The case between high-flying businessman Alex van Heeren and his former business partner Michael Kidd has reached a new round of appeals, with lawyers for van Heeren arguing over the nature of their relationship in the Court of Appeal in Wellington today.
Appearing before Justices Rhys Harrison, Forrest Miller, and Mark Cooper, van Heeren's lawyer David Goddard QC urged the court to reverse the issue estoppel imposed by the High Court in Auckland in April 2015. The order prevented van Heeren from denying he is in formal partnership with Kidd and that they accumulated assets worldwide as had been found in the South Gauteng High Court of South Africa in 2013.
"The High Court judge erred in adopting a broad approach to estoppel," Goddard said. He said a clear legal partnership between van Heeren and Kidd had not been found and the two men had a "trust relationship" rather than a formal business partnership.
In that High Court judgment, Justice John Fogarty ordered that van Heeren make an interim to Kidd of US$25 million and that an account be taken between the two former partners to determine the full amount owed.
Van Heeren was also required to cover Kidd's court costs.
The Court of Appeal hearing is set down for two days and continues this afternoon.
In a further judgment from the High Court in October 2015, where an application for stay from van Heeren was dismissed, Justice Fogarty said both counsel indicated it was likely that whoever lost in the Court of Appeal would seek leave to appeal to the Supreme Court, leaving the process capable of going "well into 2017."
When the 16-year partnership ended in 1991, Kidd signed an agreement which saw him receive just US$3 million as his share of the assets. Those assets include the global award-winning Huka Lodge in New Zealand, which Kidd has put a caveat on to prevent its sale; Dolphin Island in Fiji; shares in various New Zealand and South African companies; half the proceeds from the 1987 sale of nearly 14,000 shares in Wellesley Resources in New Zealand variously estimated to have been worth between US$16.8 million and US$20.7 million; offshore bank accounts around the world; and gold bars and bearer certificates.
The High Court judge erred in adopting a broad approach to estoppel.
In the High Court, van Heeren's lawyers argued the pair never had a formal partnership and that the indemnity settled what was owed between the two. Kidd's lawyer Stephen Mills told the court there was at least a US$18 million shortfall in what his client should have received when the partnership ended. Kidd believed the US$3 million was a dividend payment from the cash held in a joint company, but never intended that would be the full payout for his share of their assets.
Kidd also signed an agreement which not only indemnified van Heeren against any future claims by his former business partner but also said subsequent disputes had to be settled in South African courts.
In 1996, Kidd sued van Heeren for half of his New Zealand assets. In a 1997 ruling, Justice Robert Smellie said both agreements Kidd signed were an absolute defence against his claims in New Zealand but that the South African courts must decide if the documents Kidd signed meant he had no case. The matter was heard in a South African High Court in 2013 and the judge ruled the documents were void. Van Heeren failed to get leave to appeal the South African case.