Norris' practices 'unnecessary'
Nelson liquidator Pat Norris was convicted of theft this week. Sally Kidson investigates the complex dealings of a man who said he was not "a friendly liquidator".
Pat Norris is never lost for words. At his recent trial in the Nelson District Court, words were his weapons.
Defending himself, he handed Judge Michael Behrens pages and pages of paper, and before starting his defence, he gave the Nelson Mail reporter one of his business biros.
"You might run out of ink," he joked.
The trial ran for a week longer than expected, largely because Norris kept witnesses in the stand for hours.
He was frequently chastised by the judge to make sure his questions, and answers, were relevant.
He raised eyebrows by continuing to push his argument, long after experienced lawyers would have conceded. He even disagreed with the judge.
Those acquainted with Norris say his verbosity demonstrates both his arrogance and his unshakeable self-belief - two traits that have been apparent during his controversial six years in Nelson.
"He never gives up on a fight. He has all this self-belief that he's right," accountant Warwick Savage, who has worked with Norris, says.
Norris this week was convicted of theft by a person in a special relationship, after a two-week trial. He will be sentenced at a later date.
Judge Behrens found that Norris' evidence was unreliable and that Norris was untruthful. Along with his partner Claire Parr, an accountant at his company, he had blatantly engaged in dishonest conduct to cover up the theft, the judge said.
Judge Behrens agreed with the Crown that Norris had stolen $80,900 deposited into his bank account for the liquidation of an Auckland-based company, Astra Enterprises, and used the money for personal and business expenses.
Norris has issued a statement publicly apologising for his actions, which he said were found to be a serious departure from the law.
He said he was likely to appeal the decision, but would not take on any further liquidation cases.
The dishonesty conviction means he cannot be a director of a company or involved in the management of a company for five years.
He is also unable to work as a liquidator.
It is Norris' second dishonesty conviction. He has a 1999 conviction for using a document for pecuniary advantage.
He also owned a Hamilton company that collapsed, leaving creditors more than $150,000 out of pocket.
While the recent court case focused on just one liquidation, the Nelson Mail has spoken with other people involved in liquidations carried out by Norris, who have raised serious concerns about his practices.
Norris told the Nelson Mail this week that he expected other people would raise concerns about his liquidations following his conviction for theft.
"There will be heaps of stuff coming out of the woodwork. Everybody will be having a crack. So be it."
However, he said he had acted in what he thought was the best and right way.
"I've got nothing to hide."
Nelson MP Nick Smith said more than a dozen constituents had visited him to discuss their concerns about Norris over the past two to three years.
Using parliamentary privilege, Dr Smith raised his concerns about Norris.
He questioned how someone who had no formal qualifications, trained as an auto electrician and had a fraud conviction was able to charge himself out at $200 an hour.
Dr Smith said Norris' explanations to him for how he had handled some of the liquidations were "extraordinary and bizarre".
The Companies Office said this week it was still pursuing a separate case of alleged misconduct against Norris, over the way he handled eight separate liquidations.
Earlier this year, the Official Assignee tried to get Norris struck off as a liquidator, but a High Court judge ruled that she was not the right person to hear such an application.
The Companies Office allegations against Mr Norris during the trial included that he banked all the liquidation monies into one account; disposed of assets at prices below their value to people he knew; benefited as a purchaser of assets; and charged unreasonable and excessive fees.
During the trial, Norris came across as confident and well-researched. He had documents, folders and volumes of correspondence spread out over two long tables, and could quickly locate the exact documents he wanted.
But during breaks, he could often be seen under the trees in front of the Nelson Courthouse puffing on cigarettes, and he had a bottle of stress pills on his desk.
At the trial, he told Judge Behrens that section 220 of the Companies Act was a personal favourite of his, and he had every case on it from the 19th century onwards with him.
Mr Savage, who has worked with Norris twice - the second time after the Companies Office insisted that a chartered accountant review his files - said he wanted to speak out, not out of dislike for Norris, but because creditors had no idea what had happened to their money.
He said Norris enjoyed researching case law, even in his spare time.
"Without a question of a doubt he's smart," Mr Savage said. "He understands acts and legislation very well. At the end of the day, he will put in hours and hours and hours studying that sort of thing.
"Nobody wants to underestimate his intelligence. I think he actually enjoys that kind of stuff."
Some people the Nelson Mail spoke with who had dealings with Norris did not want to speak publicly, out of concern that he might take action against them.
Norris took a complaint against the Nelson Mail to the Press Council last year over a series of stories about him. The council found in favour of the newspaper.
Norris said he had to restructure his business - which had at least six staff - after negative publicity, which started after he was found guilty in 2010 of spying on his ex-wife and making intimate recordings of her.
