Minister of Education v Nayacakalou [2020] NZHC 1874

Minister of Education v Nayacakalou [2020] NZHC 1874

The appointment was invalid because the special resolution did not have the requisite shareholder votes: votes cast in the name of the deceased shareholder could not be counted because the deceased's shares had not been registered in the transferee's name and s 96 restricts the meaning of shareholder to those entered on the share register; however, reg 36 and s 283 permit the Court to treat the company as in liquidation for acts done in good faith and to appoint replacement liquidators, so the Court declared the appointment invalid but treated the company as having been in liquidation since 1 June 2016 and appointed Webb and Madsen-Ries as liquidators.

Citation
[2020] NZHC 1874
Parties
First Plaintiff: Minister of Education; Second Plaintiff: Secretary of Education; Third Plaintiff: Board of Trustees of Hillcrest Normal School; First Defendant: Kelera Nayacakalou; Second Defendant: Darrel Osborne
Court
High Court
Jurisdiction
New Zealand
Judgment Date
30 July 2020
Procedural Posture
Companies Act 1993 Liquidation Dispute / Application for Declarations and Appointment of Liquidators; Judgment on Validity of Liquidator Appointment
Outcome
Judgment: appointment of Kelera Nayacakalou as liquidator declared invalid; company treated as in liquidation from 1 June 2016; David Sean Webb and Vivien Judith Madsen-Ries appointed as liquidators and their rates approved; costs to be fixed with possibility of payment from company assets; further submissions on...
Legal Topics
Liquidator Appointment, Share Transfer and Registration, Company Register, Court Supervision of Liquidation, Costs
Companies Law Insolvency Law Civil Procedure Liquidator Appointment Share Transfer and Registration Company Register Court Supervision of Liquidation Costs

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Parties

Minister of Education

First Plaintiff

Secretary of Education

Second Plaintiff

Board of Trustees of Hillcrest Normal School

Third Plaintiff

Kelera Nayacakalou

First Defendant

Darrel Osborne

Second Defendant

Procedural Posture

Companies Act 1993 Liquidation Dispute / Application for Declarations and Appointment of Liquidators; Judgment on Validity of Liquidator Appointment

Legal Issues

  1. 1 Whether the purported appointment of the first defendant as liquidator by special resolution was valid
  2. 2 Whether the court should remove the liquidator under s 286(4) for failure to comply with judicial directions
  3. 3 Whether, if appointment was invalid, the company should be treated as in liquidation from the purported appointment date

Ratio Decidendi

The appointment was invalid because the special resolution did not have the requisite shareholder votes: votes cast in the name of the deceased shareholder could not be counted because the deceased's shares had not been registered in the transferee's name and s 96 restricts the meaning of shareholder to those entered on the share register; however, reg 36 and s 283 permit the Court to treat the company as in liquidation for acts done in good faith and to appoint replacement liquidators, so the Court declared the appointment invalid but treated the company as having been in liquidation since 1 June 2016 and appointed Webb and Madsen-Ries as liquidators.

Court Disposition

Judgment: appointment of Kelera Nayacakalou as liquidator declared invalid; company treated as in liquidation from 1 June 2016; David Sean Webb and Vivien Judith Madsen-Ries appointed as liquidators and their rates approved; costs to be fixed with possibility of payment from company assets; further submissions on...

Orders

  • Declaration that the appointment of Kelera Nayacakalou as liquidator was invalid
  • Declaration that the company has nevertheless been in liquidation since 1 June 2016