INDUSTRIAL AND COMMERCIAL BANK OF CHINA (NZ) LTD v BANK OF CHINA (NZ) LTD [2019] NZHC 110

INDUSTRIAL AND COMMERCIAL BANK OF CHINA (NZ) LTD v BANK OF CHINA (NZ) LTD [2019]NZHC 110 [8 February 2019]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-000131[2019] NZHC 110UNDER Part 15A of the Companies Act 1993IN THE MATTER OF CBL CORPORATION LIMITED(ADMINISTRATORS APPOINTED)BETWEEN INDUSTRIAL AND COMMERCIALBANK OF CHINA (NEW ZEALAND)LIMITEDFirst ApplicantBANK OF CHINA (NEW ZEALAND)LIMITEDSecond ApplicantHearing: (On the papers)Judgment: 8 February 2019JUDGMENT OF COURTNEY J[reasons for order adjourning watershed meeting]This judgment was delivered by me on 8 February 2019 at 11.45 am, pursuant to Rule 11.5 of theHigh Court Rules.Registrar/Deputy RegistrarDateSolicitors: Russell McVeagh, AucklandMayne Wetherell, AucklandCounsel: S Mills QC/R J Hollyman QC, Auckland[1] CBL Corporation Limited (Administrators Appointed) (CBLC) is in voluntaryadministration. The watershed meeting, originally scheduled for 18 May 2018, hasbeen adjourned several times. Two creditors of CBLC, Industrial and CommercialBank of China (New Zealand) Limited (ICBC) and Bank of China (New Zealand)Limited (BOC) applied without notice for orders under s 239ADO of the CompaniesAct 1993 adjourning the watershed meeting of creditors to a date no later than 10working days after the date of a decision in respect of the extant application to liquidateCBLC, and other associated orders. This morning I made the orders on the basis thatthese reasons would follow.[2] ICBC and BOC are the applicants in the liquidation application. Theliquidation application has been adjourned to a date after 30 April 2019 which,although not yet been allocated, is to be a final hearing date. The application for ordersadjourning the watershed meeting date was brought to accommodate the effortsunderway to finalise a restructuring proposal by a shareholder and directors of CBLCwhilst also protecting the position of the creditors.[3] Previous applications to adjourn the watershed meeting were made on theapplication of the Administrators and mostly allowed because of the unresolved statusof CBLC's subsidiary, CBL Insurance Limited (CBLI), which was placed inliquidation in December 2018. An adjournment of the watershed meeting date grantedin December 2018 extended the adjournment period to 15 February 2019.[4] If the anticipated proposal has the support of creditors the orders that I havemade today will give the Administrators the power to bring the watershed meetingforward so that the proposal can be adopted. If there is no proposal accepted by thecreditors, however, the best outcome for creditors will be for the liquidation of CBLCto occur in the context of the application to liquidate rather than at a watershedmeeting. If liquidation occurred in the context of the watershed meeting the restrictedperiod for voidable transactions would be from 15 August 2018; in comparison, ifliquidators were appointed by the Court, the restricted period would start in November2017.[5] The application was supported by affidavits from officers of each of ICBC andBOC, explaining the basis for the application and their views that the orders soughtwould lead to the best result for all concerned, including allowing the Administratorsflexibility in managing the watershed meeting.[6] The Administrators have, by counsels' memorandum, confirmed their supportof the application. The ANZ Bank, another creditor, has been served and does notwish to take steps.[7] Although I had previously expressed concerns about the number ofadjournments I accepted that the adjournment of the watershed meeting in order todovetail in with the current date for the liquidation application was appropriate._________________P Courtney J