Liquidators
could not recover $330,000 apparently missapropriated from a company by a
bankrupt to pay off his former wife because she did not know the source of the
money.
Liquidators from McDonald Vague took a
close interest in Mr John Ede’s involvement in west Auckland company, Neil
Timber Ltd. There were allegations of Mr
Ede missappropriating company money while apparently acting as a de facto director. In particular, the liquidators were chasing $330,000
paid towards the purchase of a property in Ambrico Place, New Lynn, as part of
a relationship property settlement. The
High Court was to rule that this money was probably stolen from Neil Timber
Ltd, dressed up as a “commission”. Mr Ede
was bankrupt at the time. He was
subsequently convicted of 23 charges under the Insolvency Act, Crimes Act and
Companies Act; sentenced to three years and one month imprisonment, and banned
from acting as a director until February 2018.
By the time liquidators were on the trail
of the missing $330,000, Mr Ede’s former wife had sold Ambrico Place and
purchased a replacement in Sturges Road, Henderson. Liquidators lodged a caveat against the
Sturges Road property claiming she held title as constructive trustee for creditors
of Neil Timber Ltd. Associate judge
Doogue ordered its removal. To hold the
property as constructive trustee for the company, she had to be aware the
original $330,000 was taken from the company.
She knew Mr Ede was bankrupt. She
knew he was in financial difficulty at the time payment was made. But there was no evidence she was aware the
funds were taken from the company, though that is probably what happened, said
Judge Doogue.
McLennan
v. Livaja – High Court (5.05.16)
16.075