Ross Group

The Liquidators of the Ross Group are now in a position to conclude the liquidations and make a final distribution to investors and creditors in the Ross Group of companies. They have requested further directions from the Court on how that final distribution should be paid. As is required before the liquidations can be formally concluded, the liquidators have also sought approval from the Court of their fees in the liquidation. Copies of the relevant documentation in relation to these matters and a summary of the application can be found below.

• Summary of Liquidators' application to the Court
• Affidavit of John Fisk in relation to final distribution and approval of Liquidators' fees
  
• Affidavit of Malcolm Hollis in support of Liquidators' application
  
• Memorandum of counsel in relation to final distribution and approval of Liquidators' fees

The Liquidators of Ross Asset Management Limited (In Liquidation) have obtained judgment in the High Court against a further investor to repay monies paid out in the period leading up to liquidation. This was under the provisions of the Property Law Act 2007 and the amount to be repaid is $258,910.73 plus interest from the date of liquidation and legal costs. A copy of the full judgment is available below.

• Full Judgment - Fisk & Bridgman v Holden, Bride & Ors NZHC 55

The Liquidators of Ross Asset Management Limited (In Liquidation) are pleased to advise that they have now paid an interim distribution 14.3705 cents in the dollar towards investors agreed claims in the liquidation.

Clawback proceedings are ongoing and any further distribution will be dependent on successful recoveries being made in relation to those proceedings. Further details will be set out in the Liquidators' next statutory report which is due in early 2019.

If any investor or creditor has not received a distribution to which they believe they are entitled please contact the liquidators here.

Following the decision of the High Court in relation to Distribution there have been some further procedural matters which have been dealt with, particularly the legal status of all parties heard at the hearing and a costs application on behalf of Investor A. No costs award was made. Copies of the relevant documentation in relation to these matters can be found below.

• Distribution Application - Memo for Liquidators seeking clarification on orders
• Distribution Application - Memo for Investor A seeking costs award
• Distribution Application - Minute of Johnston AJ re clarification
• Distribution Application - Memo for Liquidators responding to costs application
• Distribution Application - Memo of Amicus responding to costs application
• Distribution Application - Joint Memo in response to Minute of Johnston AJ re clarification
• Distribution Application - Decision of Johnston AJ re Costs
• Distribution Application - Sealed Orders of Distribution Judgment dated 8 August 2018

10 August 2018      

• Letter to Investors advising of outcome of distribution application
  
• Distribution Application – Decision of Johnston AJ [2018] NZHC 2007
  

A further investor has sought the leave of the Court to be heard in relation to the distribution application on 22 June 2018. A copy of the investor's request for leave to appear, a redacted affidavit in support, a memo from the liquidators in response and a further memo from the investor can be found below.

• Distribution Application - Request for leave to Appear from Barrington Prince
• Distribution Application - Affidavit of Barrington Prince dated 19 June 2018 - Redacted
• Distribution Application - Memorandum of Liquidators in Response to application for Joinder of Barrington Prince
• Distribution Application - Memorandum of Barrington Prince dated 21 June 2018
  

The Court has issued a minute in relation to the Distribution Hearing on 22 June 2018. A copy of the minute, a joint submission from counsel in response to the minute and the submissions for Investor

• Distribution Application - Minute of Johnston AJ dated 15 June 2018
• Distribution Application - Joint Memorandum of Counsel following Minute of 15 June 2018
• Distribution Application - Submissions for Investor

The Amicus Curiae has filed his submissions with the Court. These can be found below.

• Distribution Application - Submissions for Amicus

The Liquidators have filed a further affidavit with the Court providing some further analysis on the distribution models. A copy of this, along with the Liquidators' solicitors' submissions, can be found below.

• Distribution Application - Affidavit of John Fisk dated 18 May 2018
• Distribution Application - Submissions for Liquidators

Further to the Memorandum from Investor A seeking leave to be heard, on 26 April 2018 the High Court has approved the joining of Investor A as a party to the proceedings. A copy of Investor A's application and the response from the Liquidators can be found below.

• Distribution Application - Application for Joinder of Investor A
• Distribution Application - Memorandum of Liquidators in Response to application for Joinder of Investor A
  

The High Court has set a hearing date of 22 June 2018 to consider the Liquidators distribution directions application. More information, including a copy of the Associate Judge's minute can be found in the below documents.

