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Grant v Bhana

Grant v Bhana

Case [2016] NZHC 2755 17 November 2016

Contempt of Court

Compensatory Damages

Enforcement Orders

Civil Litigation & Procedure

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IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2014-463-169 [2016] NZHC 2755

BETWEEN
DAMIEN GRANT AND STEVEN KHOV

AS LIQUIDATORS OF RANOLF COMPANY LTD (IN LIQUIDATION) Applicants

AND

STEPHEN BHANA First Respondent

JASU MATI BHANA Second Respondent

Hearing: 8 November 2016

Appearances:

B J Norling and A Cherkashina for Applicants
First and Second Respondents in person

Judgment:

17 November 2016

JUDGMENT OF BREWER J

This judgment was delivered by me on 17 November 2016 at 3:00 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors: Waterstone Insolvency (Auckland) for Applicants
(Copy to Respondents in person)

GRANT AND KHOV v BHANA [2016] NZHC 2755 [17 November 2016]

Introduction

[1] In my Judgment of 4 October 2016,1 I confirmed that Mr Bhana and Ms Bhana are in contempt of Court because they have deliberately failed to comply with the orders made by Woolford J on 25 November 2014. On 8 November 2016, I convened a penalty hearing. Having heard the submissions of counsel for the applicants and the submissions of Mr Bhana and Ms Bhana, I reserved my decision on the appropriate penalty. This Judgment sets out the penalties I impose for the contempt.

[2] First, I record that I dismissed the application by Mr Bhana and Ms Bhana that I stay execution of my Judgment and postpone fixing a penalty pending determination of their appeal to the Court of Appeal against my Judgment of
4 October 2016. The appeal is against my finding that Mr Bhana and Ms Bhana were served with the notice of the contempt of Court hearing scheduled for
21 October 2015 and I have to deal here with the underlying contempt. In any event, I am not going to impose sentences of imprisonment.

The purpose of penalties for contempt of Court

[3] The purpose of the Court’s jurisdiction to punish for contempt in civil proceedings is two-fold. It coerces compliance with Court orders for the benefit of a private party. It also serves the public interest by ensuring the administration of justice is maintained. As was said by Lord Diplock in Attorney-General v Times Newspapers Ltd:2

There is an element of public policy in punishing civil contempt, since the administration of justice would be undermined if the order of any court of law could be disregarded with impunity.

[4] A recent statement on the purpose of imposing a penalty for contempt of

Court is given in Solicitor-General v Krieger:3

The purpose of punishment for contempt was explained in Solicitor-General v Siemer:

1      Grant and Khov v Bhana [2016] NZHC 2352.
2      Attorney-General v Times Newspapers Ltd [1974] AC 273 (HL) at 308.
3      Solicitor-General v Krieger [2014] NZHC 172 at [59].

The objective of the summary process in contempt of court proceedings is to protect the ability of the Courts to exercise their constitutional role of upholding the rule of law. Effective administration of justice under our constitution requires that the orders of the Courts are obeyed unless properly challenged or…

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 Grant v Bhana

Details

AGLC: Grant v Bhana [2016] NZHC 2755
Case: [2016] NZHC 2755
Decision Date: 17 November 2016

CaseChat Overview and Summary

The case of Grant and Khov v Bhana involved the applicants, Damien Grant and Steven Khov, liquidators of Ranolf Company Ltd, who brought an application against Stephen Bhana and Jasu Mati Bhana in the High Court of New Zealand. The applicants sought penalties against the Bhanas for their contempt of court in failing to comply with orders made by Woolford J on 25 November 2014. The court heard submissions from the applicants' counsel and the Bhanas, who appeared in person, and reserved its decision on the appropriate penalty. The primary legal issue before the court was determining the appropriate penalty for the Bhanas' contempt of court. The court considered the purpose of penalties for contempt of court, which is to uphold the rule of law, maintain public confidence in the administration of justice, and deter future contempt. The court also considered the circumstances of the contempt, the personal culpability of the Bhanas, and any mitigating factors.

In reaching its decision, the court examined previous cases involving contempt for breach of discovery by companies in liquidation. In the case of Grant and Khov v Grewal, the court fined one respondent $10,000 for deliberately failing to comply with the order, while in Rai v Chapman, the court fined the defendant $2,000 for failing to provide all books, records, and documents of a company in liquidation. The court also considered cases where fines were imposed for civil contempt, taking into account the seriousness of the contempt and the damage done to the public interest.

After considering the circumstances of the contempt and the Bhanas' submissions, the court imposed a fine of $8,000 on Mr Bhana and $5,000 on Ms Bhana. The fines were to be paid to the registry and distributed equally between the liquidators and the Crown. The court also awarded costs of the proceeding to the liquidators on a party and party basis.

In conclusion, the High Court of New Zealand found Stephen Bhana and Jasu Mati Bhana in contempt of court for their deliberate failure to comply with the orders made by Woolford J. The court imposed fines of $8,000 on Mr Bhana and $5,000 on Ms Bhana, to be distributed equally between the liquidators and the Crown. The court also awarded costs to the liquidators on a party and party basis.

Orders