NORRIE AND ANOR as Joint & Several Liquidators of PAKIRI INVESTMENTS LIMITED (IN LIQUIDATION) v SUTICH [2013] NZHC 2495

NORRIE AND ANOR as Joint & Several Liquidators of PAKIRI INVESTMENTS LIMITED (IN LIQUIDATION) v SUTICH [2013] NZHC 2495

Given the liquidators' statutory duties and the sparse company records, the court held that orders under s266 were justified to enable reconstitution of records and proper investigation of alleged voidable transactions; directors/officers must produce company books and records in their possession or control and attend for examination unless the burden is oppressive; accordingly respondents 1-3 and 5 were ordered to attend for examination and produce documents in their possession or control.

Citation
[2013] NZHC 2495
Parties
Applicant Joint & Several Liquidator of Pakiri Investments Limited (in Liquidation): Mark Hector Norrie; Applicant Joint & Several Liquidator of Pakiri Investments Limited (in Liquidation): Patricia van der Wende; First Respondent Company Director: Igor Sutich; Second Respondent Director: Larrie Newman; Third Respondent Chief Financial Officer / Shareholder: Rajendran Ravikulan; Fourth Respondent Former Director and Bankrupt: Evan James Read; Fifth Respondent Former Director and Shareholder: Arron Glyn Judson; Respondent in Separate S295 Proceeding: Time3 Global Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
24 September 2013
Procedural Posture
Applications Under Companies Act 1993 (s266 Production/examination and S295 Voidable Transaction) / Post Hearing Judgment; Court Ordered Examinations and Production Under S266; Jurisdiction Protest to Be Listed 25 Oct 2013
Outcome
Application granted in part: court ordered examinations and production of documents under s266 against respondents 1-3 and 5; matter of fourth respondent's jurisdiction to be pursued separately.
Legal Topics
Production of Documents, Examination on Oath, Voidable Transactions, Directors' Duties and Custodianship of Company Records
Company Law Insolvency Civil Procedure Production of Documents Examination on Oath Voidable Transactions Directors' Duties and Custodianship of Company Records

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Parties

Mark Hector Norrie

Applicant Joint & Several Liquidator of Pakiri Investments Limited (in Liquidation)

Patricia van der Wende

Applicant Joint & Several Liquidator of Pakiri Investments Limited (in Liquidation)

Igor Sutich

First Respondent Company Director

Larrie Newman

Second Respondent Director

Rajendran Ravikulan

Third Respondent Chief Financial Officer / Shareholder

Evan James Read

Fourth Respondent Former Director and Bankrupt

Arron Glyn Judson

Fifth Respondent Former Director and Shareholder

Time3 Global Limited

Respondent in Separate S295 Proceeding

Procedural Posture

Applications Under Companies Act 1993 (s266 Production/examination and S295 Voidable Transaction) / Post Hearing Judgment; Court Ordered Examinations and Production Under S266; Jurisdiction Protest to Be Listed 25 Oct 2013

Legal Issues

  1. 1 Whether liquidators justified in obtaining production of company documents and examinations under s266
  2. 2 What specific documents or classes respondents must produce
  3. 3 Whether orders can be made absent proof documents are in respondent's possession or control

Ratio Decidendi

Given the liquidators' statutory duties and the sparse company records, the court held that orders under s266 were justified to enable reconstitution of records and proper investigation of alleged voidable transactions; directors/officers must produce company books and records in their possession or control and attend for examination unless the burden is oppressive; accordingly respondents 1-3 and 5 were ordered to attend for examination and produce documents in their possession or control.

Court Disposition

Application granted in part: court ordered examinations and production of documents under s266 against respondents 1-3 and 5; matter of fourth respondent's jurisdiction to be pursued separately.

Orders

  • Pursuant to s266 each of the first, second, third and fifth respondents must attend before the Court at a time to be fixed and be examined on oath or affirmation by the Court or by the liquidator or counsel acting for the liquidator on matters relating to the business, accounts or affairs of the company
  • Each of the first, second, third and fifth respondents must produce any books, records or documents relating to the business, accounts or affairs of the company in that person's possession or under that person's control (document as defined in s2 Companies Act 1993)