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Hotchin loses bid against asset freeze

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Hotchin loses bid against asset freeze

3News NZ

Mark Hotchin

Mark Hotchin

The family of Mark Hotchin, a New Zealand businessman living in Australia who ran failed company Hanover Finance, have lost a bid to have assets unfrozen.

The Court of Appeal has turned down a bid by trusts related to Hotchin's family to throw out claims there wasn't a direct link between the assets held in trust and the family beneficiaries.

Justices Mark O'Regan, Terence Arnold and Douglas White dismissed the appeal by KA No4 Trustee and KA No3 Trustee, whose assets include Hotchin's incomplete multi-million dollar mansion on Auckland's Paratai Drive, according to a judgment released on Friday.

The trusts were seeking to strike out interim preservation orders made by Chief High Court Judge Helen Winkelmann earlier this year.

The trustees claimed the High Court ruling imposed a punitive element as it led to property being frozen "merely because the holder of the property had some association with the relevant person".

The Appeal Court rejected the claim, saying "it would be surprising if a protective regime such as the provisions in this case left outside of its net any issues held in discretionary trusts".

"Such vehicles are often established for the express purpose of placing assets beyond the reach of creditors, and can be vulnerable to successful challenges on the basis that the intention of the establishment was to defeat creditors," the judgment said.

The bench of judges decided it would be too early to strike out the Financial Markets Authority's (FMA's) pleading at this stage, and that it would be more appropriate for it to proceed to discovery and a substantive hearing.

The trustees also sought to strike out an FMA claim that there was an arguable case the KA4 trust was a "sham", saying the regulator hadn't supported its argument with enough detail.

The judges said the FMA's pleading was "simplistic and needs amplification and refinement", but said it didn't need to be struck out at this stage.

The FMA was awarded costs.

The FMA filed civil proceedings against directors and promoters of Hanover Finance Ltd, Hanover Capital Ltd and United Finance Ltd on March 30, 2012.

Hotchin has said that the FMA case against him is ill conceived and will be vigorously defended.

NZN

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Comments

18/08/2012 1:58:38 p.m.

Aaron wrote:

Good on you Mike a level headed comment :)

18/08/2012 6:54:49 a.m.

Aaron wrote:

Alot is to be said about the idiots with the "grab your stakes and pitch fork" mentality it is no short of childish and lead by a bunch of deluded spiteful idiots. It is fair enough to be upset if you lost any investment with Hanover though the way I see it the directors would be just as upset as clearly no one thought the market would turn so volitile. But if you wanted a safe investment why was a bank overlooked? Because of greedy investors trying to make a quick buck it is the same situation as gamblers really. People not paying back loans should be put in the spotlight as they did more than contribute to the outcome. And all the financial advisors who told their cilents to invest in hanover are obviously equally to blame. This has stuff all to do with a prospectus as I bet anyone barely read it they were blinded by their own greed. I commend Mark for taking the hits and fronting unlike other people. Hanover was not Mark's only business he was well off before hanover exsisted as far as I can conclude left hanover with nothing but debt and less than what he started with and to top it off from my research people like Eric and Mark have done alot of charity and helped the community in loads of ways and when in the position to do so were over generous people which is all forgetten because of peoples own greed. Shame on NZ hilbillies.

18/08/2012 2:42:46 a.m.

Mike wrote:

Maybe the defence just didn't spend the money in the right places?

Compare the results with the same judge and her rulings for dotcom?

There the judge has stepped outside any prior rulings in any prior case in dotcoms favour as never before has NZ asked to provide evidence of a legal case in another country (which we have a good relationship with over extraditions). Normally we let the court conduct a fair trial vs make another trial first. Eg NZ extradited the guy who killed his wife, abandoned his daughter, and fled to the US. It would be nice if our judges used a level playing field and were more predictable. I expect the ruling for dotcom will be booted upstairs to the appeal court as it falls so far outside any similar prior ruling.

For this case, I agree with continuing the hold on assets till the other issues are cleared in court. It may be hard on the family, but its also hard on those others that lost money. Hanover was not helped by the media helping cause a run on their finances. It would be nice if the media was more responsible than they were as they have taken no responsibility for helping several fiance companies fail through bad reporting.

17/08/2012 9:02:12 p.m.

Aaron wrote:

Alan is Obviously small and narrow minded. 1. Hanover never went into recievership like other finance companies. 2. The directors of hanover lost millions of their own money so clearly they didnt run off with investors money. 3. Hanover directors have been cleared of any CRIMINAL charges. But a know all like yourself should know all this right? Dont comment on something you have no clue about because you lack of understanding of what actually happened makes you look silly

17/08/2012 6:42:54 p.m.

Alan wrote:

No sympathy for him or his family. It is unfortunate they can't seize the assets of Eric Watson, any of the Bridge Corp board's family members and any of the assets of the other Hotchin family members who ran another finance company into the ground and ruined the lives of many hard working people with morally corrupt tactics. All of these collapsed finance companies were run from what I can tell by people who did not care about anyone but themselves. The senior Hotchin family members still alive must be so proud of their children! All I can say is these morally corrupt people whether they are the Bridge Corp clan, Blue Chip Mark Bryers or the any other con artist ruining the lives of hard working people should do the world a favour and end their own life. At least that would make people some feel happier.