Pheasant Tail Holdings Limited v Beverley
[2025] NZHC 3100
•17 October 2025
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2024-485-152
[2025] NZHC 3100
BETWEEN PHEASANT TAIL HOLDINGS LIMITED
Plaintiff
AND
ANTHONY MONTGOMERY BEVERLEY & ORS
Defendants
Hearing: 15 October 2025 Counsel:
A S Olney and O C Gascoigne for Plaintiff
M G Colson KC and M R M Gale for Defendants
Judgment:
17 October 2025
JUDGMENT OF RADICH J
(Adjournment of fixture)
[1] In this decision, I give my reasons for the order I made, at the end of the hearing on 15 October, adjourning the one-week fixture for the trial of this proceeding, which is scheduled to begin on 17 November 2025.
[2] The plaintiff’s (Pheasant Tail) position is that an adjournment is the most efficient way to proceed in light of this Court’s judgment of 3 October 2025 on two, related, proceedings.1 The application is opposed by the defendants, Mr and Mrs Beverley and DC One H1 Ltd (H1), who say that the outcomes reached in the October judgment, and on any appeal from it, do not affect the issues in this proceeding, and that nothing has changed that would justify an adjournment.
1 Drylandcarbon GP One Ltd v Leckie [2025] NZHC 2915 [October 2025 Decision].
PHEASANT TAIL HOLDINGS LTD v BEVERLEY [2025] NZHC 3100 [17 October 2025]
[3] The essential issue to be determined is whether an adjournment is in the interests of justice.2 Justice must be considered, both between the parties3 and in terms of the interests of other litigants in achieving the most efficient use of court resources.4
Procedural history
[4] Pheasant Tail owns 50 per cent of the shares in H1. The Beverleys, through the Puriri South Trust, own the other 50 per cent. Pheasant Tail, in turn, is owned by Messrs Leckie and Morrison. H1 was the holding company in a set of entities established by Messrs Leckie, Morrison and Beverley to manage carbon afforestation fund opportunities. The first of those funds was called Drylandcarbon, established through H1 and two other companies: Drylandcarbon GP One Ltd and Drylandcarbon One Management Ltd (together, the Drylandcarbon companies).
[5] Following a relationship breakdown between Messrs Leckie and Morrison and Mr Beverley, Messrs Leckie and Morrison established a new carbon afforestation fund venture called Forest Partners without Mr Beverley and under a different corporate structure, which did not include H1. They removed Mr Beverley as a director of Drylandcarbon GP One and Drylandcarbon One Management.
Proceedings are filed
[6] Mr and Mrs Beverley brought proceedings against H1 and Messrs Leckie and Morrison alleging oppression under s 174 of the Companies Act 1993 (the oppression proceeding). They sought also to bring a derivative action on behalf of the Drylandcarbon companies against Messrs Leckie and Morrison for breach of director’s duties arising from their establishment of the Forest Partners venture without the involvement of the Drylandcarbon companies (the derivative proceeding).
2 High Court Rules 2016, r 10.2.
3 Which includes balancing the prejudice that will accrue to the applicant with the harm to the respondent if an adjournment is granted or denied, whether the applicant has acted reasonably and done everything practical to avoid the need for an adjournment, the right of the parties to a fair trial and the need for resolution of the proceedings: Poutama Kaitiaki Charitable Trust v Taranaki Regional Council [2022] NZHC 628 at [39].
4 Poutama Kaitiaki Charitable Trust v Taranaki Regional Council, above n 3, at [39].
[7] On 22 December 2022, Mr and Mrs Beverley obtained leave from the High Court under s 166 of the Companies Act to do so.5 The decision was upheld by the Court of Appeal on 17 November 2023.6
[8] The leave decision led Pheasant Tail to file this proceeding on 1 March 2024. It is a claim by Pheasant Tail under s 174 of the Companies Act that the Beverleys, in applying for leave to commence the derivative action proceeding and through their carriage of it have caused the affairs of the Drylandcarbon companies to be conducted in a manner that is oppressive, unfairly discriminatory and unfairly prejudicial to Pheasant Tail. Pheasant Tail’s main claims (expressed in broad terms) are that:
(a)The Beverleys sought leave to bring the derivative proceeding on a premise, known to them to be false, that the derivative plaintiffs had rights to the “company information” identified in the then proposed statement of claim that were sufficient to restrain the company’s shareholders from using the information to promote, establish and/or operate subsequent funds, similar in nature to the Drylandcarbon fund (the Company Information Allegation).
