Convicted
of tax evasion amounting to nearly $400,000 and sentenced to nineteen months
jail, Auckland building contractor Clive Stephen William Bench is now under
investigation by the Insolvency Service.
The High Court issued freezing orders against trustees of his family
trust following allegations assets are being hidden from creditors.
Bench was sentenced in
January 2017 after pleading guilty to 38 charges relating to tax evasion and
forty of failing to deduct withholding tax.
This offending was spread over six tax years. He was bankrupted in April 2015. The High Court was told Insolvency Service staff
were suspicious Bench was being less than fulsome in providing information. They discovered Bench had transferred assets
valued at about $650,000 in 2012 to a family trust; the Forge Trust. Trustees of Forge are his spouse and a former
business associate. Insolvency Service
says Bench was insolvent at the time he handed over these assets. He owed Inland Revenue some $400,000 and was
under threat of a million dollar claim from liquidators of a company called
Rear Units Ltd for drawings he took from the company before its liquidation in
February 2012. Evidence was given that
the Forge Trust was set up in July 2012 and assets gifted to the Trust by Bench
one day after Rear Units’ liquidators reported to creditors that action against
Bench was likely.
Gifts made within five
years of bankruptcy can be recovered by the Official Assignee for payment to creditors. Justice Fitzgerald granted a freezing order
over Forge Trust assets. The trustees
got no prior warning of the court order.
There is a risk trust assets might be dissipated, Her Honour said. The bulk of the Trusts’ assets were described
as $790,000 cash, following a recent sale of property. There is a close link between Bench and the
trustees. Bench is considered a discretionary
beneficiary of the Trust. His conviction
for tax evasion indicates a predilection to defeat creditors, she said.
Official
Assignee v. Bench – High Court (6.10.17) & Bench v. Inland Revenue – Court
of Appeal (4.10.17)
17.130