honour preferredthat conclusion to the doubt expressed by Mallon J in Official Assignee v Norris.57Submissions for the liquidator[132] Mr Ho's submissions at the hearing in relation to the inherent jurisdiction werebrief.[133] The liquidator, by his notice of opposition, asserted that the inherentjurisdiction could not be invoked as the applicants were outside the category of thoseentitled to apply for leave for orders under s 284(1) of the Act. That remained theliquidator's primary position in the hearing before Associate Judge Johnston.53 At [65].54 At [66]–[68], citing Trinity Foundation (Services No 1) Ltd v Downey (2005) 9 NZCLC 263,917(HC), confirmed by the Court of Appeal in Trinity Foundation (Services No 1) Ltd v Downey(2006) 3 NZCCLR 401 (CA).55 At [69], [71(c)].56 At [59], citing ANZ National Bank Ltd v Sheahan [2012] NZHC 3037, [2013] 1 NZLR 674 at[127]–[129].57 At [61], citing Official Assignee v Norris [2012] NZHC 961, [2012] NZCCLR 10 at [17]–[34].[134] In his review application, the liquidator's primary point remained that theCourt does not have inherent jurisdiction (to remove liquidators) on the application ofMs Buxton or the non-parties because they fall outside the categories of personsentitled to apply for supervisory orders under s 284(1) of the Act. However, beforethe review hearing the submissions filed by Mr Ho on behalf of the liquidatorcontained the altered propositions that:(a) the liquidator accepted that the Court must have inherent jurisdiction inrelation to the supervision of liquidators (ie beyond those powersidentified in s 284(1) of the Act); but(b) the Court does not have power under s 284 of the Act to remove aliquidator; because(c) the Court's sole power to remove a liquidator is contained in s 286(4)of the Act.[135] Mr Ho invoked observations of Mander J in Shafik v Makary (where the Courthad been invited to stay a District Court judgment as a matter of the inherentjurisdiction (the High Court Rules providing only for the stay of a High Courtjudgment)).58 His Honour observed:[18] While powers arising from the Court's inherent jurisdiction are widerthan those contained in the rules and are capable of filling gaps that may arisein respect of those rules, where an issue before the Court is already the subjectof prescription, the Court will rarely choose to exercise its inherent powers.The jurisdiction should only be developed and exercised in harmony withrelevant legislation.(footnote omitted)[136] Mr Ho submitted that there was no power under s 284 of the Act to remove aliquidator. He submitted that the Court's single source of statutory power to removea liquidator is s 286(4) of the Act which provides that:(4) A court may, in relation to a person who fails to comply with an ordermade under subsection (3), or is or becomes disqualified under section280 to become or remain a liquidator,—58 Shafik v Makary [2015] NZHC 2194, [2015] NZAR 1596.(a) remove the liquidator from office; or(b) order that the person may be appointed and act, or maycontinue to act, as liquidator, notwithstanding the provisionsof section 280.[137] Mr Ho noted that the heading to s 284 of the Act reads: "Court supervision ofliquidation". He contrasted that subject matter with removal, which is the subject ofs 286(4)(a) of the Act. He submitted that the two provisions are complementary, onedealing with and limited to supervision and one dealing with removal, leaving no gap.[138] Mr Ho cited the Westlaw commentary in relation to the removal power ins 286(4) of the Act, which reads (emphasis as added by Mr Ho):59The court has power to remove a liquidator from office only if:(a) It has made a compliance order under subs (3) and the person againstwhom it is made has failed to comply with that order; or(b) The person concerned is, or becomes, disqualified to act as aliquidator under s 280.[139] Mr Ho cited Newman v Norrie as an example of the application of s 286(4) ofthe Act, where the section was relied on to remove a liquidator based on allegationsthat the liquidator lacked independence.60[140] By way of clarification of his submissions, Mr Ho noted that the liquidatoraccepted that the Court must have inherent jurisdiction in relation to the supervisionof liquidators (but not in relation to their removal).Submissions for Ms Buxton and the non-parties[141] Mr Moss referred to the steps in Associate Judge Johnston's reasoning inrelation to the inherent jurisdiction to remove liquidators. He submitted that hisHonour's reasoning at each point was correct.59 Insolvency Law & Practice (online ed, Thomson Reuters) at [CA286.03].60 Newman v Norrie [2014] NZHC 648, [2014] NZCCLR 15.