Court rules 75 investors to get $8m back from stalled New Zealand property deal
New Zealand court rules in favour of mainly Singaporean investors in stalled Queenstown resort
A years-long wrangle over a property investment in South Island that went sour has ended on a sweet note for 75 investors, mainly Singaporean, when New Zealand's top court ruled that they should get back their deposits of NZ$8 million (S$7.7 million), which includes interest.
The court upheld by a 3-2 majority investors' right to also back out of the three-stage project, which stalled after the first stage when the developer went bankrupt.
The investors, who included Malaysians, Thais and others, will also recover NZ$800,000 in legal costs, counsel Phil Creagh, representing a large group, told The Sraits Times yesterday.
At issue was the meaning of the agreements for the sale and purchase of apartments bought off the plans for the development, on the shores of Lake Wakatipu near Queenstown.
Earlier this month, NZ Chief Justice Sian Elias ruled that completion of the three stages was an essential term in the contract.
"Because the (seller) had put it out of its power to complete the development at the time it called for settlement, the purchasers of the apartments in the first stage were not obliged to settle the purchases," said Dame Elias.
Between 2006 and 2010, the investors had signed contracts to buy high-end apartments that were part of the first stage of the development. Partway through construction of the blocks, the global financial crisis occurred.
The three-stage project involved an integrated lakeside resort development known as Kawarau Falls Station, with more than a dozen hotels and serviced apartment complexes.
In 2007, developer Peninsula shifted the stage-one assets to Melview (Kawarau Falls Station) Investments, which went into receivership in 2009.
Ownership of these assets was passed in 2010 to its subsidiary, Kawarau Village Holdings, which then dealt with the buyers. When the apartments were completed, the sellers demanded payment. But the buyers refused.
The stand-off went to the New Zealand High Court, which ruled in favour of the sellers.
A three-judge court of appeal in September last year disagreed and supported the investors, paving the way to a final appeal by the Kawarau Village in the NZ Supreme Court in April. The appeal was rejected on Oct 6.
The completion of the entire project was an essential term of the contract and "the vendor was not in a position to cancel the contract," said Justice Ellen France.
The Singaporean investors listed in the case headed by Dr Ho Kok Sun ranged from wealthy individuals to HDB flat owners seeking to invest for retirement.
Lawyer Mitch Singh of NZ firm Glaister Ennor, which also acted for a big group, said "this victory reinforces that overseas investors can have confidence in the quality and fairness of our legal system in New Zealand".
Calling it a "victory for commercial common sense", he said their clients had endured a six-year process, and the right result had been delivered.