New Zealand. Sensation Yachts owner Ivan Erceg refused leave to appeal USD21.5 million order

The New Zealand Supreme Court has dismissed a leave to appeal by Sensation Yachts owner Ivan Erceg and ordered that he pay costs of NZD2,500.

The reasons for the refusal are stated by the court to be:

[1] The applicant seeks leave to appeal against a judgment of the Court of Appeal upholding a judgment of the High Court which ordered specific performance by the applicant of an agreement to purchase three yachts.

[2] The proposed grounds of appeal are concerned with whether the applicant was able to rely on a solicitors’ approval clause under which named solicitors had to be satisfied that the respondent had clear title to the yachts. The applicant ceased to retain the solicitors named in the agreement for that purpose. A further ground concerned whether specific performance should have been ordered given what was said to be the likelihood of disputes over the respondent’s clear title.

[3] We are satisfied that the main authority cited by the applicant, which relates to cancellation of a contract and not to an application for an order for specific performance, is not in point and that there is no prospect of the applicant succeeding in an appeal on any of the proposed grounds for appeal.

[4] Accordingly, leave to appeal is refused.

The case is over a contract that Sensation Yachts signed with Balenia, to build the the Cayman Islands registered company five megayachts yachts. The build program was beset by disputes that resulted in the matter going to arbitration, where it was decided that Balenia would sell three partially completed yachts back to Sensation Yachts for USD21.5 million once Balenia had supplied certification of legal title to the yachts..

Balenia supplied evidence of title to Sensation Yacht’s London based lawyer Clyde and Co, but an actual certificate of title was not issued and, on that basis, Sensation Yachts argued that it should not pay for the yachts. However, in September 2008, the High Court ordered that Erceg pay a 10% deposit within seven days and complete all documents required for Balenia to pass title to him. On receipt of those documents, Erceg was ordered to pay the balance. Erceg appealed the High Court judgement, but the Appeals court found against him in March of this year.

Erceg is now residing on France’s Côte d’Azur, where his yacht Sensation was seized earlier this month. The 50 metre, tri-deck megayact is for sale at an asking price of around USD25 million along with an impressive residence valued at around USD50 million.

Marian Martin BYM News