Victoria 88 Limited v One Step Ahead Limited (in liquidation)

[2023] NZHC 2569

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-695

[2023] NZHC 2569

BETWEEN

VICTORIA 88 LIMITED

Plaintiff

AND

ONE STEP AHEAD LIMITED

(In Liquidation) Defendant

Hearing:	On the papers
Applicant:	L Smart, Liquidator (memorandum filed 12 September 2023)
Judgment:	14 September 2023

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 14 September 2023 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

VICTORIA 88 LTD v ONE STEP AHEAD LTD (in liq) [2023] NZHC 2569 [14 September 2023]

[1]    The liquidator of One Step Ahead Ltd (In Liquidation) applies for approval of remuneration under s 284(1)(e) of the Companies Act 1993. Initially both Geoff Brown and Lynda Smart of the firm Rodgers Reidy (NZ) Ltd, Chartered Accountants were appointed joint and several liquidators of the company, but upon Mr Brown’s death Ms Smart continued as sole liquidator.

[2]    The application is accompanied by copies of the liquidator’s reports, including a draft final report to be lodged with the Registrar of Companies. The draft final report was prepared and submitted to the Court on the basis that all distributions have been made and the liquidator’s remuneration approved.

[3]    One Step Ahead Ltd was incorporated on 5 September 2002, ceased trading on 12 November 2018, and was put into liquidation by the High Court on 6 December 2018. The company had carried on business as The Watershed Bar & Restaurant, which it had purchased in August 2017. The directors advised that the reasons for the company’s insolvency were cashflow difficulties and issues that had arisen between the company and the previous owner of the business.

[4]    The liquidator has produced satisfactory details of the work undertaken in the liquidation. In the course of the liquidation, the liquidator sold the assets of the company and no further assets are to be realised. In addition to a GST liability and the costs and expenses in the sale and liquidation, the proceeds of sale of the assets have been paid to the secured creditor. Due to the level of realisations there can be no payments to preferential or unsecured creditors.

Legal principles

[5]    The principles that apply in considering such applications are set out in the decisions of Re Roselea Path Ltd (in liq),1 and Madsen-Ries v Salus Safety Equipment Ltd (in liq).2 I am required to be satisfied the remuneration sought by the liquidator reflects the fair value of the services rendered to the creditors of the company.

[6]I am satisfied that is the case here.

1      Re Roselea Path Ltd (in liq) [2013] 1 NZLR 207 (HC).

2      Madsen-Ries v Salus Safety Equipment Ltd (in liq) [2022] NZCA 101.

[7]    A significant amount of work has been undertaken by the liquidator which is set out in her reports. She has pursued all avenues of recovery and the liquidation can be concluded.

[8]    I have considered the liquidator’s reports to the company’s creditors and shareholders and I note that the initial report set out the basis upon which the liquidator would charge fees and the hourly rates that have been approved by the Court.

[9]    The liquidator has provided a breakdown of time records and remuneration which shows that the hourly rates to be applied are at a discount on those approved by the Court. Due to insufficient recoveries, the liquidator has proposed to write off a large proportion of the total time incurred by her and her staff.

[10]The proposed remuneration to be paid represents an average hourly rate of

$169.12 which is less than what is commonly charged for such work in my experience.

[11]   Whilst the preferential and unsecured creditors will not receive any payment in the liquidation, this is in circumstances where the liquidator has found the company has no further assets, valid claims or avenues to pursue.

[12]   I am satisfied the liquidator’s claimed remuneration reflects the value of services rendered to the creditors of the company and I will grant the application for approval as sought.

Result

[13]   I grant the application for approval of the liquidator’s remuneration in the amount of $11,171.77 plus GST. I note there are expenses of $880.83 incurred also which are reasonable.

O G Paulsen Associate Judge

Copy to: Rodgers Reidy (NZ) Limited, Christchurch (for Applicant Liquidators)