RICHARD GEE AGAINST THE NEW ZEALAND HERALD

Case Number: 2456

Council Meeting: AUGUST 2015

Verdict: null

Publication: New Zealand Herald

Ruling Categories: Accuracy
Balance, Lack Of
Unfair Coverage
Privacy
Confidentiality
Errors, Apology and Correction Sought
Headlines
Photographs

Overview

Mr Gee is a motivational trainer. Following litigation in the Auckland High Court, he filed a debtor’s petition for bankruptcy and was adjudicated bankrupt in August 2014. The article complained against dealt with a company, of which Mr Gee was a director and shareholder, along with his wife, that was placed into liquidation. The article covered the Court proceedings, the bankruptcy and the fact that Mr Gee was carrying out motivational work in Tonga which was funded as part of an aid package from MFAT.

The Complaint

Mr Gee complains that the principles of accuracy, fairness and balance, comment and fact, confidentiality, corrections, headlines, photographs and graphics, and privacy have been breached. He maintains that neither he nor his wife were ever interviewed. He further states that the article failed to mention that the 2014 Court case related to litigation from 2005 which he maintained he had “won”. He said matters were taken out of context, and claimed the insolvency was only $17. He said the photograph had him wearing a Rotary chain, which inferred Rotary was supporting his personal status. He said his bankruptcy was voluntary as a result of the adverse Court judgment and he was not adjudged bankrupt as reported. He said the Insolvency Department were aware of, and consented to, his travel and work, and the actual contract with Tonga was with a third party called Geewiz Group Limited. He says the running of the Geewiz Group has no relevance to him and that he provides the skills for earning funds for the company as approved and was not involved in running the company or its management.

The Response

The editor, Shayne Currie, first stated that Mr Gee spoke to the reporter for around 13 minutes, during which time the reporter asked a number of questions about the bankruptcy and business insolvency. The editor maintains that the reporter accurately reported what was said. He further stated that Mr Gee told the reporter his wife was unavailable, and that she did not have anything to add. The editor said that the reporter asked Mr Gee to pass on a message asking her to speak to the reporter. He also asked if he could suggest ways the reporter could get in touch with her.

The editor stated that the article referred to a 2014 High Court case, and stated “an appeal which, as you note, you lost”. He noted the reasons why Mr Gee maintained no further action was taken. The editor said he had looked at the High Court judgment, and was satisfied that the relevant points had been covered.

The editor stated the photograph in no way inferred Rotary was supporting Mr Gee’s personal status. The editor further stated that while Mr Gee may have decided to become bankrupt voluntarily, it still required a High Court adjudication to make it so. He pointed out that this occurred after the company liquidator successfully argued that Mr Gee had received payments he should not have received from the liquidated company and as a result was liable to repay money to the company.

The editor concluded that he considered the article was fair, accurate and balanced, but said they would like to speak to Mrs Gee to get the company’s perspective.

The Decision

There is a dispute between what was said and what took place between the reporter and Mr Gee. Normally this makes it difficult for the Council. However, in this case we can readily determine the matter based on public documents, being the decisions of the High Court.

First, Mr Gee did not “win” a summary judgment in 2005 as he stated. That fact is repeated by Brown J in his decision of June 2014. What occurred was that the Court determined that Mr Gee had an arguable defence to the claims brought against him by the company and the liquidators and the matter should proceed to trial to determine disputed facts.

The decision of Brown J delivered on 30 June 2014 is instructive. It is a lengthy judgment, and we will deal only with the matters that are pertinent to this complaint.

It was, firstly, a claim that Mr Gee pay to Richard Geewiz Gee Consultants Limited (in liquidation) a sum overdrawn from the shareholders’ current account in the sum of $52,998; and, secondly, a claim Mr Gee return to the company a payment of $34,591, made to him by way of salary in the year ended 31 March 2007.

The company was incorporated on 23 October 2001 and called PSM Holdings Limited, which was changed on 14 June 2005 to the name we have just set out. From July 2005 the company began accumulating debt to Inland Revenue, initially in respect of PAYE, but subsequently in respect of both GST and Kiwisaver Employer Deductions. Penalties and interest were incurred.

