Prefab firm mired in bitter litigation

Last updated 05:00 25/05/2014
LONG-RUNNING DISPUTE: Habode offered a fully-fitted steel-framed house for the Christchurch rebuild.

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A mire of litigation has hurt a prefabricated housing firm once touted as a promising alternative for the Christchurch rebuild.

The inventor of the prefabricated houses insists he won't pay an early investor more than $1 million as ordered by the High Court.

A long-running dispute between Rod Gibson, the inventor of the Habode house, and Wellington businessman Richard Curtis, has been playing out in the High Court, Court of Appeal and the Supreme Court since 2007.

Prefabricated homemaker Habode, whose point of difference is providing fully-fitted steel-framed homes in shipping containers, had received positive press in the past as a cheaper and quicker alternative to traditional construction. Its unique feature was that the walls and sides of the container were part of the house - folding out and down, like a butterfly. The houses are made in China and sold in New Zealand and Australia through licensees.

Gibson owned all the intellectual property rights to the concept. Richard Curtis came into the project as an investor and to provide business expertise.

The plan was to build the Habodes in China and use New Zealand as a test market before going international. A New Zealand company was formed with development and production costs to be channelled through it. But a 2010 High Court judgment from Justice Simon France said: "Costs greatly exceeded initial projections; cash flow became a problem and amidst considerable acrimony the New Zealand company collapsed [in 2006]."

In the 2010 judgment Justice France said Gibson, as owner of the IP, had set up a new New Zealand company and attracted fresh investment. "That new company has still not proved successful," he said.

Gibson also established an Australian operation in 2007 which attracted about US$5 million in investment from an Australian The invecompany. The pre-built houses had sold well in the mining boom of Western Australia.

Curtis, who came on board as an investor in Habode in 2003, had claimed a joint venture existed between his companies and Gibson's, which entitled him to a share of earnings from sales in Australia.

The High Court initially sided with Gibson in 2010, but this was overturned in the Court of Appeal. Gibson failed in a bid to reverse that decision in the Supreme Court.

Earlier this month the High Court concluded the proceedings, ruling that Gibson and his company Habode IP were liable to pay $750,000 plus interest for a share of profits from Australia and a further $118,746 in costs.

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Gibson told the Sunday Star-Times the dispute between him and Curtis, first manifesting in 2006 over liquidity issues, had turned personal.

Gibson said an effort to settle the case at a meeting late last year foundered when Curtis refused to shake his hand. "It was like I had a disease," Gibson said.

Curtis did not reply to requests for comment.

Gibson said no one was a winner from the litigation as there was nothing left for Curtis to claim.

"It cost him hundreds of thousands of dollars. And in the process, over the years, I have let all my patents go. Patents are only as good as the money you've got to fight them," he said.

Gibson, who has been on legal aid since 2012, said he was unwilling to pay Curtis. "Just let me say that I'm happy to go bankrupt," he said.

But Gibson, who divides his time between China and Christchurch, also claimed the long-running dispute and subsequent $1m award against him had not disrupted the Habode business.

"Habode is certainly not dead . . . not at all hamstrung," he said.

- Sunday Star Times

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