Registrar of Companies v Andrews
[2023] NZHC 3242
•17 November 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-001508
[2023] NZHC 3242
UNDER Section 383 of the Companies Act 1993 BETWEEN
REGISTRAR OF COMPANIES
ApplicantAND
RAYMOND ANTHONY ANDREWS
Respondent
Hearing: 18 October 2023
18 October 2023 memorandum of Applicant
24 October 2023 memorandum of RespondentAppearances:
DB Dow and EH Barnes for Applicant Respondent in person
Judgment:
17 November 2023
JUDGMENT OF HINTON J
This judgment was delivered by me on 17 November 2023 2023 at 4.00 pm Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Solicitors: Meredith Connell, Auckland. Copy to: R A Andrews
REGISTRAR OF COMPANIES v ANDREWS [2023] NZHC 3242 [17 November 2023]
[1] The Registrar of Companies applies under s 383 of the Companies Act 1993 (the Act) to permanently prohibit the respondent, Mr Raymond Andrews, from taking part in the management of a company without the leave of the Court.
[2] The application is made on the basis that Mr Andrews, an undischarged bankrupt, is a persistent offender, having been convicted of offences relating to the management of companies and also dishonesty offending. The Registrar says that a permanent term of disqualification is justified and necessary to protect the public from Mr Andrews engaging in similar conduct in the future.
[3] At the first call of the proceeding on 16 August 2023 Mr Andrews indicated that he would be opposing the application. Despite inquiry from the Registry, he had taken no steps to do so until the morning of this hearing when he filed a brief submission and a number of supporting documents, including his affidavit in support of an application for discharge from bankruptcy. Mr Andrews also appeared in person at the hearing and filed a memorandum after the fact in response to a supplementary memorandum filed by the Registrar.
[4] The grounds of Mr Andrews’ opposition, which for convenience I set out now, are:
(a)Recent decisions of the Law Society Standards Committee and/or the Legal Complaints Review Officer (LCRO) demonstrate that he should not have been made bankrupt in April 2008. The bankruptcy was the fault of his then lawyer who gave him bad legal advice.
(b)He has applied for release from bankruptcy and the Official Assignee has indicated that they will not oppose his release.
(c)His bankruptcy contains all the safeguards needed to protect the public.
(d)He has no intention of returning to business. He says he has reformed, is currently a fulltime law student at AUT and hopes to be admitted to the Bar.
(e)His case is distinguishable from Registrar of Companies v Blake,1 the only case to date where a permanent disqualification order has been made under s 383.
Background
[5] The evidence relating to the application was provided by Gregory Mark Bruce, a senior investigator with the Integrity and Enforcement Team in the Market Services Group, a division of the Ministry of Business, Innovation and Employment. Mr Bruce was not cross-examined. The matters discussed below are drawn from his affidavit and its annexures, which include previous sentencing and other decisions relating to Mr Andrews.
Bankruptcy
[6] Mr Andrews was adjudicated bankrupt on 21 April 2008 and he has remained undischarged ever since. Creditors’ claims totalling $684,757.75 were received in his bankruptcy. He has made no contribution towards satisfying any of those.
[7] Contemporaneous with his bankruptcy, Mr Andrews was convicted of a very large number of charges of tax evasion for which he received fines of $200 in each instance. That related to offending from 2002 to 2007.
2013 convictions
[8] In February 2013, following a jury trial, Mr Andrews was found guilty of seven charges of operating a business without Official Assignee approval contrary to s 436(1)(b) of the Insolvency Act 2006; two charges of obtaining credit contrary to s 371(1) of the Insolvency Act; and two charges of concealing property from the Official Assignee contrary to s 420(2)(a) of the Insolvency Act.
[9] This offending extended over a period from about July 2008 to May 2011. In sentencing Mr Andrews, Judge T R Ingram said:2
1 Registrar of Companies v Blake [2019] NZHC 680, (2019) 12 NZCLC 98-071.
2 R v Andrews DC Tauranga CRI-2009-070-006443, 13 March 2013 [First 2013 Sentencing Notes] at [2].
The situation that led to this offending was pretty straightforward. You were adjudged bankrupt and with breathtaking arrogance you decided that you simply were not prepared to co-operate with the Official Assignee. Over a long period of time you actively connived to ensure that the Official Assignee was unable to carry out the obligations that lay on the Official Assignee with the result that you were engaged in a long-term pattern of offending and deception, preying on members of the public, not only in Tauranga but around the northern half of the North Island throughout a period of several years.
