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Lepionka wins another legal round in Hawke’s Bay land spat

By Victoria Young

Sept. 10 (BusinessDesk) - Juice magnate Stefan Lepionka and his related interests have won another legal battle relating to a trophy property in Hawke's Bay.

Charlie's co-founder Lepionka and developer Garth Paterson have been fighting since 2015 when Paterson’s former company GLW Group took action over the 24-hectare riverside property.

Lepionka’s entities had paid GLW for several planned sections on the estate but the situation got tricky when GLW defaulted on its $2.6 million mortgage and Lepionka bought the debt from Westpac to protect his deposit.

After a month-long trial, Justice Sally Fitzgerald found in December 2017 that Lepionka’s interests had breached their duties as mortgagee. However, she declined to set aside its power of sale and confined GLW’s remedy to damages.

GLW, whose sole shareholder and director is Paterson’s former wife Elizabeth O’Neil, has been trying to stop the previously agreed sale to Lepionka’s interests, and indicated it wanted to go to the Court of Appeal.

However, in a recent decision following a settlement between the liquidator for GLW Group and Lepionka’s interests, associate judge Roger Bell labelled Paterson’s latest bid to caveat parts of the property “pointless.”

GLW was moved into liquidation in August 2018, and subsequently liquidator Damien Grant made a $100,000 deal with Lepionka’s interests, where Grant agreed not to take the case any further.

Despite this, another entity - LW354 - which is also owned and directed by O’Neil, lodged caveats over the property. According to the decision delivered in July this year, it is the seventh caveat lodged against the property, with the preceding instruments all withdrawn or removed by other judges.

Paterson’s interests alleged that any rights in the proceedings were held by GLW as a corporate trustee and claimed that Grant had no right to do a settlement deal.

“The appeal is a long shot, even if all the procedural hurdles can be overcome. Besides the weakness of the appeal is likely to weigh in on procedural decisions on setting aside the discontinuance and extending the time to appeal,” the associate judge wrote.

He said while LW354 might have an interest in the property, it was no greater than GLW Group’s and therefore the caveat should be removed.

“Paterson was clearly behind lodging the caveat. He and his associates should understand that the litigation cannot be reopened and that the Lepionka mortgagee can complete the sales of the lots on the Kahuranakai Road property. This attempt to block the transfers of the title has been pointless,” the judgment said.

Following the judgment of associate judge Bell, Paterson took on the Registrar-General of Land, in a bid to stop Lepionka’s interests from registering transfers of the land.

According to a minute of Justice Peter Churchman dated Aug. 8, Paterson sought an interim injunction, which had the effect of the registrar ceasing his processing of the transfer.

Justice Churchman pointed out the effect of the application was similar to the lodging of a caveat, and Paterson had been ordered by Justice Fitzgerald not to lodge any caveats.

“I drew to the plaintiff’s attention the possibility that his actions in commencing these proceedings may ultimately be found to be a contempt of court and encouraged him to take legal advice,” the decision said.

Lepionka declined to comment on the matter. Paterson could not be immediately reached.

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