The sale of Waimarie Properties at true market value is the crux of the dispute between Sparks and Greg Olliver. Photo / NZME
The sale of Waimarie Properties at true market value is the crux of the dispute between Sparks and Greg Olliver. Photo / NZME
Divorce is never pretty, especially when a lot of money is at stake. The end is nigh, possibly, of a long-running — and sometimes brutal — legal dispute over the sale of nine properties on one street in St Heliers, estimated at $17 million.
Strange and eerie to mooch around a large vacant lot in St Heliers that takes up so much room - 8945sq m, nearly two hectares - on a warm spring afternoon this week.
The earth was red and bare and rutted, and only good for thistles. There was a mound of dirt gathered up and placed in a meaningless heap. Other, older mounds of dirt were overgrown with long grass. The views were awesome. All of gently sloping Waimarie St looks down upon the harbour and across to Mt Victoria sitting prettily in Devonport. There was a solitary palm tree in the middle of that red, rutted wasteland; hard to tell whether it was a survivor of times past, or planted as a signal of future intent.
A big, rather gloomy home - a boarded-up window, a piece of rusty scaffolding - enjoyed particularly spectacular views from the top of the hill. The wasteland fell beneath it, and rose beyond it in the other direction, forming a U-shape around two bland and blandly identical townhouses.
The home and the empty land are known in court documents as the Waimarie Properties - nine sections of varying worth, as little as $6.8 million in one estimate based on a mortgagee sale, and as much as $17.2 million on a lot-by-lot sale on the open market.
The two townhouses, owned and occupied by innocent bystanders, are caught in the middle. The Bank of New Zealand, somewhat bleatingly, casts itself much in the same role in the long-running dispute over the ownership and sale of the Waimarie Properties.
The gloomy brown-brick pile used to be the six-bedroom family home of property developer Greg Olliver, his wife, Sarah Sparks, and their three children. The couple divorced in 2012. Sparks stayed on after the split, but now lives in Titirangi; Olliver moved back in, not quite lord of all he surveys.
Developer Greg Olliver. Photo / NZME
He took a $6.75 million loan from the BNZ when he bought the properties for $8.3 million in March 2007. (March, always March in the unhappy saga of Olliver v Sparks.) Houses were demolished to make way for an ambitious development, dubbed (by an imaginative journalist) the "Neverland complex". The idea was that 20 "luxury apartments" would cascade down the hill towards the water. It never happened.
Olliver ran up debts of $90 million, and narrowly avoided liquidation. Meanwhile, he defaulted on the BNZ mortgage - the loan was set to expire in 2011, in March. It was extended until July 2012. Penalties and interest began to mount. The money owed now is almost double the original loan - in March this year, the precise figure was recorded as $11,173,250.18, with daily interest of $2273.34. "Every month that passes," the bank plaintively noted in an affidavit, "adds $68,000 to the total."
The dispute is caused by the break-up of Olliver and his ex-wife. But the court file on the Waimarie Properties kind of brushes Olliver aside; he's a voice heard somewhere in the background, with the real battle for control of the multi-million-dollar properties waged between Sparks and the BNZ.
The argument between the two parties has spluttered and stalled through the courts since 2011. In essence, the BNZ has wanted to flick the properties on the cheap, as a job lot, to recover at least some of Olliver's debt; Sparks has argued for an orderly sell-down at true market value, which would entitle her to a cut of the sale price.
The fate of the Waimarie Properties is a skirmish, a kind of curtain-raiser to the division of all marital assets between Olliver and Sparks; to the BNZ, though, it's everything. Time and time again the bank has said, perhaps through clenched teeth, that it's not interested in the outcome of the matrimonial dispute. But Sparks' legal team has characterised that claim as disingenuous. It's accused the BNZ of "colluding" with Olliver, and acting in cahoots with the property developer.
The fight has been bitter. A series of beautifully calibrated legal strategies has led to an impasse. Sparks placed caveats on the Waimarie Properties to prevent the possibility of a sale; the BNZ made multiple applications to remove the caveats. Neither party budged an inch. But it looked like matters were finally due to come to a satisfactory end last week in a lovely old courtroom upstairs in the High Court at Auckland.
The courtroom, with its stained native timbers and its one pew at the back for the public, felt like a 19th century schoolhouse.
Sparks, an intense, dark-haired presence, sat at one end of the pew, to the east; furthest west, at the other end of the pew, was the man from the bank - BNZ corporate manager Craig Dungey, a narrowly built gentleman from Dunedin. Never the twain did the odd couple meet or make eye contact.
Sarah Sparks arriving at the Auckland High Court. Photo / Jason Oxenham
Things got off to a disputatious start when Ross Knight, who acts for Sparks, stuck it to the BNZ. He repeated the familiar allegation that Dungey and the bank had "dishonestly" assisted Olliver, and made a hash of things. "We say the BNZ has got itself into a terrible mess."
Dungey sighed, and his shoulders sagged. Curious that a property dispute involving one of the most expensive and desirable suburbs in Auckland should rely so heavily on a character from Dunedin. He has travelled back and forth to Auckland these past four years to sit in on court proceedings, and to face brusque cross-examinations; court documents regularly refer to Sparks and Olliver flying south to meet with Dungey on his home turf.