[10] Mr Andrews had carried out a series of business activities relating in particular to laser hair removal and funded by his son Robert in Australia. Prior to those activities Mr Andrews had been refused permission by the Official Assignee to be employed by Robert. Judge Ingram noted that Mr Andrews was not particularly remorseful nor willing to change.3 On appeal, the Court of Appeal considered that view justified.4
[11] The losses “well and truly exceeded $50,000” and the total of undisclosed funds through Mr Andrews’ bank accounts was $109,000.5 For that offending,
Mr Andrews was sentenced to 15 months’ imprisonment.6
[12] In addition, Mr Andrews pleaded guilty to a single count of obtaining by deception. This offending, which occurred over a similar period to the offending for which he was tried, involved Mr Andrews obtaining a series of payments totalling approximately $56,000 for supply of a cosmetic treatment machine. The machine was not supplied. For that offending, Judge Ingram subsequently sentenced Mr Andrews to six months’ imprisonment, to be served concurrently with the extant 15-month sentence.7
[13] As a consequence of the 2013 convictions, Mr Andrews was automatically prohibited under s 382(1) of the Act from being a director or promoter of or directly or indirectly taking part in the management of a company for a period of five years unless he obtained the leave of the Court.
3 First 2013 Sentencing Notes, above n 2, at [24].
4 Andrews v R [2013] NZCA 281 at [27].
5 First 2013 Sentencing Notes, above n 2, at [13]–[14].
6 At [43].
7 R v Andrews DC Tauranga CRI-2013-070-000617, 7 June 2013 [Second 2013 Sentencing Notes].
2017 convictions
[14] In 2017, following entry of guilty pleas, Mr Andrews was convicted of one representative charge of operating a business while bankrupt contrary to s 436(1)(b) of the Insolvency Act; one charge of concealing property from the Official Assignee contrary to s 420(2)(a); and one charge of wilfully misleading the Official Assignee contrary to s 440(1)(b).
[15] The relevant offending covered the period from about November 2013 to November 2014, and in the case of the concealing property charge, extended to 2015. The offending concerned Mr Andrews’ management of Max Imports Ltd while an undischarged bankrupt. In sentencing, Judge C J Harding held that the amount concealed from the Official Assignee was in excess of $150,000.8 Although the only direct loss to individuals was $3,000, the Judge considered that the scale of Mr Andrews’ involvement was best referred to by the turnover with which Mr Andrews was involved — that is, the $150,000 sum concealed from the Official Assignee.9
[16] In respect of the 2017 convictions, Mr Andrews was sentenced to 22 months’ imprisonment.10
2019 convictions
[17] On 15 March 2019, Mr Andrews was convicted following a jury trial of one charge of taking part in the management of a business while prohibited, contrary to ss 382(4) and 373(4) of the Act; one charge of taking part in the management or control of a company while prohibited under s 436(1)(b) of the Insolvency Act; three charges of concealing property under s 420(2)(a) of the Insolvency Act; one charge of wilfully misleading the Official Assignee in a statement made in the course of administration of a bankruptcy contrary to s 433(1)(c) of the Insolvency Act; two charges of obtaining by deception contrary to s 240(1)(a) of the Crimes Act 1961; one charge of obtaining by deception contrary to s 240(1)(b) of the Crimes Act; 12 charges of forgery contrary
8 R v Andrews [2017] NZDC 28398 [2017 Sentencing Notes] at [10].
9 At [6].
10 At [13].
to s 256(1) of the Crimes Act; and 12 charges of using forged documents contrary to s 257(1)(a) of the Crimes Act.
[18] The 2019 convictions related to offending from February 2014 to August 2017, some of this being while Mr Andrews was on bail on the charges which were the subject of his 2017 convictions.11 The offending primarily related to Mr Andrews’ involvement with a variety of trading entities concerned with the importation and distribution of motor vehicles from Australia in conjunction with his son Robert and Robert’s business Maxium Pty Ltd. This offending involved losses somewhere in the vicinity of $500,000 and approximately $775,000 was concealed from the Official Assignee.12 As recorded in the sentencing notes of Judge D J Sharp, the Crown described this offending as the “most egregious occasion which they [were] aware of in relation to persons who have continued to trade while subject to orders of bankruptcy”.13
[19] Judge Sharp sentenced Mr Andrews to six years and six months’ imprisonment.14 The Judge said:15
Your personality, your manner of dealing with things, the way that you have misled people puts you in a category of someone who completely lacks accountability. You are someone who the public needs to be protected from. Your ability to persuade people and to make seemingly reasonable statements from a position where no such statements could possibly be made marks you out as a person who has significant negative characteristics unsupported by any sense of personal responsibility.
…
Your submissions show no indication of remorse for the things that you have done. There is no indication that you are willing to take any course of conduct that would change you from being someone I perceive as a danger to the public.
