Nakhle v Karaka Estate Ltd - [2026] NZHC 2295

Applications to place the defendants, Byerley Park Ltd (BPL) and Karaka Estate Ltd (KEL), into liquidation. The defendants are corporate trustees of the Berley Park Trust (BPT) and Karaka Estate Trust (KET) respectively. Plaintiff makes the application in her capacity as director of both companies pursuant to s 241 of the Companies Act 1994 on the grounds that it is just and equitable as the boards of both companies are deadlocked due to an irretrievable breakdown in trust and confidence between the directors and shareholders; and the companies are insolvent. 

Held: Application granted. There has been an irretrievable breakdown in the relationships of the boards with respect to both BPL and KEL; and both BPL and KEL are insolvent, both on a balance sheet basis and because, without substantial external support, neither of the defendant companies are able to pay their debts as they fall due. A proposal to pay ongoing operational expenses through a receiver declined on the basis that it would permit BPL and KEL to continue trading without addressing their underlying insolvency and without guaranteeing the underlying assets of both trusts would not be put at a greater risk if they were no longer able to receive substantial external support. In addition, a receivership would not be neutral but would perpetrate the applicant's exclusion from management of the defendants and materially strengthen the co directors' position. Overall just and equitable for defendants to be placed in liquidation. Orders accordingly.