Delta #EpicFail —Noble Subdivision :   Tea & Taxing Questions

Received from Christchurch Driver [CD]
Sun, 6 Mar 2016 at 10:23 p.m.

Mr Crombie has spoken. A press release on Thursday : Something old, something new, something borrowed, with no clue.

Your correspondent has a theory in relation to Mr Crombie’s press release. Your correspondent surmises that a copy of Delta CEO Grady Cameron’s press release appears to have stuck to Mr Crombie’s saucer (stress – jiggling – spillage !!) when he was having tea and cakes in Mr Cameron’s office last week, and Mr Crombie absent mindedly put it in his pocket. Mr Crombie being a busy man then noticed it a few days later amidst some empty Cadbury Favourites wrappers and Kit-Kat bars. Thinking that he was meant to have done something, and with Grady’s cell phone off, he panics, and emails off the release, which of course is a re-run of Mr Cameron’s effort.

Mr Crombie did say there had been “some misinformation” about the mortgagee sale process. There certainly has, and it is all from Delta and its directors.

Your correspondent and Delta are of one mind here : There is no need for any confusion, Dunedinites will have a lot less suspicion and worry if we had accurate information that Delta and its Directors were not the white collar robbers of the DCC public purse that your correspondent has made them out to be.

To this end, some public minded citizens might want to put in a LGOIMA request, or perhaps write to the ODT with the following questions for Delta, to assist with the excellent What if? efforts on Noble to date.

Let us relax with a cup of Bell’s best and have our fears assuaged. Or perhaps, let us watch the twists and turns of outrageous logic that Mr Cameron will use to explain away these very simple questions :

How much of the $3.3M Delta paid to “strengthen its position” has been paid to Gold Band and Avanti Finance. This is an easy one for starters – readers of course know the answer ($2.7M) because Gold Band have told us, but if Delta get this wrong, we then know it has a telling-the-truth problem as well as previously canvassed numbers, counting and comprehension problems.

What was the remaining funds of the $3.3M spent on ?

Or in case this isn’t clear enough :

How much of the $3.3M has been paid for any advice, fees, or any other sort of payment in relation to the Noble Yaldhurst Subdivision, that was not for the actual direct purchase of first mortgage securities ?

In regard to the question above, who was this money paid to ?

How much Head Office staff time has been spent on the Noble Subdivision since December 2009 and has it been charged to the project ?

Did Delta, or any party associated with Delta, instruct, or convey to Gold Band Finance in any way, that Delta would not allow Gold Band to sell its first mortgage security to other parties (ie, other than Delta) with an interest in the land ?

Can Delta confirm that it will not offer vendor finance, and will not enter into a profit / revenue sharing agreement to the eventual purchaser of the land from the mortgagee sale process ?

Can Delta confirm that in addition to the above, it will not offer any kind of assistance to the eventual purchaser of the land ?

How much has Delta or DCHL paid Mr M Frost for any services related to the Noble Subdivision since 2012 ?

Can Delta confirm that no past or present Delta Directors, and also Mr J Boult, and Mr M Frost, are not involved, or offered any kind of advice or assistance to any of the mortgagee sale bidders ?

Is it true that due to recent developments, and subsequent to the date that tenders closed for the mortgagee sale, the firm conducting the mortgagee sale process, and/or other parties, has been urging other parties, who did not make a bid, to make a bid, even though tenders have closed ?

Given that we are dealing with Delta, perhaps readers should just consider three at most per request so as not to overtax Delta capacities.

These are all critical questions. Memo to Grady and Graham : Better to answer them now, the next time these questions are asked you will be best advised to have a lawyer – your own personal lawyer that you pay for, not a Delta one – present. (Suggestion : NOT the ones that wrote the security sharing deed….). Memo to Graham : $900 a day will not go far on lawyers’ costs.

And Graham : Note to Self : Conduct cost / benefit and personal risk register of Delta involvement. (Memo to Grady : At a salary of $2,090 per working day, hire whatever lawyer you want).

Alert readers will have noticed some of these questions suggest there are yet more horror stories and shady dealings your correspondent wishes to bring to the surface. Indeed there are, but let us have Delta’s position first, to avoid speculation. Of course we will have no option to speculate if nothing is forthcoming, and speculate we will.

