Richard and Sally Kerse claim property developer Laurence Pope improperly gained control of their Auckland accommodation complex, alleging he used confidential and commercially sensitive information to cheat them, buying them out at an undervalue.
Mr Pope strongly denies any wrongdoing.
The High Court upheld a caveat lodged by the Kerses over their former property, now Mr Pope’s Matakana Luxury Villas land in Matakana, north of Auckland, pending a full court hearing.
Circumstances in which Mr Pope’s company became owner of the Kerses’ business as part of a mortgagee sale, at a time when he had offered to save the Kerses’ land and business, require scrutiny Associate Judge Cogswell ruled.
Evidence was given of the Kerses’ proposed Airbnb project in Matakana running into financial difficulty through 2022. Construction cost overruns plus reduced patronage during the covid-19 pandemic saw their company Matakana Sheds Ltd facing a potential mortgagee sale.
They say Mr Pope appeared on their doorstep as an expert in turning around struggling businesses, offering to help. They had no previous dealings with him.
Mr Pope was given full access to Matakana Sheds financial information; to assist in negotiations with lenders, the Kerses say.
Judge Cogswell was moved to say that it is difficult to understand the motivation of Mr Pope to assist two strangers in the way that he did.
It is conceivable to characterise his actions as designed to achieve a favourable outcome for himself, at the Kerses’ expense, Judge Cogswell said.
During this time, an independent third party made a conditional offer to buy the Kerses’ business for $4.1 million. Mr Pope advised against acceptance, recommending a $4.395 million counter-offer. No deal was done.
The Kerses considered, then declined, Mr Pope’s subsequent conditional offer to buy at $3.6 million, which included a promise that the Kerses could remain on-site as tenants.
They claim Mr Pope then bought their business cheaply, part of a deal cooked up behind their backs as part of a supposed mortgagee sale with mortgages released over the land while the Kerses were still on the hook for the balance of money owed secured creditors.
In particular, they claim it was only through his work as their adviser that Mr Pope became aware that the first mortgagee would release its mortgage on part-payment of $3.6 million.
This information was not passed on to them, they claim.
The Kerses allege Mr Pope has prior dealings with this particular mortgagee. The mortgagee was not named in the court judgment.
Three months after Matakana Luxury Villas purchase, the Kerses’ tenancy was cancelled.
In the High Court, the Kerses claim Mr Pope improperly used confidential information gained whilst an advisor to Matakana Sheds, in breach of a fiduciary duty owed their business.
They allege collusion between Mr Pope and the mortgagee.
They claim a constructive trust exists over the land sold, to secure damages claimed.
Associate Judge Cogswell ruled a caveat lodged over the land remain until a full court hearing hears the allegations and counter-allegations.
Separately, one of Matakana Shed’s secured creditors also alleges wrongdoing by Mr Pope.
North Homes Ltd, owned by Auckland’s Philip Taylor, held a lower-ranked mortgage over Matakana Shed’s land, securing the balance due on Airbnb villa construction costs.
North Homes claims Mr Pope offered to ensure full payment of the $31,000 it was owed provided North Homes surrendered its security.
It has asked the High Court to reinstate its standing as a secured creditor with rights against the land now owned by Mr Pope’s Matakana Luxury.
North Homes alleges Mr Pope was ‘manipulative,’ making misrepresentations about solvency of the Kerses’ business.
Matakana Luxury Ltd v. Matakana Sheds Ltd – High Court (25.03.26)
26.114