Auckland developer Dave Henderson's ex-wife Rochelle is holding up the sale of three apartments which would help reduce a debt mountain of $48 million.
Mr Henderson's lawyers claimed in the High Court at Auckland that the caveat Ms Henderson put on the Precinct Apartments in Lorne Street preventing their sale was for an ulterior purpose, something Ms Henderson denied.
One of Mr Henderson's companies, Kitchener Rentals Ltd, unsuccessfully applied to Associate Judge Hannah Sargisson to discharge the caveat to allow the properties to be sold.
"The alleged reason is that on settlement of the sales the proceeds will fall far short of what is required to pay the debts secured under the prior registered mortgages and that there will be no equity remaining to satisfy any interest claimed by Ms Henderson," the judge said.
Westpac, which holds the first mortgage on the properties, supported Kitchener's application.
Other mortgagees whose advances total some $48 million include Babcock and Brown Real Estate Finance NZ Ltd, CK Investment Fund Ltd and Golden Fund Ltd.
Associate Judge Sargisson said it seemed improbable that other security did not exist to secure such a sum, given that the $1.73 million sale price of the apartments fell "dramatically short" of the indebtedness, "which clearly called for explanation on Kitchener's part".
The judge said Ms Henderson had made several clear and reasonable requests of Mr Henderson through his solicitors for disclosure of his financial position and that of Kitchener.
Her counsel said those request had "fallen on deaf ears".
The judge said given the history of the dealings with the apartments and the lack of disclosure, Ms Henderson was "concerned that the affairs of Mr Henderson and Kitchener are being so arranged as to defeat the interest she claims".
Ms Henderson's lawyers said that there was "at least the suggestion that some sort of commercial arrangements for the mutual benefit of Kitchener and the mortgagees have been made".
In her judgment, Associate Judge Sargisson said that in 2003, before the couple's separation, they had entered into an agreement between them as to ownership and division of property.
Ms Henderson was entitled to choose an apartment portfolio before the properties such as the Precinct went onto the open market.
Mr Henderson arranged for the then owners, Precinct Apartments Ltd, to transfer the three apartments into Ms Henderson's name.
However, Ms Henderson claimed that Mr Henderson later deferred the transfer and in March 2005 another agreement was drawn up whereby Henderson would fulfil his obligations "within a reasonable time...having regard to applicable market conditions".
She claimed in her affidavit that Mr Henderson placed Precinct Apartments into liquidation, having first arranged that the three apartments, and others besides, to be transferred to Kitchener.
Ms Henderson said that Kitchener then mortgaged the properties several times and subsequently arranged to sell them without them being offered to her.
Dismissing Kitchener's application, Associate Judge Sargisson said that it was for Kitchener to show that there was no practical advantage to Ms Henderson retaining her caveat.
However, that required disclosure, which had not been forthcoming.
"It seems that Kitchener is seeking equitable relief but is not making disclosure of its own or Mr Henderson's financial positions," the judge said.
She awarded costs to Ms Henderson.
