Court of Appeal says case involves 'reasonably clear case of mismanagement'
Property developer Gregory Olliver has failed in his attempt to overturn a ban that prevents him from holding management roles for three years.
New Zealand's Court of Appeal upheld the High Court's ruling that bans Olliver from being a director or promoter, or from being involved in the management of any company for three years starting October 2021.
"This case involves a reasonably clear case of mismanagement under s 385 [Companies Act 1993], essentially involving the abuse of corporate limited liability," the court said in its decision.
The ruling stems from Olliver's highly speculative attempt to rescue a subdivision development when he was the sole director of BBG Holdings Limited. According to the Ministry of Business Innovation and Employment (MBIE), Olliver made the attempt despite BBG not having assets or assurance of support to enter a contract or start work on the subdivision that it had no legal title to.
Vanessa Cook, acting national manager at the Criminal Proceeds Integrity and Enforcement, said Olliver's plan of using BBG as a vehicle to rescue the stalled property development project was flawed as the company didn't have assets and financial support.
"BBG was a shell company with no capital or existing business activities," Cook said in a statement. "BBG went into liquidation when the attempt to rescue the development was unsuccessful."
BBG was then went into liquidation in 2019. In September of that year, the company had one preferential claim from Inland Revenue for $32,354.61 that was repaid by the liquidator.
According to the MBIE, the liquidator also repaid unsecured creditors $248,676.15. Another $671,259.33, however, remains unpaid.
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"This case is significant as it went to the Court of Appeal, which also concluded that company mismanagement causing insolvency under section 385 of the Act is independent of directors' duties elsewhere specified in the Act," Cook said.
Olliver was once a large-scale developer who was previously featured on the National Business Review's Rich List.