Court rules in Gibbston Valley water fight

Control of crucial water supplies for residents of Gibbston Valley near Queenstown has been wrested from interests associated with bankrupt developer Dave Henderson by the High Court.

In a ruling issued on Friday last week, Justice Cameron Mander ordered that the sale of Gibbston Water Services to a company connected with Henderson be cancelled. Longtime valley resident Denis Marshall should be confirmed as the water company's director.

Ownership of the water company has been disputed since 2011, when receivers of its parent company, RFD Investments, became concerned about its apparent sale to a company called Castlereagh Properties.

Castlereagh bought Gibbston Water for the nominal sum of $1 in August 2011, the same month Henderson stepped down as director of Castlereagh after being bankrupted in November 2010.

Castlereagh is currently owned by FTG Trustee Services, whose sole director is Henderson's wife, Kristina Buxton, and sole shareholder is Henderson.

Justice Mander said liquidator Robert Walker, appointed by receivers, had correctly voided the transfer to Castlereagh because the water company was worth more than $1. He also confirmed Marshall's role as director in place of Buxton.

Walker's actions had been disputed by Buxton and Castlereagh.

Marshall, owner of Gibbston vineyard Hawkshead and a former National Party MP, said meetings were held last week about the next steps for the water company.

"We're hoping the scheme will become the property of the residents in future," he said.

About 30 properties are supplied with drinking water by the scheme.

Speaking on Buxton's behalf, Henderson said although the judge had ruled against Buxton and Castlereagh he considered the ruling to be in her favour.

"It's a not-for-profit entity," he said. "Interests associated with my wife have advanced it a lot of money. All those interests want is their money back, which is not unreasonable. The intention always was to vest the company in deedholders [who use the water]."

The water company owed about $200,000 to a range of companies associated with his wife, Henderson said.
His wife had felt an obligation to contest the liquidator's actions, he said.

"The company was bought to essentially secure [the water] for the community. Mr Walker refused to tell us what his intentions were so she felt an obligation to contest that. It's just one of those things. They get a life of their own and away it rolls."

Henderson's direct interests had acquired the water company in 2007 for $60,000, although its resource consent to control the valley's water supply was contested by some residents at the time.

Justice Mander's ruling said that shortly after Henderson's acquisition of Gibbston Water, users were invited to sign new supply deeds requiring their agreement not to do anything that would "impact negatively on the operations and aspirations of the Anthem group".

The Anthem group comprised several Henderson companies involved in a proposed property development in Gibbston Valley.

Justice Mander said the terms of the agreement and its associated costs were "a source of ongoing friction and dispute" between valley landowners and the water company.

Henderson told the Sunday Star-Times that the new deeds matched provisions in the original deeds.

"There was no change, no redrafting of the deed.

"The original deeds provided that people weren't to contest or oppose consent applications relating to certain [property] titles."