HARRISON as a Company Director of HAWKEYE UAV LTD (now in liquidation) v MANAWATU-WANGANUI REGIONAL COUNCIL (trading as HORIZONS REGIONAL COUNCIL) [2013] NZHC 3473

HARRISON as a Company Director of HAWKEYE UAV LTD (now in liquidation) v MANAWATU- WANGANUI REGIONAL COUNCIL (trading as HORIZONS REGIONAL COUNCIL) [2013] NZHC 3473 [18 December 2013]IN THE HIGH COURT OF NEW ZEALANDPALMERSON NORTH REGISTRYCIV-2013-454-000435[2013] NZHC 3473UNDER Part XVI of the Companies Act 1993IN THE MATTER of a proceeding to put HAWKEYE UAVLIMITED into liquidationBETWEEN ROWLAND CHARLES HARRISON as aCompany Director of HAWKEYE UAVLIMITED (now in liquidation)ApplicantAND MANAWATU-WANGANUI REGIONALCOUNCIL (trading as HORIZONSREGIONAL COUNCIL), a TerritorialAuthority under the Local GovernmentAct 2002First RespondentHAWKEYE UAV LIMITED (inliquidation)Second RespondentHearing: 18 December 2013 (Determined on the Papers)Counsel: B P Molloy for ApplicantJudgment: 18 December 2013JUDGMENT OF ASSOCIATE JUDGE MATTHEWS[1] The second respondent (Hawkeye) was placed in liquidation by this Court on 27 November 2013. Mr R C Harrison, a director of Hawkeye, has applied for an order terminating the liquidation under s 250 of the Companies Act 1993.[2] Section 250 provides, to the extent relevant:250 Court may terminate liquidation(1) The Court may, at any time after the appointment of a liquidator of a company, if it is satisfied that it is just and equitable to do so, make an order terminating the liquidation of the company.[(2) An application under this section may be made by—(a) the liquidator; or(b) if the company has executed a deed of company arrangement, the deed administrator; or(c) a director or shareholder of the company; or(d) any other entitled person; or(e) a creditor of the company; or[[(ea) if the company is a financial markets participant, the FMA; or]](f) the Registrar.][(2A) On an application by a deed administrator, the Court must have regard to—(a) any misconduct by the company's officers reported by the deed administrator, the liquidator, or the Registrar; and(b) the commercial decision of the creditors in accepting the deed of company arrangement; and(c) whether the deed of company arrangement would leave the company insolvent; and(d) any other matters that the Court thinks fit.](3) The Court may require the liquidator of the company to furnish a report to the Court with respect to any facts or matters relevant to the application.(4) The Court may, on making an order under subsection (1) of this section, or at any time thereafter, make such other order as it thinks fit in connection with the termination of the liquidation.(5) ...(6) ...(7) ...[3] In his affidavit in support Mr Harrison says that the debt to the first respondent council arises from a joint venture between Hawkeye and the Defence Technology Agency to conduct an aerial survey of RNZAF Base Ohakea. DTA was to cover the cost of the project. Although the invoice from the council to Hawkeye was forwarded to DTA, DTA did not make payment. Eventually the council took action under the Companies Act, requiring payment by Hawkeye. This resulted in the liquidation order being made.[4] Mr Harrison says that Hawkeye is solvent, is in a position to pay its debts as they arise, and has now paid the debt and court costs owing to the council. He says that Hawkeye will meet any other reasonable costs of the liquidator. He says that the council now consents to the liquidation being terminated.[5] A consent memorandum was filed, signed by counsel for Hawkeye and Mr Lord, an authorised signatory on behalf of the council, which confirms payment of the debt owing by Hawkeye to the council, the council's consent to thisapplication, that Hawkeye has no other substantive creditors, and that the Official Assignee does not oppose the application.[6] The application was placed before me, together with an application from counsel that the file be transferred to Wellington for urgent consideration, given that the applicant needs to continue to trade and the first available date for hearing in Palmerston North would not be until February. I reviewed the file, requested the Case Officer in the court to ask the Official Assignee for a report under s 250(3) and indicated that I would consider the application upon receipt of that report.[7] The report was filed this morning. The Official Assignee advises:(a) Latest financial statements and a completed statement of affairs for the company have been reviewed (but not independently verified).(b) These show assets of just over $1m, and liabilities at just under $150,000.(c) The company's bank has advised the Official Assignee that there aresufficient funds held across the accounts of the company and related parties to enable the bank to have the company operating within the limits of its overdraft facilities, and to have additional funds available. If the liquidation is terminated the bank will reinstate its lending to the company with a restructure of the facility limits.(d) The company has provided to the Official Assignee an undertaking that the creditors listed in the liquidation will be paid or arrangements will be made with them for payment before the order is sealed.[8] Accordingly the Official Assignee indicates that she has no objection to a termination of the liquidation being granted provided that sufficient funds are available to meet the debts of the company, or arrangements are made with allknown creditors, listed in the liquidation, and the Official Assignee's costs anddisbursements are paid. She also says that she has no objection to the termination of the liquidation provided no creditor objects.[9] I have considered the application, all the material put before me and, in particular, the information provided by the Official Assignee. I express my gratitude to the Official Assignee for her prompt response to my request for a report, whichhas enabled me to respond to the applicant's request for some urgency in consideringthis application.[10] I am satisfied that it is appropriate to make an order terminating the liquidation of the company. Whilst the company should not have allowed matters with the council to reach the point that they did reach, it is plain that the company is not in fact insolvent, and should continue to trade.[11] My only reservation relates to the request of the Official Assignee that all creditors be required to consent to the order sought. I do not think that requirement needs to be imposed, given the information provided by the Official Assignee by the bank, the net asset position of the company, and the assurance from the applicant'scounsel in the consent memorandum that Hawkeye does not have any other substantive creditors.[12] I make the following order:(a) The liquidation of the company is terminated.(b) An order may be presented for sealing, but is to lie in court prior to sealing until the applicant files with the Registrar:(i) Confirmation from the Official Assignee of payment of its costs and disbursements in the sum of $4,283.02.(ii) A written undertaking from the company that it has sufficient funds available to meet its debts, or alternatively has made arrangements for payment which are satisfactory to those creditors.[13] The only party put to any expense in relation to this application is the Official Assignee, whose costs are provided for above. Accordingly there will be no order for costs._______________________J G MatthewsAssociate Judge____________________________________________________________________Solicitors:Haigh Lyon, Auckland.