Promoted during 2015 in a blaze of publicity, construction of Island Grace resort on Fiji’s Malolo Island now sees the original investors daggers drawn in both the New Zealand and Fiji courts fighting over liability for unpaid development costs with the resort now sold on and trading as Six Senses Fiji.
Guests at Six Senses are offered luxury accommodation with a nod towards environmental issues, de rigueur for those seeking to justify their conspicuous consumption. No such candy coating for original investors in the Island Grace joint venture. Secured creditor Sequitur Hotels Pty Ltd has recovered 46 cents in the dollar to date, according to the receivers’ most recent report. Nothing on the horizon for unsecured creditors. Further recoveries depend in part on recovery of disputed unpaid calls on capital contributions allegedly due from the resort’s original joint venture investors. In the mix is New Zealand company Satori Holdings Ltd, corporate trustee of Andrew Griffiths’ family trust holding a 24 per cent stake in the Island Grace project.
The High Court was told their original joint venture was wound down in 2021 on evidence that the project was insolvent. The resort itself was on-sold to interests associated with Sequitur Hotels for FJD 24 million. Sale at this price left a shortfall to joint venture creditors of FJD 29.7 million. Satori Holdings share of this shortfall as joint venture participant came to at least FJD 6.1 million, Island Grace claims.
Mr Griffith claims the 2021 resort sale was at a ‘gross undervalue’ and further claims any dispute about what Satori owes should be heard in Fiji courts. In New Zealand, Associate judge Andrew put Satori Holdings into liquidation at Island Grace’s request. Satori was deeply insolvent, he said. It is a New Zealand registered company and the Island Grace joint venture agreement is governed by New Zealand law. Courts in New Zealand have jurisdiction, he ruled.
Island Grace alleges Mr Griffith has been running down Satori’s assets in the face of its likely liquidation. Island Grace raised concerns about Mr Griffith’s moves in Fiji to transfer Satori assets to a Delaware US-based company associated with his wife.
Island Grace is suing in Fiji both Satori and Mr Griffith alleging misrepresentation, misleading conduct and breach of contractual warranties in respect of their joint venture formation.
Island Grace (Fiji) Ltd v. Satori Holdings Ltd – High Court (17.02.23)
23.023