[20] The sentence of six years and six months’ imprisonment was upheld on appeal.16
11 R v Andrews [2019] NZDC 12700 [2019 Sentencing Notes] at [22].
12 At [7] and [13].
13 At [9].
14 At [27].
15 At [5] and [8].
16 Andrews v R [2021] NZCA 412.
[21] As an automatic consequence of the 2019 convictions, Mr Andrews was again disqualified from being a director of or being able to take part in the management of a company without leave of the Court for five years until 15 March 2024.17
Relevant legal principles
[22]The application is brought under s 383 which relevantly provides:
383 Court may disqualify directors
(1)Where—
(a) a person has been convicted of an offence in connection with the promotion, formation, or management of a company (being an offence that is punishable by a term of imprisonment of not less than 3 months), including an offence under section 138A, or has been convicted of a crime involving dishonesty as defined in section 2(1) of the Crimes Act 1961; or
(b) a person has committed an offence for which the person is liable (whether convicted or not) under this Part; or
…
(c) a person has, while a director of a company and whether convicted or not,—
(i)persistently failed to comply with this Act, the Financial Markets Conduct Act 2013, the Takeovers Act 1993, or the takeovers code in force under that Act or, if the company has failed to so comply, persistently failed to take reasonable steps to obtain compliance with those Acts or the code; or
(ii)been guilty of fraud in relation to the company or of a breach of duty to the company or a shareholder; or
(iii)acted in a reckless or incompetent manner in the performance of his or her duties as director; …
the court may make an order that the person must not, without the leave of the court, be a director or promoter of, or in any way, whether directly or indirectly, be concerned or take part in the management of, a company permanently or for a period specified in the order.
(1A) The court may make an order under this section permanent or for a period longer than 10 years only in the most serious of cases for which an order may be made.
17 Companies Act 1993, s 382(1)(a).
(2)A person intending to apply for an order under this section must give not less than 10 days’ notice of that intention to the person against whom the order is sought, and on the hearing of the application the last- mentioned person may appear and give evidence or call witnesses.
(3)An application for an order under this section may be made by the Registrar, the FMA, the Official Assignee, or by the liquidator of the company, or by a person who is, or has been, a shareholder or creditor of the company.
(3A) Subsection (3B) applies on the hearing of—
(a) an application for an order under this section by the Registrar, the FMA, the Official Assignee, or the liquidator; or
(b) an application for leave under this section by a person against whom an order has been made on the application of the Registrar, the FMA, the Official Assignee, or the liquidator.
(3B) The Registrar, the FMA, the Official Assignee, or the liquidator (as the case may be)—
(a) must appear and call the attention of the court to any matters that seem to him, her, or it to be relevant; and
(b) may give evidence or call witnesses.
(4)An order may be made under this section even though the person concerned may be criminally liable in respect of the matters on the ground of which the order is to be made.
…
(5)The Registrar of the court must, as soon as practicable after the making of an order under this section, give notice to the Registrar that the order has been made and the Registrar must give notice in the Gazette of the name of the person against whom the order is made.
(6)Every person who acts in contravention of an order under this section commits an offence and is liable on conviction to the penalties set out in section 373(4).
…
[23]The following procedural requirements must be met:
(a)The applicant must have standing.
(b)Before the order is sought, the respondent must be given at least 10 days’ notice that an order is intended to be sought.
(c)The applicant must appear at the hearing and bring to the Court’s attention any matters that appear relevant and may give evidence or call witnesses.
(d)If an order is granted, notice of the order and its subject must be given in the Gazette, as soon as practicable.
[24] Section 383 is contained in pt 21 of the Act, headed “Offences and penalties”. While penal in nature, the disqualification should be approached with the protection of the public in mind rather than punitively, as this Court held in First City Corporation Ltd v Downsview Nominees Ltd.18 To similar effect in Registrar of Companies v Blake, Venning J stated:19
... the predominant purpose of prohibition orders is the protection of the public. For this reason, when considering whether a prohibition order ought to be made (and if so, for how long), the Court is engaged in a forward-looking exercise. The respondent’s predilection to engage in future conduct of the nature giving rise to the application will therefore be highly relevant to whether a prohibition order ought to be made and if so, for how long.
[25] Of particular relevance is s 383(1A). The Court may only make an order that is permanent, or for a period of longer than 10 years, “in the most serious of cases for which an order may be made”. The proper focus of an assessment under s 383 is individual misconduct, although mismanagement may be relevant to the overall conclusion.20
[26] On sentencing for a qualifying offence, an automatic five-year disqualification period applies under s 382 of the Act. Mr Andrews has been subject to two such disqualification orders. Any longer period of disqualification requires a separate application under s 383 which can be made at any time. As the focus is on the need to protect the public, the disqualification should be such as is necessary at that point, regardless of the earlier automatic disqualification period(s). An order can be made under s 383 even though the person concerned may be criminally liable in respect of
18 First City Corporation Ltd v Downsview Nominees Ltd [1989] 3 NZLR 710 (HC). The Court was applying the predecessor to s 383, namely s 189(1)(c) of the Companies Act 1955 which was drafted in substantially similar terms.
