Top lawyer denies Capital + Merchant deal

NZ Herald

19 Feb, 2015 12:20 AM2 mins to read

Top lawyer Bruce Stewart, QC, has denied he ever reached a settlement deal on behalf of Capital + Merchant's receivers.

A top lawyer has denied he reached a settlement on behalf of Capital + Merchant Finance's receivers as a case to get money back for the company's long-suffering investors takes a curious twist.

Sources told the Herald last September that the receivers had reached a conditional settlement agreement in their case against Perpetual Trust and law firm Stace Hammond.

Perpetual Trust appointed KordaMentha as second receivers of C+M following the 2007 collapse of the finance firm, which owed investors $167 million.

The receivers later lodged action against the trustee company to try recover funds for investors.

KordaMentha also filed action against C+M's former lawyers Stace Hammond, alleging both it and the trustee breached the duties they owed the finance firm.

The case was the first time receivers of a failed finance company had gone to court to pursue recovery from a trustee company, which is tasked with protecting the interest of investors.

Yet a High Court judgment from December released publicly this week reveals Perpetual and Stace Hammond claimed the matter was conditionally settled in an oral agreement between the Queen's Counsel for the receivers, Bruce Stewart, and their lawyer.

Stewart denies he conveyed any offer to the defendants or that any offer was accepted.

Stewart hired his own QC and applied in November to be joined as an interested party in the action on the grounds his financial and reputational interests are likely to be adversely affected if the court finds a settlement agreement was entered into.

However, Justice Susan Thomas turned down this application, saying Stewart's legal rights or liabilities would not be directly affected.

"There is no evidence to suggest that Mr Stewart cannot rely on Capital + Merchant to protect his rights and potential obligations," she said.

C+M Finance
*Collapsed in 2007 owing 7500 investors $167 million.
*Two directors of C+M serving longest jail sentences handed out to finance company bosses.
*C+M's liquidator reached $18.5 million settlement with firm's auditor this year.
*Unclear what return in the dollar investors will get.