End of road for $90 million court proceedings over former family-owned bakery empire

Former Yarrows Group director Paul Yarrow who lost a $90 million claim in the High Court against former co-director ...
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Former Yarrows Group director Paul Yarrow who lost a $90 million claim in the High Court against former co-director Michael Finnigan

A long-running court saga involving two former directors of a prominent Taranaki family bakery has been thrown out of court after one of the parties lacked legal skills and repeatedly failed to obey court orders.

Paul Yarrow, a former director of Yarrows the Bakers, had sought $90 million from co-director, Michael Finnigan​, whom Yarrow blamed for the $150 million collapse of the Yarrow Group in 2011, and Yarrow's subsequent loss of income from the Manaia-based company.

After a number of delays over many years in having the claim heard in court, Finnigan applied to the High Court to have the claim struck out.

Counsel for Finnigan said the claim should be struck out because the delay amounted to either an abuse of process, or for want of prosecution.

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In a reserved judgement in the High Court at New Plymouth released on July 27, Justice Joseph Williams described the six year proceedings as a "sorry tale of delay and breached time tabling orders".

A High Court hearing to settle the claim was repeatedly delayed because Yarrow, who acted for himself, lacked the skill and application necessary to translate his "burning sense of injustice" into a "timely dispatch of his case," Justice Williams said.

The proceeding was set down for October 2016 but abandoned when Yarrow failed to file evidence. 

Yarrow, son of the late owner of the company, Noel Yarrow, and Finnigan, the former company's accountant, had previously enjoyed a close business and personal relationship before the Yarrow Group went into receivership.

Finnigan held power of attorney for Yarrow, and was called on for advice by Yarrow on the management and direction of the business.

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When Yarrow took over the 90 per cent majority shareholding of the bakery conglomerate in 2006, he became reliant on Finnigan's advice.

However Yarrow later claimed Finnigan defrauded him for his own gain by withholding crucial information which led to him ultimately losing the entire value of his investment in the Yarrow group.

Yarrow began proceedings against Finnigan in 2011 with an initial claim of $4m personal loss, and $7m in foregone benefits, and later rose to $91m.

Around the same time Yarrow also brought court proceedings against a number of parties, in New Zealand and Australia, including his late parents' charitable trust, and the executors of his father's estate.

He told the court the delays in having the personal claim hearing settled were due to having to comply with multiple court orders related to the other proceedings.

Finnigan's counsel estimated the delays amounted to 20 months during five and half years since the claim was filed, or 33 per cent of the life of the file.

Yarrow told the court it was not his intention to flout court orders and he had met deadlines 67 per cent of the time.

In a reserved judgement Justice Williams said Yarrow's non-compliance with court orders was deliberate and he lacked the "practical intention to bringing the matter to a timely conclusion".

Yarrow lacked skill, resources and character for a complex commercial litigation hearing, he said.

"He is engaged with complex litigation that he knows he cannot complete without help he cannot obtain.'

The delays and non-compliance had become more of a problem since Yarrow's counsel withdrew his services in early 2016.

Justice Williams said Finnigan, who was 80-years-old, had been held to ransom for six years until proceedings had reached a stalemate because of "persistent, serial and inexcusable non compliances."

The litigation had cast a shadow over Finnigan's life for the past six years, and his wife's health had suffered.

The claim had exhausted the court's tolerance and become an abuse of process, while the Yarrow's inexcusable delays had been prejudicial against Finnigan.

 - Taranaki Daily News

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