Director
Carl Wiekart has been ordered to pay $1.02 million to liquidators of Alpha Box,
part of the Circle Group property companies.
Circle Group shut up shop in late 2007. It carried on business as a property
investment and trading company, buying residential properties and selling them,
predominately to “mum and dad’ investors.
Alpha Box Property Holdings was at the centre of Circle Group
operations.
The High Court was told Inland Revenue put
Alpha Box into liquidation for unpaid GST.
Investigations by liquidators David Levin and Viv Masden-Ries found a
total of $1.02 million had been paid by Alpha Box to other Circle Group
companies in its dying months. Alpha Box
director Carl Wiekart had an interest in other Circle Group companies as
director, or shareholder, or both. Mr Wiekart said these payments were
reimbursement of expenses the companies incurred on behalf of Alpha Box. The liquidators said these payments were unsecured,
undocumented loans.
Justice Peters said Alpha Box’s accounting
records showed the payments were loans.
There was no documentation to justify the payments as reimbursement of
expenses. Payments were made in round
sums; indicative of a loan rather than reimbursement. Of concern, Her Honour said, was Mr Wiekart’s
evidence that priority was given to Alpha Box paying money across to Circle
Group companies where he or his parents had guaranteed liabilities.
Justice Peters ruled Mr Wiekart was in breach
of his duties as director of Alpha Box by making the loans when there was
little prospect of repayment. He was
ordered to pay Alpha Box liquidators $1.02 million.
Inland Revenue is owed GST of $108,000 plus a
further $73,800 in penalties and interest for late payment.
re Alpha
Box Property Holdings Ltd – High Court (8.06.15)
15.062