Specialist Roofing Solutions Limited v Hollis

[2021] NZHC 1192

IN THE HIGH COURT OF NEW ZEALAND GISBORNE REGISTRY

I TE KŌTI MATUA O AOTEAROA TŪRANGANUI-A-KIWA ROHE

CIV-2020-416-2

[2021] NZHC 1192

BETWEEN

SPECIALIST ROOFING SOLUTIONS LIMITED
Plaintiff

AND

KATARINA CHERIE HOLLIS

First Defendant

JASON PEACH
Second Defendant

ANN MARIE HOLLIS

Third Defendant

Telephone conference:

24 May 2021

Appearances:

D Kerr for the Plaintiff

No appearance by or for the Defendants

Judgment:

26 May 2021

JUDGMENT OF GAULT J

This judgment was delivered by me on 26 May 2021 at 3:30 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors / Counsel:

Mr D Kerr, Barrister, Napier

Mr R Revington (plaintiff’s instructing solicitor), Woodward Chrisp, Gisborne

SPECIALIST ROOFING SOLUTIONS LTD v HOLLIS [2021] NZHC 1192 [26 May 2021]

[1]                 The plaintiff seeks judgment by default by way of formal proof against the first and second defendants in this proceeding.1

Facts

[2]                 The plaintiff is a small Gisborne company. The first defendant, Ms Hollis, is a former employee. The second defendant, Mr Peach, is her partner, and the third defendant is her mother.

[3]                 The plaintiff employed Ms Hollis as its office administrator in September 2015. She was employed to work about 20 hours per week and was trusted to take care of, and responsibility for, the company’s finances.

[4]                 In August 2019, the plaintiff’s accountants informed the plaintiff that they had noticed some anomalies when preparing the company’s accounts. Following investigation, analysis of the company’s bank accounts and Ms Hollis’ bank accounts showed that between 8 March 2016 and 30 August 2019 Ms Hollis made a total of 391 payments of money from the company’s accounts into her own personal accounts which could not be accounted for as wages or any other sums legitimately due to her. The payments totalled $969,513.82. Ms Hollis had no authority to make those payments.

[5]                 During that period, Ms Hollis paid a total of $14,585.50 from her accounts into Mr Peach’s account.

[6]                 Ms Hollis was charged with obtaining by deception and pleaded guilty. The summary of facts refers to her taking $969,513.82 from the company bank account and transferring it to her own bank accounts.

[7]                 Ms Hollis and Mr Peach have been served but have taken no steps in the proceeding. Ms Hollis has been adjudicated bankrupt on her own application but on 9 December 2020 the Court granted leave for the plaintiff to continue its claim against her. The plaintiff has settled with the third defendant.

1      High Court Rules 2016, r 15.9.

Claims

[8]                 The plaintiff claims against Ms Hollis in money had and received and breach of fiduciary duty.

[9]                 Money had and received is based on the payment of money by one person to another and proof that the money would not have been paid but for a mistake of fact made by the payer.2 Breach of fiduciary duty requires a fiduciary relationship, but that is established here given Ms Hollis’ employment to take care of, and responsibility for, the plaintiff’s finances.

[10]              Having reviewed the affidavit of Mr File, the plaintiff’s director, I am satisfied that Ms Hollis is liable to the plaintiff under either cause of action for the amount taken.

[11]              In relation to Mr Peach, Mr Kerr, counsel for the plaintiff, acknowledges that the plaintiff can only trace $7,500 of its funds to Mr Peach,  being payments on     24 February 2018 and 9 April 2019.3 The plaintiff’s claim against Mr Peach for money had and received is made out to this extent.

Result

[12]              Subject to a maximum total recovery of $969,513.82 (including any recovery from the third defendant), the plaintiff is entitled to judgment as follows:

(a)against the first defendant for $969,513.82 plus interest from 30 August 2019 (the date of the last payment obtained by her);4

(b)against the second defendant for $7,500 plus interest from 9 April 2019 (the date of the second payment received by him).5

2      Napier v Torbay Holdings Ltd [2016] NZCA 608, [2017] NZAR 108 at [18]-[19].

3      Mr Kerr also responsibly corrected a small error in Mr File’s affidavit relating to transfers in December 2018 but these do not undermine the traceable amount.

4      Interest on Money Claims Act 2016, s 10.

5      Section 10.

[13]              The plaintiff is entitled to 2B costs against the first and second defendants, on a joint and several basis.

Gault J