Bankrupt property developer Dave Henderson has been dealt another blow in a long-running legal battle over a Gibbston water scheme.
The Court of Appeal has upheld a High Court decision overturning a company share sale.
The appeal court also says Gibbston Water Holdings Ltd liquidator Robert Walker is entitled to costs.
The complex legal stoush centres on the August 2011 transfer of Gibbston Water Services Ltd shares to Castlereagh Properties Ltd – related companies under Henderson’s Property Ventures group.
Water Services owned and ran a Gibbston water scheme, which is now owned by a new company, Gibbston Community Water Company 2014.
In the appeal, Castlereagh’s lawyer Jai Moss argued Walker did not have the power to unpick the transaction, the sale was approved in writing by the company’s parent company and the $1 transaction was fair value.
However, all of the company’s grounds failed and the appeal was dismissed.
The Court of Appeal decision – given by Justice Helen Winkelmann on behalf of a panel comprising Justices John Wild and Rhys Harrison – says it is “beyond argument” the liquidator had the powers needed.
The decision says that, fundamentally, Castlereagh failed to prove an ”entitled person” agreed to the transaction and the agreement was in writing.
The liquidator proved the shares were sold under value, the October 9 judgement says.
Financial accounts were prepared for the hearing but the court says they were irrelevant – because Gibbston Water Holdings director Kristina Buxton did not have them when the shares were sold.
“Even if the accounts were relevant, there are strong reasons to doubt their reliability.”
Buxton is the de facto partner of Henderson. Henderson owns Water Holdings’ parent company, FTG Trustee Services.
While the appeal was dismissed, the court rejected a claim Buxton should personally pay costs.
Walker was chasing the shares on behalf of the receivers of RFD Investments, another failed Henderson company, after an alleged breach of a security interest with Equitable Property Holdings Ltd.
Walker began legal action in October 2011 to cancel the sale and purchase agreement of Water Services’ shares.
At the height of his powers, Henderson boasted his company Five Mile Holdings would build a $2 billion township next to Queenstown Airport, but it collapsed in a mountain of debt in 2008.
– Otago Daily Times