Fees
claimed by Auckland insolvency practitioner Mark Norrie were cut in half by the
High Court for unnecessary work done on the liquidation of property developer Rayland
Investments Ltd.
Associate judge Bell
described the claimed $32,900 liquidation fees as going beyond work done in the
interests of company creditors but instead advancing the liquidator’s own
personal interests. The High Court was
told Rayland Investments was put into liquidation by a creditor owed $68,500. On learning of the Mr Norrie’s appointment as
liquidator, Rayland Investment’s owner Mr Larry Fan indicated that cash would
be put into the company to clear all debts.
Unsuccessful negotiations between the two followed with Mr Norrie putting
a tight deadline on demands Mr Fan sign what Judge Bell called a one-sided
settlement deed. Mr Fan was to front up
with $100,000 in cash with penalty interest at 29 per cent, compounding monthly,
for late payment. Mr Norrie’s duties or
his remuneration were not specified. Mr
Fan did not sign despite Mt Norrie’s threats to report him to the Integrity and
Enforcement Unit at the Companies Office.
Mr Norrie threatened to take from Mr Fan his company car, later finding
the vehicle was not owned by the company.
The company’s external
creditors totalled $76,500. The High
Court disallowed much of the fees and expenses claimed by Mr Norrie for
continuing with the liquidation. Judge
Bell said liquidators are not entitled to payment for work not required and
unnecessary. Mr Norrie showed little
interest in resolving matters. he said.
It is common practice for liquidators to put liquidation on hold where
directors and shareholders are making an honest effort to raise finance to pay
all creditors. It is where liquidators treat directors and shareholders with
hostility and take a “play to the whistle” approach that there are disputes
about liquidators’ remuneration, Judge Bell said.
re
Rayland Investments – High Court (23.08.17)
17.107