Working from a shed at the back of his Auckland property, Kevin Parkinson manufactured Namuru GPS receivers and provided electrical engineering consultancy services, trading as General Dynamics Corporation Ltd. The High Court upheld Companies Act rights for estranged spouse Louisa O’Brien to challenge her former husband’s actions; unilaterally transferring General Dynamics’ assets across to a new company, allegedly shutting her out of a relationship property claim over their former business.
The High Court was told the two were in a relationship for nearly thirty years, before separating in 2013. A dispute over what assets are relationship property is before the Family Court. Ms O’Brien lays claim to a share of General Dynamics’ business; she is a director and 50/50 shareholder. Also in dispute is a property in Wanaka, allegedly purchased with assets spirited out of General Dynamics.
Evidence was given of Mr Parkinson shutting down General Dynamics business operations immediately following their 2013 separation. In a lawyer’s letter, he said the company was a ‘one man’ operation; he was free to take his expertise elsewhere and set up a new business. Ms O’Brien said General Dynamics was more than a mere consultancy; it also manufactured and sold GPS receivers. Mr Parkinson took away four truckloads of plant and equipment when he left, she said. There was evidence of sales revenue totalling $228,000 booked by Mr Parkinson in the nine months after separation.
Associate judge Andrew ruled there was evidence Mr Parkinson breached Companies Act fiduciary duties, taking company assets when setting up his new business. Judge Andrew gave permission for Ms O’Brien to sue her former husband in General Dynamic’s name for his alleged breach of fiduciary duty. Whether Mr Parkinson did in fact convert General Dynamic assets to his own use requires a full court hearing.
O’Brien v. Parkinson – High Court (14.07.20)
20.125