Lemmington ordered to be wound up

Press, 17 December 1982, Page 12

Lemmington ordered to be wound up

PA Auckland An order was made in the Auckland High'Court winding up Lemmington Holdings. Ltd. the Auckland export investment company recently involved in major court claims against the Commissioner of Inland Revenue.

Mr Justice Vautier placed the company in the hands of the official assignee as provisional liquidator, after granting a winding up , petition sought by a number of creditors of the company. The petition was sought by 10 former clients of Lemmington Holdings who were lastt month granted a court

order that Lemmington pay them more than $144,000. A number of other creditors appeared yesterday in support of the petition. Mr Donald Dugdale, appearing for Lemmington Holdings, sought an adjournment of the creditors’ application op the grounds that the company had appealed against the earlier court judgment ordering it to pay $144,222 to the creditors.

Mr Justice Vautier declined any stay of proceedings.

In a High Court hearing on November 16, Mr Justice Barker ordered that the money should be paid to one of the creditors listed, Valdemar Jens Anderson, who had alleged in a statement of claim Lemmington Holdings fraudulently represented that he would be entitled to claim income tax deductions, export incentive, and regional development allowances under the company’s scheme. Under a widely advertised scheme, Lemmington Holdings had planned to enable investors to take advantage of the Government’s export tax incentives by claiming that, as manufacturers, they had suffered losses qualifying them for tax reductions on their ordinary incomes. Investors in the scheme bought injection moulding dies from the company, which, acted as agents for them, manufacturing plastic products and selling them overseas.

However, the Commissioner of Inland Revenue withdrew recognition of the arrangements for tax purposes from November last year.

Lemmington Holdings subsequently filed a writ against the Commissioner of Inland Revenue last month, claiming more than $33 million in damages for alleged wrongful advice given over the export tax arrangements.

In yesterday's separate court action against Lemmington Holdings, Mr Richard Craddock, Q.C., claimed on behalf of the petitioning creditors that before the court were “the most exten-

sive records of fraudulent dealings by Lemmington. since early 1981 until the present, that one could imagine." Mr Craddock claimed that the creditors he represented had been defrauded of almost $145,000. and had a judgment, which had been entered in their favour, since April. He said that the application by Lemmington Holdings for a further adjournment was simply another delaying move on the part of the company before it must ultimately be placed in liquidation.

For Lemmington Holdings, Mr Dugdale denied the company had committed any fraud involving the judgment creditors.

He said that the company found itself in its present position partly through the mistakes of its own advisers and through what he called “sharp, tactics” employed by Mr Craddock's clients.

Mr Dugdale said one such tactic had been the entering of a judgment by default, despite the fact that lawyers for Lemmington Holdings and the plaintiffs had been in negotiations at the time.

He also claimed the plaintiffs had purposely filed a large bundle of affidavits at the “last minute” before a hearing in which the company sought to have the earlier court judgment set aside.