Gemmell v Norris - [2012] NZHC 3339

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CIV 2012-442-482 [2012] NZHC 3339

UNDER Part 33 of the High Court Rules

IN THE MATTER OF an application for a search order

BETWEEN BRUCE DONALD GEMMELL RHYS JAMES CAIN
Applicants

ANDPATRICK DEAN NORRIS First Respondent

ANDNORRIS MANAGEMENT SERVICES LIMITED
Second Respondent

ANDJACKSON ALEXANDER CHURCHILL Third Respondent

Hearing: 29 November 2012

Counsel: G K Riach for Applicants
First Respondent in Person
No Appearance for Second Respondent
D Ballantyne for Third Respondent
W F Freeman for R C Parr and NMSNZ, affected persons

Judgment: 3 December 2012

JUDGMENT OF SIMON FRANCE J

BRUCE DONALD GEMMELL V PATRICK DEAN NORRIS HC NEL CIV 2012-442-482 [3 December 2012]

Introduction

[1] The applicants are liquidators, appointed by the Official Assignee, of four companies in liquidation. Their appointment arose because the existing liquidator, the first respondent Mr Norris, was convicted of stealing from one of the companies. Because of the conviction he became ineligible to be liquidator and a vacancy thereby arose.

[2] The applicants obtained a without notice search order enabling them to enter two premises and seize records relating to the liquidation of the companies. The order was considered necessary because of the circumstances in which Mr Norris’ liquidation had come to an end.

[3] The search order was executed and documents taken. The three respondents, together with two other affected persons, have applied to the Court for return of the documents taken on the basis that the warrant should not have been issued. Although there are supporting arguments that will be addressed in due course, the primary proposition is that prior to becoming disqualified, Mr Norris had resigned as liquidator and appointed the third respondent, Mr Jackson Churchill, as his successor. It is therefore said that the purported appointment of the applicants was invalid, and they were not entitled to obtain the search order.

The various parties

[4] The various interested persons are now more fully described.

The applicants

[5] The applicants are experienced liquidators. They were appointed on

23 October 2012 by the Official Assignee, consequent on what was believed to be a vacancy due to Mr Norris’ conviction.

[6] The application for a search order was sourced in the circumstances in which the appointment of the previous liquidator had ended. As part of the application it was noted that:

(a) prior to the conviction, the Official Assignee had commenced litigation to have Mr Norris removed as liquidator of several companies, including these four, for alleged breaches of his obligations;

(b)the conviction related to misuse of money belonging to one of the four companies of which the applicants were now liquidators;

(c) in relation to that company, part of its file had gone missing for a period. The Judge, when convicting Mr Norris, had described Mr Norris’ evidence on this as unreliable, and found him to be untruthful;

(d)the Judge also found that Mr Norris and his partner, Ms Parr, had engaged in a blatantly dishonest course of conduct to try and…

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 [2012] NZHC 3339
Case: [2012] NZHC 3339
Decision Date: 3 December 2012

CaseChat Overview and Summary

Gemmell v Norris involves a dispute between liquidators appointed to four companies and the former liquidator, Patrick Dean Norris, among others. The applicants, Bruce Donald Gemmell and Rhys James Cain, were appointed liquidators by the Official Assignee after Mr Norris was convicted of stealing from one of the companies, rendering him ineligible to continue in his role. The applicants sought and obtained a without notice search order to seize records from Mr Norris’ residence and business address due to concerns about the safety of the documents if obtained through normal channels. Mr Norris, along with Jackson Alexander Churchill and Norris Management Services Limited, challenged the validity of the search order, arguing that Mr Norris had resigned as liquidator and appointed Mr Churchill as his successor before his conviction. The court considered the legal issues surrounding the validity of Mr Norris’ resignation and Mr Churchill’s appointment, the necessity of the search order, and other challenges to its issuance.

The court ruled that Mr Norris’ resignation and Mr Churchill’s acceptance of appointment were not effective until the necessary documents were lodged with the Registrar of Companies. As these documents were not lodged until after Mr Norris’ conviction, the applicants were validly appointed as liquidators. The court also dismissed other challenges to the search order, including arguments regarding Court approval, consent to appointment, sufficiency of undertakings, disproportionality, material non-disclosure, and the independence of those executing the order. The court concluded that all challenges failed and confirmed the applicants as liquidators, denying the requests to quash the search order or return the seized goods.

The final orders were that the applicants remain confirmed as liquidators, with no basis to quash the search order or direct a general return of the seized goods. The liquidators were required to file a proposal for examining the seized material, with an opportunity for Mr Norris, Ms Parr, and her company to object if unsatisfied. Costs were to follow the event, with the respondents, including Mr Churchill, liable for costs due to their active involvement in the proceedings despite the potential for a simpler resolution through resignation.

Orders