100 INVESTMENTS LIMITED v WALKER [2020] NZHC 1947

100 INVESTMENTS LIMITED v WALKER [2020] NZHC 1947 [7 August 2020]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2020-485-009[2020] NZHC 1947UNDER section 284 of the Companies Act 1993IN THE MATTER of the liquidation of Property Ventures Ltd(in liquidation)BETWEEN 100 INVESTMENTS LIMITEDFirst ApplicantRFD FINANCE LIMITEDSecond ApplicantAND ROBERT BRUCE WALKERRespondentHearing: 25 June 2020Appearances: J Moss for applicantsC Sawyer for respondentJudgment: 7 August 2020Reissued: 12 August 2020JUDGMENT OF ASSOCIATE JUDGE JOHNSTONIntroduction[1] Property Ventures Ltd (in liquidation) (PVL) was incorporated on 3 November1997. It was a property development concern. Over the years, it accumulated a largenumber of subsidiaries.11 In this judgment I propose to refer to PVL and its subsidiaries as the PVL group of companies. Indoing so, I do not use the phrase in the technical sense as it is used in sub-pt 2 of pt 11 of theCompanies Act 1993 dealing with financial reporting. It is merely a convenient way of describingthe collection of entities involved.[2] On 27 July 2010 this Court made orders winding up PVL and several othercompanies in the group and appointing the respondent as liquidator.2[3] A decade on, there is no sign that the liquidation of the PVL group ofcompanies is nearing an end. There has been a remarkable level of acrimony betweenMr Walker and PVL's former Managing Director, Mr David Henderson, and theliquidation has given rise to a prodigious amount of litigation. This is just the mostrecent example.[4] As seems to happen in litigation arising from this liquidation, what on its faceis a straightforward application has become more complicated than it needs to be. Inthis judgment, I propose to deal only with the dispositive issues. I make no apologyfor ignoring extraneous matters.[5] By originating application pursuant to pt 19 of the High Court Rules 2016, theapplicants, 100 Investments Ltd (100 IL) and RFD Finance Ltd (RFD), seek twosubstantive orders:(a) an order under s 256(1)(a)(ii) of the Companies Act 1993 entitling themto inspect accounts and records; and(b) an order under s 284(1)(c) and (d) that these accounts and records beaudited.[6] As I see it the following issues arise:(a) whether the applicants should be granted leave to pursue theirapplication under pt 19 of the High Court Rules;(b) if so whether they can establish that they are creditors of PVL, whichis a threshold issue under both provisions;2 Initially the respondent was the sole liquidator. For a period there was a second liquidator,Mr John Scutter. But since Mr Scutter's retirement from the role on 22 March 2018, therespondent has again been the sole liquidator.(c) if so whether they can make out an entitlement to the orders soughtunder the two provisions.Leave to proceed by originating application[7] Most proceedings must be commenced by notice of proceeding and statementof claim. Part 19 of the High Court Rules offers an alternative process. It providesfor the commencement of proceedings by originating application.[8] The pt 19 procedure is available in respect of applications under certainspecific statutory provisions set out in r 19.2. Whilst these include certain applicationsunder the Companies Act, they do not include applications under ss 256 or 284.[9] However, r 19.5 confers on the Court a discretion to permit proceedings notcaught by r 19.2 to be commenced under pt 19.[10] Part 19 is intended to provide an efficient (and therefore inexpensive)alternative for putting an issue before the Court, when neither the Court nor the partieswill be assisted by pleadings, interlocutory steps such as discovery, and viva voceevidence. The fundamental purpose of pleadings is to define the issue or issues fordetermination. The types of proceedings singled out in r 19.2 for commencement byoriginating application are ones in which the issue or issues for determination arepredetermined by the statutes under which such applications are made. In suchcircumstances, no useful purpose will be served by the parties restating the issue inpleadings.[11] Against this background, it appears to me that the primary indicator as towhether any proceeding is suitable for commencement under pt 19 is whether the issueor issues which the applicant wishes the Court to consider is or are predetermined orobvious under the relevant statute or other rule of law, or whether the issues need tobe defined by an exchange of pleadings (statement of claim and statement of defence)so that the Court can identify exactly what it is being asked to address, and whetherthere are likely to be significant factual controversies.[12] Sections 256 and 284 both appear amongst a series of sections in theCompanies Act dealing with the "Duties, rights, and powers of liquidators" and"Qualifications and supervision of liquidators."[13] Section 256 imposes a duty upon liquidators to keep accounts and records of aliquidation, and allows those to be inspected as of right by any liquidation committee,or, if the Court so orders, shareholders and creditors. Section 284 confers powers onthe Court, inter alia to order the auditing of accounts and records.