Auckland investment banker Bill Birnie will face trial in March next year after losing a High Court bid to stay a $19 million damages claim brought by shareholders of Birnie Capital Property Partnership.At a hearing in April Justice Raynor Asher granted B
Auckland investment banker Bill Birnie will face trial in March next year after losing a High Court bid to stay a $19 million damages claim brought by shareholders of Birnie Capital Property Partnership.
At a hearing in April Justice Raynor Asher granted BCPP shareholders Allen Peters and Bernard Quinn leave to pursue the hefty damages claim, a move that could financially cripple the former Fay Richwhite banker.
Mr Birnie and his associates then changed lawyers and asked to stay the case, pending the outcome of an appeal.
However, after a closed court hearing early this month, Justice Chris Allan declined the request largely on the basis that any delays could result in the financial position of both parties involved deteriorating.
“If the appeal fails, the plaintiff will have lost some months of preparation for trial, and may well have reached the stage where it is unable to continue for financial reasons,” Justice Allan said.
“The financial position of the defendants is also likely to deteriorate further, and their ability to satisfy a judgment may be compromised if no early hearing is available.”
The case harks back to 2007 when investors, including Mr Peters and South Island businessman Allan Hubbard, agreed to invest $19 million in a number of property projects then owned or controlled by Mr Birnie.
Messrs Peters and Quinn claimed Mr Birnie and Mr Norrie breached fiduciary duty by voting against the exercise of a put option that would force the return of $19 million to BCPP.
The property assets include the Lion Rock Golf Course and Lion Rock Development, which last year gained consent to develop an international standard 18-hole golf course and residential development in the Bay of Islands.
The agreement contained an option for BCPP to transfer back the Lion Rock assets if a further conditional agreement between John Paterson & Co and Mr Birnie for the sale and purchase of certain land didn't eventuate.
In September 2009, Paterson & Co cancelled that agreement. But when the shareholders moved to exercise the put option they were outvoted by Mr Birnie and his associated interests.
On Tuesday Justice Allan granted Peters and Quinn a priority fixture, setting the case down for a three-week trial starting on March 14 next year.
“The plaintiff’s attempts to exercise the put option have already been delayed for almost a year by reason of the stance adopted by the defendants (or some of them), Justice Allan noted.
The plaintiff’s lawyer, Zane Kennedy, had argued the refusal of Mr Birnie and Mr Norrie to permit the exercise of the put could only be explained by reference to “their conflict of interest and their preference for the interests of the Lion Rock Vendors at the expense of the interests of the plaintiff.”
Birnie's lawyers had argued their client and his associates could not stump up the $19 million if they lost the case.
