ISAC (NZ) LIMITED V J MANAGH HC NAP CIV-2011-441-396

ISAC (NZ) LIMITED V J MANAGH HC NAP CIV-2011-441-396

The application for particular discovery against the liquidator was dismissed because the applicant failed to establish a prima facie indication that the Lifeline Trust documents were or had been in the respondent's 'control' as defined by the High Court Rules (a presently enforceable right to possession), and a statutory right to request documents under s 261 together with a s 266 remedy does not amount to present control. Conversely, the court granted a limited non‑party discovery order against the Lifeline Trust under r 8.21 because the specified board minutes and CEO reports (1 April 2010 to 1 June 2011) were relevant and necessary to determine issues about the IT Contract, delegated...

Citation
openlaw-7096c001_fb79_4693_8038_27313e0c1fb3.pdf
Parties
Applicant: ISAC (NZ) LIMITED; Respondent (liquidator): John Managh; Non Party (sole Shareholder): Trustees of the Lifeline Auckland Trust
Court
High Court
Jurisdiction
New Zealand
Judgment Date
2 August 2012
Procedural Posture
Companies Act 1993 Liquidation Proceeding With Interlocutory Discovery Applications / Interlocutory — Application for Particular Discovery and Non‑party Discovery After Commencement
Outcome
Particular discovery against the respondent dismissed; limited non‑party discovery against the Trustees of the Lifeline Auckland Trust granted.
Legal Topics
Liquidator Powers, Particular Discovery (r 8.19), Non‑party Discovery (r 8.21), Companies Act Ss 261 and 266, Relevance and Necessity Test (r 8.7), Costs for Non‑party Discovery (r 8.22)
Company Law Insolvency Law Civil Procedure Evidence and Discovery Liquidator Powers Particular Discovery (r 8.19) Non‑party Discovery (r 8.21) Companies Act Ss 261 and 266 +2 more

Case Brief

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Parties

ISAC (NZ) LIMITED

Applicant

John Managh

Respondent (liquidator)

Trustees of the Lifeline Auckland Trust

Non Party (sole Shareholder)

Procedural Posture

Companies Act 1993 Liquidation Proceeding With Interlocutory Discovery Applications / Interlocutory — Application for Particular Discovery and Non‑party Discovery After Commencement

Legal Issues

  1. 1 Whether the respondent liquidator had 'control' of Lifeline Trust board minutes and CEO reports such that an order for particular discovery under r 8.19 could be made
  2. 2 Whether the non‑party Lifeline Trust must produce board minutes and CEO reports under r 8.21 as relevant and necessary to the liquidation dispute
  3. 3 Whether documents sought met the relevance/adverse‑documents test under r 8.7

Ratio Decidendi

The application for particular discovery against the liquidator was dismissed because the applicant failed to establish a prima facie indication that the Lifeline Trust documents were or had been in the respondent's 'control' as defined by the High Court Rules (a presently enforceable right to possession), and a statutory right to request documents under s 261 together with a s 266 remedy does not amount to present control. Conversely, the court granted a limited non‑party discovery order against the Lifeline Trust under r 8.21 because the specified board minutes and CEO reports (1 April 2010 to 1 June 2011) were relevant and necessary to determine issues about the IT Contract, delegated...

Court Disposition

Particular discovery against the respondent dismissed; limited non‑party discovery against the Trustees of the Lifeline Auckland Trust granted.

Orders

  • Particular discovery against respondent John Managh dismissed.
  • Trustees of the Lifeline Auckland Trust to file within 20 working days an affidavit stating whether the board minutes and CEO reports (1 April 2010 to 1 June 2011) were or have been in their control and, if not, best knowledge of when control ceased and who now has control.