Claims
by experienced property developer Neville Mahon that colleague Tim Edney was
holding Queenstown properties for him in a warehousing deal were described by
the High Court as being no more than an unwritten indefinite option to purchase
which lacked commercial reality.
Mr Mahon alleged fellow
Auckland property developer Mr Edney welshed on a buyback deal over properties
in Park Street, Queenstown earmarked for development as a small retirement
complex. Pinched for cash when it came
to paying up for his June 2015 five million dollar purchase, Mr Mahon arranged
for Mr Edney to pay and take title through an Edney company: Station at Waitiri
Ltd. Associate judge Bell ruled the
prolonged negotiations which led to Waitiri taking title did not include any
finalised agreement that Mr Mahon could buy back at a later date.
Mr Mahon alleged there
was an oral buyback agreement and it was enforceable because he
partly-performed the agreement by paying architects and engineers who prepared
reports for the proposed Queenstown build.
Judge Bell ruled discussions with Mr Edney amounted to no more than a
suggestion that some time in the future there might be an agreement for a
buyback. Expenses incurred by Mr Mahon
were no more than an optimistic expectation that a buyback deal might follow.
By way of background,
the High Court was told of other financial dealings between Mr Edney and Mr
Mahon in dispute: Station Hotel in Beach Road central Auckland and a 43 hectare
development on Coronation Road at Mangere in south Auckland. Edney-controlled companies allege that one of
Mr Mahon’s companies owes over $2.1 million in relation to the Station Hotel and
that Mr Mahon’s partner Saren Lu is director of a company which has allegedly defaulted
on a $11.6 million loan in respect of Coronation Road.
Mahon
v. Station at Waitiri – High Court (4.04.17)
17.031