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Queenstown brothers and former business partners Neville and Shaun Kelly have battled each other in court since 2008 over the former's company, Thunder Jet, wanting to operate in competition with the latter's K-Jet, formerly known as Kawarau Jet.
The brothers co-owned jet-boat company Kawarau Jet between 1987 and 1999.
In 2011, Thunder Jet was granted Environment Court approval to operate on Lake Wakatipu and the Kawarau River and, late last year, council-appointed commissioners granted consent for the company to operate on the Lower Shotover River.
The problem, K-Jet lawyer Graeme Todd told the Environment Court in Queenstown yesterday, was that when commissioner John Milligan was appointed to chair the hearing and decide the matter with another commissioner, he did not have the full council's endorsement and, therefore, proper delegated authority.
Mr Todd urged Judge Laurie Newhook and two commissioners to defer the appeal hearing until a yet-to-be-filed High Court judicial review was undertaken.
Council lawyer Nick Whittington, of Auckland law firm Meredith Connell, said a council subcommittee had erred by appointing Mr Milligan but the problem was fixed by a retrospective endorsement of the commissioner by the full council in January.
Pru Steven QC, representing Thunder Jet's operating company Queenstown Water Taxis Ltd, said K-Jet's threat of a review was to keep Thunder Jet off the river for as long as possible.
The judge said the court would reveal its thinking on the jurisdictional issue this morning and took evidence from two Queenstown Water Taxis witnesses: Coastguard Boating Education tutor Katie McNabb and experienced commercial jet-boat operator Nick Hamilton, a former Kawarau Jet owner.
The case, set down for three days, centres on safety issues between the rival companies' boats, particularly radio contact.