After that initial burst, Knight softened his approach, and said that he was quite happy to take the caveats off the Waimarie Properties - after they had been sold on the open market to anyone other than Olliver. Dungey conferred in a corner with the bank's lawyer, Alexandra Cunningham. They spoke in low voices, and nodded. Cunningham informed the judge, Hannah Sargisson, that Knight's proposition was perfectly acceptable.
Peace had broken out. Judge Sargisson asked counsel to prepare a joint memorandum, and to bring it to court that afternoon for her to read and rubber-stamp. A relieved Dungey had one thing on his mind: to get the hell out of Auckland, and go home. He caught the next flight. He wasn't needed; the thing was done.
The thing wasn't done. The parties returned to court at the appointed time at 2.15pm, and Knight said there was a sticking point. It was a relatively minor issue concerning valuation. But it still required careful attention, and due perusal of the files; the problem was that neither party, in their excitement at having brokered a peace deal, had thought to bring their files back to court.
Knight looked on the bright side. "We have made," he said, "significant progress." The judge sent them away to sort it out. That was 12 days ago. It hasn't been sorted out yet.
Sparks and Dungey were unable to comment while the matter remained before the court. It's probably fair, though, to record Dungey's response when asked whether he thought it possible that the dispute might be resolved any second now. He answered, loudly, "HA HA HA HA!"
It was laughter in the dark. The case must have played out as a nightmare for Dungey and the BNZ. "Since I started working at the BNZ, in August 1978, I have been involved in numerous property-related lending transactions," Dungey said in an affidavit. "In my current role I deal with and have responsibility for entities wanting to borrow in excess of $10 million." True, Olliver borrowed much less than that, but his debt is now within Dungey's familiar territory - well in excess of $10 million.
The case has surely cost the BNZ even more. During cross-examination on September 15, 2014, Knight asked Dungey whether the bank had paid the legal costs of CIT, a company where Olliver serves as sole director.
Dungey: "I have not made any advances to Mr Olliver as director of CIT."
So while the bank fought the ex-wife, it gave financial support to the ex-husband's trust. Despite the admission, Dungey has been resolute in denying any bias in the bank's dealings with Olliver. Affidavit, July 9, 2015: "I am concerned by the allegations made against the BNZ by Ms Sparks. The BNZ has had a long business relationship with Mr Olliver and his entities ... I refute entirely the implication that the BNZ ... would have anything other than an arms-length relationship with him."
Affidavit, September 15: "Ms Sparks refers to events which she alleges suggest that the BNZ has colluded with Mr Olliver and his interests against her and her interests. On behalf of the BNZ I utterly refute this allegation. It is not true."
It might look like the might of a national bank versus a former air hostess turned divorced mother-of-three - but it would be folly to think of Sparks as some sort of naif. She has acted swiftly and decisively during the course of this complex web of trusts, entities, litigation and counter-litigation.
The troubles seemed to date back to 2011, when the couple argued over the cost of the development of the Waimarie Properties.
According to affidavits, Sparks urged her then-husband to take caution, and was concerned the whole deal might go belly-up and they'd lose the family home. Several court documents refer to the couple having "a serious argument" one evening in 2011, in March. The ides of March, the raised voices and frayed tempers in the house on the hill ... A document lodged by the BNZ on June 11 this year takes up the story.
"Without BNZ's or Mr Olliver's knowledge, on or about March 2011 ... Ms Sparks transferred the registered ownership of the Waimarie Properties [to her own trust]." It was an audacious move. Olliver applied to the High Court for an order transferring the ownership back to his trust. His application was upheld. Sparks fought it in the Court of Appeal, and lost.
She kept fighting. Her next tactic was to lodge caveats against the Waimarie Properties "to protect [her] interest in the remaining cash assets following sale". The strategy was very effective. "The sale of the Waimarie Properties by BNZ as the mortgagee," as the bank's lawyers told the court, "cannot proceed while the caveats ... are still registered." The bank set up a cry in the court: release the caveats. Sparks held on. Deadlock, stalemate, impasse.
Until, it seemed, last week in that quaint little upstairs courtroom at the High Court. But settlement was illusory, or just delayed. Another daily lump of $2734.34 in penalty interest on Olliver's loan was racked up and added to the pile of his debt. All that Auckland money, juggled by the man from Dunedin - one of the most striking features of the case is the disputed sale price of the Waimarie Properties. It's like a twisted parable of the Auckland property boom.
In August, public valuer Evan Gamby inspected the properties and came up with a projected sale figure of $17.2 million, which included $7 million for Olliver's gloomy house on the hill. The valuation was based on sales made on the open market. Nothing remarkable about any of that; Auckland house prices have become so astronomical that $17.2 million for nine properties in one of the nicer eastern suburbs sounds entirely plausible.
But the bank's valuations have been dramatically less than that - as low as $6.8 million. This is the twisted parable, the bizarre parallel universe occupied by the BNZ. While every other house sale in Auckland is concerned with driving the price up as far as possible, the BNZ's prices just keep falling.
The parsimonious valuations meant the caveats served no purpose. There simply wouldn't be any money left over for her after the properties were flicked on at a mortgagee sale. It wouldn't even pay off the BNZ debt in full. So what was the point of caveats? Why stop the sale? "The prospect of a surplus is low ... Valuation evidence suggests no proceeds will be available."
As well as Olliver's $11 million debt to the BNZ, the bank claimed that he owed the IRD $2,994,795.86. That figure was incorrect. A hearing is set down at the High Court on October 14 when the IRD will petition Olliver for about $580,000.
