AUCKLAND CRASH REPAIRS LTD (IN LIQ) v VAN ROOY [2015] NZHC 2640

AUCKLAND CRASH REPAIRS LTD (IN LIQ) v VAN ROOY [2015] NZHC 2640

The company was insolvent from at least 31 March 2010; the directors continued to trade and drew funds for personal benefit, breaching duties under ss131,135 and 137 and the statutory requirements for director remuneration under s161; the first defendant must repay his shareholder current account drawings; both defendants are personally liable to repay unauthorised/ unfair salaries; both defendants are jointly and severally liable under s301 for losses caused by continued trading, assessed at $426,090.45; awards of interest and costs follow.

Citation
[2015] NZHC 2640
Parties
First Plaintiff: Auckland Crash Repairs Limited (in Liquidation); Second Plaintiff (liquidator): Henry David Levin; Second Plaintiff (liquidator): Vivien Judith Madsen-Ries; First Defendant: Keith Sydney van Rooy; Second Defendant: Chantal Elizabeth van Rooy
Court
High Court
Jurisdiction
New Zealand
Judgment Date
28 October 2015
Procedural Posture
Company Liquidation Proceedings (directors' Liability/insolvent Trading) / Final Judgment Following Formal Proof/default (judgment Delivered 28 October 2015)
Outcome
Judgment for plaintiffs against defendants on multiple causes of action
Legal Topics
Directors' Duties, Illegitimate/reckless Trading (s301), Undervalue/related Party Transactions, Shareholder Current Account Recovery, Unfair Directors' Remuneration (s161), Quantum of Damages (causation/culpability/duration)
Company Law Insolvency Law Civil Procedure Directors' Duties Illegitimate/reckless Trading (s301) Undervalue/related Party Transactions Shareholder Current Account Recovery Unfair Directors' Remuneration (s161) +1 more

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Parties

Auckland Crash Repairs Limited (in Liquidation)

First Plaintiff

Henry David Levin

Second Plaintiff (liquidator)

Vivien Judith Madsen-Ries

Second Plaintiff (liquidator)

Keith Sydney van Rooy

First Defendant

Chantal Elizabeth van Rooy

Second Defendant

Procedural Posture

Company Liquidation Proceedings (directors' Liability/insolvent Trading) / Final Judgment Following Formal Proof/default (judgment Delivered 28 October 2015)

Legal Issues

  1. 1 Whether the company was insolvent and the effective date of insolvency
  2. 2 Whether first defendant's current account drawings are repayable to the company
  3. 3 Whether payments after insolvency constituted unfair director remuneration under s161(5)

Ratio Decidendi

The company was insolvent from at least 31 March 2010; the directors continued to trade and drew funds for personal benefit, breaching duties under ss131,135 and 137 and the statutory requirements for director remuneration under s161; the first defendant must repay his shareholder current account drawings; both defendants are personally liable to repay unauthorised/ unfair salaries; both defendants are jointly and severally liable under s301 for losses caused by continued trading, assessed at $426,090.45; awards of interest and costs follow.

Court Disposition

Judgment for plaintiffs against defendants on multiple causes of action

Orders

  • Judgment on first cause of action against first defendant Keith Sydney van Rooy for 65663 NZD with interest at the Judicature Act 1908 rate from date of demand to date of judgment
  • Judgment on fourth cause of action against first defendant Keith Sydney van Rooy for 135843 NZD with interest at the Judicature Act 1908 rate from the dates the salaries were paid to the date of judgment