09 October 2017

Guarantee: Roband v. O'Sheas

Conviction for assault and an allegation of forgery all featured in a business dispute between Waikato couple Janine Roband and Mike Cann all as a backdrop to their relationship property dispute.
Separating in 2007 after thirteen years marriage, Ms Roband and Mr Cann had for more than ten years jointly run their trucking business operating through two companies: Roadhaul (N.I.) Ltd and RHT Holdings Ltd.  The companies went into liquidation in 2009.  Mr Cann was bankrupted two years later. 
Against this background Ms Roband claimed the value of family assets was compromised by trustees of the couple’s family trust, the McGerkinshaw Property Trust, committing trust assets to unlimited interlocking guarantees of trucking company debts.  Ms Roband is a trustee herself, along with her former husband Mr Cann and a partner in O’Sheas, a Hamilton law firm.  She sued for $1.05 million, alleging O’Sheas was in breach of fiduciary duty by allowing trust assets to cover trucking company borrowing.  Justice Edwards ruled there was no breach.  There was no conflict of interest in O’Sheas acting for both the trucking companies and the Trust giving advice on signing the guarantees.  The loan monies were used in 2006 to purchase a bulk fertiliser storage business at Hautapu.  Projected income benefitted both the trucking companies and the Trust.
Ms Roband also sued separately for $367,000 from the 2007 sale of a McGerkinshaw Trust property at Newstead she said was wrongly applied to meet trucking company debts.  The Newstead property included the family home together with two large workshops for trucking operations.  She claimed her signature was forged to bank documents which entitled Westpac to claim all net proceeds of sale.  The court was told that two weeks prior to the document being signed, Mr Cann assaulted his wife by pulling her out of a car by the arm.  He was later charged and convicted.  A handwriting expert said the signature was probably that of Ms Roband.  Justice Edwards said on the balance of probabilities Ms Roband did sign documents agreeing all equity in the Newstead sale would be used to pay down trucking company debts. Ms Roband had attended meetings at law firm O’Sheas where Westpac’s entitlement to payment was discussed.  Against this background, it is simply not credible for Ms Roband to allege she was unaware the full proceeds would go to Westpac, Justice Edwards said.
Ms Roband also asked Mr Cann be removed as a trustee of the McGerkinshaw Trust.  Justice Edwards ruled Mr Cann is not a fit and proper person to be trustee.  The court was told Mr Cann was discharged from bankruptcy in September 2016, subject to conditions.  Mr Cann was described as entering into elaborate fraudulent schemes after being bankrupted in order to keep assets away from creditors.  This included use of fictional business entities and creation of false invoices.               
Roband v. O’Sheas & Cann – High Court (9.10.17)

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