Developer and lawyer chased for $510,000 debt by hotel firm

The Swiss-Belhotel on the corner of Raffles and Munroe streets.  (File photo)

Marty Sharpe/Stuff

The Swiss-Belhotel on the corner of Raffles and Munroe streets. (File photo)

A Napier developer and lawyer are facing bankruptcy proceedings over an unpaid debt of $510,000.

Developer Malcolm Herbert and lawyer Stephen Lunn were served bankruptcy notices by USAR Napier Ltd in November last year after the High Court ordered them to pay the sum in relation to a planned Hilton hotel development that turned sour.

Hotelier company USAR Napier Ltd, an arm of the Sarin Family’s hotel investment company, had intended to open a Hilton DoubleTree hotel in the former PwC building on the corner of Munroe and Raffles streets.

The company signed an agreement to lease the building, which was being converted into a hotel by Thackeray Trust trustee Malcolm Herbert.

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Before USAR took on the lease, Thackeray Trust sought to lease the building to another operator, Swiss-Belhotel.

Legal action ensued. It was resolved when USAR agreed to cease action if the trust refunded the deposit paid by USAR, plus $510,000.

The building housing the Swiss-Belhotel in Napier was once destined to be a Hilton.  (File photo)

Marty Sharpe/Stuff

The building housing the Swiss-Belhotel in Napier was once destined to be a Hilton. (File photo)

The Trust repaid the deposit but not the $510,000, prompting USAR to go to the High Court seeking summary judgment for the amount.

Late last year Associate Judge Dale Lester made judgment against the defendants and ordered USAR to prepare a schedule of amounts owed, including interest.

The Trust still did not pay the amount owed.

Herbert and Lunn appealed Lester’s decision. It was declined after the Appeal Court judges found it was “not tethered to reality”.

Herbert and Lunn also applied, in the High Court, to have the applications for bankruptcy to be set aside.

They have been unsuccessful. In a decision made last week, Judge Kenneth Johnston rejected Lunn’s argument that he was never personally liable and rejected Herbert’s argument, which appeared to be based on matters covered and dismissed in the Appeal Court.

The ruling clears the way for USAR to continue their proceedings to bankrupt Herbert and Lunn.

Herbert said: “Their [sic] will be no bankruptcy as the money is available to pay the 510k.”

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