Martin Lyttelton's conviction for the attempted murder of Richard Ord shows that the sharemarket can be a source of human conflict.

The crime, for which Lyttelton received a jail term of five years and 11 months, had its foundation in a bitter dispute over the listed entity Calan Healthcare Properties Trust, now called ING Medical Properties Trust.

Lyttelton's crime demonstrates once again that the management structures of these property trusts are flawed and have the potential to create disputes between the parties involved.

The story goes back to the formation of Calan Healthcare Properties Trust in February 1994. The original registration form was signed by just two individuals, Lyttelton and Ord.

The new trust was controlled and managed by Calan Healthcare Properties.

Although Companies Office records are incomplete it appears that the three main shareholders of the management company - Lyttelton, Ord and Brian Freestone - had equal stakes.

The basic flaw with these structures is that investors own units in the trust but they have no control over the management company, which sits at the top of the structure.

Unscrupulous management companies can, and do, take advantage of investors in these trusts.

Calan Healthcare Properties Trust listed on the NZX in September 1999. The directors of the management company were Neville Darrow (chairman), Catherine Rowley, David Sadler, Lyttelton and Freestone.

Lyttelton was managing director and Freestone an executive director. Ord was still a shareholder of the management company but had no involvement at either board or management level.

The management company's remuneration structure was as follows:
* An annual fee equal to 0.75 per cent of the gross value of the trust.
* An incentive fee equal to 10 per cent of the average annual increase in the gross value of the trust up to, but not exceeding, 1 per cent of the trust. Thus, the annual fee could not exceed 1.75 per cent of the trust's total assets.

However the management company would be reimbursed for any additional costs incurred in leasing tenancies and in relation to the acquisition, development, custody, ownership and disposal of assets.

These additional costs became a bone of contention between unitholders and the management company and between the shareholders of the latter entity.

The trust's 2002 annual meeting was a particularly heated event because these additional fees continued to soar. Bruce Sheppard of the Shareholders Association took up the case on behalf of unitholders.

By this stage Bruce Davidson - not the Bridgecorp chairman of the same name - had replaced Darrow as chairman. Sadler had also resigned while Jock Irvine and Tim Saunders had been appointed to the board.

The main issue was that $15 million of extra costs had been paid to the management company in the 1997 to 2002 period. This was in addition to the base fees of $6.5 million paid over the same period.

The big questions were:
* What were these additional costs of $15 million for?
* Who received this $15 million?

Another issue arose when the trust bought the Box Hill Gardens Medical Centre in Melbourne.

Australian regulatory authorities determined that this should be managed by an Australian company and when this was established it was owned by Lyttelton and Freestone rather than the New Zealand management company.

Thus Lyttelton and Freestone seemed to receive most of the additional costs paid by the trust and were the sole owners of the Australian management company with Ord excluded from this entity.

Davidson told an acrimonious 2003 annual meeting that the management company board was considering whether the trust's structure was appropriate and its "present view is that there may be more attractive models, including corporatisation".

No progress was made on this issue and the trust's performance remained anaemic, even though the management team received a Rolls-Royce remuneration.

There was a good deal of discussion among unitholders regarding the replacement of the management company but this would have required a 75 per cent majority of unitholders and a compensation payment equal to the annual base fee, which was $1.6 million for the June 2005 year.

Calan Healthcare Properties Trust jumped back into the headlines in January 2006 when ING launched a market stand to purchase a 9.7 per cent stake at $1.25 a unit. Shortly afterwards ING made a takeover offer for the Calan Trust at $1.25 a unit.

This created a conflict of interest between Calan Healthcare Properties Trust and the management company because if the takeover bid was successful the management company would be sacked and paid compensation of approximately $1.6 million.

However, if the management contract could be sold to another party it would be worth substantially more than this.

Ferrier Hodgson, the independent appraiser, valued the trust between $1.41 and $1.55 a unit and the independent directors on the management company board recommended that unitholders reject the offer.

One of the reasons given was that "Calan's specialist skills and experience in management of healthcare properties may not be available to Calan unitholders if the takeover was successful".

In other words Lyttelton and Freestone were vital to the future success of the healthcare properties and ING would probably get rid of them if the bid was successful.

ING's offer for the trust was withdrawn on March 9 and on the same day it was revealed that ING had agreed to buy the management company. Thus the shareholders of this entity would receive $7.8 million for the sale to ING instead of $1.6 million if ING's takeover for Calan Healthcare Properties Trust was successful.

Lyttelton revealed that an agreement had been reached to sell the management company to ING in December 2005 but this had been withdrawn when ING purchased its stake in the trust.

Lyttelton and Freestone resigned as directors of the management company in July 2006 and in August 2007 Calan Healthcare Properties Trust changed its name to ING Medical Properties Trust.

It appears that Lyttelton and Freestone had decided that about 50 per cent of the $7.8 million sale proceeds were due to the Australian operations with the other 50 per cent represented by New Zealand assets.

This determination, which was difficult to reconcile because the Australian assets represented only 40 per cent of trust's total assets, meant that Ord would get only one-third of 50 per cent of the $7.8 million sale price.

This meant that Ord's cut would be only $1.3 million.

The money remained locked up as the parties were in dispute over the distribution of the $7.8 million sales proceeds. A retired High Court judge was appointed to arbitrate the dispute but it appears that Lyttelton was hoping to resolve the issue in his favour without going to formal arbitration.

However the arbitrator finally decided that the formal process should go ahead and 10 days later, on April 10, 2008, Lyttelton drove from Remuera to Ord's North Shore home with a shotgun and a hunting knife with the intention of killing his former Calan Healthcare Properties Trust partner.

Lyttelton, who was shouting "you have ruined my life", stabbed Ord in the hands and shot his partner, Colleen Fenton, in the left thigh, severing her femoral artery.

Justice Edwin Wylie, who presided over the trial, said that Fenton, now known as Ord after their marriage, would have bled to death had police not arrived when they did.

Independent directors of listed entities have enough to worry about without having to consider potential murder attempts.

However, if the independent directors of Calan Healthcare Properties Trust's management company had insisted that the trust's Australian assets were under the control of the original management company, rather than a company controlled by Lyttelton and Freestone, then the murder attempt two years ago to this day would probably not have occurred.