Theo van den Brink walked away from a proposed joint venture with Shanghai-based interests who control Carrington Resort at Northland’s Matai Bay leaving a planned Ngawha coffee plantation part-finished. He was ordered to account for money used, hand over all equipment and was held liable by the High Court to pay damages.
In 2021, Mr van den Brink was in negotiations with Carrington over plans for a project germinating green coffee beans to produce seedlings for planting. Mr van den Brink described himself as having coffee plantation expertise from his time in New Caledonia. Financial projections on offer were tantalising: after an initial three years of negative cash flow, projections offered positive cash flow of $6.6 million from year four through to $34.8 million from year eleven. No profits ever eventuated.
The High Court was told Carrington advanced $80,000 cash to Mr van den Brink in late 2021 and purchased equipment at his request costing close to $700,000. Carrington baulked at requests for further funding, questioning a lack of progress. Mr van den Brink had agreed to propagate up to one million seeds ready for planting out within one year. Carrington representatives were trespassed from the project site when attempting to meet with Mr van den Brink. It was all downhill from there.
Mr van den Brink said the project was on hold until such time as their relationship was ‘normalised’ with signature of a formal joint venture agreement. To date, their business relationship had been set out in a signed ‘memorandum of understanding’ in which Carrington agreed to provide funding taking a proposed 60 per cent stake, Mr van den Brink to provide expertise and having a 35 per cent stake. The High Court was to later rule it was irrelevant that no formal joint venture agreement was ever signed. Business proceeded as if one were signed.
Carrington obtained a High Court order freezing Mr van den Brink’s project bank account and a further order that Mr van den Brink hand over all equipment purchased. After another High Court hearing that Mr van den Brink chose not to attend, Justice Tahana ruled that Mr van den Brink: breached fiduciary duties owed Carrington (by failing to account for money used and refusing to hand over equipment paid for by Carrington); and made statements both negligently and in breach of the Fair Trading Act (with his representations of expertise in procuring and germinating coffee seeds). Calculation of damages was deferred for a further court hearing. Carrington says it has been left to absorb full cost of the failed project after Mr van den Brink walked away.
Carrington Resort Jade LP v. van den Brink – High Court (23.08.22)
22.149