18 Feb 2015

Lundys 'probably not' solvent

6:46 am on 18 February 2015

The land Mark Lundy tried to buy to develop a vineyard was ultimately sold and developed as such - but that owner lost it in the 2008 recession and it is now owned by Chinese interests.

Mark Lundy - Day three of the trial.

Mark Lundy, 56, during the trial. Photo: RNZ / Alexander Robertson

Mr Lundy, 56, has pleaded not guilty to murdering his wife and daughter, Christine and Amber Lundy, whose bodies were found in their Palmerston North home on 30 August 2000. His retrial, before Justice Simon France and a jury of seven men and five women, is in its second week in the High Court in Wellington.

The Crown contends he killed his wife for her insurance money, and his daughter because she saw what he was doing to her mother.

Key points from day seven of the trial:

  • The Lundys missed one $425 mortgage payment in June 2000 but all others were paid.
  • The Lundy family home was worth $115,000 but they had a mortgage of $96,000, giving them equity of $19,000.
  • Mark Lundy's lawyer warned him of the risks of signing up to unconditionally buy $2 million of land for a vineyard.
  • Business development consultant and mentor David Gaynor rung Mrs Lundy between two months and three weeks before her death to warn her of the risky nature of the vineyard proposal.
  • The Lundys were "probably not" solvent when Mrs Lundy was killed, forensic accountant Reginald Murphy said.

The court was yesterday told Mr Lundy tried to buy 44 hectares of land in the Hawke's Bay for $2 million to develop into a vineyard, and planned to raise the capital for the land and development through shares and mortgage bonds.

He needed to attract investments of at least $2.8 million within four months of the prospectus for the company, Winegrowers' Ltd, being launched; just $108,500 was committed and the plan fell over about the time his wife and daughter were killed.

Allan Clarke, a horticulture and viticulture specialist for more than 40 years, yesterday told the court he looked at the land for Mr Lundy and appraised it as being suitable for vineyard development.

His report was included in the prospectus - a document he did not see until a few months ago and which he described as being "short on detail" and having figures which were "quite rounded, almost as if they'd been taken from another prospectus".

He estimated it would have cost about $2.14 million to develop the vineyard, and that excluded such things as water reticulation and staffing.

He also said a manager would need to be on site from day one, at a cost of about $60,000 a year; Mr Lundy had told people he would be earning $80,000 a year managing the vineyard from afar, and that it would take only a few hours a week.

Mr Clarke said he recommended the land to American buyers after the sale to Mr Lundy fell through, and that they developed it into Paritua Vineyards.

However, they lost the vineyard during the 2008 recession and it was now owned by Chinese interests.

Police forensic accountant Reginald Murphy yesterday gave detailed evidence of the Lundys' financial position at the time of the deaths, including their personal finances, those of their kitchen sink distribution company Marchris Enterprises and the proposed vineyard venture, Winegrowers Ltd.

Asked whether they were solvent as at 29 August 2000, Mr Murphy said: "Probably not".

He said Marchris Enterprises had, for some time, traded on the goodwill of its principal creditor and the bank and "without that support, no, it wouldn't have been viable".

Winegrowers' Ltd had nothing, Mr Murphy said.

"In fact, if anything it had a liability with the Inland Revenue."

Palmerston North lawyer Phillip Sunderland outlined Mr Lundy's actions in making an unconditional offer on the Hawke's Bay land, despite having only $19,000 equity between him and his wife.

Mr Sunderland said he expressed concern about the risk involved in an unconditional agreement but that Mr Lundy was concerned the vendors would not sell to him if there were lengthy conditions in the contract.

Mr Sunderland said there would have been "relatively robust" discussion about the unconditional nature of the contract.

He was not aware of Mr Lundy's financial position outside of what was in a prospectus for potential investors in the vineyard but under cross examination from the defence said he later became aware the Lundys had a home worth $115,000, which had a $96,000 mortgage on it.

The trial continues.

* Clarification - For the avoidance of doubt, please note that Radio New Zealand reporter Sharon Lundy is no relation to Mark Lundy.

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