The deal had its genesis in asset shuffling designed to keep assets away from creditors of property developer Gregory Olliver. It is ending with former spouse Sarah Sparks successfully arguing over $3.5 million remains under her control, not their joint control.
A decade ago, Mr Olliver had grand plans for redevelopment of nine sites on Waimaire Street in Auckland’s seaside suburb St Heliers. His then personal financial difficulties were a stumbling block. He owned no assets personally and had committed to a court-approved Insolvency Act scheme.
Ten years on, assets of the failed redevelopment have been sold and receivers are holding some $3.8 million for distribution. Unsure of the legal status of about $3.6 million cash put up to start the project, receivers went to the High Court for a ruling: was the $3.6 million equity (to be shared by the joint venture partners but deferred after payment of all debts) or a loan (to rank with payment due to other creditors)? Justice Jagose ruled the $3.6 million was a loan, advanced by Glover No.2 Ltd, a company controlled by Ms Sparks.
The High Court was told the Waimarie Street project was initiated with a 2009 joint venture agreement between Mr Olliver and Ms Sparks. The two separated some three years later. The agreed joint venture saw Ms Sparks putting in cash and Mr Olliver putting in land. It was intended they would reside on one of the Waimarie Street properties as a family home and Mr Olliver would oversee development of the rest.
Harris v. BNZ – High Court (11.09.18)
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