[14] Neither section attempts to identify the criteria which the Court must apply indetermining applications pursuant to them. The Court has a discretion. This of coursemust be exercised on a principled basis having regard to the Court's responsibilitiesin relation to the supervision of liquidations.[15] Obviously, in order for the Court to determine applications such as those madein the present case, it will be necessary for the applicant and the respondent to file andserve affidavit evidence as to the factual circumstances, but, above and beyond that, itdoes not appear to me to be likely to be of any assistance to the Court for the partiesto file and serve pleadings which would do little more than identify the provisionspursuant to which any application is made and the grounds on which any applicationis made, which can be done in an originating application and notice of opposition. Nordoes it appear to me that it would assist the resolution of these applications for theparties to move through the interlocutory processes associated with an ordinaryproceeding or for there to be viva voce evidence.[16] In short the applications made by 100 IL and RFD in this case appear to be ofa sort which, in the interests of efficiency, can and should be dealt with under pt 19.[17] To an extent, that conclusion is supported by the respondent's formalsubmissions. Ms Sawyer begins her submissions thus:This application is not appropriate to the originating application procedure andthe applicants should not have leave [18] Having said that, Ms Sawyer moves — seemingly without any particulardifficulty — directly to the substantive issues of whether the applicants are creditorsof PVL, and whether they can make out a proper basis for their claims under ss 256and 284, and does not return to the procedural issue, suggesting that the issues fordetermination are self-evident.[19] In my judgement, the applications in this case are properly brought pursuant topt 19.[20] The applicants will have leave to do so.The threshold issue – are 100 IL and RFD creditors of PVL?[21] In the case of both ss 256 and 284, creditors of the company in liquidation mayonly apply with the Court's leave. 100 IL and RFD both claim to be creditors of PVL.Mr Walker does not accept that they are.[22] On behalf of 100 IL and RFD, Mr Moss began his submissions on this issue byreferring to s 240 of the Companies Act which defines the term creditor, for thepurposes of pt 16 (dealing with liquidations) as:a person who, in a liquidation, would be entitled to claim in accordance withs 303 that a debt is owing to that person by the company (in liquidation) [23] He then referred to s 303 of the Act which provides that admissible claimsinclude: a debt or liability, present or future, certain or contingent, whether it is anascertained debt or a liability for damages, may be admitted as a claim againsta company in liquidation.[24] The applicants claim to be creditors with debts that fall within s 303 asassignees of lenders' rights and obligation under loans and related securities. Theevidence on which they rely in doing so is an affidavit sworn by Mr Rodney Hide whois the Managing Director of 100 IL and authorised by RFD to swear an affidavit on itsbehalf.100 Investments Ltd[25] Mr Hide deposes that on 24 November 2006 a company by the name ofPropertyfinance Ltd as lender entered into an agreement with a PVL group companyby the name of Lichfield Ventures Ltd (Lichfield) as borrower pursuant to whichPropertyfinance advanced to Lichfield the sum of $2,662,500 (the Lichfield loan).Pursuant to an earlier all obligations guarantee dated 30 March 2005, PVL guaranteedLichfield's obligations to Propertyfinance in terms that extended to the 24 November2006 loan.[26] On 27 January 2016 Propertyfinace assigned its interests in the transaction to100 IL, with the result, it is said, that 100 IL is now entitled to pursue a claim againstPVL pursuant to that company's guarantee, and is therefore a creditor of the companyas that term is defined.RFD Finance Ltd[27] Mr Hide says that on 11 September 2006 a company by the name of EquitableLife Insurance Company Ltd as lender entered into an agreement with a PVL groupcompany by the name of Castle Street Ventures Ltd (Castle) as borrower, pursuant towhich Equitable Life Insurance Company advanced to Castle the sum of $8.5 million(the Castle loan). The same day, PVL guaranteed Castle's obligations under theagreement.[28] He says that on 19 September 2006 Equitable Life Insurance Company aslender entered into an agreement with a PVL group company by the name ofTay Ventures Ltd (Tay) as borrower, pursuant to which Equitable Life InsuranceCompany advanced to Tay the sum of $19,801,085.45 (the Tay loan). The same day,PVL guaranteed Tay's obligations under the agreement.[29] Equitable Life Insurance company then assigned the Tay and Castle loans toEquitable Holdings Ltd, the trustee company. On 14 February 2014 EquitableHoldings assigned to RFD its interests in the debts owed to the company by Castleand Tay under those loans.