RICHARD GEEWIZ GEE CONSULTANTS LTD (IN LIQ) v GEE [2014] NZHC 1483

RICHARD GEEWIZ GEE CONSULTANTS LTD (IN LIQ) v GEE [2014] NZHC 1483

Court held the s161 certificate dated and signed on or about 1 February 2008 lacked reasonable grounds so $34,591 paid to Mr Gee must be repaid; Mr Gee breached ss135 and 137 by permitting trading and incurring liabilities after 1 October 2007 (objective test) and caused creditor loss; under s301 Mr Gee ordered to...

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Citation
[2014] NZHC 1483
Parties
First Plaintiff: Richard Geewiz Gee Consultants Limited (in liquidation); Second Plaintiffs: Henry David Levin and Vivien Judith Madsen-Ries (Liquidators of Richard Geewiz Gee Consultants Limited (in liquidation)); First Defendant: Richard Peter Gee; Second Defendant: Judith Gee
Court
High Court
Jurisdiction
New Zealand
Judgment Date
30 June 2014
Procedural Posture
Civil Company/liquidation (companies Act 1993) / High Court Judgment (trial Concluded)
Outcome
Judgment for plaintiffs in part: Mr Gee liable to repay $34,591 under s161 and to pay compensation NZD 49,761.12 under s301 for breaches of ss135 and 137; interest and costs awarded.
Legal Topics
Director Duties, Reckless Trading (s135), Director Remuneration (s161), Distributions and Solvency (s52, S56), Director Care and Diligence (s137), Liability and Contribution (s301), Solvency Testing
Company Law Insolvency Law Commercial Law Civil Procedure Director Duties Reckless Trading (s135) Director Remuneration (s161) Distributions and Solvency (s52, S56) +3 more

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Parties

Richard Geewiz Gee Consultants Limited (in liquidation)

First Plaintiff

Henry David Levin and Vivien Judith Madsen-Ries (Liquidators of Richard Geewiz Gee Consultants Limited (in liquidation))

Second Plaintiffs

Richard Peter Gee

First Defendant

Judith Gee

Second Defendant

Procedural Posture

Civil Company/liquidation (companies Act 1993) / High Court Judgment (trial Concluded)

Legal Issues

  1. 1 Whether shareholders' current account was overdrawn and recoverable
  2. 2 Whether payments to director (salaries/drawings) were fair and complied with s161
  3. 3 Whether payments constituted distributions requiring solvency certification (s52/s56)

Ratio Decidendi

Court held the s161 certificate dated and signed on or about 1 February 2008 lacked reasonable grounds so $34,591 paid to Mr Gee must be repaid; Mr Gee breached ss135 and 137 by permitting trading and incurring liabilities after 1 October 2007 (objective test) and caused creditor loss; under s301 Mr Gee ordered to pay NZD 49,761.12 as compensation; interest at 5% from 18 April 2012 and costs to plaintiffs awarded.

Court Disposition

Judgment for plaintiffs in part: Mr Gee liable to repay $34,591 under s161 and to pay compensation NZD 49,761.12 under s301 for breaches of ss135 and 137; interest and costs awarded.

Orders

  • Order that Richard P Gee repay to Richard Geewiz Gee Consultants Ltd (in liquidation) the sum of 34,591 NZD pursuant to s161(5) of the Companies Act 1993
  • Order that Richard P Gee pay compensation of 49,761.12 NZD to the liquidators pursuant to s301 for breaches of ss135 and 137