Liquidation saga ends in victory for accountant
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.