[30] PVL's internal financial records show that as at the date of the company'sliquidation:(a) Approximately $2.5 million was outstanding under the Lichfield loan;(b) Approximately $13.6 million was outstanding under the Castle loan;and(c) Approximately $6.1 million was outstanding under the Tay loan.[31] The documentation to which Mr Hide refers in his affidavit evidence appearsto support this description of events. Ms Sawyer did not contend otherwise.[32] Prima facie then, it would appear that by assignment both 100 IL and RFD arecreditors of PVL with standing to apply for the orders they seek.[33] As already said, the claim by 100 IL and RFD to be creditors of PVL ischallenged by Mr Walker.[34] In his notice of opposition Mr Walker did not provide any detail as to the basisfor this challenge. Under the heading "No standing in the applicants to make thisapplication", he asserts that 100 IL and RFD are not creditors. He recognises that theirclaim to be creditors is founded on the assignment to them of the rights and obligationsof the lenders to Litchfield, Castle and Tay including guarantees of the three loansprovided by PVL. However, in relation to these claims, all he says is that "theapplicants have not established that the assignments were valid or that they could giverise to any claim". That does not take matters very far.[35] Nor did Mr Walker take matters very much further in his short (effectively twopage) affidavit in support of his opposition. Here is the sum total of Mr Walker'sevidence on the point:6. I do not believe there can be any substance in the Applicants'claims to be creditors.7. I have sought further information in respect of the assignmentdiscussed at paragraph 5 of the affidavit of Rodney Phillip Hide,which information invalidates the claim that has been assigned.8. This assignment referred to at paragraph 6 of the affidavit ofRodney Phillip Hide is the same one referred to at paragraph [32](c)of the judgment of Venning J of today's date at [2020] NZHC 165. Ashis Honour says there, the relevant loan contained a "no assignment"clause, which would make any such assignment to the Applicant asclaimed invalid.[36] Immediately prior to the hearing of this matter on 25 June 2020, a secondaffidavit sworn by Mr Walker in support of his opposition was filed and served. Thelate filing and service of this affidavit gave the applicants' advisers virtually no timeto consider it. The late filing and service of such an affidavit is plainly objectionable,and I would have excluded it had Mr Moss pressed an objection to it. However, hedid not do so, and I therefore allowed the affidavit in.[37] In any event, I found this further affidavit evidence of little assistance. In itMr Walker makes a series of somewhat intemperate assertions on factual and legalmatters. To the extent that this evidence goes to the issue of the status of 100 IL andRFD as creditors (or not), I will address it in dealing with the submissions made onMr Walker's behalf by Ms Sawyer.[38] In her submissions relating to the status of 100 IL and RFD as creditors,Ms Sawyer covered a considerable amount of ground. In doing so, she went wellbeyond the grounds identified in the notice of opposition and the evidence before theCourt.[39] Ms Sawyer levelled criticism at the way in which the PVL group of companiesoperated. She emphasised the apparent fluidity of rights and obligations within thegroup and the way in which these were assigned or otherwise transferred between PVLitself and other companies. On this basis, she submitted that those responsible for thegovernance of the group prior to liquidation could arrange for any contractual rightsand obligations such as those under loans and guarantees to be moved at a whim.These are my words rather than hers, but she described something like a game ofmusical chairs within the group so that where such rights and obligations landed at thetime of the liquidation was, not so much a matter of dumb luck, as something that thethen directors and managers could manipulate. On this basis, she invited the Court tobe sceptical of the apparently neat position presented by 100 IL and RFD in Mr Hide'saffidavit evidence.[40] Ms Sawyer's description of the way in which the PVL group of companies wasgoverned and managed is not without foundation. However, whatever criticism mightbe made of this, the fact of the matter is that 100 IL and RFD are able to point to theclear documentary evidence that they are the successors in title to financiers who lentsubstantial sums to the three subsidiaries which indebtedness was guaranteed by PVL.Those transactions have not been the subject of specific challenge by Mr Walker asthe liquidator and have not been overturned by the Court. Prima facie then, the Courtmust recognise their legitimacy and 100 IL and RFL's status as creditors in the sumsclaimed by them and referred to in the relevant management accounts.[41] On the basis of Mr Walker's evidence quoted above, Ms Sawyer also advancedan argument to the effect that the rights and obligations of the lenders under the threeloans were not capable of assignment.