During
confusion surrounding the collapse of South Canterbury Finance and the death of
its founder Alan Hubbard, one joint venture partner attempted to grab control
of assets in a Papamoa property development.
The High Court ordered joint venture director Peter John Cameron hand
back assets which when taken were valued at more than five million dollars.
Backwash from liquidating the South
Canterbury Finance Group played out in the High Court with legal action by the
Group against Peter John Cameron following allegations he ripped off a joint
venture property development. Mr Cameron
is bankrupt. He did not defend the
action.
The court was told Mr Cameron joined with
South Canterbury in 2001 to purchase land in the Tauranga seaside suburb of Papamoa
for a residential subdivision. Mr
Hubbard provided the finance (taking a 60% stake in the venture); Mr Cameron
(with a 40% stake) was responsible for developing the subdivision and
concluding sales. By June 2010, with Mr
Hubbard and his financial empire then in statutory management, a total of $6.33
million had been advanced to the joint venture called Emerald Shores Ltd. Mr Hubbard died in September 2011. This left Mr Cameron as sole director of
Emerald Shores. Events moved quickly. Evidence was given that Mr Cameron set up a
new company under his control: Emerald Shores (2011) Ltd. He entered into a series of transactions
transferring unsold sections from Emerald Shores to Emerald Shores (2011) at a
price calculated at $2.3 million below valuation. Payment of $2.6 million was promised. It was not paid in cash; it was left due as a
four year loan from Emerald Shores to Emerald Shores (2011) with no interest
payable. Now with ownership of the
unsold sections, Emerald Shores (2011) borrowed from a series of finance
companies.
Matters reached a head in June 2012 with
three different creditors claiming rights to the same land: South Canterbury
Group (who put Emerald Shores into liquidation, suing Mr Cameron later for the
return of assets taken); secured creditors of Emerald Shores (2011)
(threatening a mortgagee sale); and Mr Cameron with his wife Margaret (who appointed
a receiver under a general security agreement they claimed over assets of
Emerald Shores).
The High Court was told Emerald Shores
(2011) paid off its debts secured by mortgage to two finance companies. The court ordered the balance of the assets
held by Emerald Shores (2011) be handed over to liquidators of the original
joint venture: Emerald Shores. As director
of Emerald Shores, Mr Cameron was held in breach of trust and in breach of his
fiduciary duties by transferring joint venture assets at an undervalue to a
company he controlled.
Emerald
Shores Ltd v. Cameron – High Court (1.08.15)
15.100