Delta #EpicFail —Epic Fraud #5 – Delta and the ghostly hand of Tom Kain

Received from Christchurch Driver [CD]
Sun, 10 July 2016 at 10:41 p.m.

Dear Readers

When your correspondent began to post on Delta’s involvement at the Noble Subdivision, he was expecting to find some noteworthy stupidity on the part of Delta, but had no idea the degree of disgusting amorality and contempt for the law that Delta and its enablers have displayed.  

Warren Buffet once said “show me the incentive and I will show you the result”. Your correspondent believes that Delta’s management team will do ANYTHING to avoid crystallising the loss at Noble, and will hide behind any fig leaf, legal or otherwise for as long as possible – because on a salary package of nearly $500,000 (not far from DOUBLE the salary of the DCC chief executive) Delta CEO Cameron (and possibly others) will have a portion of his salary at risk, subject to meeting certain KPIs. Booking a massive loss of many millions is not usually an acceptable KPI, let alone satisfactory job performance, particularly when CEO Cameron presided over the decision to proceed with Noble in 2009 and has never – publicly – raised any concerns.

This is despite Delta already having lost around $14M at the failed Jacks Point and Luggate subdivisions, and both of those subdivisions were in trouble in late 2009 when the final decision to proceed with Noble was made.

Yes, yes, readers, I hear the saucers rattling as the cups are slammed down, the Choysa leaking onto the Formica  – “this is old news…. CD is retreading ….get to tonight’s point!”

In a recent earlier post, WWTKD – What Would Tom Kain Do ?, your correspondent, somewhat tongue in cheek, posited that Delta had learnt from Tom Kain and had a fiendishly cunning plan A and plan B. Plan A being flouting the law – knowingly – and if that did not work, Plan B being “suing the stuffing out of their law firm”.

It turns out, following some explosive revelations in counsels’ submissions in the recent litigation, that this is ACTUALLY WHAT HAPPENED in respect of Plan A.

In the most recent action discussed in Epic Fraud #4, the counsel for the landowners stated “defeating the applicant’s caveat was the sole purpose behind the Sharing Agreement, as noted by David Smillie, solicitor for Delta: “If the existing caveats are not withdrawn … then there will also need to be a Security Sharing Deed with Gold Band”.” [Email from David Smillie, 4 May 2011]

In an email dated 11 February 2011, Mr Smilllie sets out step by step how the deception will work:

“1. NIL granting a registered mortgage to Delta.
2. Philpott etc consenting to registration of the mortgage (but the caveat remains in place ahead of Delta’s mortgage).
3. Gold Band agrees to Delta having 1st priority.
4. Gold Band agrees to hold its 1st registered mortgage on lot 19 on trust for Delta (to allow sale / enforcement by Delta if necessary so as to avoid caveat issues).

Mr Smillie concludes by stating, “While not ideal, that seems to be as close as we can get to a 1st registered mortgage position for Delta given the caveat issue”.

Let us allow that to sink in. Delta and their lawyers, had in December 2009 approached the landowners to remove their caveats to allow Delta to register a first mortgage for their debt. The landowners did NOT relinquish their caveats, but instead gave Delta a “caveators consent” and allowed Delta to register a second mortgage behind their caveat on the express terms that Delta security include their caveated interests and provisions.  

Delta were then able to register a $5M second mortgage. However, no doubt in light of the Delta debacles at Jacks Point and Luggate that had made a massive hole in Delta’s finances by then, Delta wanted more than a second mortgage. Delta was 100% prepared to give the static clothesline to the very landowners who had provided them with security in the first place. (Without this second mortgage security, Delta would not have been able to even contemplate their despicable deceptions).

Bottom line, readers : Delta’s response to the landowners’ consent to provide them with $5M of security is this attempt to defraud the landowners of their known prior interests.

Readers, you may say say, oh well that is simply what CD thinks, and the landowners, let’s just wait and see what the Judge says, or, if necessary, the Court of Appeal. They are the experts, not some lightly caffeinated Christchurch Driver.   

Perhaps, readers, perhaps, but what does Gold Band’s lawyer say in light of this onslaught ? Unbelievably, the lawyer (a Mr Vinnell from Anthony Harper) states that “Delta ….has not given any instructions to Gold Band under the Security Sharing Deeds for those lots”. [see 13.6 (h) New arguments, in Respondent’s Submissions in Opposition to Stay Application, CR Vinnell for Gold Band, 27 June 2016]

WTH ? What about the email from Gold Band’s CEO refusing the landowners’ offer to redeem their first mortgage because Delta would not allow them to ?! Is an instruction the same as a prohibition or a refusal ? Delta did not need to provide any instruction to Gold Band as it was made perfectly clear to Gold Band, years before the official NIL default, what Delta’s expectations were – in Mr Smillie’s email of 8 March 2011, “so as to be able to overcome the caveat if it became necessary to enforce Delta’s security”. [para 20, Submissions of Counsel for the Applicants in Support of Application for Stay of Execution. Duncan Cotterill solicitors, 20 June 2016]

Mr Vinnell is out on a slim reed indeed. He then blusters that none of this is new. Maybe not new Mr Vinnell, but true.

