A
legal spat between two overseas millionaires over ownership of Huka Lodge has
returned to the New Zealand courts.
Once they were friends
and business associates. Mr Michael Kidd
and Mr Alexander Pieter van Heeren made their fortunes as steel traders in
South Africa during the 1970s. Apartheid
South Africa was then an international pariah facing economic sanctions. They both looked to transfer funds away from
South Africa. In 1984 the luxury tourist
lodge at Huka Falls was purchased for $1.3 million. Title was taken through a nominee to hide the
South African connection given the then sensitivity of trading with South
Africa. Mr Kidd alleges Huka Lodge was
purchased out of joint business funds and he is part-owner of the
property. He says interests associated
with Mr van Heeren hold his share of the property as trustee. This question has never been resolved. To force the issue, Mr Kidd registered a
caveat over the land title for Huka Lodge.
This has the effect of preventing any sale of Huka Lodge or registration
of any mortgage against the title without Mr Kidd first agreeing.
Their dispute got an
airing in the High Court for the second time in two decades when Mr van Heeren
applied to have the caveat removed. This
reopened round one of their business dispute heard in the New Zealand courts
back in 1996. The 1996 hearings were
adjourned when Mr van Heeren argued Mr Kidd had earlier signed what was called
“an indemnity” which purported to settle all their business disputes
worldwide. The New Zealand courts
decided any question about the validity of this indemnity had to be decided by South
African courts. The New Zealand High
Court was told it took 13 years to get a final decision from South Africa with
a judge there ruling that Mr Kidd was induced to sign the indemnity following
misrepresentations made by Mr van Heeren – the indemnity was void.
Back in New Zealand
for round two, Mr van Heeren said Mr Kidd’s breach of trust claim was woefully
out of time. Huka Lodge was purchased in
1984 and Mr Kidd is alleging that purchase to be a misuse of business funds
held in trust on his behalf. Any claims
for breach of trust must be brought within six years.
Judge Bell said the
caveat will remain. The argument is not
that there was a breach of trust itself, but that jointly owned business funds
were used to purchase Huka Lodge and the Lodge is held in trust for both Mr
Kidd and Mr van Heeren. Any evidence to
support this claim has yet to be heard in the New Zealand courts.
Kidd
v. Worldwide Leisure Ltd – High Court (16.06.14)
14.025