Patrick Dean Norris v B Gemmell and R Cain

IN THE SUPREME COURT OF NEW ZEALAND

SC 119/2014
[2014] NZSC 190

BETWEEN	PATRICK DEAN NORRIS Applicant
AND	BRUCE DONALD GEMMELL AND RHYS JAMES CAIN Respondents

Court:	William Young, Arnold and O'Regan JJ
Counsel:	Applicant in person G K Riach for Respondents
Judgment:	19 December 2014

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.
BThe applicant is to pay the respondents costs of $2,500 and reasonable disbursements to be fixed by the Registrar.

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REASONS

The applicant was the liquidator of four companies. On the afternoon of 16 October 2012, he was found guilty of theft (by failing to account)[1] in respect of one of them.[2] By reason of ss 280(1)(k) and 382(1)(b) of the Companies Act 1993, he was, from that point, disqualified from acting as a liquidator. Acting on the basis that there was, as a result, a vacancy in the office of liquidator,[3] the Official Assignee appointed the respondents as liquidators under s 283(6) of the Companies Act. The respondents applied for a search order in respect of the applicant’s premises, which was duly executed. In issue now is a challenge to the search order. This challenge was dismissed in the High Court[4] and Court of Appeal.[5]
[1]Crimes Act 1961, s 220.
[2]R v Norris DC Nelson CRI-2011-42-1272, 16 October 2012.
[3]Companies Act 1993, s 283(1).
[4]Gemmell v Norris [2012] NZHC 3339.
[5] Norris v Gemmell [2014] NZCA 490.
A primary basis of the challenge in those courts and the sole focus of the applicant’s submissions in support of the application for leave is that he had, on the morning of 16 October 2012, that is, before he was found guilty, appointed another person as liquidator. The argument is that the appointment of the other person was effective, there was no vacancy in the office and the respondents’ appointment as liquidators was invalid with the result that they had no right to apply for a search order.
Both the High Court and Court of Appeal held that the applicant’s resignations and his appointment of the other person as liquidator were not effective because notice of the appointment, as required by s 283(2) of the Companies Act, was not sent or delivered to the Registrar of Companies until 18 October 2012.[6] The applicant disputes that conclusion. He says that when regard is had to the whole statutory scheme, including ss 241, 241A, 255, 280, 282 and 283 of the Companies Act, his resignation and the appointment of the other person was effective prior to his conviction in the afternoon of 16 October 2012.
[6]Norris v Gemmell, above n 5, at [27]; Gemmell v Norris, above n 4, at [21]–[22].
This is a unique case with unusual facts. We are not persuaded that the proposed appeal raises any issue of public or general importance. As well, the applicant’s arguments, at least in the round, have been fully considered in the reasoned judgments of the High Court and Court of Appeal and the interpretation adopted is in accordance with the language of s 283(2). More generally, there is no appearance of a miscarriage of justice.

Solicitors:
Harmans Lawyers, Christchurch for Respondents

CaseChat Overview and Summary

The Supreme Court of New Zealand was presented with an appeal from Patrick Dean Norris, who was seeking to challenge a decision made by the High Court and Court of Appeal regarding his disqualification from acting as a liquidator and the subsequent appointment of new liquidators. The respondents, Bruce Donald Gemmell and Rhys James Cain, were appointed as liquidators following Norris’s conviction for theft, a disqualifying offence under the Companies Act 1993. Norris argued that his appointment of another liquidator prior to his conviction should have rendered the respondents' appointment invalid, and by extension, any search order they sought to execute against him.

The primary legal issue addressed by the court was whether Norris's appointment of another liquidator prior to his conviction was effective, and whether this appointment negated the vacancy that would otherwise have justified the respondents' appointment. The High Court and Court of Appeal had already ruled against Norris, finding that his appointment was not effective because the required notice was not delivered to the Registrar until after his conviction. Norris contended that the statutory scheme of the Companies Act, including various sections related to the appointment and resignation of liquidators, indicated that his actions were indeed effective before his conviction.

The Supreme Court, however, found that the issue did not present any matter of significant public or general importance, and that the reasoning of the lower courts was sound. The court concluded that Norris's arguments had been thoroughly considered, and that the statutory language of section 283(2) supported the conclusion that his appointment of another liquidator was not effective until the requisite notice was delivered to the Registrar. The court also noted that there was no apparent miscarriage of justice in the outcome.

Consequently, the application for leave to appeal was dismissed, and the applicant was ordered to pay the respondents’ costs of $2,500 along with reasonable disbursements to be determined by the Registrar. This outcome effectively upheld the decisions of the High Court and Court of Appeal, affirming the validity of the respondents' appointment as liquidators and the search order executed against Norris.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established