A recent High Court verdict has detailed the sales techniques of former Queenstown apartment king Ross Wensley.
London couple Neil Brookes and Kirsten Harrison have succeeded in barring Wensley from suing them in New Zealand for reneging on a Frankton apartment deal.
Although several Wensley firms have gone broke, the developer is taking action via a surviving company against at least five defaulting Marina Baches buyers from Britain.
Justice Osborne’s 23-page verdict only rules on where the Brookes-Harrison case should be heard – yet it also details the Londoners’ claims of being swayed into buying.
After seeing Marina Baches advertised in 2007, Brookes and Harrison went to a London seminar fronted by Wensley and his son. The couple were keen to buy a unit off the plans but “didn’t have significant equity or disposable income
to pay either the [$130,000] deposit or the [$1.3 million] purchase price”, the judge says.
That is, until Wensley explained a no-cash deal involving New Zealand Home Bonds:
The Londoners could claim a $144,000 GST refund on their Marina managed apartment which would cover the 10 per cent deposit required by NZ Home Bonds
Wensley would even pay the $12,000 bond set-up fee
And Harrison’s Kiwi mother could guarantee the bond
Wensley’s company would also pledge an annual return on their investment.
The Brookes-Harrison deal went unconditional in August 2007, with settlement expected in February 2009.
In October 2008, when told settlement would be advanced to December that year, Brookes told Wensley they couldn’t arrange finance so quickly – and Wensley offered to advance them the equivalent of their GST refund.
A month later came a bombshell.
Wensley wrote saying Marina Baches would now become long-term rental units – not the promised short-stay visitor accommodation.
The Londoners’ legal advice confirmed the switch would put paid to GST refunds, crucial to their buying decision, and Brookes claimed it also undermined Wensley’s investment-return guarantee.
With also no sign of a promised valuation from Wensley, the Londoners backed out of the deal, alleging they’d no hope of raising what amounted to a 100 per cent mortgage.
Ruling out a NZ lawsuit, the judge backed a submission by the Londoners’ lawyer that Wensley chose to do business in Britain and any legal dispute should be heard there.
Despite Wensley’s side saying several Kiwi witnesses would be called, Justice Osborne also said: “I find the location of the witnesses to be a factor significantly in favour of the [Londoners].”
He said a key point for the Brookes-Harrison defence would be that Wensley’s purchase contract was unenforceable because the Kiwi developer wasn’t authorised under Britain’s Financial Services & Markets Act.
English laws require English courts, the judge ruled.
It’s not known whether Wensley will appeal.