Court considers Halifax

Trans-Tasman sitting may be a historic solution

LIQUIDATORS for collapsed stockbroking firm Halifax Investment Services have moved a step closer to having the case heard in a historic joint sitting of Australian and New Zealand courts.

Minutes from the Committee of Inspection’s (COI) meeting held at KPMG’s office in Sydney on November 4 detailed the next steps required to begin what is believed to be the first trans-Tasman joint sitting.

The sitting would determine how funds from Halifax Investments Services would be distributed to NZ and Australian investors.

The minutes from liquidator and COI Chairperson Morgan Kelly revealed the liquidator would produce a draft notice, which would be approved by the Courts and then distributed to creditors to ascertain how many wish to be heard in the matter and their views on the most effective and efficient way to proceed with the case.

This step would then have to be repeated across the ditch before the liquidator could petition the

High Court in NZ for approval to share the case.

“The chairman emphasised that the Liquidators are in the hands of the Courts in relation to next steps, the procedure ultimately adopted and timing,” the report said.

In August, Mr Kelly made a submission to the Federal

Court requesting the joint sitting as he argued 98 per cent of the funds held by the Halifax Group (which is made up of Halifax AU and Halifax NZ, of which Halifax AU owned 70 per cent of the shares of the NZ company) were affected by commingling.

He said he had found 61 accounts held in the name of Halifax AU with a balance of $147.81 million while another 14 accounts held in the name of Halifax NZ with a balance of NZ$51.6 million ($49 million) had been identified, with a creditor shortfall of around $19 million.

In her judgment, Justice Jacqueline Gleeson opened the door to a historic joint sitting.

She said the case was the “classic candidate for crossborder co-operation between courts to facilitate the fair and efficient administration of the winding up of Halifax AU (and Halifax NZ) that will protect the interests of all relevant persons”.

“If the liquidators’ applications are not co-ordinated, there is a real and obvious prospect of inconsistent findings, inconsistent directions or advice and consequent additional litigation, all potentially to the detriment of creditors of Halifax AU,” she said.

She said she could envisage the case being held partly in Australia and partly in New Zealand, or by audiovisual link with each court delivering separate judgments.

Halifax was run by Jeff Worboys (pictured) out of offices in Southport, Perth and Melbourne before it was placed into administration in November last year.