Norris put surveillance cameras in the woman's Bay of Plenty home so he could watch her from his Nelson home.
The woman thought the cameras, in the lounge, kitchen, dining room and bedroom, were burglar alarm sensors. She discovered the truth after Norris printed copies of pictures of her in bed with a married man and threatened to distribute them.
Norris put the cameras in the woman's house because he suspected her of having an affair.
He appeared on national television to explain why he had spied on her and shared the intimate images with others. He also admitted putting fibreglass insulation in her underwear drawer in revenge. He was convicted of making an intimate recording and ordered to pay $5000 for emotional harm.
Mr Savage said Norris - who openly boasted that he spent $125 a week on Lotto - also ran an inefficient business.
When he received the Astra Enterprises cheque for $80,900, he got the bank to clear the cheque that day. It was banked directly into his business account, which was overdrawn by $7000 before the deposit. The money was spent on personal and business expenses, and used up quickly.
Mr Savage said Norris was quick to threaten legal action if things did not go his way.
In court, Norris admitted that he had spent $3000 he billed to the Astra account on legal fees relating to his theft charge.
Norris told the court about his method of handling liquidations. He said that while others might just rubber-stamp payments, he personally saw it as his duty to try to sniff out hidden assets and investigate how the business was run.
"I don't classify myself as a friendly liquidator," he told the court.
He justified his fees in the Astra case by claiming that the company's accounts were in a mess, and blaming shareholders for not cooperating and hiding assets.
An expert witness, retired experienced insolvency practitioner Laurence Chilcott, said operating like that was completely unnecessary, and he could not understand why a liquidator would waste creditors' or shareholders' money on inquiries that had nothing to do with the creditors.
Mr Chilcott said the Astra case was extremely simple and should have only cost $12,000 in fees at the most.
Another aspect to Norris' operation is his business, Nelson Merchant Surplus, which collects and stores the assets of companies he has in liquidation.
This business is next door to the Lost Breed Motorcycle Club rooms in the Nayland Industrial Park.
Norris charges fees for the storage of items sold, on top of his liquidation fees. Storage fees are listed in a number of his liquidation reports.
Mr Savage said he had visited the warehouse on several occasions, and it was "packed" with stuff.
Aside from his business presence in Nelson, Norris was a Rotarian with a love of old cars. Mr Savage said Norris had a restored 1960s Ford worth $50,000 to $75,000, a Toyota Hilux, and an immaculate Jaguar.
During the trial, Norris sometimes parked a late-model Ford utility with the personalised plate DATRUK near the courthouse.
He held a methamphetamine prevention function in Nelson, which sprang from a personal tragedy. His son Dean was a P addict, who drowned in the Waikato River after fleeing police.
Norris said he had to stop this work because he found it too depressing.
In August this year, before his court case, Norris took the unusual step of running a public newspaper notice as an "open invitation" to attend the trial.
He said that "to further assist the transparency of open justice, those parties with an interest in this case, or an interest in criminal or insolvency law, are invited to attend".
People who wanted a copy of his submissions could also pay $125.
But in the end, no amount of words could convince the judge of his innocence. In fact, it was the lack of documents to support his claims that contributed to his undoing.
THE PAT NORRIS FILE
Born in Auckland in 1957. He set up his first business – a lawnmowing round – while still at school. After school, he trained as an auto electrician. He has also worked as a real estate agent, a Mercedes salesman and in insurance, and has owned other business, including an auto- marine spray-painting company and an insulation business. He started, but has not finished, a diploma in business management through the Open Polytechnic. In 2005, Norris' son Dean, a P user, drowned in the Waikato River while fleeing police. Norris moved to Nelson in 2006, setting up his Haven Rd headquarters in 2009. Norris unsuccessfully stood for the Kawarau mayoralty in 2007, from Nelson. He handled his first liquidation in 2008, when he took on a Mad Butcher franchise in Hamilton. In Nelson, he was involved in sponsorship of KartSport Nelson. He assisted in the organisation of a secondary school competition, and tried to organise s teenage beauty pageant at the competition. This did not go ahead, as organisers thought it was not appropriate. By 2010, Norris was handling 28 liquidations. In 2010, he was convicted of publishing and making an intimate visual recording, after he installed cameras in his ex-wife's house and captured pictures of her having an affair. In 2010, the Companies Office started investigating Norris. Also in 2010, Nelson MP Nick Smith called for reforms to insolvency law over concerns about the way Norris was handling liquidations. In 2011, police laid a charge of theft against Mr Norris in relation to the Astra case. The Official Assignee this year was unsuccessful in its attempt to get Norris struck off as a liquidator, over concerns about the way he handled eight liquidations. It is still pursuing this case. Norris was this week found guilty of theft by a person in a special relationship.
The Nelson Mail