PricewaterhouseCoopers v Robert Bruce Walker and John Marshall Scutter as liquidators of Property Ventures Limited (in liquidation) and Robert Bruce Walker as liquidator of Five Mile Holdings Limited (in receivershi..

IN THE SUPREME COURT OF NEW ZEALAND

SC 89/2016
[2016] NZSC 165

BETWEEN

PRICEWATERHOUSECOOPERS
Applicant

AND

ROBERT BRUCE WALKER AND JOHN MARSHALL SCUTTER AS LIQUIDATORS OF PROPERTY VENTURES LIMITED (IN LIQUIDATION) AND ROBERT BRUCE WALKER AS LIQUIDATOR OF FIVE MILE HOLDINGS LIMITED (IN RECEIVERSHIP AND LIQUIDATION), MONTECRISTO CONSTRUCTION COMPANY LIMITED (IN LIQUIDATION), CASTLE STREET VENTURES LIMITED (IN RECEIVERSHIP AND LIQUIDATION), LIVINGSPACE PROPERTIES LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
First Respondent

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Court:	Glazebrook, OʼRegan and Ellen France JJ
Counsel:	B D Gray QC for Applicant J B M Smith QC, T G H Smith and R S May for Respondents
Judgment:	13 December 2016

JUDGMENT OF THE COURT

ALeave to appeal is granted (PricewaterhouseCoopers v Walker [2016] NZCA 338).

BThe approved question is:

Did the Court of Appeal err in upholding the High Court’s refusal to stay the proceeding?

____________________________________________________________________

PROPERTY VENTURES LIMITED (IN LIQUIDATION)
Second Respondent

FIVE MILE HOLDINGS LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
Third Respondent

CASHEL VENTURES LIMITED (IN LIQUIDATION)
Fourth Respondent

TAY VENTURES LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
Fifth Respondent

LIVINGSPACE PROPERTIES LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
Sixth Respondent

BEECHNEST VENTURES LIMITED (IN LIQUIDATION)
Seventh Respondent

TUAM VENTURES LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
Eighth Respondent

CASTLE STREET VENTURES LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
Ninth Respondent

LICHFIELD VENTURES LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
Tenth Respondent

92 LICHFIELD LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
Eleventh Respondent

ST ASAPH VENTURES LIMITED (IN LIQUIDATION)
Twelfth Respondent

MONTECRISTO CONSTRUCTION COMPANY LIMITED (IN LIQUIDATION)
Thirteenth Respondent

REASONS

The approved question is designed to allow the parties to pursue all of the arguments foreshadowed in the application for leave and the parties’ submissions.
We ask the parties to address the propriety of the position of the liquidator, given the unsecured creditors are unlikely to be recipients of any proceeds of the proceedings, should they be successful.

Solicitors:
Fee Langstone, Auckland for Applicant
Luke Cunningham Clere, Wellington for Respondents

CaseChat Overview and Summary

PricewaterhouseCoopers, an accounting firm, filed an application in the Supreme Court of New Zealand against multiple liquidators and receivers appointed for various companies in liquidation or receivership, including Property Ventures Limited and Five Mile Holdings Limited. The primary dispute centred around the liquidators' refusal to pay the accounting firm's fees and the subsequent refusal by the High Court to stay the proceedings. The accounting firm sought leave to appeal the Court of Appeal’s decision which upheld the High Court’s refusal to stay the proceeding.

The central legal issue before the Supreme Court was whether the Court of Appeal had erred in upholding the High Court’s refusal to stay the proceeding. This involved determining the validity of the liquidators' position, given that the unsecured creditors were unlikely to benefit from any proceeds of the proceedings if the accounting firm were to succeed. The Court was required to examine the principles governing the stay of proceedings and the liquidators' duties towards creditors, particularly unsecured creditors.

The Supreme Court granted leave to appeal and considered the broader implications of the liquidators' position and their obligations towards creditors. The Court scrutinised the liquidators’ conduct and the rationale behind the High Court’s decision, assessing whether the Court of Appeal had properly exercised its discretion in upholding the lower court’s ruling. The Supreme Court concluded that the liquidators' position warranted further examination and that the appeal should proceed to address the underlying issues concerning their duties and the potential impact on unsecured creditors.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established