SIMON PETER BURNEY V WAITUNA BREWING COMPANY LIMITED AND ANOR HC PMN CIV 2009-454-480

SIMON PETER BURNEY V WAITUNA BREWING COMPANY LIMITED AND ANOR HC PMN CIV 2009-454-480

The s174(2)(c) applications were refused because there was no equitable basis to prefer one shareholder over the other or to impose a forced sale to preserve a disputed status quo; conversely, liquidation under s174(2)(g) was ordered as just and equitable because the equal-shareholder deadlock made effective management and future financing impossible. The Court waived the HCR 31.9 advertising requirement under r 1.5 because there were no creditors and advertising would serve no purpose.

Citation
openlaw-f7506e90_7f89_424c_bd87_098077cf7a65.pdf
Parties
Plaintiff: Simon Peter Burney; First Defendant: Waituna Brewing Company Limited; Second Defendant: Bruce Nigel Smith
Court
High Court
Jurisdiction
New Zealand
Judgment Date
9 October 2009
Procedural Posture
Application Under S 174 Companies Act 1993 (shareholder Oppression / Deadlock) / Judgment
Outcome
s174(2)(c) applications refused; s174(2)(g) order for liquidation granted; HCR 31.9 advertising requirement waived under HCR 1.5; no order as to costs; second defendant to file memorandum within five days identifying further orders required
Legal Topics
Shareholder Oppression, Liquidation, Compulsory Share Purchase, High Court Rules Waiver
Company Law Insolvency Civil Procedure Shareholder Oppression Liquidation Compulsory Share Purchase High Court Rules Waiver

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Parties

Simon Peter Burney

Plaintiff

Waituna Brewing Company Limited

First Defendant

Bruce Nigel Smith

Second Defendant

Procedural Posture

Application Under S 174 Companies Act 1993 (shareholder Oppression / Deadlock) / Judgment

Legal Issues

  1. 1 Whether a s 174(2)(c) order requiring one shareholder to sell to the other is just and equitable
  2. 2 Whether a s 174(2)(g) order putting the company into liquidation is just and equitable
  3. 3 Whether failure to advertise the liquidation application under HCR 31.9 deprives the Court of jurisdiction or can be waived under HCR 1.5

Ratio Decidendi

The s174(2)(c) applications were refused because there was no equitable basis to prefer one shareholder over the other or to impose a forced sale to preserve a disputed status quo; conversely, liquidation under s174(2)(g) was ordered as just and equitable because the equal-shareholder deadlock made effective management and future financing impossible. The Court waived the HCR 31.9 advertising requirement under r 1.5 because there were no creditors and advertising would serve no purpose.

Court Disposition

s174(2)(c) applications refused; s174(2)(g) order for liquidation granted; HCR 31.9 advertising requirement waived under HCR 1.5; no order as to costs; second defendant to file memorandum within five days identifying further orders required

Orders

  • Refuse the s174(2)(c) applications for compulsory purchase of shares
  • Order that Waituna Brewing Company Limited be placed into liquidation pursuant to s174(2)(g) of the Companies Act 1993