[142] Mr Moss additionally invoked the principles identified by the Supreme Courtin Zaoui v Attorney General.61 There, the Supreme Court was determining whetherthe High Court retained an inherent jurisdiction to grant bail, notwithstanding theprocedure laid down under pt 4A Immigration Act 1987. In the High Court, it hadbeen determined that any such residual inherent jurisdiction to grant bail in anon-ancillary case was precluded by implication from the provisions of pt 4A.62 Inthe Court of Appeal, McGrath J reached the same conclusion "with reluctance" butO'Regan J disagreed.63 Hammond J did not deal with the point.[143] The Supreme Court identified that the inherent substantive jurisdiction of theHigh Court to grant bail may be excluded by statute, provided the statutory purpose isplain.64 The Court cited the test identified by Lord Russell CJ in relation to theinherent jurisdiction to grant bail, as affected by statute:65Therefore the case ought to be looked at in this way: does the Act ofParliament, either expressly or by necessary implication, deprive the Court ofthat power?[144] The Supreme Court for its part stated the test in similar terms:66For such a jurisdiction [protecting the basic liberty of the individual] to betaken away, clear statutory wording is required.[145] The Supreme Court, having reviewed pt 4A Immigration Act, concluded thatthe jurisdiction to grant bail in a non-ancillary case was not clearly excluded, expresslyor by necessary implication.67[146] Mr Moss noted also the settled principle of statutory interpretation whichdeclares that clear words are required to take away an existing jurisdictional power, as61 Zaoui v Attorney General [2005] 1 NZLR 577 (SC).62 Zaoui v Attorney-General HC Auckland, CIV-2004-404-2309, 16 July 2004 at [60].63 Zaoui v Attorney-General [2005] 1 NZLR 577 (CA) at [68]–[70] and [271].64 Zaoui v Attorney General, above n 61, at [37].65 At [37], citing R v Spilsbury [1898] 2 QB 615 at 620.66 At [44].67 At [53]–[69].discussed in Rosara Joseph's article "Inherent Jurisdiction and Inherent Powers inNew Zealand".68[147] Mr Moss submitted that Associate Judge Johnston's conclusion that thelanguage of s 284 "suggests that room was deliberately left for the Court to continueexercising its supervisory role" (including in relation to preventing misconduct by itsofficers) was correct.69 Although Associate Judge Johnston had not referred to anyparticular aspect of the language in s 284, Mr Moss drew support from the observationof Heath J in Sheahan, where his Honour observed:70The wider powers of statutory supervision conferred by s 284(1) of the 1993Act are stated to be "in addition to any other powers a Court may exercise inits jurisdiction relating to liquidators".[148] In Mr Moss's submission, one such other power lies in the inherentjurisdiction.[149] To meet any "floodgates" argument, Mr Moss adopted the Associate Judge'sconclusion that the strict nature of the leave requirement (under s 284(1)) will resultin the Court only entertaining properly founded allegations.71 Mr Moss submittedthat in this way the Court will filter out claims that could not meet the leave threshold(under s 284 of the Act). Mr Moss referred to observations of Dunningham J inWalker v Gibbston Water Services Ltd, in which her Honour observed that it does notfollow that, in the exercise of a power within the Court's inherent jurisdiction, theCourt would entertain an application which does not meet the test for leave under s 284of the Act.72[150] Mr Moss submitted that Associate Judge Johnston was correct not to embracethe doubt expressed by Mallon J in Norris as to whether there remained a subsistinginherent jurisdiction. Mr Moss submitted that, in addition to the points identified bythe Associate Judge, Official Assignee v Norris was a case in which a party who fell68 Rosara Joseph "Inherent Jurisdiction and Inherent Powers in New Zealand" (2005) 11 CanterburyLaw Review 220 at 232, citing Jacobs v Brett (1875) LR 20 Eq 1 at 6 and Henderson v WangapekaGold-Dredging Co Ltd (1904) 23 NZLR 833 (SC) at 835-836.69 Judgment, above n 1, at [64].70 ANZ National Bank Ltd v Sheahan, above 56, at [128].71 Judgment, above n 1, at [68].72 Walker v Gibbston Water Services Ltd [2014] NZHC 494 at [44].within the qualifying categories of s 284(1) of the Act was trying to avoid the leaverequirements by invoking the inherent jurisdiction.73 Mr Moss submitted that a classof person expressly identified in s 284(1) is not going to be able to circumvent thestatutory intention by trying to invoke the inherent jurisdiction.[151] Mr Moss noted that the liquidator's argument on review in relation to removalof a liquidator under s 284 of the Act has changed. Whereas that jurisdiction had beenaccepted before Associate Judge Johnston, the liquidator on this appeal has sought toresile from that position without identifying that change in his review application.