Singaporean investors win $10 million in Supreme Court
A Supreme Court decision has ordered the return of $10 million worth of deposits paid by mainly Singaporean investors in a failed Queenstown hotel and apartment development.
The court ruled in favour of the investors on an appeal by vendors Kawarau Village Holdings Ltd and Melview (Kawarau Falls Station) Investments Ltd (in receivership).
The litigation was connected to a development by Auckland-based Nigel McKenna and his entities of a three stage complex on the edge of Lake Wakatipu. It was to include three five-star hotels, a four star plus hotel, a serviced apartment complex and conference centre.
The McKenna entities went into receivership in 2009 and 2010 due to the Global Financial Crisis and could not go on to start stage two and three.
Despite the curtailed development, investors were asked in 2012 to settle on units purchased in stage one and refused. The vendor than cancelled the sale agreements and claimed $10m of deposits plus interest.
The Supreme Court, in a judgement released on Friday, said the purchasers were entitled to refuse to settle as the contract called for the completion of the entire complex.
The vendor was therefore not entitled to cancel contracts and by doing so had repudiated the contracts absolving the purchasers of the need to settle. Their deposits of about $10m plus interest held by a stakeholder should therefore be returned, it said.
The appeal was therefore dismissed and $35,000 in costs awarded against the appellants.
Justices Young and O'Regan dissented saying that although the vendors were obliged to finish the development it was not an essential term of the contract which meant the purchasers should have settled.