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Huka lodge sale next act in van Heeran-Kidd dispute

Monday 5th August 2019

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The Court of Appeal has appointed receivers to enable the sale of Taupo's exclusive Huka Lodge so that it can be sold as part of a dispute between two businessmen. 

The appeal court said there are no funding or management issues at the luxury retreat, but made the orders as part of the decades-long litigation between Michael Kidd and Alexander van Heeren, a former honorary consul for the Netherlands in New Zealand. 

Van Heeren had tried to stop the appointment of receivers to the shares of the company which owns Huka Lodge, Worldwide Leisure, claiming he had already found a purchaser for the business. But the Court of Appeal said last week that McGrath Nicol’s Kare Johnstone and Andrew Grenfell should be appointed. 

In a statement, the directors of Worldwide Leisure said the day-to-day operations of the lodge will not be affected by the appointment.

"The directors are positive about the sale process and the future of Huka Lodge as a world-class luxury resort.”

Van Heeren claimed the sale would cover the US$25 million he has been ordered to pay as part of the litigation.   

The latest court decision stems from litigation filed in 1996 over the pair’s business interests, which at the time included the Taupo lodge, Dolphin Island in Fiji, shares in various New Zealand and South African companies and offshore bank accounts and gold bars. 

They had had business interests in New Zealand from 1975 but terminated their partnership in 1989. 

While they had made an agreement to separate their interests at the time, Kidd later brought legal action in New Zealand in respect of assets and profits from the New Zealand-based companies. 

A South African court ruled in 2013 that van Heeren and Kidd were partners in a joint enterprise and had a business relationship. 

Van Heeren had tried to argue that he should not have to pay anything because of an indemnity agreement between them, but the judge found that Kidd would not have signed it if van Heeren had not taken advantage of his trust. 

Back in New Zealand, Justice John Fogarty ruled in 2015 that van Heeren should pay US$25 million to Kidd as an interim payment while the pair worked out what their asset pool was worth. 

Van Heeren had gone to the Court of Appeal and Supreme Court to appeal Justice Fogarty’s decision, and the top court said in December 2016 that his appeals could go no further. 

Despite this Kidd, who is approaching 80 years old, has not yet seen the fruits of his litigation. 

Three years after Justice Fogarty’s order was made, Kidd sought an order that receivers take over Worldwide Leisure, the company which owns both Huka Lodge and Dolphin Island.

A Court of Appeal panel of Justices Murray Gilbert, Christine French and Brendan Brown allowed that last month and made an order of appointment public on Friday. It says the receivers are to sell as soon as reasonably possible partnership assets including Huka Lodge and if necessary Dolphin Island, to enable the US$25 million to be paid. 

Van Heeren made an application to vary the judgment, which had kept the judgment under wraps.

This application was based on the fact he claimed he was already raising the millions needed to pay his former business partner. 

He said that he had been marketing Huka Lodge for sale since January 2019 but the agreement for sale and purchase was not to be concluded until just last week. The appointment of receivers might thwart the sale process, he argued. 

Kidd said receivers should be appointed anyway because the sale process was dependent on conditions including Overseas Investment Office approval. He noted that the purchaser was a company recently formed to undertake the transaction and there was no guarantee from its parent company. 

Neither side nor the receivers will say who the intended purchaser is.

Johnstone added in a statement: “The appointment is over the shares and not over the company or its assets. As such, the day-to-day operations will not be affected by the appointment. The appointment over the shares is for the purpose of implementing a sale of certain WWL assets as set out in the Court of Appeal." 

She would not comment further. 

(BusinessDesk)

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