Company liquidator’s strange fishing expedition – by Tristam Price

We occasionally see cases where the wrong party ends up having to defend a claim in the ERA, but this is the first time we’ve seen a previously unknown party take over someone else’s claim.

The respondent is Linda Wang. In the background she appears to have outgrown her job in late 2019. She was employed as a Family Court lawyer with Belvedere Law Ltd for a couple of years then got permission from the Law Society to practice on her own account, and set up her own practice and resigned from Belvedere soon after – nothing unusual about that.

In June 2021 the IRD applied to have Belvedere Law Ltd put into liquidation over approximately $100,000 in unpaid taxes. Its director Mr Bodle was adjudged bankrupt the following month. Mr Sanson of PriceWaterhouseCoopers is the insolvency practitioner (liquidator) whose job it is to recover as much money as he can for the preferred creditors including the IRD. Unsecured creditors include two law firms – more on that later.

A few months before Belvedere failed, it had brought a claim against Ms Wang in the ERA, for allegedly misusing confidential information including copying templates and deleting of WeChat messages. WeChat is popular in China, and the reason given for deleting the messages was that they disappeared when the glitchy app had to be re-installed. Ms Wang had applied to have the proceedings struck out on the grounds that they were vexatious.

Mr Sanson was eventually appointed liquidator of Belvedere and while the first liquidator’s report does not mention this, he opposed the strike-out application. ERA Member Peter Fuiava declined to strike out the proceedings because of the high threshold for proceedings to be considered vexatious, although he did hint at the poor prospects of Belvedere’s liquidator’s claim succeeding.

We think Mr Bodle was just incensed because having supported Ms Wang’s application to practice on her own account, she left soon after; maybe there were aready signs that Belvedere was in financial difficulties?

Given that continuing a petty employment dispute is well outside the normal duties of a liquidator, we don’t expect to hear any more about this. It reminds us of another claim that’s dead in the water, this one against a former cardiac physiologist.

This matter also reminds us of a business associate who worked for a multinational equipment service company for 30 years and felt that he was being unjustifiably disadvantaged during a restructuring process, and raised a Personal Grievance. He ended up signing a Record of Settlement (RoS) in mediation with the agreement including a payout and the usual gag clause. A couple of years later, due to a continuation of the restructuring, his former employer ceased its New Zealand operations. Years later, he still feels aggrieved. He also lives in fear of The Holy RoS even though there is no company in New Zealand that could enforce the RoS if he breached its NDA provisions.

While these fears may seem unfounded, the Belvedere matter shows that the ERA is prepared to entertain a claim by a liquidator or perhaps more likely a previously uninvolved acquiring company, where someone from the defunct/acquired company has alleged that a former employee has breached the provisions of their employment agreement or RoS.