For your correspondent, Delta at the Noble Subdivision is the gift that keeps on giving.

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

Election Year. This post is offered in the public interest.

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20 Comments

Filed under Business, Construction, DCC, DCHL, DCTL, Delta, Democracy, Design, District Plan, Dunedin, Economics, Geography, Hot air, Infrastructure, Name, New Zealand, People, Politics, Project management, Property, Resource management, Site, Town planning, Transportation, Travesty, Urban design

20 responses to “Delta #EpicFail —Noble Subdivision :   Tea & Taxing Questions

  1. Diane Yeldon

    The ‘neighbour who responds’ claims the following: “If NBR want more information I am happy to give it. I can also add to what Murray Frost has told them about his involvement: He has represented and advised ALL parties of the security sharing agreement, NIL/Gold Band/Delta at different times. Firstly NIL, and then progressively in combinations of these parties, and then now as appears in NBR, to Delta only.”
    Now CD (in “Taxing Questions”) asks: “How much has Delta or DCHL paid Mr M Frost for any services related to the Noble Subdivision since 2012 ?
    Can Delta confirm that no past or present Delta Directors, and also Mr J Boult, and Mr M Frost, are not involved, or offered any kind of advice or assistance to any of the mortgagee sale bidders ?” (quotes end)

    Noble Investments Ltd disputed that they were a subsidiary of Apple Fields but an accounting decision seems to be that they effectively were a subsidiary. How much independence they should have had from each other seeems a bit on the murky side. But if they were independent in any sense, then it seems that they should have had independent advice.

    People could be forgiven for wondering whether there may have been wild conflicts of interest regarding the business, financial and legal advice given to various parties in these transactions – to the point that such conflicts of interest might be said to be amounting to conspiracy to defraud. Since the ‘neighbours’ (not sure of the exact status of these people) seem to be the biggest losers, if anyone were being defrauded, it seems that it would be them. And also arguably Dunedin ratepayers who would be adversely affected by any resulting unnecessary Delta losses.
    By answering CD’s question as above, particularly about who gave paid advice to whom and when, Delta and Dunedin City Holdings management could re-assure Dunedin ratepayers that no such conflicts of interest amounting to conspiracy to defraud have taken place.

    • Elizabeth

      Diane, you say “Since the ‘neighbours’ (not sure of the exact status of these people) seem to be the biggest losers”

      The neighbours (see Colin’s latest comment) are the original landowners who hold the caveats – the caveators.

      • Diane Yeldon

        Elizabeth: Still not completely clear on this. Can you confirm ( or otherwise!) the way I’m picturing this. At various times in the past, various unconnected people bought sections in the area with road access to it. (Maybe a gravel rural road.) But, if it’s rural land, then they presumably did not have reticulated stormwater drainage, sewage and fresh water supply. Then Noble Investments Ltd buys a big contiguous parcel of land close to them (but not necessarily sharing boundaries with all of them) and says that Noble is going to make a residential subdivision with all the above services plus good sealed roads. So Noble offers the original landowners a deal where their sections will benefit from the drainage and water etc services plus good sealed roads.
        Assuming this is correct so far (?), next is the terms of the deal. It looks as if the landowners might have sold their sections to Noble who promised to provide the services and roading and then sell the sections back to them (???). The ‘caveat’ protected the original owners’ interests by making it illegal for Noble to either mortgage or sell the sections. (Am enough of a Latin scholar to know that ‘caveat’ means ‘let him be warned’ ie that there are restrictions on what people can do with this piece of land because of other people’s interest in it.) But it looks as if NIL has been accused by at least some of the original landowners of not honouring any such agreement, either by not providing the agreed services, either at all or to a proper, safe and legal standard and also maybe mortgaging the properties (although how they could do that with caveats in place, I don’t understand.) Can you comment? (Or CD or Gurglars or anyone…)

        • Elizabeth

          Hopefully Colin will respond.

        • Gurglars

          It seems to me that the neighbours caveators etc actually owned all or part of the land upon which the subdivision was potentially created. CD will confirm this, otherwise the neighbours caveators would be required by Noble to pay some of the costs in part.