[42] Having regard to the terms of his notice of opposition, I have reservations asto whether that issue — that is to say the issue of the lawfulness of the assignments —is properly before the Court, but, as Mr Moss for 100 IL and RFD engaged on thepoint, I will deal with it.[43] In relation to the Lichfield loan, as Mr Moss submitted, Mr Walker's assertionin relation to the assignment of the Propertyfinance loan to 100 IL on 27 January 2016that he had "sought further information in respect to the assignment whichinformation I believe invalidates the claim that has been assigned" is not evidence atall.[44] To the extent that Mr Walker is saying that the assignments of the rights andobligations under the loans to Castle and Tay were precluded by non-assignmentclauses in the loan documentation, the loan documentation for Castle indicates that itprecludes an assignment to anyone other than the trustee. As already said, the firstassignment by Equitable Life Insurance Company was to the trustee (EquitableHoldings). The trustee was under no similar restraint. A cursory reading of the loandocumentation for Tay indicates that this contained no prohibition on assignment.[45] Finally, Ms Sawyer submitted on behalf of Mr Walker that this application wasfrivolous and vexatious, and that the Court should not entertain it. In fairness toMs Sawyer, the background to that submission relates less to the particularcircumstances of this case as to the acrimonious nature of this liquidation to which Ihave already referred. As an illustration one need only refer to Thomas J's recentdecision in Henderson v Walker3 in which her Honour concluded that Mr Walker hadmisused information relating to Mr Henderson which came into his possession in hiscapacity as the liquidator of PVL and subsidiaries. That decision extends to some 90pages and describes the disputes between the parties there in a way that is unnecessaryto replicate here. Against that background, it seems to me that Ms Sawyer'ssubmission can be summarised by saying that Mr Walker's perception at least is thatgiving Mr Henderson through 100 IL and RFL access to any documentation is onlylikely to lead to more acrimony and litigation.[46] Such an outcome is by no means beyond the bounds of possibility. However,the Court must approach this application like any other on the basis of the merits. Inmy judgment, 100 IL and RFD are able to make out a strong claim — based largelyon documentary evidence — to be creditors of PVL, and therefore entitled to pursuethese applications.The substantive applications[47] The principles upon which the Courts approach applications under ss 256 and284 were largely common ground as between Mr Moss for 100 IL and RFD andMs Sawyer for Mr Walker and I summarise them below.[48] Section 256(1) provides as follows:256 Duties in relation to accounts(1) Subject to subsection (2), the liquidator of a company must—3 Henderson v Walker [2019] NZHC 2184.(a) keep accounts and records of the liquidation and permit thoseaccounts and records, and the accounts and records in thecompany, to be inspected by—(i) any liquidation committee appointed under section314, unless the liquidator believes on reasonablegrounds that inspection would be prejudicial to theliquidation; and(ii) if the court so orders, a creditor or shareholder; and(b) retain the accounts and records of the liquidation and of thecompany for not less than 1 year after completion of theliquidation.[49] In Levin v Lawrence Toogood J concluded that an applicant pursuant tos 256(1)(a)(ii) was required to establish a good reason for any order sought.4 Onappeal the Court of Appeal affirmed the good reason test and elaborated on it in theseterms:5(a) mere suspicion or assertion by a creditor that a liquidator has notundertaken — or is not undertaking — the liquidator's statutory taskproperly is not sufficient;(b) it is not permissible for a creditor to apply merely in order to embarkon a fishing expedition — in order to sift through the accounts andrecords of the liquidation to see if that might turn something up.(c) as a minimum, the applicant must put forward some persuasive,tangible or concrete reason why inspection should be granted. Anexample might be where the creditor, from its own dealings with thecompany in liquidation, has a genuine concern about a particularaspect of the company's affairs. If the liquidator declines toinvestigate this area, or declined to say whether it had beeninvestigated, we think the s 256(1)(a)(ii) threshold would be crossed.[50] Section 284(1)(c) and (d) provide:284 Court supervision of liquidation(1) On the application of the liquidator, a liquidation committee, or, withthe leave of the court, a creditor, shareholder, other entitled person, ordirector of a company in liquidation, the court may—4 Levin v Lawrence [2012] NZHC 1452 at [56].5 Levin v Lawrence [2013[ NZCA 394 at [53].