[152] Mr Moss submitted that the liquidator's changed stance in relation to s 284 isincorrect. He referred to Hyndman v Newson, Walker v Gibbston Water Services Ltdand Katavich v Meltzer as being three cases in which the courts have recognised thejurisdiction to make a removal order under s 284 of the Act.74[153] Mr Moss submitted that s 286 of the Act, which Mr Ho suggests is the onlysource of jurisdiction to remove a liquidator, is not a strict code intended to constrainthe Court's ability to remove an officer of the Court. The focus of s 286 is on a processby which a liquidator's failure to comply with duties may be notified and enforced.The remedy of removal is simply one solution open to the Court. Ms Moss submitsthat there is nothing in s 286 of the Act to suggest it has become the only avenue underwhich the Court may remove a liquidator.Supplementary written submissionsCounsel at the hearing did not make any submissions as to any authorities (dealingwith the inherent jurisdiction) in a comparable jurisdiction. By a minute following thehearing, I invited additional written submissions as to any non-New Zealandauthorities relevant to the issue of inherent jurisdiction, with the liquidator's73 Official Assignee v Norris, above n 57.74 Hyndman v Newson [2014] NZHC 2513 at [42]; Walker v Gibbston Water Services Ltd, aboven 72, at [31]; Katavich v Meltzer [2011] NZCCLR 8 (HC) at [39].submissions to be filed first.75Supplementary submissions for the liquidator[154] Mr Ho identified the legislative provisions in England and Wales, and underthe previous provisions of the Corporations Act 2001 (Cth) as not being of assistancehere as the Court was left to determine who may make a removal application.Similarly, Mr Ho observed that the provisions which have replaced the previoussections of the Corporations Act are not of direct relevance as both provisions (s 45-1– registered liquidators and s 90-15 – external administrations (contained in sch 2 –Insolvency Practice Schedule)) expressly preserve the Court's powers "under anyother law", which must include the inherent jurisdiction.[155] Mr Ho was unable to locate any Australian cases in which the inherentjurisdiction had been invoked under the reserved powers in either s 45-1 or s 90-15.[156] Mr Ho submitted that assistance might be drawn from Hoath v Comcen PtyLtd, a decision of the Supreme Court of New South Wales (on an application underss 445D and 445G Corporations Act) to set aside or terminate a deed of companyarrangement.76 In that case, the Court held that a person filing an application unders 445D must be a creditor of the company as the applicant class was defined in thesection itself. The Court did not draw on its inherent jurisdiction to expand upon thestatutory category.[157] Mr Ho submitted that further assistance might be obtained from the decisionof the Supreme Court of New South Wales in Australian Securities and InvestmentsCommission v Wily.77 The Court was there asked to exercise the powers under thethen-section 536 Corporations Act to take action in relation to a liquidator on acomplaint made to it with respect to the conduct of the liquidator. The Court analysed75 Mr Ho's supplementary submissions included reference to a further New Zealand authority,Commissioner of Inland Revenue v Kamal [2016] NZHC 1053, (2016) NZTC 22-050. Mr Moss,in his reply, objected to the uninvited reference to a further New Zealand authority. Heappropriately nevertheless included a submission to the effect that Kamal is both distinguishableand supportive of Ms Buxton's case. Given the centrality of the issue as to the inherentjurisdiction, I have by leave considered the submissions on Kamal.76 Hoath v Comcen Pty Ltd [2005] NSWSC 477.77 Australian Securities and Investments Commission v Wily [2019] NSWSC 521.whether there was a "complaint" within the meaning of the section without discussionof the availability of the inherent jurisdiction as to whether or not a qualifyingcomplaint had been made.[158] The balance of Mr Ho's supplementary submissions was in relation toCommissioner of Inland Revenue v Kamal.78 In Kamal, the Commissioner (as acreditor in two company liquidations) had applied for prohibition orders under s 286of the Companies Act. The Commissioner's status as a creditor to make applicationunder s 286(5) of the Act was clearly established. Mr Kamal nevertheless applied fororders striking out claims against him. Associate Judge Smith held that, as mattersalleged against Mr Kamal (convictions under the Tax Administration Act 1994) werenot expressly included within the disqualifying criteria set out in s 280 of theCompanies Act, there was no basis on which the Court could make a prohibition orderunder s 286(5) of the Act.79 In other words, s 286(5) did not import a generallyapplicable fit and proper person test to supplement the specific disqualifying factorsfor liquidators set out in s 280 of the Act.