KEY POINTS:
Peter Davison hasn't seen his cousin Kim Spencer for a decade. It's about as long since he's seen any of approximately half a million dollars he lent Spencer to help him out of a tight spot. In hindsight, he was naive, he says. But he had the money and it was family. "When family that you have grown up with ask for a hand, you help them out."
Spencer was the complainant in the kidnapping case which ended in the Auckland District Court this week. Richard Kroon and Craig Weller were the accused, facing a mandatory jail sentence with a maxium of 14 years. The jury heard claims that both Kroon and Spencer were liars. The main issue for jurors was not so much who carried out the kidnapping but whether it occurred at all.
Kroon's lawyers contended that it was an invention by Spencer to avoid having to pay Kroon as much as $3 million from a side deal done in breach of their joint venture commitments.
The kidnapping was alleged to have happened on November 16, 2004, at Pakiri, north of Auckland, on a farm with commanding ocean views. The pair had divided the property into a dozen lots for resale.
That's what their joint-venture business involved - finding coastal farms, cutting them into lifestyle blocks, and sorting out details such as road access and council consents.
Primarily, Spencer did the leg-work and Kroon, who had a track record in property development, organised finance. But there were problems, particularly concerning Pakiri, and their business relationship soured.
Unsurprisingly, Peter Davison has a different view of Spencer than he did at the time he lent him the money in the summer of 1997. Spencer was a sharemilker with big plans to buy farms to convert to dairying.
Davison says Spencer told him he needed money for the farm conversions. "Little did I know that the official assignee was already moving against him [to file for bankruptcy]," Davison wrote in a statement he gave Kroon's defence team. He was technically bankrupt but was "getting in money and salting it away".
Davison has survived and built a successful business but, with a pregnant wife and a new business, the experience then caused great emotional and financial stress, Davison told the Weekend Herald.
"My young family was on the way and I had to do something. I could let it consume me or get on with life. You never forget but you just have to move on."
Spencer gave him a document, supposedly making the loan formal, but Davison's lawyer told him it was useless.
Teetering on going under, Davison asked Spencer if he could repay some of the money. "He told me that he had shifted all the money overseas and had invested in motels in Queensland and he had to be very quiet about it because he was bankrupt. "He fed me a pack of lies and one day I woke up and realised. From then on communication stopped. He cut himself off and I've never received one cent."
Rolly Spencer, at 61, is 15 years older than Kim. Rolly and his late twin brother are half-brothers to Kim and the youngest, Darryl, having the same mother.
Rolly Spencer says the once-happy family is now estranged and that their elderly mother, who lives in one of Kim's houses, is the only family member who has contact with Kim.
"I tried to resolve the situation with Peter and said to Kim, 'For God's sake sort it out. You're making it very difficult for the family'. But he walked away."
Rolly Spencer says he and Kim have hardly spoken since. "He's just cut me off, but I'm not unhappy about that. Peter Davison has been more like a brother to me." He says Kim had also fallen out with Darryl, "over cows and money".
"It's not a very nice family tale. We grew up at Waihi Beach and Mt Maunganui and we had a lot of fun, the typical Kiwi kids thing. Unfortunately the past 12 or 13 years haven't been very pleasant, I'm afraid.
"Kim's done very well but I certainly don't appreciate what's happened with friends and family."
Kim Hilton Spencer (the police investigation into the alleged kidnapping was tagged Operation Paris in reference to Spencer's middle name) was adjudged bankrupt on September 10, 1999. Two years later he was released from bankruptcy and embarked on an ambitious career buying multimillion-dollar coastal properties.
One deal that didn't go through was for the property of boxer David Tua, adjacent to the Spencer-Kroon land at Pakiri. Tua's former manager had signed a deal to sell to Spencer and Kroon, but the boxer said he stopped it when he found out about it.
Spencer lives on a large property in Orewa with his second wife, Susan (nee Hamilton), drives a Range Rover, and enjoys boating, fishing and diving - as he did a decade ago when the official assignee was trying to seize assets on behalf of creditors. The biggest creditor at the time was a finance company that loaned money to Spencer's business entities against assets that a spokesman for Stace Hammond, the Hamilton law firm that represented the finance company, said turned out to belong to others.
"Our client was left high and dry as were a number of other creditors."
