Received from Christchurch Driver [CD]
Fri, 8 Jul 2016 at 1:19 a.m.
Readers, you were promised some instalments on the current Court Action(s), and your correspondent made a prediction that the “Security Sharing Deed” prepared by Delta would be destroyed and shown to be illegal and unenforceable with career ending consequences for Delta Directors, advisers and staff alike.
We can report that things are brewing nicely. In rugby terms, while the ref hasn’t pulled out the red card, he is definitely reaching into his pocket. There must be some collective buttock clenching at Delta, in the DCHL Boardroom, and particularly, at the law firm that wrote the Security Sharing Deed. But let us digress onto other matters tonight, and save the big security sharing reveal for next week, closer to when Osborne J releases his decision.
Pour a brew, pull up a chair, and digest with Bell’s Best the following :
This latest case (because there have been many court actions on the Noble Subdivision) is where the plaintiffs, being the original landowners of the Subdivision, are seeking a stay on a court decision that removes the caveats that protect their interests in the land. The landowners had already won in Court twice before on this issue, against the Owner, NIL, but now Gold Band and Delta are effectively re-cycling that argument, indulging in financial carborundum (wearing down) of the plaintiffs. The landowners have appealed the High Court decision to the Court of Appeal, but if the mortgagee sale on the land occurs, which is due to go unconditional on July 29 2016, then the plaintiffs will be unable to enforce any Court Decision, as title will have passed free and clear to the new owner. (Legal term : The appeal will be rendered nugatory).
Your correspondent has read the submissions of counsel for the Court Action (CIV-2014-409-716), and even though this is just an application for a stay, the oasis is blooming again with plenty of material that is of particular interest to Delta’s Owners. (That is you, readers). It will take several posts, but here is the bottom line that springs to mind : after reading the submissions, there are no shades of grey. There is a stronger argument, and a weaker one, and unlike Socrates, Gold Band’s lawyer is under no threat -whatsoever- of execution for tampering with that order….
The Delta / Gold Band lawyer has made a series of statements that do not stand up to forensic examination. Put another way, they are compellingly stupid assertions.
A bit of legal background, readers : to have the Court uphold a stay, a precedent ruling – Dymocks Franchise Systems (NSW) v Bilgola Enterprises establishes the factors that must be weighed
1. Will the appeal be rendered nugatory if the stay is not granted
2. Bona fides of the applicants
3. Will the successful party be injuriously affected
4. The effect of third parties
5. The novelty and importance of the question involved
6. The public interest in the proceedings.
In this case 1, 3, 5, 6 are the relevant factors.
Gold Band’s solution to 1. is to propose that if the plaintiffs are successful in the Court of Appeal, in order to enforce their rights for the wrongful removal of the caveats they would then have to sue Gold Band for damages, as the property would have been sold. In a classic foot-in-mouth manoeuvre, Gold Band’s lawyer then gives lie to the myth of Gold Band as a corporate colossus that is well versed and able in legal battles, by stating in para 11.4 that a paltry $1.2M mortgage plus interest is causing Gold Band “serious issues as to its ability to operate as a finance company within its Trust Deed”. Gold Band only has $6.4M total capital and made a profit of $532,000 FY 2015. We can be very sure it is in absolutely no position to face a court action for millions, and your correspondent says it would not exist by the time the action got to court. Advantage : Plaintiffs !
Having opened with that foolish position, the Gold Band defence then quickly descends to the ludicrous on 3. (Gold Band being injuriously affected) by stating that “The evidence on this is compelling” …. “Gold Band has spent $26,000 on Mortgagee Sale Advertising and $104,000 on legal fees associated with the sale”.
