James Hennessy, a principal at WHK Group, faced High Court action by farming couple Joanne and Darrin Crack earlier this year.
The Cracks sought compensation from Hennessy for problems with infrastructure on the Southland farm they purchased from his company Ryanna Farming in 2008. He was sole shareholder and director of that company.
The Cracks had informed Hennessy’s accounting firm WHK in August they believed his actions in selling the Lawson Road property breached areas of the New Zealand Institute of Chartered Accountants (NZICA)’s code of ethics.
In their complaint to the NZICA the couple allege Hennessy has failed to comply with several of the NZICA’s rules around professional conduct and ethics.
An NZICA spokesman said the institute was not prepared to comment on individual cases before it. On average the NZICA receives around 100 complaints a year.
Hennessy said he had received a copy of the Cracks’ complaint and the NZICA was still considering how it would handle it.
“It sits in the institute’s hands from here, we have answered the complaint and it will be considered.”
Trading as Southern Star Farms, the Cracks found a bridge on the property had been modified and had not had proper consent, in breach of the sale and purchase agreement for the property. The farm dairy had a building permit for the original structure, but lacked proper consents for modifications to that original building.
Action by the couple saw the court award them a total of $93,000 in costs and damages relating to the bridge in July over breach of the sale and purchase agreement. This amount was not paid within the required 15 working days, and the couple have a further claim of $420,000 pending for the farm dairy breach.
Hennessy placed Ryanna Farming into voluntary liquidation in late August and could not make the $93,000 payment.
The liquidator’s reports reveal the company no longer owns any assets, and the liquidators will review the Crack farm sale and destination of the proceeds from it. The only two creditors are listed as James Hennessy, and the Cracks’ Southern Star Farms.
In his report the liquidator Iain Nellies of Insolvency Management Limited states an examination of the company records will be undertaken to determine if any assets have not been disclosed or actions liquidators could take to recover funds for the benefit of the creditors.
Hennessy has shareholdings in a number of companies around the lower South Island and has been with WHK since 1995, specialising in farm sales, acquisitions and succession planning.
Nellies said his work would determine whether there was opportunity to recover funds from Hennessy’s liquidated company. Under Companies Act rules, recovery did not necessarily have to stop at the liquidated company.
He believed the next six months would provide a “fair” indication of where the liquidation sat.