Dereck Howes, director of Auckland-based Industrial and Commercial in the business of refurbishing and leasing out shipping containers, was ordered to pay just on $600,000 after liquidation of his company. He pocketed all cash coming into the business and on-sold containers not owned by his company.
After Industrial and Commercial Enterprises Ltd went into liquidation in September 2023, liquidators could find no company records.
The High Court was told the company had no bank account; all cash was paid into Mr Howes personal bank account, used to pay a mix of company and personal expenses.
The GST number used on company invoices was Mr Howes personal tax number.
Evidence was given that Industrial and Commercial on-sold, without permission, leased containers sitting in its yard. This money also went into Mr Howes personal account.
The Companies Office file shows no record of Mr Howes formally accepting any role as an appointed director.
Liquidators did not sue Mr Howes for Companies Act breaches as a director. They sued him for ‘money had and received’ and ‘knowing receipt.’ He did not defend the liquidators’ claim. He was ordered to refund $599,800 to the company.
Justice O’Gorman ruled liquidators had proved Mr Howes wrongly misappropriated funds while in control of the company.
Industrial and Commercial Enterprises Ltd v. Howes – High Court (14.11.24)
25.033