Gold Band claim that they entered into a contract for sale of the land on May 2 2016, and that “the contract is conditional and the purchaser could walk away as a result of the stay”. We then get the sob story about what a trial and a burden the first mortgage is on Gold Band, “serious issues….ability to operate….” as noted above, which is just utter rubbish. Gold Band made out like bandits when they sold parts of the first mortgage (as per our earlier post, The Little Finance Company that did (Delta). ). At 22.50% compounding, with an imminent settlement there would be lines out the door to buy this mortgage……IF IT WERE LEGAL TO SPLIT A FIRST MORTGAGE……
Putting that aside (just for the minute Graham, Grady, you can bank on more forensics on THAT little topic !) – our hapless Gold Band lawyer fails to disclose that in July 2014 Gold Band valued the Noble Subdivision – as is – at $20.58M, and Gold Band’s CEO, Mr Brennan deposed recently that the first mortgage is just $8M, so barring Delta-like incompetence, there is no way that Gold Band will not recover the $130,000 costs they spent on the sale, and until they get it, they get to charge 22.50 % on those costs !! What’s not to like !! Game : Plaintiffs!
To complete the rout (Game – Love), the plaintiffs’ lawyers note that under the terms of the tender, [21.4] Gold Band can defer settlement of the mortgagee sale up until August 2017 which will allow plenty of time to resolve the caveat issue before the land is “sold”…. but wait Batman, said Robin…. Is it actually going to be sold ?
Conveniently, the identity of the purchaser of the mortgagee sale is not revealed because “The purchaser has not consented to its disclosure,” say
Delta Gold Band.
Batman : How very, very interesting. We are now getting to the nub of the entire #EpicFail matter. I say this “Purchaser” is in some way related to the following parties or associated interests : NIL, Apple Fields, Tom Kain’s Estate, Gold Band, Justin Prain, Gordon Stewart, and of course the DCC, DCHL, and Delta, and that DCC, DCHL, Delta are going to have a CONTINUING INVOLVEMENT in the Noble Subdivision for YEARS TO COME.
Robin : But Batman, how do you know this ?
Elementary, my trailing junior sidekick : In the February 19 2016 Delta press release, there was the phrase, “A successful conclusion of the sale….will remove the main obstacle to the subdivision being put on the market and Delta beginning to recover its outstanding debt”. Robin, words are a universal form of communication – they mean what they say, and with my comprehension SKILLS it is clear that these obfuscating lawyers or PR people are trying to fool the good people of Dunedin that a sale of the land is imminent and Delta will get (some) of its money back. But look at the words. If there is a “successful conclusion of the sale” to an arms length purchaser, then it’s a one shot deal – Delta will get all they are going to get once the prior interests are paid. Nothing more to be done. Take the lumpen loss and move on. But then it says FOLLOWING the conclusion of the sale, “the subdivision being put on the market and Delta BEGINNING to recover its debt”. The only way this can be true is if Delta are involved in the party purchasing the land, and the crucial tell-tale word, BEGINNING, indicates that until sections are sold, then Delta will not receive any money, if they receive any at all. Your caped correspondent says that this is several years, and several court actions away.
Lastly, in a fit of supreme arrogance, Gold Band’s lawyer says that there is no public interest in the case, and there is nothing novel or important involved. Nothing to see here Judge, the Court can move on…. Must not waste “public resources of the court system”, although as noted earlier, the same lawyer happily recommends the landowners waste their private resources on yet more litigation against Gold Band instead of a stay. He demeans the landowners, saying, they have “a history of running appellate litigation in this manner”. Memo to lawyer : accuracy demands that you amend that to “successful appellant litigation”….
No public interest ? This lawyer clearly doesn’t read What if?, live in Dunedin, or read the National Business Review (who compared Delta management to turnips), and is oblique to the revolutionary idea that the ratepayers of Dunedin must have some way to know if indeed the company they own has acted like a corporate criminal, as has been alleged in court documents. Because dollars to doughnuts, the ODT will not be reporting on it.
Readers, this week’s Bat riddle
Q : Why won’t the ODT make any report on the court decision on the Security Sharing Deed arrangement outcome ?
A : Because new ODT CEO Mr Grant McKenzie said there was “no relationship” between Gold Band and Delta, when there are dozens of emails and a security sharing deed that show this is not true, and public humiliation is not generally considered an effective form of career advancement, especially if the “relationship” that was denied is held to be illegal and fraudulent.
Stay tuned readers, same bat-time, same bat-channel, same Bell’s Best.
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Posted by Elizabeth Kerr
Election Year. This post is offered in the public interest.