(c) order an audit of the accounts of the liquidation:(d) order the liquidator to produce the accounts and records of theliquidation for audit and to provide the auditor with suchinformation concerning the conduct of the liquidation as theauditor requests:[51] As to the leave component of s 284, Mr Moss referred me to several authoritiesincluding the Court of Appeal's judgment in Trinity Foundation (Services No. 1) Ltdv Downey and Anor.6[52] In all of those cases the various courts confirmed that leave will be grantedwhere an applicant such as a creditor can establish a seriously arguable case on themerits.7 In this case, the application by 100 IL and RFD is of course the substantiveapplication before the Court. It is therefore unnecessary to consider the leave point asa discrete one as it will be subsumed in the substantive application.[53] Turning to that, the leading cases are Re Ocean Shipping Ltd (in liq),8 Black vSelwyn Developments Ltd (in liq)9 and Drilling Fluid Equipment NZ Ltd v Registrarof Companies.10[54] I adopt the articulation of the principle involved given by AssociateJudge Gendall (as he then was) in Drilling Fluid Equipment NZ Ltd:11The decision in Re Ocean Shipping clearly provides authority for the court tointervene in a case such as the present to use its supervisory powers vested init by s 284 of the Companies Act. As Fisher J noted in Re Ocean Shipping,there is a very strong presumption that the creditors of a failed company areentitled to a full and thorough investigation of the financial history and statusof the company, and that is especially the case where they are prepared to fundthe exercise. In my view the creditors appear to have been denied thatopportunity in the present case although, it may be that at the end of the day"the further investigation will prove fruitless but for my part I would be very6 Trinity Foundation (Services No. 1) Ltd v Downey and Anor Court of Appeal 15 November 2006at [31]. See also Birchall v Project Works Construction Ltd (in liq) (2004) 9 NZCLC 263, 547;and Official Assignee v Norris [2012] NZHC 961 at [18].7 See Adaptable Solutions v Toon [2017] 753 at [20].8 Re Ocean Shipping Ltd (in liq) HC Auckland M348196. 16 July 1996 per Fisher J.9 Black v Selwyn Developments Ltd (in liq) HC Auckland CIV-2007-404-4525 20 August 2007 perCourtney J.10 Drilling Fluid Equipment NZ Ltd v Registrar of Companies HC Wellington CIV-2008-485-1985.17 December 2008 per Associate Judge Gendall.11 At [10].slow to see a creditor denied at least the opportunity: — Fisher J in Re OceanShipping.The s 256 application[55] On behalf of 100 IL and RFD Mr Moss submits that "they meet the good reasontest and should be allowed to inspect the company accounts and records because:48.1 Mr Walker has received a considerable sum of money from the PWCsettlement;48.2 Mr Walker and SPF provided undertakings to the Supreme Court thatthere would be a return to creditors from any PWC settlement fundsreceived;48.3 Mr Walker has indicated in separate proceedings and under oath thatcreditors have done well from the liquidation;48.4 Despite this, the applicants have not received any funds from theliquidation nor any explanation of where the settlement funds havegone;48.5 It is of considerable concern that that Mr Walker's solicitor indicatedthat there may not be sufficient funds remaining to pay anything to thecreditors of PVL and that any amount has been absorbed byliquidator's fees in the circumstances of the undertakings to theSupreme Court; and48.6 Mr Walker admitted on oath that his first priority is his own pecuniaryinterest rather than the interests of the creditors.[56] It may be that the settlement of the litigation instigated by the liquidatorsagainst the directors, auditors and valuers referred to by Mr Moss in this submissionresulted in a substantial recovery. However, in and of itself, that does not take theargument very far. What matters is the amount of that recovery relative to the variouscalls on the funds which include the costs of the liquidation and the claims of securedcreditors as well as the claims of unsecured creditors. All that can really be inferredis that the successful outcome of the claims against those parties meant that theliquidator received funds which, as an officer of the Court, he is obliged to applyappropriately in the course of the liquidation. In due course the liquidator will ofcourse be obliged in terms of s 255 of the Companies Act to report. At that stage, theCourt will expect to have before it sufficient information to enable an assessment tobe made to satisfy itself that the liquidator has acted lawfully and properly indischarging those responsibilities.[57] What the litigation funder (SPF No 10. Ltd) and the liquidator said in theirevidence in the course of prosecuting the claims against the directors, auditors andvaluers was that the settlement would result in the flow of funds to the liquidators.Whilst unsecured creditors might fairly infer that this would increase the prospects ofa return to them, I do not read into what was said anything in the nature of an assuranceor undertaking that that would be the case.[58] It is true that in other proceedings Mr Walker has made the observation that thecreditors have done well in the liquidation. I accept his evidence that what he meantby that was that even the secured creditors have done well to receive any return. Inany event, an observation of that sort is not in my view capable of giving rise to areasonably founded concern that the liquidator is not discharging his responsibilitiesas such lawfully and appropriately.