        • Colin

          Hi Diane
          NIL sold Ten 4 hectare rural blocks to Ten various unconnected people between 2002 – 2003 (“neighbours”). The blocks had automatic building rights clustered either side of a sealed access lot that serviced them off Yaldhurst Road. The blocks had power, phone, and electricity for one house on each, plus rural trickle feed water supply that the purchasers could install tanks and pumps for, and septic tanks.

          The deal was NIL had 20 years in which to attain residential rezoning, obtain subdivision consent for the more intensive residential subdivision of all the land, and to provide the roading and services required for the further subdivision of all the land. In return NIL could buy back around 3.2 hectares of the 4 hectare blocks it achieved the subdivisions for, for $10 each; and the neighbours could further subdivide their remaining around 0.8 hectares (8000m2).

          The roading NIL is required to provide the “neighbours” is along their existing access lot which has to be widened by NIL. The way NIL set up the agreements only they have the right to form this widened road – the disparate owners don’t have agreements between them, only NIL does with each. NIL’s obligations in providing this road requires it to provide the stormwater requirements for it, along with the stormwater service requirements as agreed for the neighbours’ smaller subdivisions. This requires large stormwater basins on the 3.2 hectare lots NIL purchased for $10 each, with the basin locations under the power lines on land that can’t be built on.

          In 2008 NIL requested the neighbours transfer their 3.2 hectare parcels to it on the basis rezoning had been achieved and the subdivision consent was imminent. NIL convinced them they required the land to be in NIL’s name to gain finance for their roading and services obligations. This seemed reasonable and safe at the time – the obligations for the roading and services are in black and white and individually signed, and NIL was assuring the neighbours’ provisions. The neighbours transferred 3.2 hectares of their land in good faith for considerations yet to come. Yes dumb, however there were also threats at the time that if they didn’t transfer the land they would be sued for delaying the subdivision.

          Neighbours of one block having doubts soon after, lodged caveats to protect their interest. These didn’t prevent the subdivision works nor prevented NIL raising finance. Gold Band had loaned its $1.75m before the neighbours had transferred the land to NIL, and NIL generously permitted Gold Band to secure it spread over all 9 titles in the 25ha of residential and commercial land that was transferred to it. These caveators consented to Delta registering a $5M second mortgage behind their caveats on one of the 3.2 hectare lots as Delta and NIL had requested, on the basis Delta also assured that the credit and works they were securing included that for their subdivision which NIL was obligated to provide at the first stage of vesting.

          As part of that process, and without the knowledge of the caveators, NIL, Gold Band and Delta entered into a Security Sharing Deed for the expressed reason “to allow sale / enforcement by DELTA if necessary so as to avoid caveat issues; [emphasis added]. This back door arrangement is something that is expressly prohibited by the Land Transfer Act 1952 (power of sale) so as to defeat a known interest/right. Case law has established “If the designed object of a transfer be to cheat a man of a known existing right, that is fraudulent [for the purposes of the Land Transfer Act]”.

          NIL and Delta went on to renege on providing our roads and services. Delta kept advancing more and more credit without our consent. They “secured” their additional credit advances by “agreements to mortgage” over different titles which they then lodged caveats to protect. Delta’s caveats (and Delta’s second (and only) $5M mortgage) sit behind the neighbours caveats.

          NIL, Gold Band, and Delta would have spent much more money in legal fees and court actions trying to defeat the known interests of the neighbours than it would have cost to provide the provisions. They are still trying to do this.

          Delta’s “media statement 19 February 2016” refers to the neighbours’ legitimate and known PRIOR interests as mere “obstacles” to “remove” so Delta can “begin to recover its outstanding debt”. That is:-
          “A successful conclusion of the sale by the first mortgagee will remove the main obstacle to the subdivision being put onto the market and Delta beginning to recover its outstanding debt.”

          This constructive fraud may be good for Delta and its Security Sharing partners, for DCC and Dunedin ratepayers, but it would destroy many “neighbours” if it was permitted.

          Hope that makes things a little clearer Diane. Thanks for caring.