(b)That the Beverleys sought leave to bring the derivative proceeding without disclosing certain conduct on Mr Beverley’s part that was inconsistent with the allegedly false premise in the Company Information Allegation (the Inconsistent Conduct Allegation).
(c)That the Beverleys sought leave to bring the derivative proceeding on the incorrect premise that the value of the management of the Forest Partners’ fund was worth $50 million in circumstances in which Mr Beverley knew or ought to have known that the value was substantially less than that (the Fund Value Allegation).
(d)That, in seeking leave to bring the derivative proceeding, the Beverleys sought, under s 166 of the Companies Act, orders requiring the
5 Beverley v Drylandcarbon GP One Ltd [2022] NZHC 3606.
6 Leckie v Beverley [2023] NZCA 570.
Drylandcarbon companies to meet the costs of bringing the derivative action on the premise that the Drylandcarbon companies were in a position, financially, to meet those costs in circumstances in which Mr Beverley knew that was not the case (the Derivative Proceeding Costs Allegation).
(e)The Beverleys conducted the derivative proceeding in such a way that the costs incurred have been beyond the means of the Drylandcarbon companies, including because they involved an independent firm of solicitors to conduct discovery on behalf of those companies (the Proceeding Cost Allegation).
(f)The Beverleys have made comments to media outlets with the intention and effect of causing harm to the business reputations of Messrs Leckie and Morrison (the Media Allegations).
[9] On 23 May 2024, I made an order under r 10.12 of the Rules that the Pheasant Tail proceeding should be tried at the same time as the other two proceedings.7 That was the outcome sought by Pheasant Tail, Messrs Leckie and Morrison, and the defendants in the derivative proceeding. The Beverleys and Drylandcarbon companies, at that time, opposed the prospect of the proceedings being heard together. They were of the view that the Pheasant Tail proceeding should be “struck out or, at least, stayed pending the outcome of the [derivative action] and [oppression] proceedings”.8
Funding difficulties
[10] The Drylandcarbon companies had difficulty in funding the derivative proceeding. They did not have the funds in the short-term. From the end of 2023 until the hearing for the derivative proceeding and the oppression proceeding began on 9 June 2025, the Court’s intervention has been required on multiple occasions on
7 Beverley v DC One H1 Ltd [2024] NZHC 1303.
8 At [18].
issues between the parties over the ongoing nature and extent of the costs orders made when the derivative proceeding orders were made under s 166 of the Companies Act.9
[11] To summarise, the Beverleys have paid the majority of the costs of the derivative action on the Drylandcarbon companies’ behalf. They are entitled to recover those costs from the companies when the companies have the means to pay them. This costs arrangement was intended initially to be temporary. It was a stop- gap until litigation funding could be secured. By the end of 2024, it seemed that litigation funding was likely to be secured and on 25 November 2024 I authorised the Beverleys to enter into a proposed litigation funding agreement on behalf of the Drylandcarbon companies.10 However, the agreement fell through soon before trial.
Pleadings are amended and the Pheasant Tail proceeding is separated
[12] On 8 April 2025, I granted leave for the plaintiffs in the derivative proceeding to amend their statement of claim in that proceeding, and for Pheasant Tail to amend its statement of claim in the Pheasant Tail proceeding.11
[13] That allowed the Beverleys to claim in the derivative proceeding that the cost of the derivative proceeding – including any services fee under what was then the proposed litigation funding agreement – would have been avoided were it not for breaches of duties and a failing by Messrs Morrison and Leckie to accept and correct the breaches short of the proceedings. And it allowed Messrs Leckie and Morrison to claim the inverse in the Pheasant Tail proceeding: that those costs came about because of oppression on the part of the Beverleys.
