Dheil - [2021] NZHC 572

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-001972

[2021] NZHC 572

UNDER The Companies Act 1993

IN THE MATTER

of an application by Harjit Singh Dheil of Auckland, company director, for an order pursuant to s 382 of the Companies Act 1993 for leave to not be prohibited from managing companies

BETWEEN

HARJIT SINGH DHEIL

Applicant

Hearing: 11 February 2021

Counsel:

DP Hoskin and SMT Chambers for Applicant

Judgment:

22 March 2021

JUDGMENT OF DOWNS J

This judgment was delivered by me on Monday, 22 March 2021 at 4 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Steindle Williams Legal, Auckland.

Re DHEIL [2021] NZHC 572 [22 March 2021]

Permission to direct (construction) companies?

[1] Harjit Dheil seeks permission to direct, manage and promote two companies, DDL Homes Central Ltd and DDL Homes South Ltd.1 The companies build homes in and around Auckland. Permission is required because Mr Dheil was convicted of blackmail in 2019, and the Companies Act 1993 precludes a person with a conviction “of any crime involving dishonesty” from being a director, promoter or manager of a company for five years.2

[2] The application is unopposed. The Registrar of Companies3 has been notified, did not wish to be heard, and did not appear at the hearing.

Background

[3] In 2014, Mr Dheil directed and owned more than 10 companies in property development and hospitality, including Dheils Ltd.4 A former employee, A, complained about Dheils to the Employment Relations Authority.

[4] On 28 August 2014, Mr Dheil threatened A, through another defendant, that unless he withdrew his employment complaint, Mr Dheil would orchestrate a complaint of sexual assault against him. Two weeks earlier, A had interacted with an intoxicated female patron. Mr Dheil told A he would pay $10,000 to the patron (captured on CCTV footage) to complain of sexual assault. Mr Dheil drafted a letter of abandonment; and sent it to A to sign. A did so; and sent it to the Employment Relations Authority.

[5] Mr Dheil and the co-defendant were charged with blackmail. Following a jury trial in March 2019 in the District Court, Mr Dheil was found guilty. The co-defendant was found not guilty. Mr Dheil sought to be discharged without conviction. Unsurprisingly, the application failed.5 Mr Dheil was sentenced to 10 months’ home detention.6

1      The companies.
2      Companies Act 1993, s 382(1)(b).
3      The Registrar.
4      Dheils.
5      R v Dheil [2019] NZDC 8233 at [13].
6 At [21].

[6] Mr Dheil challenged conviction and sentence in the Court of Appeal. The Court dismissed the appeal.7 Mr Dheil then sought permission to appeal to the Supreme Court. That Court declined permission.8

[7] Mr Dheil says he proposes to apply to the Criminal Cases Review Commission in the hope of overturning his conviction.

[8] In early 2020, the Registrar informed Mr Dheil he was disqualified from being a director. Mr Dheil was overseas, but he learned of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Dheil

Details

AGLC: Dheil [2021] NZHC 572
Case: [2021] NZHC 572
Decision Date: 22 March 2021

CaseChat Overview and Summary

Harjit Singh Dheil, a company director, sought permission from the High Court of New Zealand to manage two companies, DDL Homes Central Ltd and DDL Homes South Ltd, despite a 2019 conviction for blackmail under the Companies Act 1993. The Act prohibits individuals convicted of crimes involving dishonesty from managing companies for five years unless the High Court grants permission. The application was unopposed, and the Registrar of Companies did not object or appear at the hearing. The court had to decide whether Dheil should be allowed to manage the companies, considering his conviction, his extensive experience in the construction industry, and the potential impact on the companies and their stakeholders.

The court considered the nature and seriousness of Dheil's crime, which involved fabricating a sexual assault allegation to influence an employment dispute. Despite this, the court recognised Dheil's otherwise good character, the absence of other convictions, and the fact that the offence occurred over six years ago. The court also noted that Dheil's wife, who had taken over his role, believed the companies would suffer without his involvement. The potential risks to employees and creditors were deemed manageable with appropriate conditions.

The court concluded that the benefits of allowing Dheil to manage the companies outweighed the risks. It granted permission for Dheil to manage the companies, subject to several conditions aimed at mitigating potential harm to employees and creditors, and ensuring transparency and accountability. These conditions included restrictions on Dheil's involvement in employment-related matters, requirements for annual auditor reports, and stipulations on the signing of formal company documents. The court ordered that a copy of the judgment be sent to the Registrar of Companies.

Orders