Sharechat Logo

Law lords criticise Apple Fields for 'contrived' appeal

By Chris Hutching

Friday 11th July 2003

Text too small?
Apple Fields received a drubbing from the Privy Council in a ruling that questioned what reasonable complaint the company could make about the transaction being appealed.

Major shareholder Tom Kain went to London two weeks ago with the appeal.

"The complaint is indeed highly contrived," according to the report by Lord Scott of Foscote. He was supported by Lord Rodger of Earlsferry, Lord Hobhouse of Woodborough, Lord Slynn of Hadlee and Lord Hutton.

Apple Fields was complaining about the sale of land it owned at Styx (now the Northwood subdivision) north of Christchurch by mortgagee Damesh Holdings, associated with businessman Ken Smith.

The Privy Council said the complaint was "staggering" in light of the benefits it gleaned Apple Fields and because the transaction was largely structured by then chairman and legal representative, Geoffrey Cone, who has since resigned (from the company.)

The essence of the complaint was that Mr Smith was associated with the mortgagee Damesh and with the purchaser of the land, Styx Developments, and therefore had a duty of care to obtain the best price but had failed to do so.

The claim offends both equity and common sense, according to the law lords. The benefit to Apple Fields was that $21 million was written off its debts because ANZ was prepared to write off a portion of what it was owed to help settle the deal, even though the land was worth about $13.4 million.

The $13.4 million figure was accepted in an earlier High Court judgment by Justice John Hansen after witnesses gave evidence of valuations ranging from $10 million to $25 million.

"There is no issue in the present case of [lack of] good faith [by Mr Smith]."

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Rio Tinto decision following strategic review of Tiwai
Contact says smelter closure is ‘disappointing’
South Port (SPN) Statement on NZAS Tiwai Point Aluminium Smelter Closure
Rio Tinto announcement on Tiwai Aluminium Smelter
Me Today announces equity raising to accelerate growth
Scott Technology Trading Update; Rising to the COVID Challenge
New non-binding indicative offer received from apvg, shareholder meeting deferred
U.S. Added 4.8 Million Jobs in June as Reopened Businesses Rehired
Auditors have a duty to be alert to fraud
Strong sales recovery but uncertainty remains over economic outlook and potential second wave of COVID-19

IRG See IRG research reports