[14] Messrs Leckie and Morrison sought that these new aspects of the derivative action proceeding should, along with the whole of the Pheasant Tail proceeding, be separated from the balance of the derivative proceeding and the oppression proceeding as a result of the orders. The Beverleys opposed the separation. I did order separation on the basis that the new pleadings would require Messrs Leckie and Morrison to refer
9 See, for example, Beverley v DC One H1 Ltd [2024] NZHC 1239; Beverley v DC One H1 Ltd
[2024] NZHC 2544; and Beverley v DC One H1 Ltd [2025] NZHC 1618.
10 Drylandcarbon GP One Ltd v Leckie [2024] NZHC 3531 (results judgment) and Drylandcarbon GP One Ltd v Leckie [2024] NZHC 3974 (reasons judgment).
11 Beverley v DC One H1 Ltd [2025] NZHC 833.
to material generated in the course of without prejudice discussions, and that it would be artificial to separate only the new aspect of the Pheasant Tail proceeding from the remainder.12 I ordered that the new allegations in the derivative proceeding and the Pheasant Tail proceeding be set down to proceed in the week of 17 November, a date to which counsel had agreed.
[15] I made associated directions requiring Messrs Leckie and Morrison to apply under s 57 of the Evidence Act 2006 to enable use of the foreshadowed without prejudice material.
Result of the derivative action and oppression proceedings
[16]In my October 2025 judgment, I made the following findings:13
(a)In the derivative action proceeding, Messrs Leckie and Morrison had, through establishing the Forest Partners venture in the way that they did, breached various duties they owed to H1 and Drylandcarbon One Management as their directors. The third, fourth, fifth, seventh and eight defendants in that proceeding dishonestly assisted Messrs Leckie and Morrison in those breaches, and Lewis Tucker had breached the confidence of all three Drylandcarbon companies.
(b)In the oppression proceeding, Messrs Leckie and Morrison had, through their actions in establishing the Forest Partners venture and in removing Mr Beverley as a director of two of the Drylandcarbon companies, conducted H1’s affairs in a way that was oppressive, unfairly discriminatory and unfairly prejudicial to the Beverleys in their capacities as shareholders of H1 and to Mr Beverley in his capacity as a director of H1.
(c)It was appropriate to make an order under s 174 of the Companies Act that Messrs Leckie and Morrison purchase Mr and Mrs Beverley’s interest in H1 for $12.135m. The fair value of H1, which totalled
12 Beverley v DC One H1 Ltd [2025] NZHC 833.
13 October 2025 Decision, above n 1.
$24.27m, included the value of the management rights in the Drylandcarbon enterprise as well as the value of H1’s beneficial ownership of the profits found to have been wrongfully made by the liable defendants in the derivative action proceeding. In assessing the value of H1’s beneficial ownership rights, I found that the value of the management rights in the Forest Partners enterprise was $14.2m but from that had to be deducted $2.13m of equitable compensation.
[17] As directed in the October 2025 judgment, a process will now follow through which:
(a)I will hear from the parties on the precise form of the orders to be made, following the filing of submissions in accordance with a timetable that spans 35 working days.
(b)Costs will be addressed through timetabling orders to be made at the conclusion of the hearing on the proposed orders.
The parties’ positions on adjournment
[18] Counsel for Pheasant Tail (and for the defendants in the oppression and derivative proceedings) say that most of the remaining issues in the Pheasant Tail proceeding are sensitive to the conclusions reached in the oppression and derivative proceedings. They say that the defendants in those proceedings intend to appeal the liability findings in the October 2025 judgment and that those findings have (and the outcome of the intended appeal will have) a material bearing on the matters to be determined in the Pheasant Tail proceeding such that it would not be efficient for the November trial to proceed.
[19] They say, in addition, that the allocation of the costs at issue in the Pheasant Tail proceeding will largely, if not entirely, be overtaken by the resolution of costs in the oppression and derivative proceedings, including costs under the s 166 orders.
[20] The Beverleys and H1 say that none of the allegations in the Pheasant Tail proceeding are sensitive to the conclusions in the October 2025 judgment or,
consequently, to findings from the Court of Appeal. I will examine those allegations shortly but the primary point made for the Beverleys and H1 is that the allegations focus on what the Beverleys knew and did at the time the derivative proceeding was commenced, as distinct from the Court’s ultimate findings on the causes of action in that proceeding.
