Gapes' liquidator 'connived' - judge

At artist's impression of Springpark, one of the developments Tony Gapes' company Redwood Group was behind. Photo / supplied

Creditors claiming more than $2 million will meet next week and vote on whether or not to replace a liquidator who property developer Tony Gapes appointed to one of his companies.

Companies linked to Gapes previously voted to confirm Auckland's John Michael Gilbert as the liquidator of the firm Victoria Street West Ltd but have been barred from doing so again by a High Court judge.

Associate Judge Roger Bell said during the last vote Gilbert had "at the least acquiesced" to an arrangement aimed at confirming his own appointment.

"That gives an appearance of less than the complete independence required of a liquidator in an insolvent liquidation. Ordinarily a liquidator should be neutral in any creditors' vote on his appointment...here Mr Gilbert connived at the arrangement under which Orakei [another of Gapes' companies] voted for him. That was less than neutral," Associate Judge Bell said.

Tony Gapes. Photo / Norrie Montgomery

"In these circumstances there is room to doubt that Mr Gilbert would carry out his duties with the same independence as the liquidator chosen only by external creditors," the judge said.

Port Nicholson Block Settlement Trust is claiming $731,000 from Victoria Street West, a firm formerly known as Redwood Group - the name under which Gapes has run hundreds of millions of dollars of property projects since 1992.

In April last year Victoria Street West had not repaid the debt to the trust and Gapes put the firm into liquidation, appointing Gilbert.

Creditors in the liquidation are claiming more than $2 million.

The trust - controlled by iwi Taranaki Whanui ki Te Upoko o Te Ika - was the only one of these creditors who voted against Gilbert staying on as liquidator at a meeting last May.
Three companies with links to Gapes, collectively owed $1.2 million in the liquidation, voted in support of Gilbert.

The trust then went to the High Court, arguing the result from the meeting was tainted.
It wanted Associate Judge Bell to order a new meeting and barr the related-companies from voting or to appoint a liquidator of the trust's choice.

The judge said there were reasons to be concerned with Gapes' behaviour - including his practice of changing the names of companies to keep the Redwood name alive, while letting insolvent firms in his group fall by the wayside.

"Those not in the know stand to be misled," the judge said.

Another was Gapes appointing a liquidator of his choice.

"That creates a concern that the liquidator of his choice may not act as hard for the creditors as one appointed by creditors," the judge said.

In his pre-Christmas decision, Associate Judge Bell said that Gilbert was to summon a new meeting of creditors to confirm his appointment as liquidator.

Gilbert has now called that meeting, to be held next Thursday in central Auckland.

The Gapes-related creditors, according to the court orders, cannot vote.