With revenue in excess of two million dollars for the 2015 and 2016 financial years, labour hire business Klavenes Construction Ltd operated without a business bank account, kept no formal business records, filed no tax returns and paid no tax. Now in liquidation, director Knut Klavenes and his wife were ordered hand over $128,100 of company money.
Liquidator Scott Greer sued, alleging surplus company revenue held in personal bank accounts after payment of company bills was a debt due to the company. On his calculation this came to $803,500. He sued using part of the Companies Act liquidation code designed to recover any element of gift where company assets are taken for inadequate consideration. Justice Palmer allowed recovery of $128,100 only. This was the net figure after deducting from company revenue in their personal bank accounts those business invoices paid by the Klavenes on the company’s behalf.
The balance of some $675,400 Mr Greer sought to recover was Klavenes Construction money in their personal accounts spent by the Klavenes to meet the debts of an associated company, Klavenes Construction Tonga. It had building contracts in both Tonga and New Zealand. This is not surplus money held by the Klavenes owed to Klavenes Construction, Justice Palmer said. It is company money spent, rightly or wrongly, by the Klavenes to meet the debts of an associated company. It is for Klavenes Construction Ltd, now controlled by Mr Greer, to take a separate action for any recovery from either Klavenes Tonga or the Klavenes personally, he ruled.
Greer v. Klavenes – High Court (22.06.18)
18.129