Rich lister cleared over farm sale; in line for million-dollar costs payout after claims found to have 'lacked merit'

Bay of Plenty rich lister Colin Armer says he was "very disappointed that such baseless and frivolous allegations against me and my colleagues had to be defended in public". Photo/Alan Gibson

A Bay of Plenty rich lister has been cleared by the High Court of allegations he bought a Taupo farm under value, with the justice who heard the case saying the claims "lacked merit".

Colin Armer, of Armer Farms, along with the several other defendents in the approximate 10-week long trial in the High Court at Hamilton, are in line for a costs payout in the millions after Justice Paul Heath ruled against plaintiff Warwick Burgess.

Justice Heath said the case qualified for Category 3 - the maximum - case for costs and found the allegations "lacked merit" and were "over-complicated".

Burgess had questioned the "closeness" of the relationship between the former Fonterra director and an executor of Burgess' mother's estate.

The case centred around the sale of the Burgess' 1665ha property at Tihoi, on the northwestern side of Lake Taupo, to Armer, who owns three farms surrounding the property.

In court, Burgess' lawyer Damian Chesterman outlined varies concerns, including an Armer Farms (N.I) Ltd payment of $30,000 to trustee Tony Western's company Westex Ltd - just six weeks after a smaller portion of the property was sold for $4 million to Armer in 2009.

"The invoice is rather vague but refers to the construction of a culvert and some tracks and is for the amount of $28,000 plus GST," Chesterman told Justice Heath at the start of the trial in September.

"The relevance of it from the plaintiff's perspective is that it happened so soon after the sale of the farm that it's part of the relationship between Mr Armer and Mr Western."

Warwick Burgess now faces a hefty bill after losing his civil case against Armer Farms and others in the High Court and being ordered to pay costs. Photo/Alan Gibson

One of Burgess's main claims was the trust let it become rundown in the near 30 years before that sale and if had been developed in the 1980s it could have been worth up to $15 million by the time it was eventually sold in 2009.

Family lawyer Alasdair Morrison and accountant Philip Monk were also defendants, with Burgess alleging Monk set up an estate plan and the farm signed over to the family's company, CTE Burgess Ltd, by Christian Burgess just before his death without his knowledge.

Chesterman had claimed Morrison knew about the agreement but failed to disclose it.

Rob Latton, lawyer for Monk and the New Zealand Guardian Trust, submitted it was in fact the Global Financial Crisis which saw the property of Christian and Molly Burgess drop in value by $1.7 million over a seven-month period.

Justice Heath, in a decision released on Thursday, not only dismissed the allegations but
also ordered Burgess pay costs, which could see him landed with a bill in the millions of dollars because he ordered a 50 per cent uplift for each of the eight defendants.

Justice Heath wasn't specific about the payout and instead called for the defendants to issue submissions on their costs.

In an earlier Herald report, Armer's lawyer Campbell Walker QC indicated it would be more than $2 million if the uplift was granted.

At the start of the trial, the lawyers for all four defendants had estimated the cost of an 11-week trial being $1.67 million. However, it would likely be more than $2m given the uplift was granted by Justice Heath.

The lawyers successfully sought an injunction be put on a Paeroa property owned by Burgess in the event he lost the case.

In his decision, Justice Heath also dismissed Burgess' claims that Armer Farms had authorised others to destroy or bury farm equipment that he had the right to uplift prior to the sale taking place.

"Warwick's allegations are no more or less than an assertion that Mr Armer
deliberately authorised others to destroy or bury property of value to Warwick. On
the evidence, I am not persuaded on a balance of probabilities that it is so.

"Indeed, I go further. I accept Mr Armer's evidence that he did not give authority to destroy deliberately property of value. Those items that may have been destroyed were, I
find, no more than 'junk' that it was necessary for Mr Armer to have removed from
the Burgess Farm."

All of the defendants were awarded costs with each getting a 50 per cent uplift except for Western, who died some years ago, whose counsel did not take part in proceedings.

In a statement to the Herald, Armer expressed "concern and disappointment" the case even went to court.

"I'm very disappointed that such baseless and frivolous allegations against me and my colleagues had to be defended in public and that the allegations were repeated and in my view misrepresented as fact in the media.

"I am very pleased that we received unqualified judgment in our favour and that we have been completely exonerated of any wrong doing in respect of purchasing the property in question, and am pleased that my family's and colleagues' reputations can now be restored.

"I'm also grateful the judge has released his verdict just prior to Christmas, so we can get on with a peaceful Christmas knowing this is no longer hanging over us."

Chesterman, on behalf of Burgess, declined to comment about the decision.