Orchardist fights for his home

Orchardist Rod Wellwood is facing eviction from his family home unless he pays his debt to the Bank of New Zealand the result of his Puketapu kiwifruit orchard going bust and being sold.

Mr Wellwood, who saw the value of his orchard business tumble dramatically due to poor returns for the green varieties of kiwifruit, says he will only be moved from his home by force.

"They are throwing me out on the street penniless at age 77," he said. "I will stay to protect the debris of my dreams. I have nothing to lose."

Bank of New Zealand external relations manager Erica Lloyd said there was still a deal on the table for Mr Wellwood and he needed to engage his lawyer to avoid proceedings. The BNZ had offered to accept a settlement for a lesser amount, saving Mr Wellwood's home, but he indicated he wasn't in a position to pay.

For Mr Wellwood and his son Michael, the problem started in 2006 when their orchard business bought an adjoining block when returns for green kiwifruit were high.

"The orchard was valued at more than $4 million less than five years ago - plus the house," Mr Wellwood said.

With the Psa scare making headlines, the Wellwoods asked a valuer what effect if would have on their business.

"He said, you are already at bare land value - it can't get any lower."

When the bank saw the lower valuation it called in its loans and Mr Wellwood's house was part of the security.

Rod's son, Michael, said banks would not do the same thing in the Bay of Plenty, the centre of kiwifruit growing in New Zealand, where many orchards were struggling as a consequence of poor returns on the green variety and the effects of Psa.

"We [Hawke's Bay kiwifruit growers] are a square peg in a round hole. If we were in the Bay of Plenty we would have been left alone and they would have been more open-minded about our proposals because if you start on one up there it would be dominoes."

East Coast Rural Support Trust co-ordinator Mike Barham said the BNZ's move to sell Mr Wellwood's home was legal - "but it is a heartless, heartless way of operating".

"Why can't they sit down and do a deal? The BNZ appear to be more proactive in Hawke's Bay than other banks in regard to calling in their money," Mr Barham said.

It was not, however, unprecedented for a bank to sell a home to recover a rural-sector loan.

"Rod signed a guarantee using his house as collateral for the orchard. It is totally lawful for the bank to do that but what we are pushing is that it's a 77-year-old man who's wife died in the house. He brought his family up in the house.

"We have offered an alternative package giving equity in the son's house but it would equate to about $100,000 less than what the bank wants. Our thinking is the bank has already taken a huge loss on the orchard, what's another wee bit to leave a 77-year-old man in his house?

"It's a tough environment out there. We just want some compassion - we don't feel they [BNZ] have shown enough. They are taking it to the letter of the law which they are entitled to do.

"The money was easily leant back then, the banks were shovelling it out by the wheelbarrow full. What's a wee bit of a loss for goodwill?"

The Wellwoods said they had used a panel of industry experts to work up a proposal to convert the orchard to new varieties and subdivide off land. BNZ turned down the proposal even though it would have left them in a better position than they are now, Mike Wellwood said.

"They have made it worse for us and themselves. This orchard is performing above industry averages in returns ... cash coming in. Last year it came second in the Hawke's Bay Grower of the Year competition. The only orchard that beat it was .6ha."

The Wellwoods say they still have goodwill in the community.

"Most of the guys who go bust leave a host of unpaid creditors behind them," Michael said. "We haven't done that."

Rod Wellwood was presented with a bill as a result of a personal guarantee he was asked to sign when equity levels fell. He says he is frustrated at what he calls a lack of justification of the amount he owes BNZ.

"They have not informed us what the orchard sale made. They say I still owe them about $1.981 million. That's b******, we get no accounting at how they arrive at that figure."

Michael Wellwood accused the bank of failing to act in a spirit of partnership. "They did due diligence, they got it wrong too. This bank is determined to leave us with absolutely nothing ... other banks are leaving people with their houses.

"We will take responsibility for the fact we borrowed money from them, we take responsibility for the fact things happened in the kiwifruit industry that meant it didn't work. That's business, it happens every day. That's why we fully cooperated and exhausted all avenues in regard to keeping the orchard. But now its personal, now it's the house."

BNZ external relations manager Erica Lloyd said she was puzzled by the claim that the BNZ called in rural loans more than other banks. "I know that we work incredibly hard with farmers in trouble in Hawke's Bay," she said.

In the meantime, Mr Wellwood is adamant he is not moving. "This place won't be worth a hell of a lot if they go ahead, because they won't get vacant possession - they'll have to throw me out". patrick.osullivan@hbtoday.co.nz