Grant and Khov v Grewal

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2015-404-989
CIV 2015-404-990
CIV 2015-404-991
CIV 2015-404-992

CIV 2015-404-994 [2016] NZHC 1564

BETWEEN

DAMIEN GRANT AND STEVEN KHOV

AS LIQUIDATORS OF AK GROUP LTD (IN LIQUIDATION), CHK HOSPITALITY LTD (IN

LIQUIDATION), BUCKLANDS BEACH LTD (IN LIQUIDATION) AND STANMORE BAY LTD (IN LIQUIDATION)

Applicants

AND

RAJWINDER SINGH GREWAL, RAVINDER KAUR, JOTI JAIN and SATWANT SINGH

Respondents

Hearing:	2 June 2016
Counsel:	A Ho for Applicants R S Grewal, in person A R Gilchrist for Ravinder Kaur D Ryken for Joti Jain G Aulakh for Satwant Singh
Judgment:	11 July 2016

JUDGMENT OF HEATH J

This judgment was delivered by me on 11 July 2016 at 4.00pm pursuant to

Rule 11.5 of the High Court Rules

Solicitors:

Registrar/Deputy Registrar

Brent James Norling/Alden Ho, Auckland

Counsel:
A R Gilchrist, Auckland

D Ryken, Auckland

G Aulakh, Auckland

GRANT AND KHOV AS LIQUIDATORS OF AK GROUP LTD (IN LIQUIDATION), CHK HOSPITALITY LTD (IN LIQUIDATION), BUCKLANDS BEACH LTD (IN LIQUIDATION) AND STANMORE BAY LTD (IN LIQUIDATION) v GREWAL [2016] NZHC 1564 [11 July 2016]

The applications Background Preliminary comments Contempt: legal principles		CONTENTS	[1] [7] [11]
(a)      Liability		[13]
(b)      Penalty		[17]
(c)      Apportionment of fines		[21]
Analysis
(a)	Introductory comments	[23]
(b)	Mr Grewal	[26]
(c)	Ms Kaur	[37]
(d)	Ms Jain	[41]

Apportionment of fines  [47]

Costs  [49] Result       [55]

The applications

[1]      AK Group 2006 Ltd (AK Group), Bucklands Beach Ltd (Bucklands), CHK Hospitality Ltd (CHK) and Stanmore Bay Ltd (Stanmore) were each placed in liquidation on 11 December 2014.  These companies are part of what is known as the “Masala” group.

[2]      The original liquidator, Mr Gilbert, resigned in favour of Messrs Grant and Khov (the liquidators).  They have had carriage of the administration of each of the companies in liquidation since their appointment on 5 February 2015.

[3]      Following their appointment, the liquidators took orthodox steps to obtain records  of each  company so  that  they could  ascertain  the respective  assets  and liabilities.1    Difficulties were encountered.  They led the liquidators to apply to this Court for orders requiring directors and former directors to deliver up documents to them.  In particular, application was made against:

(a)       Mr Grewal2 and Mr Satwant Singh,3 in respect of AK Group,

(b)      Mr Grewal in respect of Bucklands,4

1      Companies Act 1993, s 253: headed “principal duty of liquidator”.

2      CIV-2015-404-989.

3      CIV-2015-404-991.

4      CIV-2015-404-992.

(c)       Mr Grewal in respect of CHK,5 and

(d)      Mr  Grewal,  Ms  Ravinder  Kaur  and  Ms  Joti  Jain,  in  respect  of

Stanmore.6

[4]      Orders were made by consent, on 29 July 2015.7    Mr Tolhurst, a solicitor, appeared on behalf of all four respondents to consent.  On 2 October 2015, service of the orders was effected at the address for service provided; namely, Mr Tolhurst’s office.   By filing Court documents on behalf of the four respondents, Mr Tolhurst had warranted authority to act for each.

[5]      The liquidators took the view that Mr Grewal, Mr Singh, Ms Kaur and Ms Jain…