Shan Ling was ordered to repay $400,000 taken from Apollo Bathroom and Kitchen to pay a personal tax bill. Her claim the money was owed for unpaid salary and commissions was dismissed. There was no evidence she had an employment contract with Apollo.
Apollo Bathroom and Kitchen Ltd is insolvent, put into liquidation by Inland Revenue for unpaid taxes. Five months prior to liquidation in 2017, Ms Ling had Apollo pay her tax bill of $400,000. Inland Revenue was threatening to bankrupt her. Liquidators sued. Diverting company money in payment of personal expenses is in breach of the Companies Act as a ‘transaction at undervalue’. Ms Ling benefitted to the tune of $400,000; the company got nothing in return, they said.
Ms Ling’s husband was formerly director of Apollo Bathroom. She said she was entitled to payments of $432,841 from the company for her work as a consultant: unpaid wages at $1100 per week, plus $118,000 in unpaid sales commission. Justice Jagose said other than Ms Ling’s assertions that she was employed by the company, there was no evidence provided of any employment contract.
Her $400,000 tax bill was negotiated down from an Inland Revenue assessment of arrears and penalties totalling $467,000 owing for the 2009-2012 tax years. Ms Ling had not filed tax returns for any of these years.
Apollo Bathroom and Kitchen Ltd v. Ling – High Court (22.02.19)
19.047