Gemmell v Norris - [2014] NZHC 1071

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CIV-2012-442-482 [2014] NZHC 1071

BETWEEN
BRUCE DONALD GEMMELL and

RHYS JAMES CAIN Applicants

AND

PATRICK DEAN NORRIS First Respondent

NORRIS MANAGEMENT SERVICES LIMITED

Second Respondent

JACKSON ALEXANDER CHURCHILL Third Respondent

Hearing: 20 May 2014

Appearances:

G K Downing for the applicants
The first respondent in person
No appearance for the second and third respondents
R L Roff for the Commissioner of Inland Revenue

Judgment:

20 May 2014

JUDGMENT OF CLIFFORD J

Introduction

[1] The applicants, Bruce Gemmell and Rhys Cain, are the liquidators of four companies, Trafalgar Top Ltd, Astra Enterprises Ltd, Murchison Buses Ltd and Frost Steel Compactors Ltd (the Four Companies). This is an interlocutory application by Messrs Gemmell and Cain to vary the terms on which Kós J directed that certain documents seized by them following searches of the premises of the first, second and
third respondents were to be dealt with.

GEMMELL v NORRIS [2014] NZHC 1071 [20 May 2014]

Factual background

[2] Mr Norris – a former insolvency practitioner – was between 19 December

2008 and 1 March 2010 appointed liquidator of each of the Four Companies.

[3] Mr Norris was, on 16 October 2012, convicted in the District Court at Nelson of theft by a person in a special relationship. That conviction arose when Mr Norris was found to have misappropriated $80,960.51 when acting as liquidator of Astra Enterprises. The evidence at Mr Norris’ judge alone trial was that those monies were paid into a bank account of the second respondent (NMSL) and were used by Mr Norris to buy items for or repay debts of that company or Mr Norris himself personally.

[4] Judge Behrens found that Mr Norris engaged in a blatantly dishonest course of action to try and cover up his failure to deal with or account for the property of Astra (that is, the proceeds of the misappropriated cheque) to Astra’s creditors.

[5] Mr Norris’ conviction resulted in his automatic disqualification to be liquidator of the Four Companies. Mr Norris appealed that conviction unsuccessfully.

[6] On 18 October 2012, some two days after his conviction, Mr Norris addressed a letter to the Registrar of Companies in which – responding to that disqualification – he purported to appoint the third respondent, Mr Jackson Churchill, car salesman of Nelson and a personal friend, as liquidator of the Four Companies in his stead.

[7] On 23 October 2012 the Official Assignee appointed Messrs Gemmell and Cain liquidators of the Four Companies, to fill the vacancy caused by Mr Norris’ disqualification upon conviction.

[8] On 29 October 2012 Messrs Gemmell and Cain applied on a without notice basis for, and were granted by Kós J, orders to search Mr Norris’ home and the premises of NMSL and Mr Churchill, to recover and preserve documents (etc) relating to the conduct of the liquidation of the Four Companies by Mr Norris.

Messrs Gemmell and Cain gave undertakings to the Court they would provide copies of all material…

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 Gemmell v Norris

Details

AGLC: Gemmell v Norris [2014] NZHC 1071
Case: [2014] NZHC 1071
Decision Date: 20 May 2014

CaseChat Overview and Summary

In Gemmell v Norris, Bruce Donald Gemmell and Rhys James Cain, liquidators of four companies, applied to the High Court of New Zealand for permission to inspect and use documents seized from the premises of Patrick Dean Norris, the former liquidator of the companies, and others. The application was made to vary an earlier order by Kós J, which had restrained the liquidators from using the seized documents. The primary legal issues were whether the liquidators should be allowed to inspect and use the documents for the purpose of the liquidation and whether the costs associated with this process should be borne by Norris.

The Court granted the application by the Commissioner of Inland Revenue to join as a third party and allowed the liquidators to inspect and use the documents to comply with lawful requests from the Commissioner. The Court also varied Kós J's orders to permit the liquidators to inspect and use relevant documents for the liquidation of the companies, excluding those that are privileged or unrelated to the liquidation. The Court directed that the liquidators should bear the costs of identifying privileged and irrelevant documents, as this was part of the process they proposed when obtaining the initial search orders. The Court further ordered the independent solicitors to report on the progress of identifying and returning privileged and non-relevant documents within six weeks.

This decision allows the liquidators to proceed with the liquidation of the companies by using the seized documents, subject to the exclusion of privileged and irrelevant material. The Court's ruling ensures a balance between the need for efficient liquidation and the protection of personal legal privilege and confidentiality.

Orders