A pre-emptive strike in a relationship property dispute by Winton farmer Janeen Drummond in unilaterally taking $78,000 out of their family company bank account survived a High Court challenge by husband Russell.
The Drummonds farm multiple sheep and beef properties in Southland, estimated to be worth between twenty and twenty-five million dollars. The High Court was told the two separated in 2019 after some 24 years marriage. Some months later, Janeen unilaterally withdrew $78,000 from a Rabobank account in the name of RG & JM Drummond Farms Ltd, one of many business entities and trusts holding their business assets. Husband Russell had blocked regular salary payments previously agreed, she said.
Russell sued, using company law arguments. The two are both directors of Drummond Farms and have equal shareholdings. Unilaterally taking money from the company was a breach of directors’ duties by Janeen, he said. She should be removed as a director and ordered to repay the money, he claimed. He sued using the High Court fast-track summary judgment procedure, where payment of a debt is ordered unless the person sued has a believable defence.
Justice Gendall ruled Janeen had a plausible cross-claim. She says the company owes her personally about $224,000; money loaned to the company earlier. While Janeen may have acted improperly in unilaterally taking $78,000 from Drummond Farms, Russell’s action in seeking summary judgment was not appropriate, Justice Gendall said. The major issue is one of untangling their relationship property on separation, he said. Arguments over the $78,000 are merely a subset of this major issue.
Drummond v. Drummond – High Court (16.02.21)
21.033