QUEENSLAND MAINTENANCE SERVICES (NZ) LIMITED (IN LIQUIDATION) v ZULLO PROPERTY GROUP (NZ) LIMITED [2016] NZHC 1755

QUEENSLAND MAINTENANCE SERVICES (NZ) LIMITED (IN LIQUIDATION) v ZULLO PROPERTY GROUP (NZ) LIMITED [2016] NZHC 1755

There was insufficient prima facie evidence of fraud to sustain the caveats; a limited freezing order was justified because applicants had good arguable causes of action and a real risk of asset dissipation, but the quantum was limited to NZD 1,000,000; the first applicant must give an undertaking (noting limited...

Source-derived case information.

Citation
[2016] NZHC 1755
Parties
First Applicant: Queensland Maintenance Services (NZ) Limited (in liquidation); Second Applicants: Gareth Russel Hoole and Clive Robert Bish; First Respondent: Zullo Property Group (NZ) Limited; Second Respondent: Zullo Holdings (NZ) Limited; Third Respondent: Bright Horizons New Zealand Childcare Limited; Fourth Respondent: Frank Zullo
Court
High Court
Jurisdiction
New Zealand
Judgment Date
29 July 2016
Procedural Posture
Company/insolvency Proceedings (companies Act Claims) / Interim Applications for Preservation Orders (caveat, Freezing Order, Pre Judgment Charging Order)
Outcome
Caveat application dismissed; pre-judgment charging order dismissed; limited freezing order granted
Legal Topics
Fraudulent Transfer, Constructive Trust, Caveat, Freezing Order (mareva), Pre Judgment Charging Order, Undertaking as to Damages, Directors' Duties, Shareholder Distributions
Company Law Insolvency Equity Civil Procedure Fraudulent Transfer Constructive Trust Caveat Freezing Order (mareva) +4 more

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Parties

Queensland Maintenance Services (NZ) Limited (in liquidation)

First Applicant

Gareth Russel Hoole and Clive Robert Bish

Second Applicants

Zullo Property Group (NZ) Limited

First Respondent

Zullo Holdings (NZ) Limited

Second Respondent

Bright Horizons New Zealand Childcare Limited

Third Respondent

Frank Zullo

Fourth Respondent

Procedural Posture

Company/insolvency Proceedings (companies Act Claims) / Interim Applications for Preservation Orders (caveat, Freezing Order, Pre Judgment Charging Order)

Legal Issues

  1. 1 Whether there is a prima facie case of fraud to sustain caveats and give rise to an institutional constructive trust
  2. 2 Whether applicants have a good arguable case and real risk of dissipation to justify a freezing order
  3. 3 Whether applicants must give undertakings as to damages and whether special circumstances excuse them

Ratio Decidendi

There was insufficient prima facie evidence of fraud to sustain the caveats; a limited freezing order was justified because applicants had good arguable causes of action and a real risk of asset dissipation, but the quantum was limited to NZD 1,000,000; the first applicant must give an undertaking (noting limited value) while the liquidators were excused from providing undertakings due to special circumstances; the pre-judgment charging order failed for lack of a qualifying disposition.

Court Disposition

Caveat application dismissed; pre-judgment charging order dismissed; limited freezing order granted

Orders

  • Caveat application dismissed
  • Pre-judgment charging order dismissed