[159] In relation to s 280, the Commissioner had relied upon ANZ National Bank Ltdv Sheahan to assert that the Court may invoke its inherent jurisdiction to expand thelist of disqualifying characteristics in s 280 of the Act.80 In rejecting theCommissioner's submission, Associate Judge Smith held that:81No provision in the Act which would create any such additional disqualifyingcircumstance has been identified by the Commissioner, and in circumstanceswhere Parliament has set out a lengthy and detailed list of disqualifyingcircumstances I do not consider that it would be a proper exercise of either theCourt's inherent jurisdiction or of its supervisory function to add to that list.[160] Mr Ho noted that the Court had then considered whether there was a continuingfailure under s 286 by Mr Kamal to comply with his duties to disqualify himself fromappointment. The Court held that Mr Kamal was no longer bound by the duties underthe Companies Act once he resigned and that s 284 could not be called upon toovercome the plain words of s 286(2). His Honour observed:78 Commissioner of Inland Revenue v Kamal, above n 75.79 At [58].80 ANZ National Bank Ltd v Sheahan, above n 56.81 Commissioner of Inland Revenue v Kamal, above n 75, at [57]; see also [59]–[62].[75] The Commissioner refers to the Court's inherent jurisdiction overliquidators in their capacity as officers of the Court. But I do not think theinherent jurisdiction that has filled the gap in cases like ANZ National BankLtd v Sheahan can be invoked to give the Court any jurisdiction over aliquidator which would be contrary to the way Parliament has chosen tostructure the Court's powers (in this case, the specific procedure prescribed ins 286 for the making of prohibition orders). Also, the Court's supervisorypowers over its officers, whatever might be their extent, cannot in my view beexercised in respect of those who were officers of the Court but are no longerin that position (including liquidators who have resigned).[78] the Court's power to impose a prohibition order (at least on theapplication of a creditor) appears to have been deliberately limited to thosesituations where a recalcitrant liquidator has (i) failed to heed thecreditor/plaintiff's notice and (ii) remained in office. If that limitation was notin fact intended, I think that is something to be corrected by the legislature;the wording of the statute cannot in my view be stretched to bear a contraryinterpretation.[161] Mr Ho submitted that the decision in Kamal accordingly is persuasive authorityfor the proposition that the Court's inherent jurisdiction should be invoked only to fill"gaps". In Kamal, the disqualifying factors under s 280 were found to be exhaustive.Here, Mr Ho submitted that the specified classes of applicants should similarly havebeen held to be exhaustive.Supporting submissions for Ms Buxton[162] In his supplementary submissions, Mr Moss referred to the legislative positionin a number of Commonwealth jurisdictions. He observed that the inherentjurisdiction to supervise liquidators has not been discussed in the case law in Canada,Singapore or the United Kingdom, where the applicable legislation does not restrictthe class of persons who may apply for removal of liquidators. Mr Moss referred tothe decision of the Privy Council in Deloitte & Touche AG v Johnson as one whichcontains useful comments in relation to the inherent jurisdiction of the Court and itsapplication in parallel with a legislative provision for a removal of a liquidator.82 Thecase was on appeal from a judgment of the Court of Appeal of the Cayman Islands.82 Deloitte & Touche AG v Johnson [1999] 4 LRC 281.The relevant statutory provision did not restrict the class of persons who might applyfor removal of an official liquidator.83[163] Nevertheless, the Privy Council observed that, notwithstanding the lack of arestricted class of applicants, not every person would be allowed to make anapplication. The Court differentiated an application under statutory provision and anapplication under the Court's inherent jurisdiction:84In their Lordships' opinion two different kinds of case must be distinguishedwhen considering the question of a party's standing to make an application tothe court. The first occurs when the court is asked to exercise a powerconferred on it by statute. In such a case the court must examine the statute tosee whether it identifies the category of person who may make