It was a structured finance deal akin to a mortgage Nirvana Farm claimed, trying to revive its lapsed option to repurchase its Taranaki land blocks being planted out in pursuit of carbon credits. Nirvana struggled to find the cash needed to buy land recently valued at $7.8 million with its option price to buy being $4.69 million.
Controlled by Whanganui honey producer Henry Mathews, Nirvana’s financial position has been fragile since market prices for honey plummeted during the covid-19 pandemic.
At a time when Nirvana owed BNZ some $52 million, a credit line was opened up with Singapore-based Vitol Asia Ltd offering $55 million in exchange for carbon credits.
The High Court was told Vitol’s financing required Nirvana to plant a new forest on some 3000 hectares of land near Stratford, land then currently used for harvesting manuka honey.
In 2022, foresters PF Olsen Ltd were contracted to plant and manage the new plantation on Nirvana’s behalf.
Evidence was given of Nirvana failing from the outset to pay Olsen’s contracting charges on time. This led to Vitol Asia making good Nirvana’s defaults, for a brief period.
Olsen subsequently demanded invoices be pre-paid, before work would continue. This resulted in Vitol Asia banging heads together, seeking a commercial solution.
Nirvana offered Olsen mortgage security over the Stratford land; giving it the status of a secured creditor for unpaid invoices. Olsen declined, suggesting Nirvana sell its land to Olsen with a right to buy this land back later for a fixed price.
Nirvana’s further offer of mortgage security was refused.
A subsequent 2024 contract saw Nirvana agree to sell its land to Olsen for $3.86 million, being the balance of the contract price due under their forestry management contract. In addition, Nirvana was required to make monthly payments of $50,000; to cover Olsen’s ‘interest and other costs.’
Nirvana had the option to buy back the land in three month’s time. It failed to raise the cash.
Lodging caveats over the land to block Olsen’s planned onward sale, Nirvana claimed its sale plus option to buy back was analogous to a mortgage.
Olsen was in breach of duties as a mortgagee by not giving Nirvana sufficient time to refinance, it alleged.
Associate Judge Skelton ordered removal of the caveats, allowing Olsen’s onwards sale to proceed.
It was clear from the 2024 discussions that Olsen was not willing to take mortgage security, he said. It wanted title to the land. There was no intention that the sale plus option to buy back could be construed as a common law mortgage, he said.
The court was told Nirvana Farm Ltd is in receivership. Nirvana receivers took no part in the litigation. They raised no objection to Mr Mathews making a claim against Olsen on Nirvana’s behalf.
Nirvana Farm Ltd v. F R Waipuna Ltd – High Court (5.12.25)
26.039