Relieved Blue Chip investors 'don't trust anyone'

ANDREA FOX
Last updated 05:00 10/08/2012

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"We don't trust anyone any more".

As they toasted each other at avoiding bankruptcy after a landmark Supreme Court decision, elderly victims of the failed Blue Chip property scheme last night agreed they had learned the harshest lesson of their lives.

For others the advice - and the court ruling in their favour - has come too late: they have lost their homes, their health and, in some cases, their marriages.

More than a dozen Waikato Blue Chip investors are thought to be in line to get their deposits in Auckland apartments back and be relieved of the obligation to settle on apartments they never intended to own, as a result of the ruling.

They are among 250 investors who put their money into convoluted products marketed by the Blue Chip property investment group, founded by Mark Bryers.

The scheme involved the investors signing sale and purchase agreements on units in three yet-to-be built Auckland apartment buildings. But it was never the intention that they would actually end up purchasing them. However, when Blue Chip collapsed in February 2008, the developers of the apartment buildings tried to enforce the agreements.

In the case of one Hamilton couple, who would not be named, at age 68 and 76 they were faced with having to find nearly $1 million to settle two apartment purchases, after taking a $91,000 mortgage on their freehold home as a deposit.

Led by barrister Paul Dale, the investors' case unsuccessfully went to the High Court and then the Court of Appeal. The Supreme Court, the highest court in the land, has now thrown out the lower courts' rulings.

One investor, now 72, said she had had to go back to work, and she and her husband, now 80, had downsized into a retirement village to pay lawyers' bills while the spectre of bankruptcy hovered.

"We're over the moon. It's been 4 years of absolute hell. I'm going to hand in my notice at Christmas. When we drove away from our house yesterday morning [shortly before the court ruling was due] we asked ourselves: would it still be ours in the afternoon?

"The most important thing about this is we get to keep our home. And our marriage survived."

She said the couple had vowed "to go down fighting" but they did not trust anyone now.

Another older Hamilton couple said the relief was "tremendous". They had been faced with selling their home.

A Hamilton man, now 78, who has lost a $200,000 deposit and will never get it back because the apartment turned out to be a car park, said the past five years had been "sheer agony". The health of he and his wife had badly suffered.

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"I don't trust people now."

He said there had been no prospectus for the property investment scheme and he blamed himself for not doing his homework.

While the ruling will not benefit him personally it was still a relief.

"It has opened a Pandora's box. Everything has been quiet until now, but cages are starting to be rattled. A lot of people will have to come to the party and come clean now."

But Aucklander Tony Collingwood, named in the decision as representative of Blue Chip investors, said the courtroom result is 12 months too late for him.

He has lost his family home and his marriage is over. "It would have been all right if it was a year ago, but it's been too long. It's too late for people, it's far too late. It p..... me off in the respect that it means nothing to us now."

Last year, Westpac put Collingwood's Massey home to mortgagee sale. He had borrowed against it to put a $150,000 deposit on three Blue Chip apartments.

Since then he has lived in six different rental homes, split from his wife and been left caring for his twin 13-year-old daughters.

He now faces imminent bankruptcy after the Inland Revenue Department began proceedings against him and his wife.

Collingwood blames the stress of the forced sale and the battle over his Blue Chip investment for his lack of attention paid to taxes.

In North Canterbury, Owen Dawe greeted the news from the Supreme Court with more optimism.

"It's been a long march, quite a long march, but we're delighted for our legal team that took on the challenge," he said.

Dawe has been co-ordinating with several other local Blue Chip investors, and he said reaction to the court decision ranged from stunned to ecstatic. "The ones I've spoken to today are just overjoyed. One old lady told me ‘I'm not dreaming, am I?' "

Dawe said the decision would allow many investors to move on with their lives. "For our guys, we can get on with living. It's as simple as that, this has been hanging over our heads for five years," he said.

A Waikato pensioner who did not want to be named was also pleased to hear word of the court victory. "I can hear the champagne corks being popped from here!" he said.

- BusinessDay.co.nz

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