Gold investors fail in bid

Press, 12 September 1988, Page 20

Gold investors fail in bid

PA Auckland Attempts by certificate-holders to stop the defunct Goldcorp Holdings from selling bullion failed in the High Court at Auckland on Friday. Mr Michael Dakin, representing 408 certificate-holders in Goldcorp, sought an interim injunction to restrain the company’s receivers from dealing in the bullion. He submitted the future of the bullion should be determined by the certificate holders, not the receivers.

The receivers, represented by counsel, Miss Helen Winkelmann, said Goldcorp needed to sell the bullion, citing the cost of storing it, the cost of insurance, and fluctuating gold prices. Proceeds from the bullion will be held in an interest-bearing trust account, the receivers have told the court.

The money will remain in this account until either the question of who owns the bullion is decided in the courts or until a further court order.

Miss Winkelmann said allocated bullion such as bullion items stored by people, would not be sold.

Non-allocated bullion represented by a certificate, which makes up most of the gold being held, would be sold.

Mr Justice Tompkins rejected the interim injunction because “the complexities and possible problems that could arise from holding the bullion and coins, in my view, outweigh the possible disadvantage to the plaintiff from the bullion and coin being sold.”

The plaintiff was only representative of some of the certificate holders, and its views did not necessarily reflect all holders. The court was told up to 1600 people were certificate holders, and of the 408 members Mr Dakin represented only 364 were paid-up members.

His Honour said if he stopped the sale of the bullion, those other unrepresented certificate holders may suffer losses.

Counsel for Mr Dakin, Mr Patrick Finnigan, told the Court the amount of bullion held by Goldcorp was far less than that claimed for by the plaintiff.