The
High Court ordered investigative accountants analyse financial records of
tourism company Auckland Dolphin and Whale Ltd after joint venture owners fell
out over profit calculations when company annual revenue tripled to $1.1 million in
six years.
Dolphin & Whale is jointly owned by
Mark Draskovich from Mangawhai Heads and Auckland businessman William
Goodfellow. Mr Drascovich alleges
excessive charges have been imposed by Mr Goodfellow since 2011 for marketing
and management costs and for repairs and maintenance in respect of their
Hauraki Gulf mammal watching business. The
High Court was told annual management fees rose from $67,500 in 2010 to
$330,000 in 2011. Gross revenue earned
by Dolphin & Whale rose from $400,000 in the 2006 financial year to $1.1
million in 2012. Mr Drascovich took management control in April 2014.
Mr Draskovich also alleges a satellite
dish was missappropriated and there was a failure to pay survey costs for Dolphin Explorer, the joint venture’s
vessel.
Mr Goodfellow says there has been no
underhand behaviour. Costs imposed were
charged according to their prior agreement.
Mr Draskovich alleges Mr Goodfellow is overcharging
exorbitantly for services provided. He
says all joint venture “profit” is being diverted by way of fees. In particular, he is heavily critical of
overhead charges for repairs and maintenance.
Mr Goodfellow also has interests in other sea-going enterprises such as
former America’s Cup yachts used as a tourist venture, the “Pride of Auckland”
vessels, ferries and vessels in the Bay of Islands, Sydney and Hamilton Island,
Australia. Evidence was given that costs
of Mr Goodfellow’s Auckland repair yard were spread across his business
opperations according to the revenue of each business. This meant Dolphin & Whale was paying
about thirty per cent of repair yard overhead costs in the years 2011-2013.
Justice Peters ruled fees charged were
“oppressive” in the sense that they were substantial, were in dispute and were
apparently imposed without prior consultation.
She ordered the appointment of independent chartered accountants as
agreed between the joint venture partners to assess what should be a fair fee
payable for repairs and maintenance, marketing and management. She said she was not persuaded on the evidence
that there had been any bad faith on Mr Goodfellow’s part.
Draskovich
v. Goodfellow – High Court (22.03.16)
16.047