For over two decades Robert Stone and Hohua Hemi built up their business exporting used cars from Japan to New Zealand and other countries. Now they are at each other’s throats. Each alleges the other is stripping cash out of the business for their own personal benefit. An Auckland customs broker stands between them left holding $8.8 million, unsure who gets the money.
The High Court was told the two entrepreneurs own, directly or indirectly, a string of companies, stretching from Japan through the Philippines and the British Virgin Islands, co-ordinating sales and shipment. While business was prospering, operations were managed on an informal basis. The two have fallen out. Mr Hemi alleges Mr Stone has misapplied business resources to fund a lavish lifestyle in the Philippines. Mr Stone alleges Mr Hemi has wrongly used joint business resources to finance expenses in New Zealand. In particular, he complains Mr Hemi’s Pacific Auto Carrier (NZ) Ltd used joint business and shipping arrangements to run a competing business. They should both share in Pacific Auto’s profits, he claims. From 2012, Mr Hemi, through Pacific Auto, imported used Japanese cars sold on a door-to-door basis, separate from their well-established importing business.
A 2016 mediation failed to sort out their differences. Next stop; the High Court. Legal action was taken by Melanie Latumbo, financial controller for Philippines-based iCOMM International Ltd providing back-office services for the Stone/Hemi conglomerate. She alleged she had been wrongly removed as a director of Pacific Auto, asked to be reinstated and further asked for legal action to be taken in the company’s name against Mr Hemi. She assured the court she was acting on her own initiative. Justice van Bohemen said her legal claim was being pursued for collateral reasons; advancing Mr Stone’s personal dispute against Mr Hemi. It is highly unlikely that Ms Latumbo would have brought these proceedings without Mr Stone’s active support and encouragement, he said.
Ms Latumbo’s claim was dismissed. The evidence indicated Ms Latumbo had resigned as director of Pacific Auto by October 2014, though no formal letter of resignation was sent in. Since Ms Latumbo had not proved she was still a director, she could not ask the court to take action in the company’s name against Mr Hemi.
Latumbo v. Pacific Auto Carrier (NZ) Ltd – High Court (25.10.18)
18.209