Harold Webber and his wife, Sharon, bought a farm in Southland in the mid 1990s and went into an equity partnership with Spencer.
"We went half shares in cowsheds and half shares in the stock," Webber told the Herald. "Unbeknown to us, Kim technically mortgaged our stock to the finance company, Elders. Elders kept wanting to count stock [to check the value of the security Spencer gave]. One day I said to them, 'How can you count them because half of them are ours'.
"That's how the can of worms opened. It was two years of hell. We did stand to lose everything; the farm - the lot."
The Webbers have heard nothing from Spencer since. "No, no apology," he says. "I could go into great detail and you'd be horrified - he was meant to be a friend."
There were other Southlanders, he says, who regret doing business with Spencer. One was farmer Brian Church, who gave evidence in 1999 in a case in the High Court in Hamilton in which the official assignee was pursuing $250,000 that Spencer was suspected of wrongly denying his creditors.
In his judgment Justice Hammond said Spencer had got the money from Davison. Susan Spencer had used $53,000 to buy a boat at a time, the judge said, Kim Spencer's financial position was "utterly precarious". Kim Spencer gave "a most extraordinary account", said Justice Hammond, about what happened to approximately $200,000. He claimed he had kept it in cash in a suitcase, driven down to Gore, and gave it to Church in the street as a further deposit for the purchase of his farm and was given a receipt.
Church flatly contradicted this, giving evidence he had only ever received an initial $50,000 deposit, most of which went in costs when the sale failed and he had ultimately had to sell at a substantial loss. Spencer was unable to produce a receipt and nor did a search (under a warrant obtained by the official assignee) of Spencer's home.
Justice Hammond: "This is not a case where there can be any misunderstanding ... Somebody did not tell the truth in my court. I am obliged to say that in my view Mr Spencer did not tell me the truth. And it must follow that Mr Spencer is endeavouring to cover up wherever the money really went to ... Mr Spencer struck me as a weak individual. His evidence lacked any precision or recall. He constantly endeavoured to blame his former wife for all the woes which had befallen him, or to explain away the disasters he had managed to heap upon himself.
"He showed little sense of fiscal or moral responsibility. Mr Spencer's feeble explanation that he was in a confused and chaotic state at the time falls on granite. And between the two men, I thought that Mr Church was unquestionably telling me the truth, whereas I thought Mr Spencer was not."
The $200,000 was never recovered.
Spencer is at present involved in various civil court actions; with Westpac and Auckland Finance (who financed Pakiri and are pursuing their money), with Kroon (who is seeking a share of the deal he claims Spencer cut him out of) and Philip Parker, an Aucklander who runs an investment business out of London.
Parker is counter-suing Spencer, claiming $27 million, in relation to a 747ha coastal farm at Whangape in the Far North.
PARKER bought the station from Spencer for $9.5m (twice what Spencer had paid a year earlier, in 2005), planning to subdivide.
He claims it was advertised as having the potential to create 30 waterfront sites each worth $1.5 million; that two valuations were produced to support this and Spencer had "unequivocally affirmed" that local Maori were unconcerned about subdivision. After buying, Parker discovered there were Treaty of Waitangi claims on the land and plans by Spencer had been blocked by Ngati Haua.
Parker cancelled the purchase and is being sued regarding that by Spencer. The figure in Parker's counter-claim relates to lost potential profit. The Weekend Herald understands he is considerably out of pocket.
In the kidnapping case, the evidence to support Spencer's account of being the victim of Kroon, Weller and four balaclava-clad accomplices came from phone records suggesting contact between Kroon, Weller and Spencer, at times and from places that fitted the prosecution scenario that Kroon, fed up with Spencer, took the law into his own hands. There was contested identification evidence of Weller and of Weller and Kroon's link through the Mothers Motorcycle Club.
The detail Spencer gave of the alleged attack - of guns, knives and a man speaking Russian, of being stripped naked below the waist and forced to sit on a plastic sheet (so there would be no trace had they "literally scared the crap" out of him, suggested the Crown) - would not be out of place in The Sopranos.
Kroon's lawyer suggested these were examples of Spencer's cunning - buttons he could push because he knew of Kroon's historic connection with the motorcycle club, knew of his visits to Russia where he and his wife had adopted a child. The ace for the defence was Spencer's credibility.
Bruce Stewart, QC, who is representing Spencer in civil disputes, said his client had no comment to make.