        • Diane Yeldon

          Thanks to Colin for his reply. What I have read about Tom Kain (who died in 2014) leads me to believe that the man was an unrepentant bully.
          I can’t help feeling that both the Christchurch City Council and the Dunedin City Council have got some moral responsibility, even if not legal responsibility, to make this good for the original neighbours. Both LTAs are, or should be, authorities in the sense of knowing what’s what in the area of land subdivision, should uphold their own rules and make sure illegal, substandard and non-complying work is not carried out by a developer or their contractors (especially, as in Delta’s case, when they ARE the contractor).
          As for caring, if individuals are not safe, then the whole population is not safe. Sooner or later, it might be anyone’s turn of fortune to get cheated and bullied. Then Martin Niemöller’s famous statement describing the dangers of political apathy applies: “First they came for ….” https://en.wikipedia.org/wiki/First_they_came_

  2. Gurglars

    Now CD (in “Taxing Questions”) asks: “How much has Delta or DCHL paid Mr M Frost for any services related to the Noble Subdivision since 2012 ?
    Can Delta confirm that no past or present Delta Directors, and also Mr J Boult, and Mr M Frost, are not involved, or offered any kind of advice or assistance to any of the mortgagee sale bidders ?” (quote)

    Diane asks the above, Delta won’t answer this question!!

    If Delta are involved in bidding on the “mortgagee sale”, they will definitely be “chasing their losses”.

    Any offerees proven to be involved with Delta should be charged with criminal conspiracy to further defraud. As should any Delta staff and directors.

    The sale of Yaldhurst must be an arms length transaction, those arms not to include any of the advisors to Delta previously or they can be said to be benefitting from their own poor advice.

    • Diane Yeldon

      Being in the know with ready cash before a mortgagee sale is a good way to get a bargain, someone’s trash (or ‘trashed’ asset) being someone else’s treasure.

  3. Elizabeth

    What I thought might’ve been a sleepy Monday, is not.

    Our readership is engaging with the following top posts and pages (from a total of 58 posts hit since midnight), a concentration on Delta. After 13., the preoccupation (likely in anticipation of tonight’s public meeting at South Dunedin) is with posts concerning the 3 June 2015 flood.

    1. Home page / Archives
    2. Dunedin: University students into excess alcohol, party drugs, sexual abuse, vandalism #CRIME
    3. Delta #EpicFail —Noble Subdivision : Tea & Taxing Questions
    4. Delta #EpicFail —Nobel Subdivision : A Neighbour responds
    5. Delta #EpicFail —Noble Subdivision —Epic Fraud
    6. Delta #EpicFail Noble Subdivision : Councillors know NOTHING
    7. Delta #EpicFail Noble Subdivision : If I were a rich man / Delta Director
    8. Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
    9. Delta —Noble Subdivision #EpicStorm Heading OUR WAY
    10. Delta #EpicFail Noble Subdivision : Gold Band Finance —The Little Finance Company that did (Delta).
    11. DCHL, subsidiaries and DCTL
    12. Delta: Update on Yaldhurst subdivision debt recovery
    13. Delta #EpicFail Noble Subdivision : NBR interested in bidders

  4. Rob Hamlin

    i am utterly at a loss as to why anybody would wiilingly hand over land to a developer pretty much ‘gratis’ in return for a promise – however apparently ‘cast iron’ that promise was. Once an asset is out of your control, it can be freely used to beat you over the head. This the Yaldhust neighbours now know – and the Silver Fern Farm suppliers will shortly find out.

    Was there an element of ‘or else’ to this NIL offer to the neighbours? Perhaps our well informed posters can enlighten me/us?

    • Diane Yeldon

      Rob: I am similarly at a loss as to how anyone could, as follows, convince: “the [Christchurch] city council, which was then drawing up its district plan, to rewrite it based on his vision of future development”.
      However, maybe, once convinced, the Christchurch City Council wanted to “make it so” as in the famous words of Star Trek, Captain Jean-Luc Picard: https://www.youtube.com/watch?v=RrG4JnrN5GA

      The first quote is from a 2014 article in the Christchurch Press about Tom Kain, founder of Apple Fields, of which Noble Investments Ltd seems to be a subsidiary. http://www.stuff.co.nz/the-press/business/9598474/Kains-empire-was-apples-and-property

      • Diane Yeldon

        And a little further light relief from Star Trek. Maybe helpful for the new batch of freshers trying to find their way around. Warning – sexual references … (I think.)
        Star Trek: The Sexed Generation

    • Colin

      Rob. You’re on the money.
      The owners that handed over their land were on a hiding to nothing at the hands of an unscrupulous “developer” (NIL/Apple Fields Ltd (AFL)).
      Yes they were threatened that if they didn’t hand it over they would be sued for millions for holding up the development, and handing it over appeared to be a reasonable and safe decision “to allow the financing of theirs and NIL’s subdivision requirements” as they were assured.

