Peri
Finnigan and Boris van Delden from insolvency specialists McDonald Vague were
told the net was cast too wide in their attempt to force lawyer Brian Ellis
hand over personal tax returns and a statement of his financial affairs as part
of their plans to sue directors of failed Wenztrou Co-operation Ltd.
In what is a first for
New Zealand, Ms Finnigan and Mr van Delden are attempting to get access to
directors’ personal financial affairs to see whether they are worth suing. Australian courts have accommodated
liquidators, in particular allowing them to see details of any professional
indemnity insurance held by directors of insolvent companies.
As liquidators of
Wenztrou, formerly known as Trojan Foods (NZ) Ltd, Ms Finnigan and Mr van
Delden are looking to sue the company’s directors for some $775,000 alleging
breach of their directors’ duties. Liquidators
have statutory powers under the Companies Act to examine on oath company
directors about “the affairs of the company”.
Wenztrou’s liquidators want to see Mr Ellis’ personal tax returns for
the period 2012 to 2016, copies of his personal bank statements, a list of all
his assets and liabilities valued at more than $10,000 and the names of all
trusts in which he has an interest as either trustee or beneficiary.
Associate judge Sargisson
ruled the liquidators failed to justify why such wide-ranging demands were
necessary. She left open the question of
whether liquidators should even be permitted to get access to directors’
personal financial details.
Finnigan
v. Ellis - High Court (23.06.17)
17.072