Another excuse offered (and amazingly, accepted by Judge Osborne), was that it was “commercially expedient” for the security sharing agreement to cater for Delta rather than the applicants. [para 25, Submissions of Counsel for the Applicants in Support of Application for Stay of Execution. Duncan Cotterill solicitors, 20 June 2016] This is the basis of the appeal : That expediency is not a justification for land transfer fraud. And yes, readers, there is definitely more on this to come.    

Readers, we in fact don’t have to wait for the judicial system. We have an expert who has tried judges’ patience at every court in the land with similar spurious arguments, and there is no one, and I mean no –one!, who has a better view about how far the law can be bent and abused, having been arguably (how he loved that word!) the country’s leading exponent of vexatious litigation.

I refer of course to the late Tom Kain. Yes, Mr Kain’s palsied and quivering hand extends beyond the grave….

Their Zombie Bad Policies [wesharepics.info]

The smoking gun from Mr Kain : The landowners’ counsel writes [para 22], “It appears that Noble, Delta and Gold Band suspected their arrangement sailed very close to the wind, as an internal email of 13 October 2011 from Tom Kain notes:

“Some time ago when we asked Jim Keegan whether or not Delta could be granted security over Gold band’s mortgage and he did not think this could be done. However David Smillie, on behalf of Delta, believes this can be done….”

Jim Keegan is a senior partner at Cavell Leitch, a large Christchurch law firm. Mr Keegan graduated from Law School 44 years ago in 1972, and is the head of their (large) specialist property team. He is the go-to lawyer for a number of large developers. Mr Smillie, on the other hand…. is Delta’s lawyer.  

Tom Kain was the man, readers, who proffered an agreement to a party at another subdivision some years ago. The party signed the agreement, and then Tom Kain promptly sued the party for agreeing to it, having been the one who prepared the agreement. And it didn’t stop at the High Court. Tom Kain took the case all the way to the Privy Council, where he lost comprehensively. The Law Lords said derisively of Mr Kain’s argument, “it offends both equity and common sense”.

It has come to this. Delta will go to the dark places that Tom Kain – Tom Kain ! would not go. Delta offends not only equity, common sense, but integrity, honesty, commercial practice and common decency. It’s no wonder they had to shut down in Christchurch. They would be commercial pariahs. Even hard nosed Australian contractors would baulk at this. No one would trust them to clean even a mudtank (Sorry, Fulton Hogan!) after this behaviour.  

But readers, there’s more. The central defence of the Gold Band / Delta in opposition to the stay action discussed in Epic Fraud #4 was that there was a buyer for the mortgagee sale, and if the stay was allowed the buyer may walk. Gold Band wouldn’t disclose the buyer, but your correspondent understands that Delta / DCHL have already advised or intimated to the DCC earlier in the year that Delta is part of the buyer’s consortium, and if that is the case, Gold Band and their lawyers are misleading the court by omitting this very material fact.  

And then there is the inevitable Delta misdirection. In response to a letter about the Noble debacle (ODT 3.3.16), CEO Cameron stated categorically, “We are no longer involved in this type of civil construction, and won’t be again.” Grady, how can this statement be true if Delta is part of the mortgagee sale and will have ongoing “involvement”, and you knew this when you made this statement? If this is the case your credibility is further diminished (is there any left?).   

Mr Crombie, Mr Cameron, and ALL the Delta Directors (aka turnips) : If and when the courts find that Delta has acted outside the law, this will end some careers at Delta and DCHL. Massaging numbers to hit your KPIs is not going to help you now. There will be fast and furious duck-shoving and plaintive cries of ignorance. Your correspondent’s message tonight : The cover-up is always worse than the crime, and you are all complicit in that. This extra legal activity has been going on for years, on top of the actual massive debt, and not one of you has expressed any misgivings to your Owners, the DCC, that even ‘potentially’ illegal behaviour is going on. Not a single one of you emerges with any credibility.

Your correspondent understands that at this very moment, time is up for some of you. In the DCC garden, the overripe, malodorous turnips are being turned over. This is a very good thing.  