[21] The Beverleys and H1 say, in addition, that none of the allegations in the Pheasant Tail proceeding are sensitive to the ultimate determination of costs in the oppression and derivative proceedings. They say that Pheasant Tail have not been clear about the costs that might be resolved through the process yet to occur following the October 2025 judgment or about the “cost overhang” that Pheasant Tail may wish to maintain in this proceeding.
[22] The Beverleys say that the adjournment of the Pheasant Tail proceeding would be prejudicial to them. They refer in particular to the allegations of wrongdoing made against them in the Pheasant Tail proceedings and to the existence of the allegations in the proceedings having a bearing on Mr Beverley’s endeavours as a professional director. In a supporting affidavit, Mr Beverley makes the point that, in applying for roles as a professional director, litigation which has a bearing on fulfilment of relevant obligations needs to be disclosed – both for reputational and indemnity insurance reasons. Despite the October 2025 judgment, which essentially is in Mr Beverley’s favour on these points, he sees the existence of the Pheasant Tail proceeding as causing complications.
[23] The Beverleys and H1 see Pheasant Tail’s application as an endeavour to delay the proceedings unnecessarily following a lack of preparation on its part. They say that it is not the case that “everything practical” has been done by Pheasant Tail to avoid the need for an adjournment.14
Discussion
[24]There are in my view three primary reasons for granting an adjournment.
14 Being one of the relevant factors in considering applications for adjournments identified in Poutama Kaitiaki Charitable Trust v Taranaki Regional Council, above n 3, at [39]; and by Isac J in Huritu v Attorney-General [2023] NZHC 2173 at [9(c)].
There is a relevant relationship between the issues in the Pheasant Tail proceeding and the findings in the October 2025 judgment (and in any subsequent judgment on appeal)
[25] In the October 2025 judgment, I found that the Drylandcarbon companies did have rights to the “company information” that is the subject of the Company Information Allegation in the Pheasant Tail proceeding. (The allegation in the Pheasant Tail proceeding is that, to the contrary, Mr Beverley knew that they did not have those rights.) The Beverleys and H1 say that there is a material difference between a finding that those rights did exist at law (which may or may not be upheld on appeal) and Mr Beverley’s state of mind when he sought leave to bring the derivative proceeding; the latter being the relevant allegation in the Pheasant Tail proceeding. Final findings on appeal, they say, are not relevant.
[26] As I see it, there is at least a strong argument that any finding on whether the premise was in fact false is related to an allegation that Mr Beverley believed it to be false.
[27] While Mr Beverley’s actual state of mind can be the subject of examination through evidence when the Pheasant Tail proceeding is heard, the findings in the October 2025 decision about the nature and ownership of that information are likely to be of direct relevance.
[28] The Inconsistent Conduct Allegation in the Pheasant Tail proceeding overlaps with the Company Information Allegation. It points to alleged conduct that is said to be consistent with Mr Beverley knowing that the premise alleged in the Company Information Allegation was false. While particular facts, as pleaded, would need to be explored in the Pheasant Tail proceeding, the final outcome of the derivative proceeding will be likely to have a bearing on these allegations.
[29] Similarly, in the case of the Fund Value Allegation, the Court’s findings on the value of the fund in the October 2025 judgment will be likely to have a bearing on the allegation that Mr Beverley’s understanding of the value of the fund, when he sought leave to bring the derivative proceeding, was incorrect. Again, Mr Beverley’s actual state of mind at the time (drawing upon the valuation and expert analysis he had
commissioned) is a step back from the Court’s ultimate findings on the issue, but they are likely to be connected. In all likelihood, the Court’s analysis of value will be considered alongside Mr Beverley’s.
[30] The Derivative Proceeding Costs Allegation examines Mr Beverley’s understanding of the Drylandcarbon companies’ ability to meet the costs of the derivative proceeding when he sought the s 166 orders at the outset. The focus is on Mr Beverley’s state of mind at a particular point in time and so the actual costs incurred ultimately by the companies is likely to have less relevance than the predicted costs at that time. Nonetheless, there may be an argument that they are relevant. The terms of the s 166 order, and the companies’ financial position to meet costs, have been the subject of five separate decisions of the Court, following detailed submissions and evidence on each occasion.15 The outcome of the derivative proceeding in the High Court is such that it can be seen as having been worth commencing. That outcome may or may not change on appeal but the ever-revolving issue of the terms of the s 166 order will be likely to be the subject of further consideration by the Court in the costs process that, as mentioned earlier, will follow the October 2025 judgment.
