Sovereign Services Limited v Catterall

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-000378 [2014] NZHC 279

UNDER  Part 12 of the High Court Rules

IN THE MATTER             of an application for summary judgment

BETWEEN  SOVEREIGN SERVICES LIMITED Plaintiff

ANDMECHELLE TE AWHINA CATTERALL Defendant

Hearing:                   On the papers

Judgment:                25 February 2014

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 25 February 2014 at 4.30 pm

pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date………………………

SOVEREIGN SERVICES LTD v CATTERALL [2014] NZHC 279 [25 February 2014]

[1]      On 24 February 2014 the plaintiff, Sovereign Services Ltd, applied urgently and  without  notice  for  freezing  orders  affecting  assets  held  by  the  defendant, Mechelle Catterall, and ancillary orders. The purpose of the orders is to restrain Ms Catterall from dealing with her assets (subject to an allowance for ordinary living expenses and legal expenses) pending the determination of proceedings it has commences against her.

[2]      The prerequisites for such orders are well settled:1

(a)       There must be a good arguable case against the defendant; (b)           The defendant must hold assets within the jurisdiction;

(c)       There must be grounds for believing there is a risk that assets within the jurisdiction will dissipate;

(d)      The plaintiff must give an undertaking as to damages;

(e)       The plaintiff must make material disclosure of all facts and possible defences;

(f)       Assets held by a third party may be the subject of a Mareva injunction if a causal link can be established.

[3]      I made freezing orders immediately with reasons to follow. In this judgment I

give those reasons and also make ancillary orders as sought.

The basis for the application

[4]      The defendant, Mechelle Catterall, has been employed as executive personal

assistant  to  Sovereign’s  chief  executive  officer  since  2006.  She  is  currently on parental leave. After going on leave she contacted Sovereign’s accounts department

1      Wilsons (NZ) Portland Cement Ltd v Gatx-Fuller Australasia Pty Ltd [1985] 2 NZLR 11 (CA).

several times regarding invoices that she claimed she had forgotten to process.  This and the discovery of an invoice with an identical narration to one Ms Catterall had presented for payment to “J R Lester Consultancy” raised suspicions.  Sovereign’s manager of fraud and investigations, Ross Anderson, began to investigate. He has sworn an affidavit regarding the relevant events.

[5]      Mr Anderson’s investigations have identified a large number of fictitious invoices and unauthorised payments totalling $659,896.74.   The invoices were apparently   rendered   by   J   R   Lester   Consultancy,   Helen   O’Toole   Executive Professional Services and J Bernardo Professional Services.   The invoices did not have GST numbers and Mr Anderson has been unable to locate any businesses with these names.

[6]      The invoices were presented by Ms Catterall to the accounts department for urgent payment.   Payments were made into bank accounts in the name of Jodie Rochelle Lester, H P D O’Toole and J Bernardo.  Mr Anderson’s enquiries indicate that those account holders remitted about two-thirds of the payments made to the credit of Ms Catterall’s personal ASB…