You heard it here first at What if?, readers.

█ For more, enter the terms *delta*, *noble* or *epic fraud* in the search box at right.

Posted by Elizabeth Kerr

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

*Image: wesharepics.info – their zombie bad policies, tweaked by whatifdunedin

Note | Litigation privilege requires:
1. that the document(s) come into existence when litigation was either already under way or was ‘reasonably apprehended’ (meaning it’s a serious or realistic prospect); and
2. the ‘dominant purpose’ for creating the document must have been to enable the client’s legal adviser to either conduct the case or advise the client on that litigation.
Can legal professional privilege be waived?
Yes. Legal professional privilege can be waived by the client – that is, the client can choose to release the information that is privileged.

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9 Comments

Filed under Business, Construction, DCC, DCHL, Delta, Democracy, Design, District Plan, Economics, Finance, Geography, Housing, Infrastructure, Name, New Zealand, OAG, Ombudsman, People, Pet projects, Politics, Project management, Site, Town planning, Transportation, Travesty, Urban design

9 responses to “Delta #EpicFail —Epic Fraud #5 – Delta and the ghostly hand of Tom Kain

  1. Gurglars

    Clearly, if CD has the right oil on these shananigans, the lawyer acting for the caveators also would place this in front of the judge. Surely our law is not yet so corrupt that it could ignore these issues?

    • Observer

      G – The law doesn’t ignore these issues, just those administering it do. They appear to have been corrupted by corporates with power and wealth getting away with it for so long they consider it quite normal.

      Delta lawyers drew up the Security Sharing agreement between Delta, Gold Band and the developer NIL (Apple Fields Kain & Prain) which was designed to cheat those of caveated known prior interests (fraud).

      The High Court found that because the decision and actions of this consortium (to cheat the original land owners of their caveated known prior interests – fraud) was made for “commercial” reasons it was not a fraud.

      The private citizens being defrauded by this commercial consortium now have to spend more money to fight against this corruption by appealing this decision.

      • Hype O'Thermia

        Wow, live and learn!
        Shafting people for commercial reasons is OK. Amateurs however better not try.

        • ab

          The Welcome, after the R Atkinson sketch.

          “Good morning. Welcome to the LifeAfter. We need to get you sorted. Mr Fields, nickname ‘Apple’, you have been very bad, consorting with venal corporates and calling lovely Cantabrians ‘the Plains’. Venal lawyers join them. Take the hot elevator, going down. No, the fornicators will Not be joining you. That’s the point of Hell’.

      • Gurglars

        Observer I said the law, and to all purposes the law is those who administer it – see the law a synonym for the police, or the justice system.

        The law (the high court judges) who are corrupted here by the very appointment process have determined that fraud is OK for commercial reasons.

        When is fraud NOT committed for commercial reasons?

        The very lot who appoint the judges also took away the right to go to independent judges,the Privy council, because they wanted to retain the right to rort anyone who took on government appointed lawlords.

        And people want Helen Clark, the perpetrator of that breach of human rights to lead the UN and presumably continue by taking away the human rights of people of other countries. The leopard (or in this case the pussy cat) does not change its spots or stripes.

        • ab

          The UN Candidates’ debate is comprehensive, but only Helen is covered on NZ media. Others, tearaways and partisans from Europe and Africa, get standing ovations after their presentations.

        • Observer

          In that light Gurglars, the answer is to your original question is yes, but further, not only does our law ignore these issues of corporate corruption, it promotes it. The law and the fraudsters’ lawyers assist them to commit these crimes. As referenced from Court documents by CD, those corrupt then complain when they consider the victims have taken too long to successfully defend themselves.

  2. WWTKD On The Air

    Tom Kain, litigious baritone voiced landed Cantabrian, feuded with family, set up Apple Fields, quoted poetry at opportune moments, sued people, and submitted a new District Plan to CCC. It was of bicycle wheel design, with all of Tom’s interests at the centrifuge..

    How could you not like the outrageous too big for provincial NZ bon vivant?

  3. Calvin Oaten

    Epic Fraud #5! Oh dear Dave, whatever do you do now? Of course regardless of all else, you as Mayor are the person at the top. Too late, I suspect to plead ignorance as the DCHL subsidiary Delta is the centre of all these disclosures, it is hardly credible that you knew nothing of it all. Particularly as it was you who instituted a review and change of directorial persons and approaches in order to “clean out” the old guard of “cronies”. New Chair Mr Crombie has his finger right on the pulse and as your appointee you are in the loop. Shame really, not a good place for you with the election looming. You might rue the day you moved into the ‘big boys’ sand pit.

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