Mr Kamal was appointed as liquidator of two companies of which the Commissioner of Inland Revenue (CIR) was a creditor.  The CIR applied to the High Court for orders under section 286(5) of the Companies Act 1993 prohibiting Mr Kamal from acting as a company liquidator for a period of up to five years.

In CIR v Kamal [2016] NZHC 1053 the CIR sought the orders on the basis that Mr Kamal was guilty of a continuing breach of his duties as a liquidator that made him unfit to act as a liquidator because:

  • Mr Kamal's convictions for offences against the Tax Administration Act 1994 made him generally unfit to act as a liquidator
  • Various acts and omissions of Mr Kamal in his role as liquidator of the two companies and one other company amounted to breaches of his duties as a liquidator.

The Court struck out the application, concluding that it was not reasonably arguable that the CIR's claim identified any continuing failures by Mr Kamal to comply with his duties because:

  • Liquidators are not subject to any general requirement of fitness, and therefore Mr Kamal's convictions could not provide a basis on which the Court could make a prohibition order under section 286(5)
  • Mr Kamal had resigned as a liquidator of the company and so was no longer bound by the relevant duties once he resigned as liquidator, meaning that there could be no continuing failure to comply.

See Court decision here.