Statutory manager Rod Pardington wins court battle
UPDATE / Monday, July 30:
Corporate recovery specialist Rod Pardington won’t be removed from the statutory management of the Peninsula Club retirement village in Whangaparoa – now spanning 17 years.
The recovery partner at Deloitte has had proceedings, brought by village developers Garry and Wendy Crawford, thrown out of Auckland High Court.
Justice Judith Potter struck out the Crawford’s claim, saying they were unable to make out their case Mr Pardington breached his statutory duty.
The Crawfords are trustees of six entities associated with the village and placed in statutory management, by order of the governor general, in October 1994 when it was on the verge of collapse.
Earlier this month, the court heard how the Crawford’s fears a 17-year-old GST claim, now worth $9 million, could come back to bite them was one reason they wanted the statutory management terminated and all funds and documents transferred to them.
They were critical of Mr Pardington’s statutory management and, in particular, their inability to have access to the retirement village entities and the cashflow generated from them.
Justice Potter found Mr Pardington’s duties under the Corporations Act were public duties, to which private law rights couldn’t be attached.
Mr Pardington’s lawyer Ralph Simpson told the court during proceedings that negotiations with IRD were expected to be concluded by October and the end of the 17-year-old statutory management was in sight.
Monday, July 9
Corporate recovery specialist Rod Pardington is fighting allegations he breached his statutory duties over the financially disastrous Peninsula Club retirement village in Whangaparaoa.
And he is is now waiting for the High Court to decide whether he will be removed from the job he was appointed to almost two decades ago.
Mr Pardington, recovery partner at Deloitte, faced proceedings at Auckland High Court last week brought by village developers Garry and Wendy Crawford, whose fear a 17-year-old tax bill could come back to bite them is one reason they want the statutory management terminated.
Although the couple sold the village north of Auckland in 1994, Crawford companies retained “buy-back rights” over 78 of the units with obligations to buy and resell them from departing residents.
Problems surfaced as village residents became concerned their positions were not secured and Mr Pardington was appointed statutory manager on the recommendation of the Securities Commission the same year.
More than 17 years later, the Crawfords and two other parties are now accusing Mr Pardington of a disorderly statutory management and keeping incomplete financial accounts.
In particular, they say he failed to inform them of an outstanding GST claim against one of their companies, now worth $9 million (including $8 million in penalties).
They say it is no longer safe for Mr Pardington to look after their affairs because the IRD claim has been left for so long and they are seeking termination of the statutory management, damages for losses incurred and for stress, anxiety and the loss of enjoyment of life they have suffered.
Their submissions reveal a suspicion Mr Pardington was not preserving the Crawford’s interests and was instead acting with the intention of attempting to justify the massive delays that have occurred.
The Crawfords, said to have no assets or income, have also applied for security of costs to ensure they have enough funds to pay the Mr Pardington’s costs if they won.
Mr Pardington’s lawyer Ralph Simpson applied to have the action struck out.
As a statutory manager, his client had no private law duty to the plaintiffs and the case was therefore “legally untenable”, he said.
One of the main reasons the statutory management has taken so long is the time it takes for elderly residents to leave and money to come in to the trust account.
Mr Simpson said the Ministry of Economic Development was supportive of Mr Pardington’s approach and for him to remain until money can be distributed.
Negotiations with IRD were expected to be concluded by October and the end of the 17-year-old statutory management was in sight, said Mr Simpson.
The court proceedings raised questions as to whether the court has jurisdiction to remove or appoint statutory managers from their office.
It’s understood if a statutory manager doesn’t perform their duties properly they can be removed on an order of the Minister of Economic Development.
Justice Judith Potter reserved her decision.