A group of Asian investors who purchased apartments in New Zealand lost their deposits amounting to NZ$10 million, after the developer went bankrupt during the global financial crisis, reported The Straits Times.
Comprising mostly Singaporeans and Malaysians, the 109 investors did not only fail in their legal bid to recover their deposits, but also faced a NZ$36 million counter-claim from the firm run by the receivers, for the losses suffered during the market crash. The High Court of New Zealand ruled in February that Kawarau Village Holdings is entitled to deposits as well as the NZ$36 million from the said group of Asian investors.
Between 2006 and 2009, the group invested in the failed NZ$2 billion Kawarau Falls development in the South Island.
Court documents showed that they acquired the off plan units in Lakeside West and Kingston West, which were to be built on the shores of Lake Wakatipu, near Queenstown.
Conceived in 2005, the buildings were supposed to be Stage 1 of a three-stage integrated lakeside resort development – dubbed Kawarau Falls Station – that was expected to become a world-class resort consisting of serviced apartment complexes and 13 hotels.
The buildings were part of an ambitious project by Auckland developer Nigel McKenna and marketed in Asia by Austpac Investment Consultancy.
However, Peninsula Road, the project’s original developer, was placed in receivership in 2010 after going bankrupt the year before.
The investors were then served by the receivers with settlement notices in 2011 for their purchases. None of the investors settled, claiming that Kawarau Village breached the contract.
As such, Kawarau Village cancelled the sales and purchase agreements in March 2012 and forfeited the deposits.
Meanwhile, the group sought a court order for the return of their deposits.
Representing more than 30 investors, lawyer Phil Creagh of Anderson Creagh Lai, revealed that fewer than 10 of the investors had settled with Kawarau Village. The others proceeded with a joint appeal against the judgment that will be heard in August 2016.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
