Boult escalates battle to prevent Crux publishing Stonewood papers
Following a High Court ruling in late February that Crux should be given access to the main documents in the Stonewood court case, Mayor Boult has now launched two separate court actions to prevent Crux from gaining access.
Stonewood and associated companies collapsed in 2016 owing $26 million to creditors. Mayor Boult, along with Stonewood founder Brent Mettrick, was a director of Stonewood prior to the collapse and the subsequent liquidation of the companies
Crux was granted access to the pleadings on February 23rd by the High Court in Christchurch, but now Mayor Boult has not only launched an appeal, but also asked the High Court judge to effectively suspend his decision until the appeal to the Court of Appeal has been determined.
The Court of Appeal has agreed to fast track the Boult appeal so that it will be heard on Tuesday June 14, 2022 in Christchurch.
As part of his ruling in February, High Court Associate Judge Owen Paulsen said:
“I do not accept Mr Boult’s submission that as the claims against him have been settled and there is information concerning the litigation and settlement from other sources, there can be no legitimate public interest in the proceeding.
“I consider the public has a genuine interest in knowing about litigation involving the collapse of a substantial group of companies owing many millions of dollars to creditors.”
“Such public interest survives settlement of the litigation and, here, would also arise from the fact Mr Boult holds public office.”
"Crux is to have access to any documents that are part of the formal court record as defined in r 4 of the Senior Courts (Access to Court Documents) Rules 2017 to the extent there is no order or direction prohibiting access or publication thereof."
Source: Judge Owen Paulsen - Christchurch High Court Ruling. February 23, 2022.
The court system has allocated two hours for the hearing of the appeal. Crux made the application to access to the court documents following Mayor Boult, and co-defendant Brent Mettrick’s settling of the case for $3.5 million, meaning details of the Stonewood case would not be argued in an open court.
In the latest report by the liquidators, EY, their claims against the two former directors are summarised as:
“Breaches of directors' duties pursuant to ss 135, 136, 137 of the Act by both Mr Boult and Mr Mettrick, recover alleged excessive remuneration that was paid to Mr Boult, and a failure to correctly authorise Mr Boult's director's remuneration pursuant to s 161 of the Act by both Mr Boult and Mr Mettrick.”
In September 2018, some of the Stonewood documents were released by the High Court to media, including the claims by the Stonewood liquidators, EY. The following extracts were published by RNZ and Stuff.
"The continued trading of the (Stonewood) group was likely to cause substantial risk to creditors," the claim said.
"As at the reckless trading date SHL [Stonewood Homes Limited] had been insolvent for nine months.
"As at the reckless trading date SHNZL [Stonewood Homes New Zealand Limited] had been insolvent for eight months."
The liquidators claimed the group's debt facilities were completely drawn down and the companies were suffering significant trading losses.
"During this time, the liquidators claim Mr Boult attempted to purchase or invest in the group, which was a conflict of interest as he stood to gain financially."
Mr Mettrick said in his statement of defence he carried out all his duties as a director in good faith and relied on reports, data and other advice he was entitled to under the Companies Act.
The liquidators also detailed what they said were overpayments of directors fees, with Mr Boult being paid a total of $667,298 over two years, with $267,555 being claimed as an overpayment.
Sources: EY Statement of Claim via RNZ and Stuff September 2018.
Mr Boult released the following statement at the time:
“I strenuously reject any allegation I did not fulfil my duties as a director,"
"As a director, I acted on what I understood was reliable information and advice and, based on that advice, I believed there was a reasonable prospect the companies would trade successfully through their financial difficulties.
"I believe that I am being unfairly targeted in this matter and the outcome will establish that in due course."
Mr Boult tried unsuccesfully to have the liquidator's case against him and Mettrick halted due to the source of legal funding not being identified. Court proceedings then revealed the "mystery funder" as property developer Chris Meehan with the judge deciding that the case against Boult and Mettrcik should continue.
Mr Meehan told the court that part of his motivation for funding the case was that Mr Boult was "unfit for public office."
Mr Boult is also facing the possibility of being disqualified as a director by the Registrar of Companies.