A Mr Livingstone, of the firm UHY Haines Norton (Auckland) Limited, was Mr Gee’s accountant for some 25 years. He was also the company’s tax agent. He was first approached by the Inland Revenue expressing concerns in November 2006. Those concerns recorded disappointment that Mr Gee had again fallen into an arrears situation with regard to his personal tax “and now, the newly formed company tax”. An IRD file note in December 2006 indicated the company had agreed to clear the amounts owing by the end of February 2007. Despite this, arrears continued to accrue. Mr Livingstone wrote to Mr Gee, warning him of the seriousness of the situation and stating that it was essential contact be made with the IRD to arrange repayment. Despite that advice, from October 2007 the company failed to pay PAYE assessments and failed to pay Kiwisaver Employer Deductions. The Judge, in the decision, noted that more significantly in dollar terms was the company’s failure to account for GST.

Mr Livingstone also wrote to the company’s solicitors in June 2009 (the Judge noting the letter was probably written in June 2010), informing them the company was insolvent the entire time it was in operation, and that he had written to Mr Gee each year advising him of that status. Mr Livingstone confirmed that in his evidence.

It was against that background that the liquidated company and the liquidators brought proceedings to recover the sums mentioned above. It is unnecessary for us to go into the numerous complex causes of action, and we will refer only to those that were successful as listed at [11].
Section 161 of the Companies Act 1993 allows a company to authorise payment of remuneration or other benefits to a director for services. But it requires the board to enter the payment or benefit into a register, and directors must sign a certificate stating the making of the payment or the provision of the benefit was fair to the company, and they also need to state the grounds for that opinion.

In this case, such a certificate was signed. However, if reasonable grounds did not exist for the opinions set out in the certificate, the director may be personally liable to the company for the amount. In this case the Judge was satisfied that at the date the certificate was signed by Mr Gee authorising the payment of salary, there were not reasonable grounds for his opinion, expressed in the certificate, that the sum was fair to the company as at the date of the certificate. He held Mr Gee personally liable to repay the company the sum of $34,591.

In relation to the claim by the liquidators, the Judge was satisfied that Mr Gee had breached the provisions of s 135 that prohibit reckless trading on the basis of a conclusion that from 31 March 2007 onwards Mr Gee permitted the company to continue to trade absent a definite arrangement with Inland Revenue. He found that such an arrangement was never a realistic proposition, given Mr Gee’s, and the company’s, track record. He also found that Mr Gee had breached his duty of care under s 137, and was negligent in permitting the company to trade after 1 October 2007. In the circumstances, the Judge found it appropriate to order compensation payable by Mr Gee under the Companies Act to the liquidators for indebtedness from 1 October 2007 of $16,452.29, plus liquidators’ fees and disbursements of $36,308.83, from which he deducted an allowance of $3000, leaving a final liability of $49,761.12 due by Mr Gee to the liquidators.

It is clear from the Insolvency Act 2006 that a debtor who files an application with the assignee for adjudication of bankruptcy (known as a debtor’s petition) is adjudicated bankrupt as a consequence of such filing. It perhaps would have been better if the reporter had used the technical term “adjudication”, rather than the term “made” that he did use, but we consider nothing turns on that.

Unless one was familiar with Rotary regalia, a viewer of the photograph would be unaware that it was a Rotary chain. In any event, the use of the photograph in no way implies that Rotary supported Mr Gee’s activities.

The article makes it plain that Mr Gee had the permission of the Official Assignee to work in Tonga. It also reported that the company contracted, Geewiz Group Professional Speakers Limited, was owned by Mr Gee and his wife, but that Mr Gee resigned as a director on the day he was made bankrupt. One of Mr Gee’s complaints is that he has nothing to do with the running of that company, which could be implied. However, for the sake of completeness we note that the business website provided to us by Mr Gee shows the Skype address for the company as being one of ‘richard.gee2’, and the email contact for the company was ‘richard@geewiz.co.nz’.

This was accurate reporting of what was currently occurring and what had occurred in Court proceedings through to the subsequent bankruptcy. It was also a matter of public interest, particularly when New Zealand foreign aid money was involved. We are satisfied none of the Press Council’s principles have been breached as alleged. The complaint is not upheld.

Mr Gee lodged a late complaint that his conversation had been recorded. We accept that, as long as the journalist is a party to that conversation, recording is standard and acceptable practice.


Press Council members considering this complaint were Sir John Hansen, Liz Brown, Chris Darlow, Peter Fa’afiu, Jenny Farrell, Sandy Gill, Marie Shroff, Vernon Small, Mark Stevens and Tim Watkin.

John Roughan took no part in the consideration of this complaint.