When
overturning attempts to turf Chinese investors out of a Northland tyre
recycling venture, the High Court referred to the Solicitor General for further
investigation fake court documents used unsuccessfully as evidence in the trial.
Annoyed at what he
assumed was a lack of progress with his recycling project, Auckland-based Peter
Adams engineered a series of steps which saw him remove Mr Jun Zhang as a director
and put their company ELT Recycling (NZ) Ltd into liquidation. Justice Heath described the whole process as
a charade, ordering the steps taken be reversed.
ELT Recycling was
established in 2015 to promote what was envisaged as an environmentally sound
approach to tyre recycling. Mr Adams
took a minority twenty-five per cent stake.
Other shareholders were Auckland-based Mr Zhang together with Mr Weidong
Li from Qingdao City in China and Mr Changlong Jiang from Doncaster in Victoria,
Australia.
The High Court was told
Mr Adams put himself off-side almost immediately by failing to put up his
agreed $37,500 in working capital.
Instead he issued a $36,700 invoice for work done on the company’s
behalf. When that was not paid he
purported to issue further shares to a company he controlled, using these extra
votes to fire Mr Zhang as director. Now
in control of the company, he elevated his claimed fees to the status of a
secured claim, using this supposed security to appoint an administrator and
ultimately put the company into liquidation.
These steps were buttressed by what he called a ruling of the Maori Land
Court. This document related that Mr
Zhang had failed to act in good faith towards Mr Adams and that Mr Adams was
entitled to take control of the company’s ANZ bank account. It was formatted to look like a court
document, resplendent with an official-looking seal. Learning of this supposed takeover, Mr Zhang
contacted ANZ and had the company bank account frozen.
Justice Heath ruled Mr
Adams had no authority to take control of the company in the manner he did. Mr Zhang was reinstated as director and the
supposed liquidation reversed. The
company’s only asset is the balance of the ANZ bank account; $88,300 now held
in a lawyer’s trust account. A copy of the
High Court judgment will go to the Solicitor-General for investigation into the
apparent use of bogus court documents.
Justice Heath said Mr Adams has been misled by those responsible for the
bogus court orders.
re
ELT Recycling (NZ) Ltd – High Court (15.08.17)
17.102