[31] The Proceeding Costs Allegation focuses on costs incurred by the Beverleys in the derivative proceeding.16 This is something which, at least to a material extent, will be likely to be part and parcel of the costs assessment in the derivative proceeding.
[32]Certainly, the October 2025 judgment has no bearing on the media allegations.
[33] Having said all of that, an overarching point arises from the relief that is sought in the Pheasant Tail proceedings. An order is sought under s 174(2)(b) of the Companies Act that the Beverleys are to pay Pheasant Tail compensation for “losses suffered by [Pheasant Tail] as a consequence of the costs of the [derivative proceeding] being met by the [Drylandcarbon companies] pursuant to the [costs orders made by the Court previously under s 166]”.
15 The decisions referred to in fns 9 and 10 above.
16 While the derivative proceeding was brought in the names of the Drylandcarbon companies, the Beverleys had the conduct of it.
[34] The costs of the derivative proceeding and, likely, the final terms of the s 166 order will be the subject of the costs process, which is soon to take place.
It will be inefficient to run a five-day trial when it is likely to affected by the outcome of an appeal from the October 2025 judgment
[35] In light of the linkages and overlaps just described, the cost and time taken by the Pheasant Tail trial before an appeal outcome is known in the derivative and oppression proceedings is likely to create considerable inefficiencies. Material parts of the foundation for the trial will be affected by the appeal outcome and by the costs process in the derivative proceeding.
Many of the cost issues that arise in the Pheasant Tail proceeding will be addressed in the costs processes soon to take place in the derivative and oppression proceedings
[36] As mentioned when looking at the prayer for relief in the Pheasant Tail proceeding, much of what is sought will be wrapped in the process, yet to take place, to determine scale and s 166 costs in the derivative proceeding – and, possibly, related scale costs in the oppression proceeding.
[37] The timetabling orders that are in place in that proceeding are such that a hearing on costs could not take place before the November fixture for the Pheasant Tail proceeding.
Prejudice and the interests of justice
[38] I acknowledge the Beverleys’ desire for finality, at least at the High Court level, in the proceedings across the board. I acknowledge the difficulties that arise, as described in Mr Beverley’s affidavit, while some of the allegations remain at large.
[39] However, significant allegations are levelled by both the Beverleys, on the one hand, and Messrs Leckie and Morrison, on the other. A primary consideration for the Court in those circumstances is as to how, most efficiently, to get to the end of the road insofar as all of the proceedings, and likely appeals, are concerned. I see it as being most efficient, in the case of the Pheasant Tail proceeding, for the final outcomes to be known in the other proceedings, including on costs, in the first place.
[40] Efficiencies have always been a key consideration as decisions about the disposal of the Pheasant Tail proceeding have been made – on a progressive basis – during the course of the derivative and oppression proceedings. The parties’ own views as to whether a Pheasant Tail proceeding should be heard with the other proceedings or not, and if not, then when, have changed over time and the Court has considered submissions on those issues several times now. On each occasion, changed circumstances have warranted refreshed consideration of the most efficient course and of the interests of justice as between the parties and in terms of the most efficient of court resources.
Result
[41] In the wake of the October 2025 judgment, and the steps that will now follow, my assessment leads me to the conclusion that the November trial for the Pheasant Tail proceeding should in the interests of justice be adjourned. I make an order accordingly.
[42] A joint memorandum of counsel is to be filed with a proposed timetable in the Pheasant Tail proceeding within 10 working days of the Court of Appeal’s decision; including on costs.
[43] Costs are reserved at this stage. I record Mr Colson KC’s point that the Beverleys and H1 will be seeking orders over what has been referred to as their wasted costs in the wake of this adjournment. Mr Olney has, in response, reserved Pheasant Tail’s position. In the event that the parties, or any of them, wish costs to be considered in the short term, memoranda may be filed.
Radich J
Solicitors
Mallett Partners, Wellington for Plaintiff Bell Gully, Wellington for Defendants
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