Property developers David Oliphant and Brent Clode have differing views over development of the 92-unit Sargeson apartments in Takapuna on Auckland’s North Shore. Financiers, the head contractor, the project manager and the quantity surveyor are all of one view: none will have anything to do with Mr Clode; financing will be withdrawn and construction halted if they have to deal with him personally.
Mr Oliphant is sole director and shareholder of Auburn Development Ltd, owner of the Sargeson development. Mr Clode claims Sargeson is his baby. He claims to have devised the development and to have invited Mr Oliphant to come in as a fifty per cent partner. He says his fifty per cent shareholding was initially not registered. Mr Clode took steps last February to have this claimed shareholding acknowledged and registered. This was done after Mr Oliphant stopped paying him weekly remuneration of $3000 for work on the project. Mr Oliphant says financiers expressly stated Mr Clode was to have no equity interest in the project because of his previous questionable behaviour. Mr Clode’s conduct has been subject of criticism in several court cases. Justice Palmer said Mr Clode has become seriously unpopular in the property development industry.
Mr Oliphant told the High Court a March 2018 agreement with Mr Clode promised him fifty per cent of Sargeson’s net profit, with an option after all debts had been cleared to convert this profit share into a fifty per cent stake in Auburn Development Ltd.
Mr Clode sued, alleging Mr Oliphant was in breach of their March agreement by not meeting ‘on a weekly basis … to review and direct all aspects of the development’. Mr Oliphant was stonewalling, he alleged, instead taking advice from others. This will affect potential profitability, he says, putting his profit share at risk. Mr Clode asked for a mandatory injunction, forcing Mr Oliphant to utilise his skills in a management role.
Justice Palmer refused an injunction. There is no advantage, he said, in making a court order telling the parties to do what they have agreed to do when Mr Oliphant says his actions are not in breach of the March agreement. The meaning of the March agreement is in dispute.
If Mr Oliphant is found to be in breach, Mr Clode can claim damages, Justice Palmer said. If it is found that Mr Clode was improperly frozen out of decision-making it may be difficult for him to prove what difference his involvement might have made, Justice Palmer said. Granting an injunction, however, ran the risk of bringing the Sargeson development to a halt.
Clode v. Oliphant – High Court (15.06.18)
18.123