The High Court allows receivers to hold back millions of dollars to fight legal claims from a wine industry pioneer
Receivers of the Villa Maria wine empire will retain $5 million from any surplus after they pay off debts, to fund their legal defence in a bitter blow to the business’ former owner, Sir George Fistonich.
Despite the setback, Fistonich is vowing to continue his legal battle against Calibre Partners’ Brendon Gibson and Neale Jackson, the appointed receivers of Villa Maria’s former parent company and sole shareholder, FFWL.
“I am disillusioned that [the receivers] have been allowed to keep $5.1m from the sale of Villa Maria to protect themselves against any legal action I may take,” Fistonich said in a written statement.
“However, I will not let this deter me from seeking justice for the sale of Villa Maria at an obvious undervalue.”
In a judgment released today, Justice Gerard Van Bohemen ruled the receivers can hold onto $5.16 million from approximately $40 million of surplus funds to defend against the number of current, and potential future, legal challenges Fistonich is bringing against them.
The decision follows a hearing in the High Court at Auckland earlier this month, where Fistonich’s lawyer James Farmer QC argued the receivers’ bid to retain the funds should be declined, as the money would be used to fund their legal defence against Fistonich’s allegations of neglect or breach of duty.
Farmer also challenged the reasonableness of the receivers holding onto a sum as large as $5 million.
But Justice Van Bohemen sided with the defendants’ lawyer Adam Ross QC and allowed the application.
According to Van Bohemen, to do otherwise “…would be contrary to public policy as well as the accepted principle that a receiver is ordinarily entitled to an indemnity and lien in respect of their costs incurred in the carrying out their duties as receiver.
“I am satisfied that the receivers have a right to withhold a retention to defend allegations of neglect, default or breach of duty against them,” the ruling said.
Van Bohemen also dismissed Fistonich’s claim that $5 million was too large a sum to retain.
Last May, Villa Maria’s parent company, FFWL, was put into receivership. A receivers’ report later revealed the company owed Rabobank and ANZ about $212 million and Indevin New Zealand purchased the Villa Maria Estate business for $190m.
The winery’s treasured Māngere site, which doubled as a concert venue, ended up in the hands of Goodman Property Trust for $75m, but Fistonich believed the land was valued at a much higher price.
Fistonich has launched a number of legal claims against the receivers – one challenging their conduct around the sale of the land and another requesting all documents relating to the sale of the Māngere vineyard site.
He intends to file another claim that the receivers were negligent and sold this land for less than it was worth.
The receivers deny the allegations.