Dispute over Kingston Flyer assets

A legal battle has erupted over who owns assets associated with the Kingston Flyer historic steam train.

The former train and tavern operator has been issued a trespass notice to stay off the Kingston Flyer site and told by the train's receivers that its lease has never been valid.

Kingston Flyer Steamtrain Ltd (KFSL) held a 35-year lease to operate the business with Kingston Acquisitions Ltd (KAL).

The train ceased operations when Kingston Acquisitions went into receivership in November and that company's assets failed to sell by international tender.

KFSL director Phil Kerr yesterday said he received a letter on December 23, hand-delivered by Queenstown security guards.

"The receiver sent a letter to our companies in Kingston, advising that the whole agreement between KFSL and KAL is void ab initio [from the beginning]," he said.

The letter also said the lease agreement between Mr Kerr's Kingston Village Inn Ltd company, trading as the Kingston Tavern, with KAL was void from the beginning.

After delivering the letter to Mr Kerr, the security guards changed the locks on the Kingston Tavern and rail yards.

"We were given a notice to leave and stay off the premises and if we failed to do so, we would be committing an offence against the Trespass Act," Mr Kerr said.

KFSL owned "various assets" on the Kingston site, he said.

"The receivers are saying Kingston Acquisitions own 100% of everything. They don't. The receiver's legal advice is incorrect. We hold conclusive evidence to the contrary," he said.

He declined to say what assets KFSL owned.

"There's too many to list. There's hundreds of them. They were purchased by the company in association with operating the Kingston Flyer for seven years," he said.

Receiver Lindsay McClean, of Malloch McClean Queenstown, said he had received legal advice that all the assets were owned by KAL.

"All the assets are for sale. We have legal advice that KAL owns all the assets. The lease is a different story. KFSL had a lease on the train but that's got to be tested," he said.

He said he would be "negotiating" with interested parties in the New Year.

Bayleys Queenstown sales consultant Barry Robertson said seven tenders for the train had been rejected by the mortgagee, Prudential Mortgage Nominees.

He said the receiver was taking steps to clarify confusion around the ownership of some of the assets, including leases, carriages and plant.

A Wellington-based charitable trust which lodged a tender said the tender documents were "misleading" and the receivers should have sorted out all issues before putting the assets up for sale.

Graham McCready, of National Mutual Trust Ltd's Computers for Schools Charitable Trust Board, said the trust lodged a tender, then found out KFSL owned the trademark "Kingston Flyer" and other assets.

Mr McCready said the trust had proposed to operate the train, establish a reserve fund and use the money to buy computers for schools in the area.

In May, the trust delivered 80 computers to a Mangere school which had been hit by vandals.