Liquidators in control of Christchurch motor vehicle dealer formerly known as Nigel Thompson Motor Company Ltd are suing used car importer Autoterminal claiming $2.9 million.
They allege Autoterminal was party to fraud getting paid with intent to defraud Thompson Motor creditors, or failing that was paid at a time knowing Thompson Motor was insolvent. In turn, Autoterminal alleges it was Thompson Motor that acted fraudulently. Autoterminal itself is currently subject of legal action between entrepreneurs Robert Stone and Hohua Hemi fighting for control of their multimillion dollar joint venture used car import trade.
In March 2017, Thompson Motor was put into liquidation. It defaulted on multiple agreements with Inland Revenue promising to get tax payments back on track. Unsecured creditor claims filed with Thompson Motor liquidators total $680,000; assets recovered to date $3200.
The liquidators challenge payments totalling $2.9 million made by Thompson Motor to supplier Autoterminal in the two years prior to liquidation. Normally, disputes over recovery of pre-liquidation payments are dealt with in a relatively straightforward High Court procedure with a minimum of paperwork. Thompson Motors’ liquidators got court approval, over Autoterminal objections, to have the case instead heard under Part 18 of the High Court rules; requiring each side to disclose detailed claim and defence with wide rights of discovery, enabling disclosure of documents by court order.
The High Court was told of irregular dealings between Autoterminal and Thompson Motors with allegations Thompson Motors forged registration documents prior to sale of imported used cars and that Thompson Motors fraudulently pocketed car sale proceeds.
The need for a full statement of each side’s position and access to all relevant documentation requires use of the detailed Part 18 procedure, Associate judge Smith ruled.
Levin v. Autoterminal New Zealand Ltd – High Court (25.09.19)
19.172