In August 2008, Perpetual Trust put former Queenstown developer Dave Henderson's Anthem Holdings Ltd into receivership, the subsequent asset litigation hinging on the priority ranking of separate initial loans of $675,000 and about $700,000, both secured against the $1 million of wine.
In the High Court in Christchurch recently, companies RFD Finance No 2 Ltd and Gibbston Downs Wines Ltd, of which Mr Henderson was sole director, sought a declaration from Justice Lester Chisholm on the priority of security interests over the loans, which were secured under the Personal Property Securities Act.
Justice Chisholm dismissed the application, saying Mr Henderson's security interest over the wine did not have priority over the defendant, Perpetual Trust.
Mr Henderson could not be contacted by the Otago Daily Times yesterday, but Fairfax NZ News reported he had said he would appeal the decision.
Receiver Paul Sargison of Gerry Rea Partners, acting for Perpetual Trust, the trustee of Diversified Mortgage Trust No1, was contacted yesterday and said about $700,000 was now owed.
The debt had been purchased from Capital + Merchant.
Mr Sargison said Justice Chisholm's decision "vindicated" the receiver's claims throughout the litigation process, which began about January 2009, over an estimated 40,000 litres of wine, which later included more wine from a Wanaka winery.
"I believe the judgement is correct and don't expect any appeal to alter the decision of Justice Chisholm," Mr Sargison said.
Mr Sargison was asked if the wine had been sold in the interim and the proceeds placed in a trust for disbursal after the High Court decision.
"There is no wine, that has been realised.
"[However] there is no money as it was used up in litigation expenses in the course of the receivership. There's virtually no funds," Mr Sargison said.
The original 2005 loan by Propertyfinance Securities Ltd was in late 2007 assigned to Propertyfinance Funding Nominees Ltd.
In July 2010 it was assigned to RFD Finance No 2 Ltd and Gibbston Downs Wines; companies of which Mr Henderson was sole director.
The second loan was initially made by Capital + Merchant and was registered in April 2006, before being assigned to Perpetual Trust, as the trustee of Diversified Mortgage Trust No 1.
C+M thought its loan was made on the basis it would hold first ranking security interest, and subsequently PFSL agreed to concede that ranking priority; which is what Justice Chisholm ultimately upheld as "still in force when the receivers were appointed".
In August 2010, Mr Henderson sought an interim injunction, claiming the receivers were not conducting the wine sales at fair prices, and maintaining Gibbston Downs and RFD Finance were entitled to possession.
Justice Christine French declined the injunction, saying it was "understood" by both parties the priority ranking switch "would endure".
In an earlier decision by Justice French, released in April 2010, she found that "specified vintages of wine were the personal property of Anthem and that the receivers [Gerry Rea] were entitled to immediate possession of the wine or the proceeds of disposal".
The wine interests had initially lain with Mr Henderson's Anthem Holdings Ltd, which he was using to establish a Gibbston valley vineyard, with the wine security having been transferred later to Gibbston Downs and RFD Finance.
In 2009 Mr Sargison said Anthem Holdings was wholly owned by RFD Investments Ltd, a company owned by Christina Buxton and for which the sole director was Mr Henderson, developer of the failed $2 billion Five Mile project in Frankton.
In November 2010, Henderson was placed in bankruptcy.
By his own account Henderson, who was also bankrupted in 1996, had gross personal debts of about $165 million and $86 million after the sale of secured assets.
The debts came mainly from personal guarantee of loans to his companies, BusinessDay reported at the time.
Justice Chisholm noted the receivers were appointed by C+M because "Anthem was in default" of a $675,000 loan facility "which immediately indicates that Anthem was in financial trouble".
"Under those circumstances appointment of the receivers undoubtedly gave rise to a conflict about which security interest should prevail because there was clearly insufficient collateral to satisfy both claims," Justice Chisholm said in his decision released this week.
Some of the Gibbston land owned by Anthem Holdings was planted in grapes as part of a vineyard development which included agreements regarding wine production, Mr Sargison said.
The wine in dispute was produced from Anthem Holdings land and stored in Wanaka.
