Another blow for Blue Chip investors

Blue Chip founder Mark Bryers. Photo / Doug Sherring

The Court of Appeal has dismissed litigation brought by Blue Chip investors who signed up for units in three multi-million-dollar apartment complexes.

The investors, who include many retirees, unsuccessfully fought to have a High Court decision overturned on sale and purchase agreements they signed for inner-city high-rise blocks the Barclay, Bianco and Icon.

Former Government ministers Wyatt Creech and John Luxton, senior Auckland lawyer Jock Irvine and disgraced Blue Chip boss Mark Bryers were cited in the decision as some of the prominent Blue Chip directors who investors trusted when they signed up.

Westpac was named as the lead funder for all three blocks at the centre of the action, lending $37 million for Barclay alone where John Abel-Pattinson and Kevin Cox's Greenstone Group achieved $39 million pre-sales, the judgment said.

Although Bryers resigned as a director of various Blue Chip businesses in February 2007, the court said he remained a consultant and was "the directing mind" of Icon apartments.

Dozens of appellants were involved in the action trying to stop their "off the plan" deals proceeding, but the court dismissed their pleas.

Greenstone Barclay Trustees developed the Barclay, Turn and Wave was responsible for the Bianco and Icon Central undertook the Icon.

Barristers Paul Dale and Daniel Grove represented the investors. When the decision was issued yesterday Dale said he was obviously disappointed but it was too early to say if he would go to the Supreme Court for a final ruling.

"We would have to apply to take that and it's too soon to comment."

Justices Mark O'Regan, Grant Hammond and Tony Randerson said the crux of the action was three judgments issued simultaneously by Justice Geoffrey Venning in the High Court at Auckland which found investors had not validly cancelled their sale and purchase agreements for apartments. "The investors now appeal against those decisions," the three appeal judges said.

Blue Chip collapsed in February 2008 and hundreds of investors suffered substantial losses. Many also were facing ongoing liabilities they had not counted on having to meet.

"These appeals are concerned with investors who, as part of their investments with Blue Chip, signed agreements to buy apartments in three separate developments in Auckland City," the Court of Appeal said.

To have the sale and purchase agreements cancelled, the investors would have to prove breach of the Fair Trading Act by Blue Chip agents, the court found. Those agents would have to be shown to be acting for Blue Chip and the developers of the apartment blocks, and then that the agreements were invalid and tainted by illegality.

Yesterday's decision is a further blow for Blue Chip investors. Bruce and Judy Bartle of Whangarei lost a Supreme Court case to have their contract overturned in December.