the application.This goes to the jurisdiction of the court, for the court has no jurisdiction toexercise a statutory power except on the application of a person qualified bythe statute to make it. The second is more general. Where the court is asked toexercise a statutory power or its inherent jurisdiction, it will act only on theapplication of a party with a sufficient interest to make it. This is not a matterof jurisdiction. It is a matter of judicial restraint. Orders made by the court arecoercive. Every order of the court affects the freedom of action of the partyagainst whom it is made and sometimes ( as in the present case) of other partiesas well. It is, therefore, incumbent on the court to consider not only whether ithas jurisdiction to make the order but whether the applicant is a proper personto invoke the jurisdiction.[164] Mr Moss submitted that the decision is authority for the proposition that,notwithstanding the encompassing nature of the relevant statutory provision in theCayman Islands, there remained a parallel inherent jurisdiction. He submitted that thePrivy Council had restricted the categories of applicants not by reference to the classto which they belong but according to their interest in the liquidation and the effect ofthe liquidator's actions on them. In other words, under the inherent jurisdiction, theclass of applicant was unrestricted but any applicant still had to meet the minimumrequirement of being a "proper person".[165] Mr Moss submitted that the Privy Council's approach to the inherentjurisdiction accords with that which Ms Buxton has accepted should be applied inrelation to the liquidator's removal, namely that Ms Buxton has to satisfy the Court83 Companies Law (1995) Revision, s 106(1); see Deloitte & Touche AG v Johnson, above n 82, at286.84 At 288.that those requirements for leave which apply under s 284 of the Companies Act wouldbe met in support of an application based on the inherent jurisdiction.[166] Mr Moss then turned to Australian authority. Mr Moss referred in particular tothe judgment of the Supreme Court of New South Wales in Re United MedicalProtection (No 3).85 Under s 479(3) Corporations Act 2001, an application to the Courtfor directions in relation to a liquidation was permitted to be made by "a liquidator, orany contributory or creditor". Austin J found it to be unclear whether a "liquidator"included a provisional liquidator, which led his Honour to consider the matter ofinherent jurisdiction:86As to directions under s 479 (3), it is not entirely clear that this section isavailable in the case of a provisional liquidator, as opposed to a liquidator aftera winding up order has been made. However, the Court has inherentjurisdiction to provide directions to an official liquidator appointed asprovisional liquidator, because an official liquidator is an officer of the Court Therefore I am satisfied that I have the power to give directions to MrLombe as provisional liquidator, on his application, either under s 479 (3) orin the exercise of the Court's inherent jurisdiction [167] In short, it was found (notwithstanding the express reference to applications bythree identified classes of person) that directions were able to be given, by way ofsupervising the liquidation, within the inherent jurisdiction of the Court.87Analysis – the inherent jurisdiction[168] This Court had a long-established inherent jurisdiction to supervise court-ordered liquidation processes and court-appointed liquidators.88 As identified byHeath J in ANZ National Bank Ltd v Sheahan, the inherent jurisdiction had for instancebeen invoked in 1978 in Re Securitibank Ltd (in liq), where Barker J held that theCourt had an inherent jurisdiction to give directions to "its officer, the liquidator", ajurisdiction distinct from that conferred by s 241(3) Companies Act 1955.89 Where85 Re United Medical Protection (No 3) [2002] NSWSC 488.86 At [26].87 A similar approach to that of the Supreme Court of New South Wales was adopted by the SupremeCourt of Queensland in Re Rothwells Ltd [1990] 2 Qd R 181.88 See the review of the authorities in ANZ National Bank Ltd v Sheahan, above n 56, at [122]–[139].89 Re Security Bank Ltd (in liq) [1978] 1 NZLR 97 (SC) at 106; ANZ National Bank Ltd v Sheahan,above n 56, at [129]. See also Ian Fletcher The Law of Insolvency (5th ed, Sweet & Maxwell,London, 2017) at [1-024].the Court has been dealing with a court-ordered liquidation, a line of casescommencing with Re Condon, ex parte James established that the liquidator is subjectto supervision as an officer of the Court.90[169] As Livingspace was put into liquidation by order of this Court, the authoritiesestablish that the Court possesses inherent jurisdiction to supervise this liquidator andliquidation unless that jurisdiction has been excluded by the provisions of theCompanies Act.