Croad v Rabson HC Wellington CIV-2010-485-000793

[2011] NZHC 305

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2010-485-000793

UNDER  Section 301 of the Companies Act 1993

IN THE MATTER OF     the liquidations of Double Zero Holdings Limited (in liquidation) and Vision Limited (in liquidation)

BETWEEN  ANDREW CROAD

CHRISTINE MARGARET DUNPHY Plaintiffs

ANDMALCOLM EDWARD RABSON First Defendant

ANDDAVID HITCHENS Second Defendant

Hearing:         11 April 2011

Appearances: H L Thompson

Judgment:      11 April 2011

ORAL JUDGMENT OF JUDGMENT OF HON JUSTICE FRENCH

[1]      The plaintiffs are the liquidators of Double Zero Holdings Limited and Vision Limited.  They are seeking an order under s 301 of the Companies Act 1993 againt the first defendant, Mr Rabson.  Mr Rabson is a director of both Vision Limited and Double Zero Holdings Limited.

[2]      An order was also originally sought against another director, Mr Hitchens, but that claim house been discontinued following a settlement.

[3]      For  his  part,  Mr  Rabson  has  filed  a  statement  of  defence  and  also  a counterclaim against the liquidators.

CROAD V RABSON HC WN CIV-2010-485-000793 11 April 2011

[4]      In the counterclaim pleading, he makes a general allegation of breaches of duties.

[5]      The case was set down for hearing today back in December 2010.   Earlier this year Mr Rabson sought an adjournment, which was declined.

[6]      When the matter was called this morning, there was no appearance by Mr Rabson.  I am satisfied from the record that it is clear he was well aware of today’s hearing.  In view of his absence, the matter then proceeded by way of formal proof.

[7]      Counsel for the plaintiffs, Mr Thompson, called two witnesses: one was Mr Croad, the liquidator, and the other was Mr Shephard, who is a principal of the firm which has undertaken the liquidation.  He was present at a crucial meeting with Mr Rabson and also has engaged in extensive correspondence with him

[8]      The evidence establishes that in September 2009 Mr Rabson transferred the sum of $240,000 out of the account of Vision Limited to the family trusts of himself and Mr Hitchens equally, being the sum of $120,000 each.

[9]      The liquidators were appointed on 5 February 2010.

[10]     The evidence satisfies me that some of the money transferred was used for the benefit of one or other of the two companies, but Mr Rabson has failed properly to account for $58,084.31.

[11]     The liquidators have made numerous requests for Mr Rabson to account for the monies. They have received conflicting explanations, some of which are patently not credible.

[12]     I am satisfied that Mr Rabson has indeed failed properly to account  for

$58,084.31.

[13]     It follows the plaintiffs are entitled to the order they seek.   I accordingly make an order under s 301 Companies Act requiring Mr Rabson to repay the sum of

$58,084.31.

[14]     As  regards  Mr  Rabson’s  counterclaim,  not  only  was  he  in  breach  of timetabling directions relating to the prosecution of his counterclaim, he has of course also failed to appear this morning.  In those circumstances, the plaintiffs are also enttield to judgment on the counterclaim.

[15]     I also award the plaintiffs costs on a 2B basis in respect of both their own claim and the counterclaim.

Solicitors:

McMahon Butterworth Thompson, Auckland