Grant v Bhana - [2015] NZHC 2596

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2014-463-169 [2015] NZHC 2596

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: 21 October 2015

Counsel:

B J Norling and A Cherkashina for Applicants
No appearance by or on behalf of the Respondents

Judgment:

21 October 2015

JUDGMENT OF BREWER J

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

GRANT AND KHOV AS LIQUIDATORS OF RANOLF COMPANY LTD (IN LIQUIDATION) v BHANA [2015] NZHC 2596 [21 October 2015]

[1] The applicants are liquidators of Ranolf Company Ltd. Mr Bhana is described as the person who has had effective control over that company at material times. Ms Bhana, the second respondent, is described as a director of the company.

[2] I am satisfied from the affidavits which have been filed by the applicants that Mr Bhana and Ms Bhana have deliberately frustrated the liquidation process. In particular, and of relevance for this application, they have persistently failed to produce to the applicants the books, records and documents relating to the company and to an associated trust, the Ranolf Trust.

[3] On 13 October 2014, the applicants filed an originating application for orders to compel the respondents to produce the relevant documents and to provide the applicants with relevant information as to the identities of current and past trustees of the Ranolf Trust and details of the assets of the Ranolf Trust.

[4] The respondents took no steps. Accordingly, on 25 November 2014, Woolford J made the orders sought and these were sealed and served on the respondents. Mr Bhana was served on 18 December 2014 and Ms Bhana was served on 22 December 2014. An explanatory memorandum was served on them at the same time. I attach a copy of the orders of Woolford J to this judgment for the sake of completeness.

[5] I am satisfied on the subsequent affidavits that have been filed that the respondents have taken no steps to comply with the orders of the Court. I am satisfied also that the applicants have made all reasonable attempts to convince the respondents to comply with the orders of the Court.

[6] On 16 July 2015, the applicants applied on notice for orders that the respondents be held in contempt of Court, fined, and imprisoned unless they comply with the orders of the Court. That application was served on Ms Bhana on
26 September 2015 and on Mr Bhana on 29 September 2015. Contemporaneously, a

copy of the affidavit of Mr Jones sworn on 15 July 2015 in support of the interlocutory application was served also.1

[7] There has been no appearance today by or on behalf of the respondents.

[8] In reliance on the affidavits filed by the applicants, I am satisfied beyond reasonable doubt that the respondents are in contempt of Court. That is to say, they have deliberately disobeyed the orders of the Court made…

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 [2015] NZHC 2596
Case: [2015] NZHC 2596
Decision Date: 21 October 2015

CaseChat Overview and Summary

The High Court of New Zealand heard a case involving Damien Grant and Steven Khov, liquidators of Ranolf Company Ltd, who sought orders against Stephen Bhana and Jasu Mati Bhana, respondents who had control over the company and an associated trust. The liquidators sought orders to compel the respondents to provide documentation and information regarding the Ranolf Trust. The initial application was filed on 13 October 2014, and on 25 November 2014, Woolford J granted the orders sought. Despite these orders, the respondents failed to comply, prompting the liquidators to file an application on 16 July 2015 seeking that the respondents be held in contempt of court and punished accordingly.

The legal issues before the court were whether the respondents had deliberately frustrated the liquidation process and whether the court should impose penalties for contempt. The court found that the respondents had indeed deliberately disobeyed the court’s orders, leading to a finding of contempt. The court acknowledged that merely declaring the respondents in contempt was insufficient and that a penalty must be imposed to uphold the rule of law and maintain public confidence in the administration of justice.

The court decided not to immediately determine the penalty but instead issued an order to arrest the respondents, requiring them to appear before the court on 5 November 2015. The court allowed the respondents the opportunity to file affidavits attesting to their compliance with the prior court orders. If such affidavits were filed by 2:15 pm on 2 November 2015, the respondents could request the arrest order be varied or revoked. If the respondents failed to file affidavits or if the arrest order was executed, a date would be set for a penalty hearing. The liquidators were also directed to serve a copy of the judgment on the respondents and to file a memorandum of their costs. The court awarded the liquidators costs on an actual and reasonable basis.

Orders