19 Registrar of Companies v Blake, above n 1, at [79].
20 At [40].
the matters that form the basis of an order,21 but the duration of a finite order made under s 383 should be determined with regard to any s 382 disqualification. In Blake for example, Venning J made an order under s 383 that was to run concurrently with the existing disqualification22 and in Registrar of Companies v Bublitz Fitzgerald J considered the effective disqualification period of ss 382 and 383 combined when assessing the appropriate duration of an order under s 383.23
[27] This is only the fourth time that the Registrar has filed an application for an order under s 383 and as noted above, in only one of those cases, namely Blake, was an order made for permanent disqualification.
Relevant case law
Australian Securities and Investments Commission v Adler24
[28] Under comparable legislation in Australia, Santow J referenced three categories of disqualification orders, being short-range (up to three years), mid-range (from seven to 12 years) and long-range (25 years to life). Within these categories Santow J identified a number of features applicable to determining into which category the offending fell. In the long-range category, Santow J identified the following features:25
(a)large financial losses;
(b)high propensity that defendants may engage in similar activities or conduct;
(c)activities undertaken in fields in which there was potential to do great financial damage such as in management and financial consultancy;
(d)lack of contrition or remorse;
21 Companies Act, s 383(4).
22 Registrar of Companies v Blake, above n 1, at [74].
23 Registrar of Companies v Bublitz [2022] NZHC 2177 at [177].
24 Australian Securities and Investments Commission v Adler [2002] NSWSC 483, (2002) 46 ACSR 80.
25 At [56(xiii)].
(e)disregard for law and compliance with corporate regulations;
(f)dishonesty and intent to defraud; and
(g)previous convictions and convictions for similar activities.
[29] In Blake, Venning J said that similar considerations apply in relation to an application under s 383.26 I agree but note that the factors listed are not necessarily in order of priority, nor do they all have to be present.
Registrar of Companies v Blake
[30] The 2019 decision in Blake is most applicable here. The case involved two respondents, Mr Blake and Mr Ryan.
[31] Mr Blake had been involved in the management of two companies in breach of a prohibition order under s 382 of the Act. The companies were subsequently placed in liquidation, owing respectively over $700,000 and $600,000 to creditors.27 Mr Blake had been adjudicated bankrupt three times and had previous convictions for similar offending. He was sentenced to two years and four months’ imprisonment.28 For this offending, Mr Blake was automatically disqualified from being a director of or being able to take part in the management of a company for five years.29
[32] Mr Ryan (previously known as Mr Thompson) had an extensive history of dishonesty offending, dating back to 2000.30 In 2005 he was sentenced to three years and three months’ imprisonment for making false statements on the Companies Register and for numerous charges of dishonesty related offending.31 In 2017, he was convicted of assisting Mr Blake in his offending and was sentenced to two years and
26 Registrar of Companies v Blake, above n 1, at [44].
27 At [12]–[13].
28 R v Blake [2017] NZDC 28774.
29 Registrar of Companies v Blake, above n 1, at [16].
30 At [24].
31 Ministry of Economic Development v Thompson DC Auckland CRI-2004-092-4718, 18 February 2005.
two months’ imprisonment.32 Mr Ryan had been adjudicated bankrupt twice before and was an undischarged bankrupt at the time of his 2017 convictions.33
[33] Subsequently Mr Ryan was also convicted for his role in a Ponzi scheme that received $8.39 million from 900 investors over the span of a year.34 The total losses arising from the scheme amounted to $4.4 million, of which Mr Ryan personally took approximately $1.3 million.35 In respect of that offending, Mr Ryan was ultimately sentenced to six years’ imprisonment to be served cumulatively on the two years two months’ imprisonment for assisting Mr Blake.36 He was also subject to the automatic five-year statutory ban from being a director or promoter of a company under s 382(1).
