Norris found guilty of theft

02:40, Oct 17 2012

Pat Norris has been found guilty of theft, with a judge finding the Nelson liquidator's trial evidence "unreliable".

"My impression was and is that he was untruthful," Judge Michael Behrens said in a written decision released yesterday.

Norris, 55, had represented himself in a non-jury trial in the Nelson District Court. He had denied a charge of theft by a person in a special relationship.

Judge Behrens convicted Norris, and a date is yet to be set for his sentencing.

The judge said in his decision that he believed Norris and his partner Claire Parr, who was an accountant for Norris' company, "engaged in a blatantly dishonest course of action to try and cover up" Norris' dishonesty.

A conviction means that Norris will be automatically prohibited under the Companies Act from being a director or involved in the management of a company for five years.


He will also be disqualified from being appointed or acting as a liquidator or receiver.

The charge related to the way Norris handled the liquidation of an Auckland-based company, Astra Enterprises.

In August 2009, Norris received a cheque for $80,900, which was a cash asset of Astra.

The cheque was paid directly into Norris' company's trading account, rather than a trust account or an account set up specifically for Astra Enterprises.

Judge Behrens said Norris' company account was overdrawn by $7000 at the time the Astra money was deposited, and by early November the account was overdrawn again.

Norris said he spent the $80,900 on fees.

Judge Behrens said the Crown gave evidence that after the Companies Office started investigating the Astra file, Norris started making up invoices on the file - which, coincidentally, equalled the $80,900.

Judge Behrens found there was no question that Norris' payment of the Astra monies into his company's working account and their subsequent use by Norris for company and personal debts and purchases "was intentional".

"Once the inspection was made, his actions then in regard to Astra were to render invoices which could not and have not been substantiated."

Judge Behrens said Norris' former employee Nyle Sunderland and accountant Warwick Savage both gave evidence that Norris had told them the Astra case was one that could catch him out.

Mr Savage gave evidence that Norris panicked and started making up invoices on the Astra file after the Companies' Office visited.

Judge Behrens said he accepted the evidence of Ms Sunderland and Mr Savage over that of Norris and Ms Parr.

"Plainly, [Norris and Ms Parr] were unable to provide contemporaneous records to confirm or verify the work claimed to have been done in connection with the Astra Liquidation."

Judge Behrens said there was no original documentation put forward to support Norris' claim that he had done a budget for the liquidation. The copy of the documentation provided was, in his view, "suspect as a provider of reliable information".

He also accepted expert evidence that reasonable liquidation fees for work on the Astra case were $12,000.

Nelson MP Nick Smith has been pushing for reform of the regulation of insolvency practitioners, and raised concerns about Norris in Parliament last year under parliamentary privilege.

Dr Smith said Judge Behrens' verdict was welcome and would bring a real sense of relief to many of his constituents.

He said people going through a liquidation were under enormous financial stress, and the last thing they needed was dishonest practitioners making those tough times even worse.

He said more than a dozen constituents had come to him with concerns about Norris over the past two to three years.

"His conviction will bring some reassurance not just to those involved in liquidations, but also the creditors, that in future there will a greater degree of integrity around the winding-up of companies."

Dr Smith said the issue of implementing a proper system of legislation around the liquidation sector remained, and was something the Government would be progressing.

"The real question is why we allow people with previous convictions [and] no accountancy qualifications to practise in this tricky area."