Trust fails to recover $1.4m
JOHN EDENS IN QUEENSTOWN
A judge has knocked back a demand for payment of $1.4 million in a family dispute over vintage French wine involving Queenstown developer Lindsay Singleton.
BWIP, run by Mr Singleton, applied to set aside a demand for payment by members of a family trust, Diane Singleton, James Kirkland and others.
Trustees allege two loans were made and should be repaid with interest.
However, BWIP said the advances were not disputed and rather than being loans the sums were investments.
BWIP's position was that each advance represented an investment, not by the trust, but by Lindsay's brother Lester.
Lindsay, Lester and brothers Wayne and Ian Singleton established WAGIL in 2001 to develop an apartment and hotel complex in Queenstown, investing significant sums of money.
In 2004 Lindsay incorporated BWIP to acquire fine Bordeaux wine for use in an investment fund and used money advanced by his brother to the tune of $600,000.
The firm entered into an agreement to buy wines from the 2005 vintage for $1.8 million but there was difficulty securing finances so Lindsay wrote to Lester asking for $890,000.
The sum was transferred from Lester's account with his wife in May 2007.
However, by 2009 the international economy was in freefall, the asset value of the wine reduced and the plan to use it in an investment fund had not happened.
Associate Judge David Abbott, sitting in the High Court at Auckland, said the critical issue was whether Lester had authority to act for the trust, whether the demand for payment was on their behalf and whether the transaction was a loan or investment capital.
"In my view the significant aspect of these transactions is that they were essentially a family arrangement, rather than an arms-length commercial contract ... The highly personal and family nature of the arrangements is reflected in the lack of documentation and the informality of the arrangements, including their apparently open-ended nature."
There was no evidence from the members of the family trust on several fronts and a substantial dispute had arisen about the BWIP transactions.
A demand for payment was set aside but the case could still go to trial.
Lindsay Singleton was the driving force behind development of The Rees hotel and apartment complex on Frankton Rd.
- © Fairfax NZ News
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