Boult gains stay in Stonewood case

QUEENSTOWN

QUEENSTOWN Mayor Jim Boult has succeeded in obtaining a stay of proceedings in the High Court case being brought against him by the liquidators of Stonewood Homes Ltd.

However, Associate Judge Owen Paulsen ruled in a decision on August 21 liquidators Rhys Cain and Rees Logan may apply to lift the stay once satisfactory steps had been taken to address legal matters to do with the way the case was being funded.

Mr Boult was a director of Stonewood Homes before it was placed in receivership on February 22, 2016, owing large sums of money to unsecured creditors.

The liquidators claim Mr Boult and a second defendant allowed Stonewood and another company to trade while insolvent for about 20 months, during which the companies’ financial positions deteriorated by millions of dollars.

Judge Paulsen’s decision relates to Mr Boult’s application for a stay of proceeding on the grounds the case was an abuse of process due to factors related to it being funded by property developer Chris Meehan, through his company PLF Services Ltd.

Judge Paulsen noted Mr Meehan was approached by a lawyer to gauge his interest in funding the claims against Mr Boult and the other defendant, and a litigation funding agreement was reached on December 14, 2016.

PLF agreed to pay for such things as court costs and legal, witness and investigator fees.

Mr Boult, represented by Alan

Galbraith QC, argued Mr Meehan’s involvement was problematic, as he owned development company Winton, which is active in the Lakes district.

Mr Boult claimed the funding risked effecting actual pressure on him and Queenstown Lakes District Council officers and was brought for some ulterior or improper purpose or in an improper way.

Mr Galbraith submitted it was open to the court to find Mr Meehan had a ‘‘vendetta’’ against Mr Boult and intended to interfere in his election as mayor for a collateral purpose of influencing council activity in respect to Mr Meehan’s commercial interests.

Judge Paulsen noted the court was loath to stay a proceeding when there was a genuine and viable cause of action, as was the case here.

Evidence was given by public relations consultant Celia Crosbie, who said journalist Aimee Wilson had told her she was being paid by Mr Meehan to investigate Mr Boult.

Ms Wilson also said Mr Meehan had a personal vendetta against Mr Boult.

Mr Meehan gave evidence he did not know Mr Boult personally and did not have a vendetta against him.

He would prefer that Mr Boult was not the mayor because he believed he did not have a solid business track record, Judge Paulsen said.

Mr Meehan’s evidence was that his company, Winton, was funding the litigation for a commercial return.

Winton had not previously been involved in litigation funding of this kind but had looked into such opportunities.

Judge Paulsen noted Mr Meehan funded the case through PLF to provide anonymity for Winton.

He wanted to avoid allegations of favoured treatment by the council for Wintonrelated entities and equally to prevent Mr Boult negatively influencing consent applications to the council.

Judge Paulsen found Mr Meehan did not have any problematic motives as alleged.

‘‘His purpose in funding this litigation is to make a profit.’’

He described evidence of a vendetta as hearsay.

‘‘I accept Mr Meehan’s evidence, which is corroborated by Mr Cain who says Mr Meehan has never expressed any ulterior motive for providing funding.’’

He found it was important Mr Meehan did not seek out the opportunity to fund the case but was approached.

Judge Paulsen described evidence of a vendetta as unsatisfactory and he found the suggestion the funding might compromise Mr Boult and council staff to be conjecture.

‘‘I do not see how, in these circumstances, council staff would be compromised by the funding arrangement.’’

He also found there was no evidence supporting Mr Meehan’s claim Winton’s applications had been treated less positively by the council since Mr Boult had become aware of Winton’s involvement.

‘‘This is a challenge to the integrity of the council for which no supporting evidence is provided.’’