CORRECT: Van Heeren's former business partner Michael Kidd seeks US$25M, High Court hears
Michael Kidd, a former partner of high-flying businessman Alex van Heeren in ventures including the Huka Lodge, is seeking a US$25 million interim payment in a long-running dispute over the division of assets when their 16-year business partnership ended in 1991.
In an interlocutory hearing in the High Court at Auckland, South Africa-based Kidd is seeking both the interim payment and a summary account which, if granted, would prevent the case having to go on to a full High Court trial.
When the partnership ended, Kidd signed an agreement which saw him receive just US$3 million as his share of the assets which are now conservatively valued at US$47.5 million, the court heard. The assets include the upmarket Huka Lodge near Taupo, on which Kidd has put a caveat to prevent a sale, Dolphin Island in Fiji, shares in various companies, offshore bank accounts, and gold bars.
Kidd's lawyer Stephen Mills told the court there was at least an US$18 million shortfall in what his client should have received when the partnership ended. But there is still some uncertainty over the full extent of the assets built up under the partnership because of the complexity of the arrangements for handling the money.
Kidd also signed an agreement which both indemnified van Heeren against any future claims by his former business partner but also said subsequent disputes had to be settled in South African courts.
The pair were principally involved in steel trading in South Africa and Zimbabwe, with the steel sold both within South Africa and to offshore markets. The court has heard today that Kidd mainly handled the steel trading while van Heeren dealt with handling and investing the substantial profits that trading generated. Most of the profit, particularly from international trading, were channelled through trusts and offshore bank accounts.
The court was told that Huka Lodge was bought by a company, Gaynan, which is an amalgam of the two partners' wives' names, with the balance paid by another of their companies, Prime NZ. Prime NZ was involved in steel trading with Algeria, which the court was told today was facilitated by a New Zealand government eager to boost trade with Algeria.
In 1996, Kidd sued van Heeren for half of his New Zealand assets. In a 1997 ruling, Justice Robert Smellie said both agreements Kidd signed were an absolute defence against his claims in New Zealand but that the South African courts must decide if the documents Kidd signed meant he had no case. The matter was heard in a South African High Court in 2013 and the judge ruled the documents were void.
In today's hearing Kidd's lawyer is arguing the South African court's findings should simply be accepted here by the courts as an 'issue estoppel' rather than having to relitigate the matter again, including issues as to the extent of the business partnership.
Both partners were meant to shift to New Zealand in 1980 due to the political uncertainty in South Africa but in the end only van Heeren came while Kidd stayed in South Africa.
Counsel for van Heeren, Bruce Gray, hasn't presented the statement of defence yet.