Interests associated with former property developer David Henderson are fighting for control of the water supply to central Otago’s Gibbston Valley.
Mr Henderson and partner Kristina Buxton live on a property in the Valley. There is a long and acrimonious history between Mr Henderson and Gibbston Valley neighbours over ownership and control of a jointly operated water supply, set up as a not-for profit corporate. Some thirty properties use the service.
The High Court was told Henderson interests took control of the scheme in March 2007 paying $60,000 to buy Gibbston Water Services Ltd. The valley water supply was at risk when Mr Henderson was bankrupted in November 2010. Gibbston Water was put into receivership and then liquidation. While Henderson family interests then tried unsuccessfully to regain control by selling Gibbston Water assets to a related Henderson company for one dollar, the Gibbston Water liquidator instead sold the water scheme for $35,000 to a newly formed company owned by other Gibbston Valley property owners: Gibbston Community Water Company (2014) Ltd.
Tomanovich Holdings Ltd, owned by Henderson family interests with Katrina Buxton as director, is in court alleging the $35,000 sale to Gibbston Water (2014) was below market price. It wants the sale reversed. This would have the effect of putting Mr Henderson back in control. Having argued a few years previously the valley’s water scheme was worthless and a sale at one dollar could be justified, Henderson interests now say the scheme is worth at least $140,000 and was sold to Gibbston Water (2014) at an undervalue.
Neighbours are fed up. They allege that an argument about sale of assets on a company liquidation is being used improperly in an attempt to wrest control from current owners; that Henderson interests are misusing the court process as evidenced by irreconcilable values argued for valuations of the same assets in different court actions; that Mr Henderson is intimately involved in court litigation in breach of High Court prohibition orders which followed his conditional release from bankruptcy; and that he has acted in a threatening manner towards Christine Erkkila, a current Gibbston Water (2014) director. The High Court was told Mr Henderson was offered cash to make good any loss he might have suffered as an unpaid creditor of now-liquidated Gibbston Water Services Ltd. This offer was rejected. Gibbston Water (2104) asked that the challenge to asset sales be struck out.
Justice Gendall ruled Henderson interests were entitled to their day in court but no further action could be taken until they put up money or a bond as security for Gibbston Water (2014)’s likely legal costs. The amount required has yet to be fixed.
Tomanovich Holdings Ltd v. Gibbston Community Water Company 2014 Ltd – High Court (8.05.18)
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