Former Team New Zealand boss Tom Schnackenberg has taken legal action against the team, claiming it has deliberately shut him out of the next America's Cup.

The veteran sailor and boat designer, who held the syndicate together when Russell Coutts and Brad Butterworth defected to Alinghi in 2000, has lodged papers in the High Court at Auckland claiming Team NZ's new leadership hired him only to stop him from moving to another team.

"Any of the syndicates would have him if they could", his lawyer said yesterday.

Schnackenberg, 59, was the syndicate head of the disastrous 2003 cup defence, after which an independent report identified the management structure as the most important reason for the failure to retain the cup.

When round-the-world helmsman Grant Dalton was brought in to manage the next challenge, Schnackenberg was demoted to the design team. Dalton said yesterday that he was disappointed Schnackenberg had decided to take court proceedings. He said the team thought their former boss had made an "amicable departure".

Team NZ had taken legal advice and the suit would be defended. Schnackenberg and his company, North Sails, are seeking to set aside a restraint-of-trade convenant in his agreement with Team NZ so he can join another syndicate.

The case has been set down for a preliminary hearing later this month when Team NZ is expected to file a statement of defence. The hearing is likely to be held in late May. The action is the latest row in a sport that has become dominated by litigation.

Last month Coutts, the most successful helmsman in cup history, settled with Alinghi boss Ernesto Bertarelli after he was fired last July.

Schnackenberg, who is regarded as a gentleman in a sport saturated by scandal and skulduggery, was sacked by Dalton in December. The explanation was that Schnackenberg's role had diminished to an extent that the best solution was for him to leave the team.

In his court papers, Schnackenberg alleges he was with Team NZ for only three months in this campaign, once Dalton came on board, between August 1 and October 31.

"We are alleging that the purpose for engaging him for a very short period at the early stage of the campaign was so that they could say 'now you can't go and work for anyone else'," said Schnackenberg's lawyer, Kit Toogood, QC.

Mr Toogood said the case would turn on the reasonableness of the restraint of trade and the fairness of keeping Schnackenberg out of the campaign altogether when they said they didn't want him.

He said Team NZ claimed Schnackenberg had confidential information that they thought needed to be protected by an order saying he should not go to another syndicate at any time during the current campaign.

"He says he doesn't know what is supposed to be so secret that he can't be trusted to keep secret."

Asked which syndicate Schnackenberg wanted to join, Mr Toogood said that there were a number of possibilities. "Any of the syndicates would have him if they could."

Speculation has been mounting in Italy that Schnackenberg and Coutts are keen to be involved in the Luna Rossa challenge, formerly Prada, in the next cup.