Jackson's war of the Rings

By LOUISA CLEAVE

It should have been another highlight in the career of Peter Jackson. Instead, the New Zealand premiere of his second Lord of the Rings movie, The Two Towers, was overshadowed last night by a very public row between the director and the Film Commission.

Jackson used the spotlight of his Wellington premiere to announce that "self-serving bureaucrats" such as commission chairman Barrie Everard and chief executive Ruth Harley were not welcome at the gala event.

He attacked the commission for failing to pay the debts of a local film, Kombi Nation, about young New Zealanders doing their OE in Europe. The production company behind the film, Kahukura, owed almost $300,000 to Jackson's company The Film Unit (formerly the National Film Unit).

Everard and Harley did not take this criticism lying down. Everard described Jackson's comments as petty, appalling and vitriolic.

Harley said Jackson was simply trying to get the commission to pay his company's debts. She added that she would just have to take her kids along to The Two Towers and pay for her own tickets.

"It's not so tragic - I do that every week."

The row stems from the collapse of Wellington production company Kahukura this year and the debt it owes The Film Unit. The commission had contracted Kahukura to make a series of low-budget films, including For Good, Aidiko Insane and Kombi Nation. The commission and Kahukura also had a deal to make Crime Story, a film based on the novel by Maurice Gee.

Filming on For Good and Aidiko Insane was complete, Kombi Nation was in post-production and Crime Story was still being filmed when Kahukura's financial problems surfaced.

In its annual reports, the commission said it continued to pay cast and crew on Crime Story until the Inland Revenue Department put a stop to the payments. It said "strenuous efforts" were made to retrieve the film assets from Kahukura, including an offer to purchase the company's share of rights to the four films.

However, the company went into voluntary liquidation on May 31 owing creditors hundreds of thousands of dollars - including $270,000 to the Film Unit - and the movies were among the assets seized by the liquidator.

The commission later found that $120,000 paid for pre-production of Crime Story had not been used for that purpose.

According to the first liquidation report in June, Kahukura owed Westpac Trust $127,517, Inland Revenue claimed at least $120,000 and The Film Unit said it was owed $299,981. Crime Story creditors had unsecured claims of $520,000.

Jackson wants the commission to pay the debt and maintains it could have avoided the entire Kahukura debacle. He says The Film Unit alerted the commission to the outstanding bills on March 5 and threatened to pursue legal action against Kahukura unless the debt was paid.

Jackson claims that instead of paying the bill and then scrutinising Kahukura to see where its money had been spent, the commission committed itself to a further $2 million investment in Crime Story.

Everard disputes Jackson's time line, saying the Crime Story agreement was signed on January 16. He says it is Jackson's Film Unit which failed to act, by waiting until March to alert the commission to bills which had not been paid since November.

"If the credit control department at The Film Unit had phoned the commission in December and said, 'Is Kahukura receiving its funding for Kombi Nation, because we're not being paid?' we would not have this mess we have today," Everard told the Herald yesterday.

Everard says the commission is not a guarantor of production companies - "that would make the commission a studio" - but contracts independent companies to make films.

He says commission-financed productions are overseen by an Australian company (a completion bond guarantor) which requires weekly reports from the production and monitors budget costs and schedules.

Everard says there was no indication of problems until the commission heard from The Film Unit in March.

"What we didn't do at the time - and have never done before - is ring around all the people working on a film and ask them if they're being paid.

"Generally, if somebody wasn't being paid for a few weeks, you would expect the alarm bells to go and somebody would ring the commission. Which I believe The Film Unit should have done because it was the most substantial service provider that wasn't being paid."

Kahukura's financial difficulties surfaced during the production of the television series Love Bites.

New Zealand On Air allocated a substantial $4 million to Kahukura to make 26 half-hour episodes of the comedy for TV3.

Parr has claimed that an investor in the series pulled out of a $500,000 commitment and Kahukura was forced to put up the money.

"The robbing Peter to pay Paul probably started at that point," Everard said yesterday.

At the end of last year Parr was not happy with the nearly completed Love Bites, privately admitting that his first attempt at a television series had been fraught with difficulties.