[59] I accept of course that 100 IL and RFD have not received any payment. Thisis explained both by the fact that their claims to be accreditors of PVL is not currentlyrecognised by the liquidator and by the fact that it would be unusual in any liquidationfor there to be an interim distribution to unsecured creditors.[60] The indication of Mr Walker's solicitors that there may not be any availablefunds for a distribution to unsecured creditors is not in my view capable of giving riseto a reasonably founded concern on the part of the unsecured creditors that theliquidator is not discharging his responsibilities lawfully and appropriately. Again,everything turns on the quantum of the funds received on the settlement relative to theclaims on those funds.[61] The suggestion that Mr Walker has admitted on oath that his first priority is hisown fees is not in my view a fair one. What Mr Walker said is that the costs of thelitigation — which include, but are no means limited to, his own fees — are a first callon the available funds. That statement simply reflects the priority of payments by aliquidator and to preferential creditors under sch 7 of the Companies Act.1212 See Companies Act 1993, Sch 7(1)(a).[62] Whilst 100 IL and RFD may well have their concerns about the way in whichMr Walker is discharging his responsibilities, the grounds put forward by them do not,in my view, meet the good reason test as described by the Court of Appeal in Levin vLawrence. On their behalves it is said that their essential concern is that Mr Walker isnot conducting the liquidation of PVL lawfully and appropriately. But the pleadedbasis for their concern does not seem to me to give rise to an objectively assessedfoundation for any such concern; as articulated by the Court of appeal in Levin vLawrence, mere suspicion is not sufficient. This case contrasts with Tempest LitigationFunders Ltd v Kamal13 where the evidence pointed to the possibility of the liquidatorhaving misconducted a creditors' meeting and I ordered the production ofdocumentation relating specifically to that meeting.The s 284 application[63] Mr Ross submits that 100 IL and RFD should have the order they seek for theauditing of the accounts and records under Mr Walker's control because:63.1 that they have a credible factual basis that Mr Walker has not paid outcreditors (or all of the creditors proportionally) from PWC settlementfunds. The applicants rely on the submissions at paragraph 44 above;63.2 that if the claim is established, there is a reasonable likelihood that theCourt will disturb the decision of Mr Walker because it would almostcertainly find the decision unreasonable on the ground that it was abreach of Mr Walker's duties as a liquidator to pay out unsecuredcreditors in equal proportions subject to preferential claims underSchedule 7;63.3 they are prepared to fund the independent audit.[64] He continues:64. The applicants simply seek an independent audit of the accounts ofthe liquidation so as to understand where the settlement proceeds werepaid. If Mr Walker has nothing to hide, an audit will show that. If hedoes, then it is in the interests of justice that an audit exposes thatbecause Mr Walker is an officer of the Court and acting, at all timesas liquidator of PVL, under orders of the Court appointing himliquidator to PVL.13 Tempest Litigation Funders Ltd v Kamal [2020] NZHC 827.[65] It appears to me that of s 284, as explained in the cases and commentary, isgenerally applied so as to give creditors who, when the outcome of the liquidation isknown, have a legitimate grievance as to the way in which it has been conducted andcan demonstrate that if it had been conducted otherwise the outcome may have beenmore advantageous for them an opportunity to examine whether their concerns arewell founded. In such circumstances, creditors are entitled to insist on a retrospectivereview in the form of an audit of the company's affairs and the liquidator's actions.The leading authorities such as Re Ocean Shipping Ltd (in liq) all involve applicationsafter the liquidator or liquidators have filed their final reports and such information isavailable to the Court and interested parties.[66] I do not see the utility in such order at this stage when the liquidation isincomplete and the liquidator has not provided a final report as to such things as thecosts of the liquidation, amounts recovered and the distribution of any moniesavailable between secured creditors, preferential creditors and unsecured creditors.Conclusion[67] For all of those reasons, the application is dismissed.[68] That leaves only the question of costs. As to that, my preliminary view is thatthe respondent is entitled to a costs order. There may however be issues relating to thefact that, as she explains it, Ms Sawyer's status as an employee and that may affect theappropriate costs order. I would expect counsel to be able to discuss and resolve costs.However, if they are unable to do so, they may revert by memorandum and I will dealwith costs on the papers in the usual way.Associate Judge JohnstonSolicitors:Hucker & Associates, Auckland for applicants