IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2011-404-1623
CIV 2011-404-1626
CIV 2011-404-1619 [2013] NZHC 1807

UNDER	the Insolvency (Cross-border) Act 2006

IN THE MATTER OF	THE LIQUIDATIONS OF SS FARMS AUSTRALIA PTY LTD, CEDENCO JV AUSTRALIA PTY LTD AND SK FOODS AUSTRALIA PTY LTD

BETWEEN	JOHN SHEAHAN AND IAN RUSSELL LOCK
Applicants

AND	ANZ BANK NZ LTD AND KATE ELIZABETH DEKKER Respondents

Hearing:	(on the papers)

Counsel:	D J Chisholm QC and M Heard for Messrs Sheahan and Lock
M J Tingey and D J Friar for ANZ Bank NZ Ltd and Ms Dekker

Judgment:	17 July 2013

JUDGMENT (NO. 3) OF HEATH J

This judgment was delivered by me on 17 July 2012 at 4.00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

SHEAHAN AND LOCK v ANZ BANK NZ LTD AND DEKKER [2013] NZHC 1807 [17 July 2013]

[1]       In judgments given on 15 November 2012  and 26 April 2013,  I dealt with applications arising out of the liquidation of three Australian companies (SS Farms Australia Pty Ltd, Cedenco JV Australia Pty Ltd and SK Foods Australia Pty Ltd) and two unlimited New Zealand companies (Ex Ced Foods and Cedenco Ohakune).

[2]       All but one of the applications were dealt with finally, in my judgment of 15

November 2013.   One was adjourned for further argument; an application by the liquidators of the Australian companies under art 21(1)(d) of the First Schedule to the Insolvency (Cross-border) Act 2006.    The second judgment dealt with admissibility of evidence of foreign law on that application.

[3]       In my judgment of 26 April 2013, I directed the Registrar to set the art 21 application down for a defended hearing on the first available date after 14 June
2013.    In the meantime, appeals and cross appeals had been filed in the Court of

Appeal against virtually (if not) all of the orders that I made in the 15 November

2012 judgment.

[4]       In  a  joint  memorandum  dated  15  July  2013,  counsel  for  the Australian liquidators and ANZ Bank NZ Ltd, seek an adjournment of the art 21 application. No hearing is sought this year.  Rather, a mention hearing is requested in December
2013.

[5]       The reason for the adjournment application arises out of continuing disputes about  the  ownership  of  shares  in  one  of  the Australian  companies,  SK  Foods Australia Pty Ltd,  and an inter-company loan made to that company.  One of the parties claiming to own the shares is SK Foods LP.  It is being administered under Chapter 11 of the Bankruptcy Code (US). The trustee of the US company, Mr Sharp, has “expressed a preference” that the liquidators of the Australian companies not investigate further the conduct of ANZ, either in New Zealand or Australia.   The
circumstances of that investigation are set out fully in my earlier judgments.

[6]       In November 2012, the US Bankruptcy Court for the Eastern District of California ruled that the shares and the right to claim the debt were the property of SK Foods LP.   By application of the principle of res judicata, the Federal Court of Australia  has  recently  decided  that  the  Bankruptcy  Court’s  decision  will  be recognised in Australia.    Counsel for the liquidators advise that an appeal of the Bankruptcy Court‘s decision may be pending.

[7]       In addition, the Commissioner of the Australian Federal Police has sought restraining orders under the (Commonwealth) Proceeds of Crime Act 2002.   That application seeks to restrain payment of any funds from SK Foods Australia to creditors or shareholders and to restrain receivers of SK Foods Australia and SS Farms Australia from dealing with funds held as receivers.

[8]       The Australian  liquidators wish  to  preserve their  rights  under  the  art  21 application but accept Mr Sharp’s position that, if the Australian Federal Police’s application for forfeiture is ultimately unsuccessful, the liquidators will not have a mandate to pursue it.  In those circumstances, a lengthy adjournment is requested.

[9]       Counsel advise that adjournment of the art 21 application will not impact on progress of other appeals.  The parties have abandoned all appeals, save for those in relation to my interim judgment on the art 21 application.  On 2 July 2013, the Court of Appeal stayed that appeal to a date one month after delivery of this Court’s judgment on the art 21 application.

[10]     In those circumstances, I accept the position taken by the parties and make the following directions:

(a)	The art 21 application is adjourned for a telephone conference at 9am on a date in December 2013, to be fixed by the Registrar.

(b)	Leave is reserved for the parties to seek any further directions that may be required. That may be done by memorandum.

(c)	All questions of costs are reserved.

P R Heath J

Solicitors:
LeeSalmonLong, PO Box 2026, Auckland
Bell Gully, PO Box 180, Auckland
Counsel:
D Chisholm QC, Level 14, Waterloo Quadrant, Auckland