Sir Peter Jackson has labelled the man accused of selling one of his vintage planes and using the money to pay off his own debt a "conman" and a "piranha".

Eugene DeMarco faces six charges relating to fraud during 2016 and 2017 while working for The Vintage Aviator, a company owned by Sir Peter, which sells restored and replica vintage World War I planes.

The movie mogul was called as a witness in the trial in the High Court at Wellington this morning, where he explained how the company and his relationship with DeMarco had come about.

Sir Peter wanted to run a factory building replica World War I planes from scratch, and hired DeMarco to carry out the work. It was also his role to test pilot the aircraft.

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He said it eventually became clear that "Gene didn't like people looking over his shoulder", but he and partner Dame Fran Walsh still wanted to maintain oversight, so appointed two "utterly trustworthy" directors of the company - their personal lawyer and personal accountant.

Eugene DeMarco with a partly reconstructed Albatros DVa airplane. Photo / RNZ, Ruth Beran
Eugene DeMarco with a partly reconstructed Albatros DVa airplane. Photo / RNZ, Ruth Beran

He described how DeMarco came to him asking for a $620,000 loan so he could buy a pair of World War II planes to save them from being sold internationally. It was to be short-term loan, paid off within a year.

But as time went on, the loan still hadn't been repaid.

Sir Peter said DeMarco then spoke to him in 2016 about an "old fella" in Auckland who had won the lottery and wanted to buy some World War I planes to donate to the NZ Warbirds Association.

"This was at a time where there was a lot of tension and pressure around Gene repaying the debt ... There was a lot of, kind of, inherent anger in the air around this," he said.

No solid plans were made to sell the plane, as far as he knew.

"The next thing that I recall was that I was just surfing the internet one evening in earlyish 2017 and I saw a photograph from a New Zealand Warbirds open day."

Sir Peter had spotted a photo of one of his planes. He had not heard anything about a sale being made so began asking questions. It turned out the company had received no money from the sale.

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He then tracked down the man who had bought the planes, who found his chequebook and told him how much he'd paid.

"I said these are vastly overpriced planes, this is not our price," Sir Peter said.

Vintage Aviator manufactures reproductions of World War I era aircraft. Photo / File
Vintage Aviator manufactures reproductions of World War I era aircraft. Photo / File

When questioned by defence lawyer Marc Corlett, QC, Sir Peter said DeMarco was a "conman".

DeMarco had pointed to documents where Sir Peter described other members of the company as lying to him, despite telling the court they were completely trustworthy.

"I think they were both guppies in the clutches of a piranha," he replied.

"I think they were not blameless but they had somebody who manipulated and lied to them and ran rings around them."

The background

DeMarco told the company he had been offered a higher price by the association because they wanted to help him pay off his debts. However, Crown prosecutor Sally Carter earlier told the jury this was a lie.

In order to avoid any extra tax on the inflated price it was agreed the money would go through DeMarco's company called The Old Stick and Rudder, then to The Vintage Aviator (TVAL).

The Warbirds Association and its benefactor believed their money was going straight to TVAL.

They paid 85 per cent of the price in mid-2016, with the remainder due upon delivery.

The Crown said DeMarco used $720,000 to pay off his debt and let another $1m sit in his bank account, and used it for everyday bills.

DeMarco eventually returned some of the money to Warbirds.

He is also accused of using a vintage plane for security in getting a $250,000 BNZ loan, without permission to do so.

- additional reporting by RNZ