• Distribution application - Letter to Investors advising of timetabling
• Joint Memorandum of Counsel for conference on 9 April 2018
• Memorandum from Investor A seeking leave to be heard
• Minute of Johnston AJ as to timetabling

The distribution application is being progressed by the counsel assisting the Court and the liquidators' solicitors. Counsel assisting the court was to have reported back to the Court on matters relating to the application by Friday 23 February 2018.   Due to the complexity of the matters being considered, counsel assisting the Court has sought a further three weeks to report back to the Court. The liquidators have agreed to this extension of time. More detail around this can be found in the document below.

Distribution Timetabling - Joint Memorandum and Minute of Johnston AJ

The Liquidators of the Ross Group have made an application to the High Court to approve a model for distribution of funds held in the liquidation. More information, including a copy of the application, can be found in the below documents.

Letter advising of application

Summary of application

Application by liquidators for directions

Memorandum of counsel in support of initial orders

Memorandum of counsel as proposed Amicus

Redacted affidavit of John Fisk

Minute of Thomas J as to initial orders

Sealed interim orders of the Court
 

The Supreme Court has held that in the case of McIntosh v Fisk the liquidators are able to recover interest on the clawback judgment obtained against Mr McIntosh at the rate of 5% per annum calculated from the date of liquidation.

A Summary from the Supreme Court: Hamish Mcintosh v John Howard Ross Fisk and David John Bridgman [2017] NZSC 129

Full Judgment: Hamish McIntosh v John Howard Ross Fisk and David John Bridgman [2017] NZSC 129

The Supreme Court has held that in the case of McIntosh v Fisk the liquidators are able to recover Ross Asset Management Limited (In Liquidation) ("RAM")'s payment of fictitious profits to Mr McIntosh, but are not able to recover repayment of the initial investment, as he has provided fair value for that sum. The effect is that Mr McIntosh is required to repay the fictitious profits to RAM.

The liquidators are reviewing the decision to determine what further action now needs to be taken in relation to other investors who have also received payments of fictitious profits from RAM. An update will be sent to investors shortly in this regard.

A Summary from the Supreme Court: Hamish McIntosh v John Howard Ross Fisk and David John Bridgman [2017] NZSC 78

Full Judgment: Hamish McIntosh v John Howard Ross Fisk and David John Bridgman [2017] NZSC 78

On 12 April 2014 the Financial Markets Authority obtained the approval of the High Court to bring the receivership of David Robert Gilmour Ross and associated entities to an end. The Receivers' Final Report can be located here:

David Ross - Receivers' Final Report

The High Court has held that Duncan and Nora Priest are entitled to shares valued at circa $2 million. The liquidators of Ross Asset Management Limited (In Liquidation) ('RAM') had argued that the shares formed part of the general body of assets available to RAM's investors.

The Court held that the circumstances surrounding the acquisition and holding of the Priest shares were sufficiently different than the situation with other RAM investors, that a bare trust in favour solely of the Priests was created and that trust endures the receivership and liquidation of RAM. Accordingly the shares do not form part of the general body of assets available to RAM's investors.

The liquidators are reviewing the decision to determine whether to appeal.

A summary from the High Court: Priest v Ross Asset Management et al [2016] NZHC 1803

Full Judgment: Priest v Ross Asset Management et al [2016] NZHC 1803

On 16 March 2016 the Court of Appeal released its judgment on McIntosh v Fisk confirming the decision in the High Court that fictitious profits should be repaid to the liquidators for the benefit of all creditors. The liquidators were denied their cross-appeal for claw-back of capital withdrawals, with Miller J dissenting on this point.

The liquidators were advised on 15 April 2016 that McIntosh has applied for leave to appeal the fictitious profits aspect of the Court of Appeal’s decision to the Supreme Court. As a result of this, the liquidators now intend to apply for leave to cross-appeal on the matter of capital withdrawals. If leave to appeal is granted, we will also be making an application for this appeal to be heard with urgency.

The liquidators will be in further contact with the affected investors in due course.

The Court of Appeal has confirmed the High Court ruling in Fisk v McIntosh. All three judges agreed that the Liquidators of Ross Asset Management Limited (In Liquidation) are entitled to claw back the full amount of fictitious profits received by an investor prior to liquidation. The claim was successful under both the provisions of the Companies Act 1993 and the Property Law Act 2006.

By a majority decision (2-1), the Court declined the liquidators’ cross-appeal seeking to recover the full value of withdrawals, being both capital deposited and fictitious profits. One dissenting judge would have allowed this cross-appeal.

The Liquidators note that the Court has attempted to balance the interests of both the individual investor and the general body of creditors based on the prevailing law which binds the Court of Appeal.

