FOCUS 2000 LIMITED AND ANOR V WALTON LESLIE BEANLAND AND ORS HC AK CIV 2007-404-000598

FOCUS 2000 LIMITED AND ANOR V WALTON LESLIE BEANLAND AND ORS HC AK CIV 2007-404-000598

The court granted an undertaking to preserve the endowment fund pending resolution of the substantive proceedings and held that the sixth and seventh defendants, as trustees, are entitled in the interim to have their legal costs paid from the fund, while the first to third and fifth defendants (claims against them being personal in nature as directors) are not entitled to access the fund for their legal costs at this stage.

Citation
openlaw-37e856df_e973_40bb_af9d_fe331cb78526.pdf
Parties
First Plaintiff: Focus 2000 Limited; Second Plaintiff: The Cerebral Palsy Society of New Zealand Incorporated; First Defendant: Walton Leslie Beanland; Second Defendant: Christine Williamson; Third Defendant: Nikki Pye; Fourth Defendant: Anne Murphy; Fifth Defendant: John Thorpe; Sixth Defendant: Sandringham Trustee Service Limited; Seventh Defendant: Coyle Trustee Services Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
21 February 2007
Procedural Posture
Civil (high Court) / Interlocutory Hearing for Interim Injunction/undertaking
Outcome
Undertaking granted to preserve funds; interim payment of sixth and seventh defendants' legal costs from the endowment fund allowed; access to fund for legal costs by first to third and fifth defendants denied; timetable directions set.
Legal Topics
Directors' Duties, Conversion/knowing Receipt, Trustees' Indemnity for Costs, Mareva/interim Freezing Relief, Disclosure of Interests
Company Law Trusts and Trustees Equity Charity Law Civil Procedure Directors' Duties Conversion/knowing Receipt Trustees' Indemnity for Costs +2 more

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Parties

Focus 2000 Limited

First Plaintiff

The Cerebral Palsy Society of New Zealand Incorporated

Second Plaintiff

Walton Leslie Beanland

First Defendant

Christine Williamson

Second Defendant

Nikki Pye

Third Defendant

Anne Murphy

Fourth Defendant

John Thorpe

Fifth Defendant

Sandringham Trustee Service Limited

Sixth Defendant

Coyle Trustee Services Limited

Seventh Defendant

Procedural Posture

Civil (high Court) / Interlocutory Hearing for Interim Injunction/undertaking

Legal Issues

  1. 1 Whether the resolution and transfer of $5,000,000 to the Endowment Foundation was effective at law
  2. 2 Whether the first to fifth defendants breached their duties as directors under the Companies Act 1993
  3. 3 Whether the sixth and seventh defendants, as trustees, may have their legal costs paid from the trust fund pending resolution

Ratio Decidendi

The court granted an undertaking to preserve the endowment fund pending resolution of the substantive proceedings and held that the sixth and seventh defendants, as trustees, are entitled in the interim to have their legal costs paid from the fund, while the first to third and fifth defendants (claims against them being personal in nature as directors) are not entitled to access the fund for their legal costs at this stage.

Court Disposition

Undertaking granted to preserve funds; interim payment of sixth and seventh defendants' legal costs from the endowment fund allowed; access to fund for legal costs by first to third and fifth defendants denied; timetable directions set.

Orders

  • Undertaking: first to third and fifth to seventh defendants to hold the fund and income without disbursement save for payment of legal expenses incurred by sixth and seventh defendants until settlement, judgment or further order
  • Order that sixth and seventh defendants' legal costs and expenses of defence be paid in the first instance from the endowment fund, subject to ultimate incidence of costs to be determined at the substantive hearing or by agreement