There was talk that nearly every writer in the country had taken a crack at the scripts - with Auckland writers being flown to Wellington to write - and TV3 was sending back episodes to Parr for re-editing.

During production, Parr replaced the director of photography and re-shot many episodes, all which would have added to the cost of the project.

Like many production companies, Kahukura was juggling a number of projects at different stages of pre-production, production and post-production.

Kombi Nation, directed by Grant Lahood, had been filmed back in 1999 but languished for the next couple of years.

Lahood says the project was "plagued by problems" and the film-makers found it "quite tough" to get the commission to part with the money needed for post-production.

Lahood says the commission gave an initial injection of $300,000 to film Kombi Nation and Kahukura received a further $460,000 for post-production work, the fine-tuning such as sound mixing.

Lahood says he first learned of Kahukura's debt to The Film Unit in April, when he tried to obtain a print of Kombi Nation for its premiere in Wellington. The Film Unit would not release it.

"I spent all week on the phone getting Kahukura to sort this out," says Lahood. "I ended up appealing to The Film Unit to do me a favour and they released the print for the premiere."

A security guard turned up with the print and sat alongside it in the projection room, says Lahood.

The guard then packed it in a box and took it back to Avalon straight after the screening.

Lahood blames the commission for failing to monitor where the post-production money was being spent.

Experienced director Jackson and young film maker Lahood have become unlikely brothers-in-arms against the commission.

Lahood says Jackson's moral support is "fantastic for me" because he feels "a bit trampled" by the commission.

Last week, Lahood took matters into his own hands and paid $20,000 to PricewaterhouseCoopers for the rights to Kombi Nation.

"[The commission] took six months to not purchase the rights from the liquidator. And the end was not in sight."

Everard says the liquidator did not want to deal with the film-makers independently and "obviously thought they'd get a better deal from the commission by holding on to the three films".

But he says he asked the liquidator last Friday to sell the film rights to Lahood and the other film-makers.

"He said they'd think about it on the weekend, and on Monday I heard from the producer of For Good that he'd acquired his for $2500. The liquidator then managed to get $20,000 out of Grant Lahood."

Everard says Lahood can claim back the money from the $30,000 outstanding from the budget for Kombi Nation held by the commission.

But Lahood is nowhere closer to seeing his work in cinemas. He cannot have the physical print of his film until The Film Unit debt is paid.

Is it the commission's responsibility?

"Of course it is," says Lahood. "The Film Commission was set up to make New Zealand films and support New Zealand film-makers.

"If they can't see their way clear to doing what they have to do to save these films, it's idiotic. They're going to sacrifice my film for what is a relatively small amount of money in the grand scheme of things."

Jackson says Lahood should be applauded for extracting his film from the Kahukura liquidation mess. Now it is the commission's job to complete the film and sell it, he says.

Everard disputes Jackson's claim that the commission should have paid the debts back in March and avoided the present difficulties.

He says the debts would have sucked $1.5 million out of the commission's budget at the expense of the rest of the film industry.

"It would be a gross misuse of public money."

THE KOMBI NATION SAGA


THE CAST

Peter Jackson: The Lord of the Rings director, owner of The Film Unit (formerly the National Film Unit).

Barrie Everard: Film Commission chairman, Auckland film distributor, exhibitor and producer.

Ruth Harley: Film Commission chief executive.

Larry Parr: Veteran film producer, owner of Kahukura Productions (in liquidation).

Grant Lahood: Director of Kombi Nation, a Kahukura-produced film about young New Zealanders doing their OE in a Kombi van around Europe.

THE PLOT

* Kahukura wins Film Commission funding to produce a series of feature-length movies, including Kombi Nation.

* Kahukura goes into liquidation owing about $500,000.

* Creditors include Jackson's company, The Film Unit, owed almost $300,000.

* Jackson blames the commission for refusing to rescue. Kombi Nation with extra money. He blacklists Everard and Harley from the NZ premiere of The Lord of the Rings: The Two Towers.

* Everard accuses Jackson of using the commission to collect Kahukura's debts to his company.

EARLY REVIEWS

Mixed. Critics seem confused over who is the real bad guy.

Herald feature: Lord of the Rings