[34] The Registrar applied for permanent disqualification orders for both Mr Blake and Mr Ryan under s 383. Following consideration of the various factors identified by Santow J in Adler, Venning J made an order permanently disqualifying Mr Ryan. He held that Mr Ryan had been “guilty of persistent and ongoing dishonest behaviour involving the use of the company structures to obtain money from the public” and that his case was “one of the most serious cases” and was therefore an appropriate case for a lifetime ban.37
[35] Venning J considered a permanent ban was not appropriate in the case of Mr Blake, although he considered Mr Blake’s conduct fell into the category of “the most serious of cases”.38 The Judge said that the sums lost as a result of Mr Blake’s offending were not at the extreme end of the range and his offending had not involved criminal dishonesty.39 Venning J imposed a 12-year period of disqualification on Mr Blake to run concurrently with the existing five-year disqualification under s 382.40 As the Registrar submits, it is not possible to discern from Mr Blake’s sentencing notes
32 R v Blake, above n 28, at [149] and [151].
33 Registrar of Companies v Blake, above n 1, at [23].
34 At [27].
35 R v Ryan [2018] NZDC 13386 at [20] and [36].
36 Ryan v R [2018] NZCA 586. The Registrar’s submissions referred to a sentence of seven years six months’ imprisonment but the Court of Appeal resentenced Mr Ryan to six years’ imprisonment. In Registrar of Companies v Blake, above n 1, Venning J referred to the sentence imposed by the District Court, not the sentence as amended by the Court of Appeal.
37 Registrar of Companies v Blake, above n 1, at [77].
38 At [72].
39 At [74].
40 At [74].
the specific amount involved in relation to his offending, but the loss to creditors appears to have been in the realm of $600,000.
Registrar of Companies v Bublitz
[36] In Registrar of Companies v Bublitz, Mr Bublitz and Mr McKay had been convicted of offending in relation to their involvement with Mutual Finance Ltd in 2010 and its subsequent collapse.41 The total loss to the public was approximately
$860,000.42 Mr Bublitz was sentenced to 11 months’ home detention43 and Mr McKay to 10 months’ home detention.44 Both were also prohibited from taking part in the management of a company for a period of five years under s 382 of the Act.45
[37] The Registrar sought 12-year prohibition orders against both respondents. When combined with the portion of the five-year automatic ban already served by Mr Bublitz and Mr McKay, the total effective prohibition sought by the Registrar was 15-and-a-half years from the date of their convictions.46
[38] Fitzgerald J noted that while the offending was serious and premeditated, the actual losses were limited to $860,000.47 She considered that the circumstances of Mr Bublitz and Mr McKay could be materially distinguished from those of the eponymous Mr Blake as they had never before offended or engaged in any relevant misconduct.48 The Judge noted that while Venning J considered Mr Blake’s history demonstrated a high likelihood that without an order he would engage in similar activities or conduct,49 Mr Bublitz and Mr McKay were assessed as having a low risk of re- offending.50 That low risk of reoffending was reinforced by the fact that Mr Bublitz and Mr McKay had not engaged in any conduct relevant to the Registrar’s application
41 Registrar of Companies v Bublitz, above n 23.
42 Bublitz v R [2019] NZCA 364 at [152].
43 At [167].
44 McKay v R [2019] NZCA 493 at [34].
45 Registrar of Companies v Bublitz, above n 23, at [2].
46 At [3]. The judgment refers to a total prohibition sought of 14-and-a-half years but the correct period appears to be 15-and-a-half years.
47 At [178]–[179].
48 Registrar of Companies v Bublitz, above n 23, at [183].
49 Registrar of Companies v Blake, above n 1, at [68].
50 R v Bublitz [2019] NZHC 592 at [13].
in the 12 years between their offending and the application.51 Although the nature of the respondents’ offending was more serious than that of Mr Blake, the Judge said:52
Mr Blake’s history of misconduct provided much greater indicia of future offending or misconduct than in this case, and thus a much greater need for protection of the public.
[39] Fitzgerald J disqualified both respondents for three years and six months from the date of her judgment.53 This resulted in an effective total prohibition of seven years.
Registrar of Companies v Branson-Marsters54
[40] The Registrar applied under s 383 to disqualify Mr Branson-Marsters for 15 years, to which Mr Branson-Marsters consented.55
[41] Mr Branson-Masters had a long and persistent history of offending including 74 dishonesty convictions for burglary, dishonest use of documents and obtaining by deception, as well as 30 offences under the Insolvency Act 1967 for breaching his bankruptcy obligations.56 He had caused significant financial damage through his misuse of companies. Venning J noted that his actions put him in “the most serious of cases category”.57
[42] The Judge was satisfied that the order sought was appropriate and made a decision on the papers accordingly.58
Analysis
[43] The criteria for the Court to make an order under s 383 are satisfied: Mr Andrews’ convictions meet the qualifying thresholds of ss 383(1)(a) and 383(1)(b). The procedural requirements are also satisfied, including that the Registrar has
51 Registrar of Companies v Bublitz, above n 23, at [192].
52 At [186].
53 At [177].
54 Registrar of Companies v Branson-Marsters [2022] NZHC 1394.
55 At [3].
56 At [5].
57 At [16].
58 At [17].
standing to make the current application and Mr Andrews was provided with the appropriate period of notice.
[44] The question is whether the Court should make an order and in particular whether the Court should impose a permanent ban (or a ban longer than 10 years), that being available only “in the most serious of cases”.