[170] Associate Judge Johnston (before concluding that the inherent jurisdiction tosupervise liquidators had not been limited) recognised Parliament's power to do sothrough legislation:91Where the legislature has clearly and unambiguously prescribed the Court'sjurisdiction in relation to a particular area of substantive law, there is no scopefor the Court to call on its inherent jurisdiction to claim jurisdiction beyondthe four corners of the legislative prescription (except perhaps in extremecircumstances such as those contemplated by Cooke P in Taylor v NewZealand Poultry Board).92[171] In Zaoui v Attorney-General, the Supreme Court considered the inherentjurisdiction to grant bail in light of the statutory regime under pt 4A of the ImmigrationAct.93 The Court held:(a) The inherent jurisdiction can be displaced by legislation.94(b) The inherent jurisdiction (to grant bail) can be excluded by statuteprovided the statutory purpose is plain.95(c) Clear statutory wording is required to take away the inherentjurisdiction.9690 Re Condon, ex parte James (1874) LR 9 Ch App 609 (CA); Re David A Hamilton and Co Ltd (inliq) [1928] NZLR 419 (SC).91 Judgment, above n 1, at [63].92 Taylor v New Zealand Poultry Board [1984] 1 NZLR 394 (CA) at 398.93 Zaoui v Attorney-General, above n 61.94 At [36].95 At [37].96 At [44].[172] Here, the inherent jurisdiction to be examined is in relation to the Court'ssupervision (including removal) of a court-appointed liquidator. In the applicationrelating to removal, Ms Buxton had expressly invoked the inherent jurisdiction of theCourt to supervise the conduct of liquidators as officers of the Court. Mr Mosssubmitted that the inherent jurisdiction was not displaced by the provision of pt 16 ofthe Act.Supervision of liquidators under the Companies Act 1993[173] Sections 240–316B comprise pt 16 of the Act. Associate Judge Johnstoncorrectly identified that pt 16 of the Act was in part intended to reduce the degree ofcourt involvement in the day-to-day conduct of liquidations.97[174] The guiding influence upon the 1993 statutory amendments is well-summarised by the authors of Insolvency Law & Practice:98One of the dominant themes of the company insolvency law reform has beenthe reduction of the role of the court in the everyday course of liquidations.Previously, the court's involvement in a liquidation (especially in acompulsory winding up) often required liquidators to make frequentapplications to the court. The scheme of pt 16 of the Companies Act 1993 is to permit the liquidator toproceed with the liquidation with as little interference from the court aspracticable, but providing for a supervisory procedure whereby interestedpersons may apply to the court for a review of the liquidator's actions.[175] As described by Toogood J in Levin v Lawrence, the supervisory jurisdictionunder s 284 of the Act has a particular focus in relation to the decisions to be made inthe course of a liquidation:99The Court is required to exercise a supervisory jurisdiction over liquidationsand to intervene when it is appropriate to do so. But the statutory regime underthe Companies Act favours allowing liquidators to make business decisionswhich they, as the persons appointed to exercise statutory responsibilities, arebetter qualified than the Courts to make. Without abrogating its supervisoryobligations, the Court should be slow to intervene where matters of judgment97 Judgment, above 1, at [64], citing Companies Bill 1990 (50-1) (explanatory note) at ix and Walkerv Gibbston Water Services Ltd, above n 72, at [29].98 Insolvency Law & Practice (online ed, Thomson Reuters) at [CA284.01].99 Levin v Lawrence [2012] NZHC 1452 at [54] (footnotes omitted).and assessment on commercial matters are concerned. That includes assessinghow far to investigate possible avenues of recovery of funds for distribution.Weighing the likely cost of pursuing such avenues against the prospects ofsuccess and the amount which may be recovered are matters for judgmentwhich are squarely within a liquidator's domain.