Bay of Plenty sawmill allegedly sold for $1

A Bay of Plenty sawmill worth millions of dollars may have been sold for just $1 by its receivers, according to papers filed in the High Court at Auckland this week.

Hamilton businessman John Zwiers is disputing the ownership of the Waipa Sawmill near Rotorua.

He wants to be declared the owner of the mill, which receivers of the Central North Island Forest Partnership sold to Waipa Corporation on December 16.

Zwiers alleges the owners of Waipa Corporation - Waikato businessmen Gary Catley and Phil Verry - reneged on a deal to join him in a bid for the mill, later using his confidential information for their own bid.

The papers allege Catley and Verry breached their fiduciary duty because the relationship they had with Zwiers was one of trust and confidence.

The two businessmen are also accused of breaching the Fair Trading Act because they engaged in misleading and deceptive conduct.

A hearing date has yet to set for the case.

Zwiers, who owns a sawmill at Orini, said he initially considered offering $15 million for the mill and the Mt Maunganui timber remanufacturing plant.

He later revised his bid to $9.5 million for the Waipa mill alone.

Zwiers had planned to bid for the mill himself, but after meeting Catley and Verry, decided to put together a consortium.

In July, Catley and Verry decided they wanted to complete the purchase themselves.

According to Zwiers, the mill was worth about $48.5 million, including land and buildings worth just over $13 million.

"The Waipa mill was purchased for a price unknown to Mr Zwiers but believed to be $1," the papers said.

Zwiers wants the court to rule that Catley and Verry hold the mill in "constructive trust" for him.

He is seeking profits and damages of $100,000 and wants all confidential information returned to him.

The mill, which has 325 staff and contractors, went into receivership in February 2001.

In a statement, Verry disagreed with Zwiers' claims and said the new owners were committed to the mill, which was not for sale.

- STAFF REPORTER, NZPA