LINES V WAKEFIELD BUILDINGS LIMITED HC NAP CIV-2005-441-825

LINES V WAKEFIELD BUILDINGS LIMITED HC NAP CIV-2005-441-825 9 December 2005IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY CIV-2005-441-825BETWEEN KEITH ALEXANDER LINES Plaintiff AND WAKEFIELD BUILDINGS LIMITED Defendant Judgment: 9 December 2005 In accordance with r540(4) I direct the Registrar to endorse this judgment with a delivery time of 3.00pm on the 9th day of December 2005.JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL[1] The plaintiff has made an ex-parte application for appointment of an interim liquidator of the defendant company. [2] The plaintiff is one of the two directors of the defendant company. [3] The grounds upon which the application are made are: (1) That a conflict of interest exists on the part of the other director of the defendant company, Mr David Paterson. (2) The company's only asset, a commercial building in Napier, is falling in value. (3) There exists a need for interim control of the defendant company.[4] The plaintiff has filed an affidavit in support of his application. It details what appears to be a reasonably long history of conflict between the plaintiff and Mr David Paterson as directors of the defendant company. [5] Mr Paterson is also a director of Acme Panel & Paint Limited, which is the tenant of the building in Napier owned by the defendant company, its sole asset. [6] Lengthy correspondence has taken place between the solicitors to the plaintiff and to Mr Paterson over what appears to be the last six months. [7] A deadlock has clearly arisen between the directors of the company. [8] Whether, however, this is sufficient grounds for the appointment of an interim liquidator of the defendant company pursuant to Rule 700W of the High Court Rules, that is another matter. [9] It is clear that the Court will appoint an interim liquidator only if it is satisfied that there are sufficient grounds to do so - Re Hammersmith Town Hall Company(1877) 6ChD 112 and Re Hill and Plummer (Merchants) Limited [1956] NZLR 979. [10] It is clear, also, that an order for appointment of an interim liquidator will not normally be made where the assets of the company can be preserved by other less expensive measures – Bulktec Pty Ltd v Geothetis Ltd (1994) 13 AC SR 716. [11] The present application is made by the plaintiff on an ex-parte basis. [12] Given the recent history in this matter as illustrated in the correspondence attached to the affidavit of the plaintiff filed here, I am not satisfied that it is appropriate for the order sought to be made on an ex-parte basis. [13] I direct, therefore, that the present application is to be made on notice. [14] In considering this, I simply note at this point the comments in McGechan on Procedure at para HR700W.02 that for an application under Rule 700W to appoint an interim liquidator to succeed:the applicant must show a valid liquidation application, a likelihood that the applicant will succeed, and a need for interim control. In evaluating the last requirement, the Court will consider whether assets are in jeopardy, whether the status quo should be maintained, and whether the interests of creditors are safeguarded. Conflicts of interest of the directors are also relevant[15] A direction is now made, therefore, that the application by the plaintiff for appointment of an interim liquidator is to be made on notice. ________________________________Associate Judge D.I. Gendall