[176] It may be considered somewhat surprising that the removal of a liquidator wasnot expressly included as one of the listed directions or orders provided for in s 284(1)of the Act. The Court has nevertheless recognised that an order of removal (followingvalid appointment) falls within the power to "give directions in relation to any matterarising in connection with the liquidation" under s 284(1)(a).100[177] The Court's resort to s 284(1) as the source of statutory jurisdiction to removea liquidator is explicable by the narrow circumstances which may give rise to an orderremoving the liquidator from office under s 286(4) of the Act. As the heading to s 286of the Act indicates, the section is concerned with "orders to enforce liquidator'sduties". The self-evident, central purpose of the section is to provide a procedure bywhich a liquidator may be ordered to comply with their duties. The statutory powerunder s 286(3)(c) – to remove the liquidator from office – is but one of four forms ofresolution which may be ordered on an application made by one of the classes ofindividuals identified in s 286(1). By reason of s 286(2), any applicant other than aliquidator, before making an application under s 286 of the Act, must first have givennotice of the failure to comply to the liquidator with at least five days of continuingfailure then following.[178] As such, s 286 of the Act cannot be viewed as a comprehensive statutoryregime for the removal of liquidators for the range of circumstances which might makeappropriate the consideration of removal. For example, the liquidator's fitness to holdoffice in relation to a particular liquidation might flow from a one-off event whichdemonstrates unfitness but which event, by its nature, will not be continuing. AssociateJudge Johnston's observations as to the importance of the Court being able toinvestigate (properly made) allegations of misconduct on the part of a liquidatorinvolve the recognition that not all instances of misconduct or unfitness will100 Katavich v Meltzer, above n 74, at [38]–[39]; West v Grant [2013] NZHC 3043 at [15]; Hyndmanv Newson, above n 74, at [47]–[51]. I nevertheless recognise that a contrary conclusion has beenreached by Associate Judge Bell in McMahon v Ah Sam [2014] NZHC 659 and in subsequentdecisions.unnecessarily fall within the regime of the statutory procedure.101 Those types ofsituation explain why the broader provision for the Court's supervision of liquidationas contained in s 284 of the Act has work to do in relation to removal.[179] The statutory regime considered in Commissioner of Inland Revenue v Kamalis of a nature distinguishable from the Court's supervision of a liquidation.102 Itconcerns what is very much a creature of statute – a regime for prohibiting personsfrom acting as liquidators (whether currently engaged on the conduct of a liquidation).Such was recognised as a determining aspect of the application in Kamal.103[180] I accordingly reject the submission of Mr Ho as developed at the reviewhearing, that s 286(4) of the Act provides the only statutory basis for removal of theliquidator, with no such power existing under s 284 of the Act.[181] Notwithstanding the rejection of that central aspect of Mr Ho's submissions,this still leaves for review the issue as to whether pt 16 of the Act (particularly in ss284 and 286) had the plain purpose of excluding the inherent jurisdiction.[182] Both Associate Judge Johnston in the judgment under review and Heath J inANZ National Bank Ltd v Sheahan referred particularly to the language used byParliament in s 284(2) of the Act. Section 284(2), it will be recalled, is that whichprovides:The powers given by subsection (1) are in addition to any other powers a courtmay exercise in its jurisdiction relating to liquidators under this Part, and maybe exercised in relation to a matter occurring either before or after thecommencement of the liquidation, or the removal of the company from theNew Zealand register, and whether or not the liquidator has ceased to act asliquidator when the application or the order is made.[183] Associate Judge Johnston found s 284(2) to support the continued availabilityof the inherent jurisdiction, stating:104While pt 16 of the Companies Act was in part intended to reduce the degreeof court involvement in the day-to-day conduct of liquidations, the language101 Judgment, above n 1, at [66].102 Commissioner of Inland Revenue v Kamal, above n 75, discussed at [159]–[162] above.103 At [75], quoted at [161] above.104 Judgment, above n 1, at [64] (footnotes omitted).used by Parliament [in s 284(2)] suggests that room was deliberately left forthe Court to continue exercising its supervisory role where necessary.[184] Previously, in ANZ National Bank Ltd v Sheahan, Heath J found s 284(2) to berelevant. His Honour observed that the wider powers of statutory supervisionconferred by s 284(1) of the 1993 Act were stated to be "in addition to any otherpowers a Court may exercise in its jurisdiction relating to liquidators".105[185] I respectfully disagree with the conclusion that the reservations in s 284(2) ofthe Act can contribute to a conclusion that Parliament was in pt 16 of the Actdeliberately preserving the inherent jurisdiction as a basis of removal of liquidators.The powers referred to in s 284(2) are expressly defined to be "in addition to any otherpowers a Court may exercise in its jurisdiction relating to liquidators under this Partof this Act" (emphasis added). Section 284(2) does not contain an express preservationof powers generally – it is expressly a preservation of powers the Court may exerciseunder pt 16 of the Act.