      By handing it over they are still being given a hiding. They’ve spent hundreds of thousands fighting to protect their interest and to be included in the subdivision, and having to fight in court for it. NIL/AFL are countersuing for fifty million and finding other ways to defeat our interests through its Security Sharing Partners Gold Band and Delta.

      NIL/AFL personnel were renowned for these traps we have now found. In a Styx Mill mortgage sale case in 2002 (the same year NIL/AFL were doing the “deal” with this land as it happens), AFL’s Tom Kain had convinced the first mortgagee Damesh to buy the property under specific conditions that saw the second mortgagee ANZ write-off $8.25M of AFL’s debt. AFL then sued Damesh for agreeing to its deal and took him through all the NZ Courts and then to the Privy Council in London:-

      Appeal No. 40 2002; their Lordships stated … “The proposition that against that indisputable background AFL can complain that Damesh failed to satisfy its section 103A duty is a staggering one which offends both equity and common sense. Their Lordships have no hesitation in rejecting it.”

      This is unfortunately what we are up against.

  5. Rob Hamlin

    Yes, as someone who fought the wars to keep the Apple and Pear marketing Board in business, I have no fond memories of Apple Fields or their methods – which don’t seem to have changed much.

    • Colin

      One of the resident stakeholders owed the road and services at NIL’s cost read verbatim the signed black and white clause to NIL and Apple Fields Ltd Tom Kain. His response was “you can say it says that”. Reading it again verbatim received the same response. The resident then showed him the clause, pointing out that “it” said it! Tom Kain’s response was that a court might read it differently. Which leads us back to what the Privy Council Lords said of another of his/AFL’s court antic’s … “The proposition that against that indisputable background AFL can complain that Damesh failed to satisfy its section 103A duty is a STAGGERING one which OFFENDS BOTH EQUITY and COMMON SENSE. Their Lordships have no hesitation in rejecting it.” [excuse my emphasis]

  6. Diane Yeldon

    I wonder if the truth of the extent of the Christchurch City Council’s involvement in this sorry business will ever be told. I hope so. Maybe they were frightened of Tom Kain, who seemed to threaten to sue everybody, and often did. I wouldn’t be surprised if some of these aggrieved landowners had gone to the CCC for help and good advice, got none and ended up feeling that CCC was on Tom Kain’s side. If so, CCC is still in a position to make this good.

    • Colin

      CCC are still frightened Diane. Justin Prain has been alongside with Tom Kain all along and has made the threat of suing CCC very clear to them in public meetings. Deputy Major Vicki Buck expressed her concern’s openly in public meetings. It is much easier for CCC to continue to support NIL and let them do whatever they want and to oppress the affected public and residents that brought to their attention the “seriously unsafe” non-complying roads CCC staff had permitted to be constructed illegally without consent and were trying to vest.

      CCC are still denying the affected residents their legal rights under the RMA as affected parties to variations to their own subdivision consents (being made by NIL & Prain) that make their subdivisions impossible.

      The truth has been well evidenced and told, but it appears it wont be heard by deaf ears until a Judge speaks and rules.

  7. Calvin Oaten

    Having been offline for nearly a week due to shifting residence, I can’t believe how this saga has developed. Thanks to CD we can see clearly that no-one in the Delta camp, either management, directors, or elected Mayor, have in any way done any due diligence (as if they understood the meaning of the word) whatsoever on the whole Noble Yaldhurst subdivision which seemed blighted from the beginning by dark historical connections dating back to previous times. Like babes following a trail of breadcrumbs they have all been led into the woods to the point where they are lost, frightened, and close to desperate. It proves one thing if nothing else, and that is if you pay top dollar for expertise it’s no guarantee that you don’t end up with monkeys. Once again, it’s the ratepayers who look like the ‘fall guys’.

    • Douglas

      Calvin
      Simples. They have their hands in your pockets – no problem – no accountability – no nuffink! Same with the South Dunedin drainage debacle. No accountability no surveillance no sense – just obfuscation and bullsh. Hansel and Gretel in charge.

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