For readers of Dickens, the litigation rivals Jarndyce v. Jarndyce. Michael Kidd sued business partner Alexander Pieter van Herren for fraud in 1996. Twenty five years later Mr Kidd is dead, the case unresolved and the sum of $US 25 million sits in court being run down in payment of legal expenses and expert witness fees.
It took nearly twenty years of litigation through both the South Africa and New Zealand courts for Mr Kidd to get a court ruling that he had been defrauded by Mr van Heeren in his operation of their international steel trading partnership. The New Zealand High Court ordered an interim payment into court of $US 25 million pending a further court hearing over damages. There was a six year delay before Mr van Heeren paid this money into court, a delay exacerbated by what the Court of Appeal called attempts by Mr van Heeren to wriggle and twist at every turn resisting liability being sheeted home and any accounting for his wrongdoing. Mr Kidd died two weeks after payment into court. Executors of Mr Kidd’s estate want access to this money. Mr van Heeren says $US 25 million is an extravagant assessment of how much is owed; it could be as little as $US 2.6 million, he says. The final figure for damages has yet to be established.
Meanwhile, Mr Kidd’s estate is accruing huge liabilities. The Court of Appeal was told Mr Kidd had borrowed against his expected court winnings from a litigation funder: LCM Operations Pty Ltd. Initial borrowings of $US 4.3 million had ballooned out to some $US 17.25 million. LCM is charging interest at thirty per cent, compounding annually.
Back in the New Zealand courts, Mr Kidd’s executor asked for an early release of the funds held in court. While sympathetic to the executor’s position, the Court of Appeal ruled there were too many unresolved issues to second-guess what might be the full damages payable to Mr Kidd’s estate. The court likened the litigation to a game of musical chairs in which the participant with the greater stamina not only wins the game but also gets to take home all the chairs.
The money remains in court.
Estate of Michael Kidd v. van Heeren – Court of Appeal (11.06.21)
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