[45] I agree with the Registrar’s submission that overall this case has the features identified in Adler and referenced by Venning J in Blake and Branson-Marsters, that justify a permanent ban. I address below the relevant factors from Adler; Mr Andrews’ grounds of opposition; and my overall assessment.
Adler factors
Large financial losses
[46] While the loss suffered by Mr Andrews’ victims is not at the extreme end of offending, it is nonetheless substantial. The losses for the two sets of offending in 2013 well exceeded $106,000 and the amount concealed from the Official Assignee was $109,000.59 The 2017 convictions involved losses to individuals amounting to only $3,000, but the total amount concealed was upwards of $150,000.60 The more serious 2019 convictions involved losses to individuals amounting to $500,000 and concealment of $775,000 from the Official Assignee.61 There is an overlap between the losses incurred by members of the public and the funds concealed, such that it is not possible to arrive at an overall loss or amount concealed. However, it is fair to say that the overall losses are significant.
[47] In addition, there is the shortfall in Mr Andrews’ bankruptcy of $684,757.75. This loss to creditors was large, particularly measured as at 2008. Mr Andrews’ bankruptcy is not one of the qualifying criteria for an order under s 383 but I agree with the submission made for the Registrar that matters consequent upon the bankruptcy including the quantum of loss are clearly relevant. Observations to similar
59 First 2013 Sentencing Notes, above n 2, at [13]–[14].
60 2017 Sentencing Notes, above n 8, at [10]. As discussed above, the Judge considered the amount concealed to be the more important point.
61 2019 Sentencing Notes, above n 11, at [7] and [13].
effect were made by Fitzgerald J in Bublitz where she stated that evidence relevant to whether an order should be made is not confined to the conduct giving rise to the threshold ground for the application.62 As noted in Blake, personal financial failures may “be an indicator of recklessness towards obligations which would be a relevant consideration” in determining whether an order should be made and if so, for how long.63
[48] Overall, the New Zealand public has suffered significant losses as a result of Mr Andrews’ misconduct (and mismanagement) over the period from 2008 to his latest offending in 2017.
High propensity to engage in similar activities or conduct
[49] There is no indication at all that Mr Andrews could rehabilitate. The level of his offending has escalated on each occasion, as is evident from the sentencing outcomes. Most notably, in respect of the 2019 convictions Mr Andrews was sentenced to six years six months’ imprisonment, a sizeable sentence which reflects the seriousness of his offending. While Mr Andrews is now 74 years old, his last set of offending occurred up to the age of 69 and he was imprisoned not long afterwards. His offending is persistent and escalating. It is clear that his advancing age has not served to deter him.
Fields of activity with potential to do great financial damage
[50] Mr Andrews’ offending does not fall into the categories which could cause most danger in terms of financial loss. Nonetheless a very large number of individuals have been duped into what amounts in total to large losses. Were it not for the intervention of the criminal system, the damage is likely to have been much more significant.
62 Registrar of Companies v Bublitz, above n 23, at [82].
63 Registrar of Companies v Blake, above n 1, at [60].
Lack of contrition or remorse
[51] This factor overlaps with that of a respondent’s propensity to engage in similar activities. It is clear from the material before me that Mr Andrews has no remorse. As discussed above, Judge Ingram in 2013, Judge Sharp in 2019 and the Court of Appeal in 2021 all considered that Mr Andrews was neither remorseful nor willing to change.64
[52] There is ample evidence to support this conclusion. I note that one of Mr Andrews’ victims was his own daughter whose bank accounts were exploited in an effort to conceal money from the Official Assignee.65 Mr Andrews showed no acknowledgment of the impact on his daughter who Judge Sharp described as “devastated by what [Mr Andrews] did”.66
Disregard for law
[53] Mr Andrews has continued offending even after his first experience of imprisonment, and in the face of a range of measures aimed at mitigating his risk to the public. A common feature of his offending is a blatant disregard for the restrictions imposed by law. Associate Judge Doogue in declining to discharge Mr Andrews from bankruptcy in 2013 found he had demonstrated an “overall indifference to his obligations under the Insolvency Act 1967”.67
[54] In dealing with Mr Andrews’ appeal against the sentence imposed for his first set of 2013 convictions, the Court of Appeal traversed his extensive non-compliance with bankruptcy restrictions including multiple instances of operating businesses while others were named as directors, using false names, and using his personal bank account details on company invoices.68
[55] Most recently, in 2019 Judge Sharp described Mr Andrews as having repeatedly attempted to continue trading notwithstanding prohibitions against doing
64 First 2013 Sentencing Notes, above n 2, at [24]; 2019 Sentencing Notes, above n 11, at [8]; and
Andrews v R, above n 4, at [27].
