Estate lawyers press judge for 'security costs'

Former Fonterra director Colin Armer was busy trying to help save the company and not overly bothered about buying the Burgess estate's Tihoi farm, his lawyer told the court. Photo / Alan Gibson

A High Court judge may put an injunction on a Taupo man's property in a bid to appease lawyers' possible claim in costs over an 11-week court case that will stretch into the millions.

Lawyers for parties involved in a multimillion-dollar estate wrangle have made it no secret they find the civil prosecution brought by Taupo man Warwick Burgess on their clients unfounded and a waste of time.

This afternoon in the High Court at Hamilton, Campbell Walker QC - defending rich lister and former Fonterra director Colin Armer - said the lawyers for all four defendants had done an estimation of an 11-week trial which currently stood at $1.67 million. However, if an "uplift" was given by Justice Paul Heath, it could go as high as $2.34m.

After discussion, Justice Heath said it was a possibility to put an injunction on Burgess' property, a decision that would be made after he gave evidence.

Burgess claims the executors of his late mother Molly Burgess' estate were not only neglectful in their capacity but also acted fraudulently by allowing the family's 1665ha property to be sold to Armer Farms [N.I] Ltd for $4m. Burgess claims the estate let the property go to ruin but if developed in the 1980s, it could have reached as much as $15m when it was sold to Armer Farms in 2009.

Through his lawyer Damian Chesterman, Burgess also claims there was a "close relationship" between deceased trustee Tony Western and Armer, stating he was privy to private information and the pair were in constant contact after his mother's death, until the property was sold.

Walker said allegations of a conspiracy and skulduggery involving his client were outrageous.

Armer wasn't the only one in the running to secure the property, with several other cashed-up million-dollar buyers, including former Prime Minister Helen Clark's brother-in-law.

"It wasn't covert, [Western] off dealing with Armer Farms as the only purchaser."

He said if Western and Armer were involved in a conspiracy against Burgess to buy the property, why would Western request a marketing plan from a local real estate agent. He then produced emails to back up his statement.

"So Why is Armer Farms being talked about so much? Well there's a pretty obvious reason. He's the natural buyer ... in a collapsing market in a global financial crisis."

"How can you criticise them for receiving what turns out to be a brilliant offer they wish they had taken."

Walker submitted it was Burgess himself who scuttled the 2008 proceedings by launching proceedings under the Family Protection Act, stalling any possibly sale. That's also when the country was feeling the squeeze of the Global Financial Crisis that would see the property drop in value by more than a million dollars before it is eventually sold to Armer.

"The executors are being accused of breaching their fiduciary duty, the solicitor is being accused of dishonest assistance and my client is being accused of knowing receipt for doing a deal with a price higher than what the plaintiff said was market value."

Walker said his client was a "decent man" who had built up his large dairy farm properties over many years.

"He has done that not through skulduggery or false dealing but just being better at dairy farming than most farmers."

Walker told the judge that during this 2008-09 period, Armer wasn't sitting by the phone waiting for phone calls from Tony Western, rather he was active in his role with Fonterra and trying to help keep it afloat.

"He was the director of Fonterra and he was centrally involved in trying to save that company because it was at serious risk of going under ... he wasn't really focused on this transaction, it was something he could take or leave.

"The point is, he's not a person just sitting around looking for dirty deals, he's just a businessman trying doing a job ... he owned a group of farms, that was his crime."

He also pointed out that although Western was a bit "rough round the edges", the rest of the trustees and executors backed his actions 100 per cent in getting Armer Farms to buy the property.

Earlier, Adam Ross QC, acting for Rotorua lawyer Alisdair Morrison and his law firm O'Sullivan Clemens, said claims by Burgess that the family property was to be passed down to him as had been done in previous generations were untrue.

Documents - including affidavits, wills, solicitor file notes - will prove that it wasn't his mother's intention to leave him the whole property, rather splitting it 60-40 with his brother, Hilton, which had been in her first will in 1981.

The defence this afternoon wrapped up their openings, with Burgess then set to take the stand. His evidence is expected to take a couple of days.