The High Court has dismissed a bid by one of David Henderson’s companies now directed by his wife to stop liquidation proceedings.
Wellington accountant Robert Walker, the liquidator of several companies in the Henderson group, has started court action to liquidate Castlereagh Properties Ltd, of which Henderson was a shareholder until June 27, 2010.
The shares are now held by FTG Trustee Services Ltd, a company directed by Henderson’s wife Kristina Louise Buxton, but with the shareholding in Henderson’s name.
Henderson was bankrupted on November 29, 2010 and remains a bankrupt. Walker has also issued bankruptcy proceedings against Buxton.
She is the sole director of Castlereagh, which applied to the High Court at Christchurch last month to have the liquidation action stayed. Associate Judge Rob Osborne rejected the bid in a judgement this month.
The decision came shortly before Henderson’s big win last week against the Police over an unauthorised search of his offices in 2011 and is another chapter in a bitter and long-running battle between Henderson, Inland Revenue and Walker.
Walker’s liquidation action was based on Castlereagh’s failure to pay a costs award he received in a related case last year.
In that case, the High Court upheld Walker’s decision to cancel a sale and purchase agreement.
In upholding Walker’s decision, the court awarded costs and disbursements against Castlereagh and Buxton, jointly, of $29,651 in favour of Walker.
Castlereagh has appealed the High Court’s decision that upheld Walker’s cancellation of the contract and wanted the liquidation action delayed until the Court of Appeal made its decision.
The company argued the refusal of a stay would produce an injustice through “the failure to balance Castlereagh’s need to preserve the position in case its appeal was successful”.
Proposals by Buxton suggested security for costs could be provided but these were rejected by Walker.
Buxton referred to her family home, a lifestyle block at Gibbston, for which she holds a valuation of $1.85m. She said a debt of $920,000 was secured over the property. She said she needed four months to prepare the property for sale.
The property is owned by Tomanovich Investments Ltd of which she is sole director. Its shares are owned by Trans-Tasman Trustee Services, a company directed and owned by Christchurch lawyers Grant Smith and Clive Cousins, although Henderson was a shareholder until May 17, 2013.
Osborne noted Castlereagh’s evidence did not indicate what steps had been taken to raise funds for the costs judgement.
“Castlereagh’s deponents have either unwittingly or deliberately remained silent on that point . . . I find it as a probability that Castlereagh and Ms Buxton’s associated companies would between them have been able to raise the funds needed to meet the costs judgement had they set out to do so.”
Osborne said Castlereagh’s evidence did not explain how it was able to sustain its litigation given it had no assets or income.
“Mr Walker is likely to be prejudicially affected by a stay. This factor militates against the making of a stay.”
The agreement which Walker cancelled was over the sale of shares owned by Gibbston Water Holdings Ltd (another Henderson-related company). Gibbston, shortly before its liquidation in October, 2011, transferred the shares to Castlereagh for $1.
Source: Stuff News
Story by Martin Van Beynen. Published 14/05/2015
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