65 2019 Sentencing Notes, above n 11, at [6].
66 At [6].
67 Official Assignee v Andrews [2013] NZHC 3494 at [30].
68 Andrews v R, above n 4, at [5]–[12].
so.69 There has been a clear and continued effort on the part of Mr Andrews to deliberately disregard the law and any protection it provides for the public.
Dishonesty and intent to defraud
[56] In addition to the offending under the Act and the Insolvency Act, Mr Andrews has been convicted of criminal offending, including multiple counts of obtaining by deception, forgery, using forged documents and tax evasion. All of this offending was intentional and calculated. His most recent offending was described by the Court of Appeal as premeditated and concerted, involving multiple victims.70
Previous convictions and contraventions for similar activities
[57] As set out above, Mr Andrews has been convicted on four occasions of similar but unrelated offending. Judge Harding remarked in his 2017 sentencing notes that the offending before him was nearly identical to the offending Mr Andrews had been convicted of in 2013.71 His offending, as already mentioned, has only escalated.
Mr Andrews’ grounds of opposition
[58]The grounds of opposition have no merit.
[59] As recorded, Mr Andrews says the decision of the LCRO demonstrates he should not have been made bankrupt. However, the decision upon which Mr Andrews seeks to rely makes several findings of unsatisfactory conduct against one of Mr Andrews’ previous barristers whom he instructed in 2017 to, among other things, endeavour to renegotiate his bankruptcy status. Mr Andrews had been bankrupt for many years at that point. The LCRO findings are based on the barrister’s failure to adequately inform Mr Andrews about progress on a retainer, failure to respond in a timely and reasonable manner, failure to hold monies received from Mr Andrews in a trust account and related issues with fees and invoicing. None of these matters has any bearing on the present application. While the LCRO also found that the barrister misled Mr Andrews into believing that he had completed favourable settlement
69 2019 Sentencing Notes, above n 11, at [4].
70 Andrews v R, above n 16, at [91].
71 2017 Sentencing Notes, above n 8, at [5].
negotiations regarding Mr Andrews’ bankruptcy when he had not, there was no suggestion by the LCRO that the barrister’s conduct was in any way causative of Mr Andrews’ continuing status as an undischarged bankrupt.
[60] In all the circumstances, it is extraordinary that Mr Andrews should argue his 2008 bankruptcy was the fault of his lawyer. This is however consistent with the findings made by all the sentencing Judges of a complete lack of personal responsibility or accountability on Mr Andrews’ part.
[61] Since the hearing the Official Assignee has confirmed that the Insolvency Service does not oppose Mr Andrews’ release from bankruptcy. Again however that is not relevant. He has been in bankruptcy for 15 years which is materially longer than normal, and nothing further is served by its continuation at this point. As noted above, no payments have been made to creditors. This again only further demonstrates Mr Andrews’ disregard for his financial obligations, and supports a s 383 prohibition order being made.
[62] Mr Andrews’ associated point that his bankruptcy contains all the safeguards needed to protect the public is of course negated by his application for release. Even were this not the case, the submission is clearly incorrect given his extensive convictions for non-compliance with the conditions of his bankruptcy. As Judge Ingram said, Mr Andrews not only failed to cooperate with the Official Assignee, he connived to circumvent the law.72
[63] Whether Mr Andrews intends to return to business (or not) is also not relevant to whether he should be allowed to do so. The same applies to his hope to be admitted to the Bar. The purpose of a s 383 order is to protect the public. Whether an order is justified requires a forward-looking assessment of Mr Andrews’ predilection to engage in future conduct of the nature giving rise to the application. There is no evidence that Mr Andrews has reformed. I consider if permitted to take part in the management of a company there is a high likelihood that he would engage in similar conduct. The objective of public protection is not achieved by relying on statements made by Mr Andrews.
72 First 2013 Sentencing Notes, above n 2, at [2].
[64] Finally, Mr Andrews’ submission that his situation is distinguishable from that of the respondents in Blake is discussed below.
Overall assessment
[65] I agree with the Registrar that Mr Andrews’ case falls between that of Mr Blake and Mr Ryan.
[66] Mr Ryan’s offending involved greater losses, a larger number of investors being duped and a somewhat more extensive criminal history. However, both Mr Ryan and Mr Andrews were subject to multiple periods of imprisonment for relevant offending and committed flagrant breaches of the Act and their financial obligations. Although Mr Ryan’s offending involved greater financial loss, quantum of loss is but one factor to consider when assessing culpability for offending involving fraudulent conduct. This is reflected in the prison sentence Mr Andrews received for his 2019 offending (six years and six months) being six months more than that which Mr Ryan received for his most serious offending (six years, to be served cumulatively on an earlier sentence). Similar to the sentencing process, large financial loss is only one factor identified by Adler as justifying long-term disqualification orders.
