Greer v Klavenes - [2018] NZHC 1504

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-1812

[2018] NZHC 1504

UNDER Section 298 of the Companies Act 1993

IN THE MATTER

of the liquidation of KLAVENES CONSTRUCTION LIMITED (In

Liquidation)

BETWEEN

SCOTT WILLIAM GREER

Applicant

AND

KNUT JOHN KLAVENES

Respondent

Cont … /2

Hearing: 17 May 2018

Appearances:

S W Greer for Applicant

J van der Zanden for Respondent

Judgment:

22 June 2018

JUDGMENT OF PALMER J

This judgment is delivered by me on 22 June 2018 at 2.00 pm pursuant to r 11.5 of the High Court Rules.

.....................................................
Registrar / Deputy Registrar

Solicitors:
Solv Law Ltd, Auckland
J van der Zanden, Barrister, Auckland Castlefinn Law, Ltd, Manukau

GREER v KLAVENES [2018] NZHC 1504 [22 June 2018]

CIV-2017-404-2216

UNDER Section 298 of the Companies Act 1993
IN THE MATTER of the liquidation of KLAVENES
CONSTRUCTION LIMITED (In

Liquidation)
BETWEEN SCOTT WILLIAM GREER
Applicant
ANDKNUT KLAVENES & MELENAU KLAVENES

Respondents

Summary

[1] In these two proceedings Mr Scott Greer, the liquidator of Klavenes Construction Ltd (KCL), seeks recovery of dispositions made without adequate consideration under s 298 of the Companies Act 1993. Mr Greer claims $803,517.28 from director and shareholder Mr Klavenes Snr and his wife Mrs Klavenes, and
$16,030.26 from their son Mr Klavenes Jnr. I agree KCL made dispositions which exceeded the consideration it received from them and the s 296(3) good faith defence is not available. However, I do not agree dispositions by KCL to and on behalf of another company, KCL Tonga, can be recovered from Mr and Mrs Klavenes personally. I grant the applications in the amounts of $128,124.99 from the Klaveneses and $16,030.26 from Mr Klavenes Jnr, plus interest. I award costs to Mr Greer, even though he appeared personally, because he acted as liquidator.

What happened?

Who’s who

[2] Mr Knut Klavenes Snr is the sole director and shareholder in KCL, which was incorporated on 27 July 2011. It operated a labour hire business for construction in Auckland. On 7 October 2011 another company, Klavenes Construction (Tonga) Ltd (KCL Tonga), was incorporated in Tonga and operated a construction business. Mr Klavenes Snr and his wife, Mrs Melenau Klavenes, (the Klaveneses) are the directors and Mrs Klavenes is the sole shareholder of KCL Tonga. Mr Knut Klavenes Jnr is the Klaveneses’ adult son. Mr Scott Greer was appointed as liquidator of KCL on 16 December 2016.

The Klaveneses and KCL

[3] In the 2015 and 2016 financial years KCL turned over more than $2,000,000. A significant portion of that was paid into the Klaveneses’ personal bank accounts without formal records or accounting. From January 2014 to December 2016, funds from KCL were paid into the bank accounts of the Klaveneses and of Mr Klavenes Jnr. Payments were made back the other way as well. KCL funds were used for KCL Tonga expenditure.

[4] The Klaveneses say, while Mr Klavenes was in Tonga, their bank prevented him from making international financial transfers from…

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 Greer v Klavenes

Details

AGLC: Greer v Klavenes [2018] NZHC 1504
Case: [2018] NZHC 1504
Decision Date: 22 June 2018

CaseChat Overview and Summary

Scott Greer, the liquidator of Klavenes Construction Ltd (KCL), filed a lawsuit against Knut Klavenes, the company's director and shareholder, and his wife, Melenau Klavenes, seeking to recover funds that he claimed were dispositions made without adequate consideration under section 298 of the Companies Act 1993. Greer sought to recover $803,517.28 from the Klaveneses and $16,030.26 from their son, Knut Klavenes Jnr. The court had to determine whether the funds were dispositions made without adequate consideration and whether the defence under section 296(3) of the Act applied. The court found that KCL made dispositions to the Klaveneses which exceeded the value of consideration they provided. However, the court did not consider that the dispositions by KCL to KCL Tonga could be recovered from the Klaveneses personally. The court granted the applications in the amounts of $128,124.99 from the Klaveneses and $16,030.26 from Knut Klavenes Jnr, plus interest. The court awarded costs to Greer, even though he appeared personally, because he acted as liquidator.

The court's reasoning was based on the analysis of the payments made by KCL to the Klaveneses and the son. The analysis showed that the Klaveneses had withdrawn more funds from KCL than they had paid to KCL. The court found that the dispositions by KCL to KCL Tonga were not dispositions to the Klaveneses and could not be recovered from them personally. The court considered the total dispositions by KCL to the Klaveneses, in excess of the value of consideration it received from them, amounted to $128,124.99. The court found that the defence under section 296(3) of the Act was not available to the Klaveneses on the facts. The evidence did not support the payments by KCL to the Klaveneses having been made in good faith, when they were withdrawing funds as a matter of course, they were personally receiving payments meant for KCL and, from June 2015, creditors were going unpaid. The court found that Knut Klavenes Jnr could not establish the defence for the $16,030.26 Greer sought because he had not discharged the evidential onus to show there was consideration for this amount. The court ordered Knut Klavenes Snr and Mrs Melenau Klavenes to pay KCL $128,124.99 plus interest from 29 July 2017 and costs on a 2B basis and disbursements. Knut Klavenes Jnr was ordered to pay KCL $16,030.26 plus interest from 27 July 2017 and costs on a 2B basis and disbursements.

Orders