The liquidators are currently considering whether to appeal the Court of Appeal’s decision on the capital aspect to the Supreme Court. They will consult the liquidation committee about this. In light of the decision, the Liquidators intend to continue with the two existing cases which have been commenced in the High Court as well as writing to other investors who have made withdrawals in the last six years where the Liquidators consider a claim exists.

A summary from the Court of Appeal: McIntosh v Fisk [2016] NZCA 74

Full judgement: McIntosh v Fisk [2016] NZCA 74

DRG Ross Family Trust - Receivers' final report

Ross Group Companies - Result of 8th liquidation committee meeting

David Ross and related entities - Receivers' 30 month report

DRG Ross Family Trust - Receivers' 18 month report

The High Court has confirmed that the Liquidators of Ross Asset Management Limited (In Liquidation) ('RAM') are entitled to claw back the full amount of fictitious profits received by an investor prior to the Company's liquidation. The claim was successful under both the provisions of the Companies Act 1993 and the Property Law Act 2006.

The Liquidators note that the Court has attempted to balance the interests of both the individual investor and the general body of creditors. The decision provides guidance to allow further such claims to be made by them - with the aim of providing a higher return to those investors remaining when RAM was placed into liquidation.

In light of the decision, the Liquidators intend to continue with the two existing cases which have been commenced in the High Court. They are also reviewing the position of a number of other investors who have received payments from RAM in the period leading up to the Company's liquidation.

The judgment can be found here: FISK v HAMISH McINTOSH [2015] NZHC 1403 [22 June 2015]

Ross Group Companies Liquidators' 4th six monthly report

Ross Group Companies outcome of seventh Liquidation Committee meeting

David Ross & related entities Receivers' 24 month report

DRG Ross Family Trust - Receivers' 12 month report

Ross Group Companies - Liquidators' 2nd six month report

DRG Ross Family Trust report - Receivers' first report

David Ross and related entities - Receivers' 2nd six month report

Letter from IRD re prior year tax returns

Result of the 5th Liquidation Committee Meeting

David Ross first six monthly report

Ross Group final company Receivers' report

The Receivers and Managers to Ross Group today submitted liquidation applications to the High Court of New Zealand for a number of the companies currently in receivership. A High Court hearing date of Monday 17 December 2012 has been allocated.

This is consistent with their Report and Memorandum of Counsel submitted and presented to the High Court of New Zealand for review (respectively on 15 November and 23 November 2012).

The Receivers and Managers to Ross Asset Management Limited and related entities (In Receivership) submitted a Memorandum of Counsel on Friday 23 November 2012, for the High Court of New Zealand to review today (Monday 26 November).

The Receivers and Managers confirmed no additional significant assets have been located since their last report to the Courts and investors. The latest value of assets identified as supporting investors' portfolios is $11.478 million with inquiries continuing.

The Receivers also updated the Court with their opinion that those Ross Group companies holding assets be placed in liquidation and that a relevant application to do so will be filed shortly with the Court. Those entities not holding assets should remain in receivership.

For avoidance of doubt, the Receivers and Managers sought re-confirmation from the Court that they be allowed to sell assets owned by the wider Ross Group in order to pay for reasonable fees and costs incurred to date in their administration (e.g. receivership fees and costs, advertising and legal fees). Today's High Court hearing re-confirmed the Court's earlier ruling that the receivers can sell such property to cover those costs and fees incurred.

The Receivers and Managers continue to work through the process of preparing liquidation applications.

Following the release of Mr David Ross from hospital yesterday, the Receivers and Managers have been able to meet with Mr Ross this afternoon. The purpose of the meeting was to confirm the financial position of each of the entities to which the Receivers have been appointed to.

Mr Ross has been fully cooperative in answering the Receivers' and Managers' questions.

Mr Ross and the Receivers reviewed the Report submitted to the High Court on 13 November 2012.

Based on this meeting, the Receivers and Managers do not expect to locate any further assets of significant value within the Ross Group (In Receivership). The Receivers and Managers acknowledge this will be extremely disappointing news for investors.

Further work will now be focused on finalising the collection of information from brokers by the Receivers and Managers, and reporting to the Court this Monday on proposed next steps.

Receivers' second letter to investors

PwC report to the High Court of New Zealand on the Affairs of Ross Asset Management Limited and Related Entities (In Receivership)

Appendix II

Appendix III

Appendix IV

Appendix V

News release: Update on Ross Asset Management Limited (In Receivership) and related entities

Receivers from PwC and brokers NZ First Capital to date have been identifying and preserving assets on behalf of investors, as per the orders obtained by FMA.

Sealed order: Ross Group - Sealed order 12 November 2012