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R v Holmes [2016] NZDC 18876

Published 16 December 2021

Judge-alone trial — liquidation — duties of company directors — failure to attend offices of liquidator — failure to provide liquidator requested information — failure to keep records of business — Companies Act 1993, ss 189, 194, 261 & 376. The defendant faced four charges under the Companies Act: one of failing to attend the offices of the liquidator to be examined on oath pursuant to s 261; one of failing to provide the liquidator information about the business as requested by the liquidator pursuant to s 261; one of failing to keep documents and records in relation to the business pursuant to s 194(1); and one of failing to keep documents and records in relation to the business pursuant to s 189(1). The defendant was the director of a company which had been placed into liquidation. The essential elements of the offence under s 261 were that a liquidator give notice in writing to the director of a company to attend on the liquidator at a reasonable time and place, or provide information to the liquidator, or be examined on oath; and that the director failed to comply with the notice. Evidence of emails sent between the defendant and the liquidator showed that the liquidator had tried three times to arrange a time to meet with the defendant, so the first elements of the offence were satisfied. The Judge found that the defendant's lack of response to the second pair of notices was evidence that he had failed to comply with the notices. The defendant was therefore found guilty on the first two charges. In relation to the third and fourth charges, evidence from the defendant's accountant was that the company was a non-trading company and therefore the records required to be maintained were limited to bank statements. Counsel for the defendant submitted that a defence under s 376(2)(b), that he had taken all reasonable steps to ensure that his company complied with the Act, was available to the defendant. Based on this evidence the Judge concluded that the prosecution had not proven the charges to the required standard. The defendant was entitled to benefit from the s 376 defence and he was found not guilty on the third and fourth charges. Judgment Date: 7 November 2016