Liq­ui­da­tion saga ends in vic­tory for ac­coun­tant

The Dominion Post - - Business - Marty Sharpe [email protected]

Liq­uida­tors came af­ter him for a miss­ing $150,000. In­stead they had to pay him $5462.

Have­lock North ac­coun­tant David Sorensen, who re­ceived a cheque from liq­uida­tors Deloitte yes­ter­day, said a re­cent court rul­ing had ‘‘to­tally ex­on­er­ated’’ him of any wrong­do­ing.

Sorensen was the ac­coun­tant for fruit-pick­ing con­tract­ing busi­ness DP Alam Hor­ti­cul­ture Ltd, which went into liq­ui­da­tion in early 2016.

The com­pany, which em­ployed 50 staff in Hawke’s Bay and Te Puke, was put into liq­ui­da­tion in the High Court at Napier fol­low­ing a pe­ti­tion by the Com­mis­sioner for In­land Rev­enue for un­paid tax of $576,697.

Liq­uida­tors for Deloitte, Colin Owens and David Vance, made a claim against Sorensen af­ter dis­cov­er­ing that $421,666 of com­pany funds had been de­posited in his bank ac­count.

Sorensen told them the funds were used to pay com­pany ex­penses, such as staff wages.

The liq­uida­tors were un­able to find com­pany records that iden­ti­fied the purpose of the pay­ments, but pay­roll records iden­ti­fied that $271,636 had been paid in cash wage pay­ments.

That left an un­ex­plained short­fall of $150,020 for which they is­sued pro­ceed­ings against Sorensen.

Sorensen said he had kept records of all pay­ments through his bank ac­count and he of­fered to travel to Welling­ton to ex­plain the al­leged short­fall.

Be­fore the mat­ter could be heard in court, the liq­uida­tors filed a no­tice of dis­con­tin­u­ance say­ing it was clear ‘‘lit­i­ga­tion would be a pro­tracted and ex­pen­sive ex­er­cise, and would ex­ceed the funds avail­able’’.

The liq­uida­tors had sought fund­ing from In­land Rev­enue to con­tinue the claim, but this was de­clined.

The liq­uida­tors claimed Sorensen had pro­vided a small se­lec­tion of records that did not pro­vide an ex­pla­na­tion for the al­leged miss­ing funds.

They also claimed that a let­ter from the com­pany direc­tor as­sert­ing that he had au­tho­rised the pay­ments had not been writ­ten by the direc­tor, and the direc­tor had ad­mit­ted to them that Sorensen had writ­ten the let­ter for him to sign.

Af­ter the liq­uida­tors dis­con­tin­ued their claim, Sorensen sought costs of $6244 and dis­burse­ments of $110.

The liq­uida­tors said costs should lie where they fell, and that the claim was jus­ti­fied and dis­con­tin­ued only due to a lack of funds.

Sorensen said he had acted law­fully and could ex­plain the trans­ac­tions and had in­tended to de­fend the pro­ceed­ings.

Late last month Jus­tice Jil­lian Mal­lon­ruled that Sorensen was en­ti­tled to costs of $5352 and dis­burse­ments of $110.

Yes­ter­day Sorensen told Stuff he had just re­ceived a cheque for the full amount and felt ‘‘to­tally ex­on­er­ated’’.

Pre­par­ing his de­fence had cost him $11,000 and had taken a ‘‘vast amount of time’’. ‘‘The whole thing was ut­terly poorly based to start with. I told them that.’’

Owens said liq­uida­tors had iden­ti­fied a claim and pur­sued it.

‘‘Un­for­tu­nately we were not able to get any fur­ther cred­i­tor fund­ing. The liq­uida­tors weren’t pre­pared, ob­vi­ously, to fund it on their own, so un­for­tu­nately we had to with­draw the ac­tion,’’ he said.

ROBYN EDIE/STUFF

Jus­tice Jil­lian Mal­lon ruled that David Sorensen was en­ti­tled to more than $5000.

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.