Liquidation: CIT Holdings v. Olliver

Developer Gregory Olliver lost his battle for control of over 10,000 square metres of prime land in Auckland’s eastern suburbs.  The High Court ordered a caveat be removed enabling a liquidators’ sale to Oceania Healthcare go ahead.  It further ordered Mr Olliver vacate immediately rent free housing where has been living on site.

Listed company Oceania plans to build a retirement village on a Waimarie Street site in St Heliers.  The site is owned by Mr Olliver’s company CIT Holdings Ltd, now in liquidation.  Disputes over control of CIT have seen sequential High Court litigation first between Mr Olliver and his former spouse and then between Mr Olliver and liquidators of CIT.

Back in 2009, CIT purchased Waimarie Street with a $6.75 million Bank of New Zealand loan.  BNZ is unpaid.  The loan has now ballooned out to more than $14.5 million with interest accruing at about $100,000 per month.  CIT is in liquidation with debts in excess of $22.5 million.

The High Court was told Mr Olliver has resisted all efforts by the liquidator to sell Waimarie Street.  He has made multiple offers to buy, all of which were refused.  He created a security deed in his favour, later invalidated by the High Court, attempting to appoint receivers to take control of the land.  When CIT liquidators were about to settle the Waimarie Street sale to Oceania in December 2017, Mr Olliver lodged a caveat against the land blocking the deal.  He claims an interest in the land arising from a trust.

Justice Peters ordered removal of the caveat.  Liquidators had managed to get the best price possible.  They are obliged first to pay off BNZ and CIT’s preferential creditors.  Mr Olliver’s claimed right to share in anything that might be left could be dealt with later.  The court was told liquidators’ costs and legal expenses to date have run to some $450,000.  The price Oceania is paying was not disclosed.

Mr Olliver was also ordered to shift out of a residence at 22 Waimarie Street.  This property covers nearly 3000 square metres.  He had no lease or tenancy agreement with CIT Holdings entitling him to stay.  He had not been paying rent.  The liquidators’ earlier attempt to get a Tenancy Tribunal order removing Mr Olliver failed.  With no tenancy agreement, the Tribunal had no jurisdiction.

CIT Holdings Ltd v. Olliver – High Court (23.02.18)

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Company: Han v. Kuan Yap & Associates Ltd

An interim liquidator was appointed to take control of accounting practice Kuan Yap & Associates Ltd after owners fell out paralysing their business.  Company law operates to deal with internal disputes within professional services firms trading as limited liability companies. 

David Han and Kuan Yap jointly own the Auckland accountancy business.  Both are directors.  The High Court was told the business is failing after a deadlock over business operations.  Mr Yap alleges Mr Han cut off funding and is taking no active part in generating fees for the business.  Mr Han alleges Mr Yap shut him out of the business by unilaterally engaging employees, removing his access to Xero clients, disconnecting the business’ website and misappropriating company funds.  Staff morale has plummeted.  The High Court appointed Grant Reynolds as interim liquidator.  He is authorised to take control of all company assets pending resolution of the owners dispute.

Han v. Kuan Yap & Associates Ltd – High Court (22.02.18)

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Insurance: Robin v. IAG

With Christchurch earthquake re-repairs predicted to run into hundreds of millions of dollars, the High Court ruled insurance companies cannot push responsibility to recover compensation for faulty repairs back on to property owners.  Insurers are contractually liable to properly make good the original earthquake damage and they alone are directly responsible for any faulty repairs carried out on their behalf by rebuild contractors.

Insurer IAG New Zealand failed in its attempts to have a Christchurch Fitzgerald Avenue property owner take up the legal chase over faulty foundation repairs.  Suzanne Robin is suing IAG alleging the repair was inadequate.  The High Court ruled against IAG’s attempts to drag into the litigation other parties it alleges are to blame: the contractor who scoped the repair, other contractors who carried out the allegedly faulty repairs and the Council as issuer of a code compliance certificate.

Associate judge Matthews said it is for IAG not Ms Robin to sue those responsible for the allegedly faulty work.  Ms Robin does not have any information regarding the legal relationship between IAG and its contractors.  IAG was not a mere intermediary.  Insurance policy wording created a direct contractual obligation on IAG to properly repair earthquake damage to Ms Robin’s property.
Post judgement note: This decision was reversed on appeal.  Other allegedly liable contractors are to be added as defendants.  This enables all factual issues to be heard in one trial.  And protects IAG's rights of subrogation, allowing it to enforce any rights in tort Ms Robin may have against repair subcontractors. 

Robin v. IAG New Zealand Ltd – High Court (21.02.18)

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