Liquidator warns against $8000 free palm offer: 'plants secured'

Brent Hubbard and Harley Haynes leased KiwiRail land. Photo/Dean Purcell

The liquidator of an embattled Onehunga palm company says plants valued at an average $8000 each cannot be given away because they are now under his control.

Andrew McKay of BDO said assets of Oceanic Palms were not under the control of the men who previously ran the business and no plants could be given away.

"They're the assets of the company and we will be dealing with them accordingly. The plants are secured in a yard which they can't get into because they've been locked out so they can't get to the trees to give them away," McKay said.

His comments follow statements from the two men who lost three court battles against their landlord KiwiRail and said this week they wanted to give away palms worth an average $8000 each - but KiwiRail also says the men are barred from giving away any plants on its land.

Brent Hubbard and Harley Haynes of Oceanic Palms said 130 plants were still on the site - land they rented from KiwiRail for years - but they now want councils, botanic gardens or other organisations to take them.

Hubbard said they had already given away about 35 of their precious plants but 130 palms of 2m to 5m high had an average market value of $8000.

Each palm was worth $1000 to $15,000 and included Nīkau, fan palms, Butia capitata or the jelly palm and Trithrinax - "not rubbish palms", Hubbard said.

Their free palm offer ends a long-running saga where the men who represented themselves in court lost at each round.

On October 6, the Supreme Court rejected Peter Brent Home Hubbard, Harley Haynes and Oceanic Palms' attempt at action against KiwiRail. The palm men wanted to challenge a Court of Appeal decision which they lost last year.

The Supreme Court said no because there was nothing to suggest the appeal court's decision was wrong.

Oceanic had operated its business from the 4985sq m leased site of nearly half a hectare at 44a Alfred St, the court said, although Hubbard said they had initially leased a smaller plot in 2000.

But KiwiRail sought a rent raise in 2014 because the men were paying below the market rate. It gave them notice in 2014, the Supreme Court said, seeking $123,200 annually.

Then the battle began.

Each side engaged valuers and after consultation, they said the rent should be $100,000 a year. The palm men rejected that and wanted to pay their original rent.

The Court of Appeal said the men initially got the land rent-free in 2009 for the first three months.

Brent Hubbard and Harley Haynes (R) from Oceanic Palms. Photo/Dean Purcell

In fact, in a reverse landlord-tenant relationship, KiwiRail actually had paid the men $20,399 for work they did to the Onehunga site, including cutting down trees and putting up fences, the court noted.

By 2010, the rent was struck at $34,300/year but at that rate, KiwiRail said it was "not the current market rent and there is a concession granted to Oceanic Palms." The rent rose to $37,502 a year in 2013.

A year later, KiwiRail said it had determined the market rent was $123,200/year.

KiwiRail then gave notice in September 2015 it intended to cancel the lease.

So the palm men went to the High Court in 2016, asking Justice Fogarty to prevent the rent rising by more than 50 per cent. The Supreme Court summed up that case.

"The High Court rejected Oceanic's application for relief against forfeiture of the lease but Oceanic was given an opportunity to avoid cancellation of the lease by, within one calendar month from the date of delivery of the judgment, paying KiwiRail the arrears of rent and disputing the rent formally so that it could be submitted to arbitration. Oceanic took neither of these steps," it said.

Still, the men remain upset about the situation and emailed the Herald.

"Regardless of the right or wrongs of the purported debt and the contract, we are offering to give away a substantial quantity of palms to botanic gardens and councils around the country," Hubbard said.

"The plants represent the end products of half a lifetime's work in growing. We have had many of them for 20 years, some are much older than that.

"It was our initiative that got Nīkau palms into central Auckland. When we started working for the council, we thought it was much more worthwhile than doing private landscaping.

"We looked after the Karangahape Road and Vector [now Spark] Arena palms for two years free of charge," Hubbard said.

The men said they would seek a judicial review of their situation.

Kate Jorgensen, KiwiRail chief financial officer, said this morning that the enterprise was "owed approximately $240,000 by Oceanic Palms after the business failed to pay its lease on commercial land in Onehunga. We have been through several legal processes to retrieve this debt.

"Last year the Court of Appeal noted: "KiwiRail demonstrated considerable patience in allowing Oceanic Palms to continue in occupation for many years despite non-payment of any increased rental from 1 March 2015."

Jorgensen said KiwiRail had tried every avenue to resolve the issue.

"As one of New Zealand's largest land owners, we work hard to treat all of our tenants fairly and reasonably but in this case Oceanic Palms has stalled the process at every opportunity," she said.

"Efforts to resolve the dispute have included an initial review of the rent being charged by valuers from both parties, an arbitration process which Oceanic Palms refused to engage in and judgements from the Courts. Oceanic Palms has fully tested its rights, and the courts have unanimously upheld KiwiRail's position," she said.

The termination of the lease and subsequent liquidation of Oceanic Palms were a last resort, she said.

"Early in the arbitration process, Oceanic Palms proposed donating its plants in lieu of paying its debt to KiwiRail. KiwiRail rejected this offer. As a state-owned enterprise we are required to act in a commercial manner and part of that is recovering money that is owed.

"KiwiRail has not allowed Oceanic Palms to remove any plants which are currently on KiwiRail land as these assets were subject to liquidation proceedings," she said.

This week, the High Court ordered the liquidation of Oceanic Palms and appointed Andrew McKay and Andrew Bethell of BDO in Auckland, she said.

"In its decision the High Court upheld the view, expressed consistently by courts throughout the judicial process, that KiwiRail has consistently acted reasonably and in good faith. Any further decisions regarding the sale or disposal of Oceanic Palms assets will now rest with them and further inquiries regarding that process should be directed to the liquidator," Jorgensen said.