[186] However, the test (as identified in Zaoui) is not whether Parliament hasexpressed an intention to preserve the inherent jurisdiction. Rather, it is whetherParliament has, by clear statutory wording, expressed an intention to take away theinherent jurisdiction.106[187] None of the various overseas decisions to which I was referred provideassistance. They turn on their own legislation for the specific outcome. Theygenerally serve to indicate that there is a consistent approach to determining whetherthe inherent jurisdiction remains, and that it accords with the position established inNew Zealand, as enunciated in Zaoui.[188] For the liquidator, Mr Ho emphasised Parliament's specific listing of classesof applicant for each of ss 284 and 286. Mr Ho invoked the doubt expressed by MallonJ in Official Assignee v Norris as to whether the Official Assignee could invoke theCourt's inherent jurisdiction as a way around the limits (expressed by classes of105 ANZ National Bank Ltd v Sheahan, above n 56, at [128].106 Zaoui v Attorney-General, above n 61, at [44].applicant) prescribed by the statute.107 In the event, the Court in Official Assignee vNorris does not appear to have been required to make a final determination in relationto the subsistence of the continuing availability of the inherent jurisdiction.[189] I am not persuaded that Parliament, in pt 16 of the Act, has clearly excludedthe operation of the inherent jurisdiction in relation to the removal of liquidators. Ideliberately refrain from reaching a parallel conclusion in relation to the generalsupervision of the process of liquidation, which was the express subject-matter of s284. Matters relating to a liquidator's fitness to be officer in relation to a particularliquidation may stem more from general behaviour or characteristics of the liquidatorthan from their conduct in the particular liquidation itself. It is not possible toanticipate every situation in which a liquidator's conduct or propensities may, throughthe conduct of a liquidation, impact on others. In the exercise of the inherentjurisdiction, courts develop their own tests and thresholds before particular orders willbe considered. The fact that Parliament, in providing a statutory regime, has imposeda threshold in relation to applicant classes does not drive a single conclusion thatParliament thereby intended to oust the Court's inherent jurisdiction (whether broaderor otherwise). In the event, albeit for slightly different reasons, I find the AssociateJudge correctly concluded that the Court retains its inherent jurisdiction to entertainapplications for the removal of a liquidator, including by persons who do not fallwithin the categories identified in s 284(1) of the Act.[190] Associate Judge Johnston concluded that an applicant, when invoking theinherent jurisdiction, must first seek leave to apply for an order of removal (in parallelwith the process under s 284 of the Act). As the Court has inherent powers in relationto its procedures, that approach to a leave application was one within the Court'spowers. His Honour accordingly made no error in requiring a leave application beforea removal application itself is entertained.107 Official Assignee v Norris, above n 57, at [29].Orders[191] As a consequence of these findings, in relation to the orders under review, Idirect:(a) at [71(a)] – the refusal of joinder is confirmed;(b) at [71(b)] – the directions for service and appearance are rescinded;(c) at [71(c)] – the liquidator's request for further directions is stayed for aperiod of 20 working days, with the liquidator in that period to file andserve a fresh request limited to records in the possession or under thecontrol of Kristina Buxton in her capacity as a director of RFD FinanceLimited which relate to the business, accounts, or affairs of LivingspaceProperties Limited (in rec and in liq);(d) at [71(c)] – the finding of inherent jurisdiction (on its terms) isconfirmed;(e) at [71(d)] – the timetable direction for any removal application isamended to apply to the period within 15 working days of thisjudgment; and(f) at [71(e)] – the costs of the 6 September 2019 judgment remainreserved, but are to be dealt with if not resolved by memoranda filedalso in relation to the costs of this review.Osborne JSolicitors:Canterbury Legal, ChristchurchNorling Law, AucklandBarristerJ Moss Barrister, Christchurch