High Court backs American judgment against OneWorld adviser

By MARTIN JOHNSTON

Former Team New Zealand member Sean Reeves has been ordered for a second time to hand over more than $1.6 million for his involvement in an America's Cup secrets scandal.

A New Zealand court has backed a United States judicial order that Reeves compensate OneWorld Challenge for breach of contract over allegations he tried to sell the Seattle-based syndicate's secrets.

The roots of the row go back to the split-up of Team NZ following its winning of the 2000 cup series in Auckland. The wrangle tarnished the Auld Mug ahead of Team NZ's 5-0 loss to Alinghi in March last year.

In the High Court at Auckland, Master Hannah Sargisson has endorsed OneWorld's bid to enforce the US order for Reeves to pay more than US$1.05 million ($1.67 million).

He must now find US$300,000 ($479,360) for damages to OneWorld and more than US$750,000 ($1.197 million) in costs.

Additionally, he has to pay annual interest of about 1.45 per cent between the filing of the claim in New Zealand and last Friday.

Reeves could not be contacted last night and his lawyer Peter Spring, who represented him at the April 7 hearing, would not answer questions about whether his client would pay up or appeal.

He said he would need fresh instructions from Reeves - who was out of Auckland until today - before he could comment on his behalf.

Reeves, a lawyer who helped draft the protocol for the 2003 cup series, left Team NZ in 2000 for OneWorld as a rules adviser.

He left OneWorld in 2001 and the syndicate later accused him of trying to sell $6 million of its secret information to rival Oracle Racing.

He denied this, counter-suing for defamation and accusing other former Team NZ members of leaking secrets to rivals.

Sargisson said in her ruling that based on Reeves' admissions, the US court found he had retained copies of and disclosed information bound by a confidentiality agreement with OneWorld.

Reeves did not appeal against the US judgment, but argued in the High Court that it should not be enforced because the US court had denied him natural and "substantial" justice.

He claimed OneWorld knowingly paid one of Team NZ's former designers to provide designs like those the designer had produced for Team NZ.

Reeves contended in the High Court it would contravene public policy to apply the US judgment and enable OneWorld to enforce what he called its own "ill-gotten gains".

But Sargisson said any possible illegality in OneWorld's obtaining the documents was for their owner to pursue with the syndicate.

"It is not a matter in which Mr Reeves has raised a proper interest. The only apparent interest is in escaping his contractual obligations, by taking advantage of another's alleged wrong-doing."

Reeves also argued that the US court wrongly restricted his access to OneWorld's confidential design documents, limited the scope of his questioning of certain witnesses and that his US lawyers inadequately represented him.

But Sargisson said no breach of natural justice occurred that was material to the outcome.

The US judge had made clear that even if it was assumed OneWorld had unlawfully obtained the documents, this would not alter the legal result.

Team New Zealand spokesman Warren Douglas said he doubted whether syndicate boss Grant Dalton had ever met Reeves and as far as the new organisation was concerned, the matter was history.

Secret plans

* 2000: Team NZ splits after retaining the America's Cup in Auckland.

* 2000: Sean Reeves switches to OneWorld Challenge and lures former Team NZ colleagues to join him.

* 2001: Reeves leaves OneWorld.

* 2001: OneWorld accuses Reeves in a US court of trying to sell $6 million of its secret design and technical plans to rival syndicate Oracle Racing.

* He denies this and counter-sues for defamation.

* 2002: Reeves ordered in the US to pay damages to OneWorld for breach of contract, plus costs - more than US$1.05 million ($1.67 million).

* April 2004: High Court in Auckland orders Reeves to pay up.