Auckland Airport faces legal challenge to Queenstown deal

Aerial view of Queenstown airport. Photo / Mark Mitchell.

Auckland International Airport Ltd said it has been served notice today of High Court of proceedings in relation to its recent purchase of a stake in Queenstown Airport.

The plaintiffs, in separate proceedings, are Air New Zealand and Queenstown Community Strategic Assets Group Trustee Ltd (SAG).
SAG is a recently incorporated company with Queenstown businessman John Martin as its sole director and shareholder.

In July a high-powered group of Queenstown business and community leaders demanded they wanted "our airport back", arguing the sale of a quarter of Queenstown's airport to Auckland Airport was settled before the community knew about it. Mr Martin, a property magnate, fronted the call.

Auckland Airport said on July 8 that it was investing in a 24.99 per cent shareholding in Queenstown Airport by subscribing for new shares for $27.7 million. It has an option to increase the holding to 30 per cent to 35 per cent at any time up to June 30 next year.

Auckland Airport said today that in each of the proceedings, Queenstown Lakes District Council, Queenstown Airport Corporation Ltd and Auckland Airport are named as first, second and third defendants respectively.

The plaintiffs are seeking a judicial review of the share issue, claiming it breached certain provisions of the Local Government Act.

They are also seeking an injunction preventing the issue of any further shares to Auckland Airport or the entering into a shareholders' agreement between Auckland Airport and Queenstown Lake District Council, as is proposed as part of the transaction announced 8 July 2010.

Auckland Airport said it believes the plaintiffs' claims are without merit and will strongly defend the proceedings.

- NZPA