[67] This case is more serious than that of Mr Blake whose conduct Venning J nonetheless found fell into the most serious of cases for which an order may be made.73 Unlike Mr Blake, Mr Andrews has multiple convictions for dishonesty offending under the Crimes Act which raises the seriousness of his offending to a higher level.
[68] I reject Mr Andrews’ submission that his case is distinguished from Mr Ryan and Mr Blake’s in that they conducted businesses under aliases and were directors of a large number of companies, while Mr Andrews was not. First, this is factually incorrect. As noted by the Court of Appeal Mr Andrews has on occasion used false names.74 Second, an order under s 383 is not limited to those convicted while a director of a company, nor is the number of corporate entities involved of particular relevance. Mr Andrews’ convictions did not arise while acting as a director because
73 Registrar of Companies v Blake, above n 1, at [72].
74 Andrews v R, above n 4, at [8].
he was ineligible or unable to do so at all material times. More relevantly, he was involved in the management of companies over a long period where he was acting as a quasi-director in breach of insolvency, company and criminal law.
[69] Mr Andrews also submits it is relevant that Mr Ryan and Mr Blake had been adjudicated bankrupt multiple times while he has been only once. Again, I disagree, certainly on the facts of this case. Bankruptcy is not a qualifying criterion for an order under s 383 in any event. But, further, Mr Andrews has been an undischarged bankrupt for 15 years, whereas a bankrupt is ordinarily automatically discharged after three years.75 He has remained a bankrupt as a result of the Assignee objecting to a discharge on three occasions.
[70] Last, Mr Andrews says it is relevant that Mr Ryan was prosecuted by the Serious Fraud Office while he has never been “investigated” by that office. This submission is also misconceived. While an investigation by the Serious Fraud Office might be relevant, it is not a significant factor, as highlighted by the features identified in Adler.
[71] Viewed overall, I am satisfied that, as with Mr Ryan and Mr Blake, this case falls into “the most serious of cases” in terms of s 383(1A). I consider it is more serious by some measure than that of Mr Blake and close in seriousness to that of Mr Ryan.
[72] This case is quite similar to that of Branson-Marsters where Mr Branson- Marsters was disqualified as a director for 15 years. However, permanent disqualification was not sought. All that can be said is it clearly fell into the most serious category given the disqualification imposed was for a period of over 10 years. The parties effectively agreed a period of 15 years.
[73] Bublitz is a very different fact scenario. Mr Bublitz and Mr McKay were first- time offenders and had not engaged in any conduct relevant to the s 383 assessment in the 12 years between the qualifying offending and the s 383 order made by
75 Insolvency Act 2006, s 290.
Fitzgerald J.76 As they were sentenced to home detention, the lack of relevant conduct cannot be attributed to any period of imprisonment. On the other hand, Mr Andrews has persistently offended over a lengthy period of time — effectively non-stop between 2008 and 2017, but for his periods in custody. Mr Andrews was only released from custody for his last offending on 20 April 2022. Unlike Bublitz, this is not a case where the progression of time demonstrates that a person presents less of a risk to the public. Mr Andrews’ offending has not lessened over time. It has in fact escalated.
[74] Further, although the actual loss in Bublitz was similar to that here, when one considers the amounts concealed from the Official Assignee and outstanding in Mr Andrews’ bankruptcy, the offending demonstrates a far greater risk to the public than in Bublitz.
[75] The combination of all of the factors discussed above renders Mr Andrews’ case one of the most serious cases, and appropriate for a permanent prohibition order. None of his convictions in isolation falls at the extreme end but the cumulative effect of a long period of recidivist (and escalating) offending amounts to serious offending. Mr Andrews has engaged in ongoing and intentional dishonest behaviour facilitated by his use of company structures. Despite being sentenced to two prior periods of imprisonment, Mr Andrews continued to offend. His last set of offending (the 2019 convictions) involved criminal dishonesty and resulted in a lengthy sentence of imprisonment, by far his longest to date. Mr Andrews has shown complete disregard for the law and for his bankruptcy. The financial losses have been significant. Mr Andrews is entirely unremorseful. I see no prospect of rehabilitation and a high prospect that he may engage in similar conduct if the door is open for him to do so.
[76] In the circumstances, I conclude that a permanent order is necessary to protect the public.
Order
[77] Raymond Anthony Andrews is prohibited, without leave of the Court, from being a director or promoter of, or in any way, whether directly or indirectly, being
76 Registrar of Companies v Bublitz, above n 23, at [191]–[192].
concerned or taking part in the management of a company pursuant to s 383(1) of the Companies Act 1993.
Hinton J
9
1