Sir George Fistonich, founder and owner of winemaker Villa Maria. Photo / Richard Robinson
Sir George Fistonich, founder and owner of winemaker Villa Maria. Photo / Richard Robinson
The cost of defending claims by Villa Maria wine magnate George Fistonich against receivers appointed to his company could be as much as $5 million, a court has heard.
Fistonich was in the High Court at Auckland on Tuesday arguing against the receivers appointed to Villa Maria's holding company FFWLin May 2021 retaining funds from the receivership to defend against his claims.
According to their most recent report, the receivers said the sale value of the business, land and assets was about $265m, leaving money to Fistonich after paying back more than $200m in bank loans to Rabobank and ANZ.
Acting for Fistonich and his interests, Jim Farmer QC told the court his clients had filed a claim against the receivers over the sale of land at Māngere, alleging the receivers refused to allow them the right to redeem debt on the land, which they believed they could have sold for a higher price.
A second claim alleging the receivers breached their statutory duty by selling assets at an undervalue price is also due to be filed, he said.
However, the hearing on Tuesday centred on the issue of how the receivers, Brendon Gibson and Neale Jackson, would cover the cost of defending the claims.
Farmer pointed to Section 20 of the Receiverships Act, which says receivers don't have indemnity against liability if they breach Section 19 of the act, which says they have a duty to get the best possible price for property in receivership at the time of sale.
Aerial view of the Villa Maria Estate in Mangere. Photo / Supplied
In this case, there are allegations, but no judgment has found the receivers to be negligent or in breach.
Farmer argued against the receivers withholding funds from the FFWL receivership to defend against the actions brought by Fistonich.
Of the $5m estimate, he said: "That, with respect, seems to be an enormous sum of money by any standard and we'd definitely take exception with that amount of money being able to be retained, assuming there is a right of retention, which we're disputing."
Farmer said the estimated cost was $1.5m to the receivers and $3.5m in legal costs.
Adam Ross QC, acting on behalf of the respondents, said the $265m sale value of the business, land and assets reflected the complex nature of the business.
Defending the $5m estimate, he said: "It is reasonable, in my submission, to assume that the litigation will be commensurate with that complexity."
Ross told the court a decision against the receivers having access to the receivership funds, in the form of a lien, would be a complete novelty.
The hearing was about whether the receivers had the right to withhold funds to defend against the claims being brought against them, he said.
