Bridgecorp investors asked to pay Petricevic court bill

A wrangle over security of costs – which determine if the losing party can pay the winner's costs --  began at High Court at Auckland today ahead of next month's hearing between the trust and one of Bridgecorp’s former finance companies Navigator Finance.

Liquidators for Navigator Finance are pursuing an unsecured advance of $2.25 million it said was transferred to the Petricevic Family Trust and not repaid before Navigator, of which Mr Petricevic was a shareholder and director, was tipped into liquidation in June last year.

The liquidators, Corporate Finance, have placed a caveat on Mr Petricevic’s $4.4 million Remuera property, preventing the trust from raising money for the defence.

Trust lawyer Bruce Stewart QC, is asking the court for an order that Navigator provides security for the trust, should the trust successfully defend the proceedings.

Mr Stewart told the High Court at Auckland this morning $2.25 million was transferred from Navigator on to the trust’s balance sheet, on terms the trust would then own Navigator.He said Mr Petricevic had sworn there was never a loan agreement between Navigator and the trust.

Corporate Finance lawyer Murray Tingey, who argued the trust had poor book-keeping, said there was no evidence a transfer of shares took place.

Bridgecorp receivers are funding proceedings for Navigator’s liquidators.

Mr Stewart proposed Bridgecorp receivers also provide the security of costs for the trust, should the trust successfully defend the proceedings next month.

Stewart said the trust sought $2.70 from each Bridgecorp investor to provide a maximum security of $40,000 for the three-day trial.

That amount was worth it if they won the claim for the $2.25 million, he said.

“The impact on those creditors if they have to pay $40,000, would be miniscule,” he said.

“Is it fair the trust funds this litigation, succeeds handsomely, and gets no costs?”

This morning’s hearing has broadened to the question of just who owns Navigator Finance?

And if Navigator does recover the proceeds, who does it give the money to?

Judge Peters this evening reserved her decision on awarding security of costs until next week.