The Court of Appeal has backed a ruling allowing Christchurch property developer David Henderson to bat off a statutory demand for $80,000.
The Henderson win is another chapter in the long and bitter saga between Wellington liquidator Robert Walker, who is the liquidator of Henderson’s failed property empire, and Henderson, who is a bankrupt.
The Court of Appeal, in a judgement on June 17, upheld a decision by associate Judge Rob Osborne setting aside a statutory demand on RFD Finance Ltd (RFD), lodged by Walker as liquidator of Sol Management Ltd (Sol).
Walker served the the demand on RFD, part of another group of Henderson companies, on August 7, 2013, requiring repayment of $80,000.
The money was part of $150,000 paid to Henderson’s company, Tomanovich Holdings Ltd (THL), by the Queenstown Lakes District Council. Henderson directed about $135,000 of the money to Sol’s Westpac account. About $26,000 was applied to Sol’s overdraft and, on the same day, he ordered the transfer of $80,000 to the trust account of Cousins & Associates, for the credit of RFD.
The $80,000 was then transferred between other Henderson companies. No records were kept of the terms on which THL diverted part of its $150,000 payment to Sol and of the nature of the transaction between Sol and RFD apart from a trust account note.
In the High Court, Judge Osborne said the documentation [provided by Henderson] was completely inadequate.
Henderson contended the Sol account had been used as a conduit because THL had lost its bank account. The liquidator introduced documentary evidence Westpac was maintaining a bank account for THL as late as January 2011.
The Appeal Court endorsed “the associate Judge’s sympathy for the liquidator regarding the apparent ground for finding Mr Henderson in default of his director’s obligations to maintain financial records. Similarly we agree it was relevant Mr Henderson and Ms Buxton (Henderson’s wife) were not co-operative in attempts to clarify factual matters”.
However the court said Osborne was right he could not discount the prospect THL did not have a bank account and that Henderson had an argument putting the debt into dispute.
“The decision does not constitute a final determination of rights. Rather it precludes the liquidator from relying on the summary procedure in recovering assets claimed to be owed to the company in liquidation. The (issues) must await substantive determination on the issues.”
Source: Stuff News story by Martin Van Beynen. Published 23 June 2015