Barry Hart bankrupt

Barry Hart is made bankrupt by ANZ over unpaid damages claim of $34,000

Mega debt-ridden struck-off lawyer Barry Hart has lost his battle against bankruptcy.

His bank, ANZ, has succeeded in its application to bankrupt him at Auckland High Court, over an unpaid damages claim of $34,000 - relating to the mortgagee sales of his family farms.

Associate Judge Hannah Sargisson adjudicated him bankrupt just after midday.

Mr Hart, who was present in court, wanted proceedings halted until his appeal of ANZ's morgagee sale process is heard at the Court of Appeal in March, when he wants to introduce fresh evidence to prove ANZ sold his properties in Waimauku for much less than they were worth.

ANZ opposed any adjournment, saying the time for the court to grant any indulgence to Mr Hart, who originally owed ANZ more than $30 million, had come to an end.

ANZ's lawyer Laura O'Gorman says bankruptcy was inevitable for Mr Hart at some point.

"Regardless of the outcome of the appeal he is clearly insolvent and will still owe large amounts to the bank," Ms O'Gorman says.

Arguments from both parties were heard at Auckland High Court on Thursday, but Associate Judge Hannah Sargisson reserved her decision until today, when she said it was not appropriate to delay this matter.

"It's quite clear there has been an act of bankruptcy and that the bank is prima facie entitled to its order of adjudication," the judge said.

"This is not a case where I can be confident that in the short term, Mr Hart has any reasonable chance of success and in that case, it would be unfair that the creditor be expected to delay its application and to have Mr Hart's affairs brought under the control of the Official Assignee.

"This matter has a long history. It's plain that Mr Hart was not in a position to pay the costs order on which the bankruptcy notice was based"

The associate judge said if Mr Hart might yet have a successful claim for breach of the mortgagee's duty, then it is one that could be pursued with the leave of the court or the Official Assignee.

Associate Judge Sargisson said Mr Hart had taken no formal steps to oppose ANZ's application for adjudication, and has relied on the oral application made by his lawyer Jeremy Bioletti last week.

Although she could have granted Mr Hart an adjournment to make a formal application for a stay, she had declined to do that too.

After the adjudication was made, Mr Hart told media he would appeal the decision.

Manoeuvring the courts for months

Mr Hart has been manoeuvering the courts for months over the mortgagee sale of his land.

ANZ has already sold almost all the land in his $26 million rural property portfolio – security for the $30 million-plus debt he owed, accruing interest at $200,000 a month.

Mr Hart's debt to ANZ has been reduced to $17.5 million following the mortgagee sales.

ANZ issued a bankruptcy notice against Mr Hart last month after he lost his damages claim against the bank and was ordered to pay  the bank $28,000 to cover its legal costs to fight his successive injunction applications to halt the mortgagee sale process.

The costs order was not appealed by Mr Hart.

But the bankruptcy notice was set aside because of other proceedings in train, where Mr Hart argued ANZ's mortgagee sale process was not just and equitable and the properties were undersolved.

His claim for a breach of mortgagee's duty was dismissed by Associate Judge David Abbot last month.

Mr Hart's legal career was brought to a halt in October when he was struck off, after a lawyers' disciplinary tribunal found him guilty of professional misconduct in grossly overcharging some of his clients.

His appeal of the striking-off was heard at Auckland High Court last week, where he argued  the tribunal should not have gone ahead with the July hearing when he was unwell and unable to attend.

Chief High Court Judge Helen Winkelmann and Justice Graham Lang reserved their decision, which is expected to be released in early February.

Mr Hart's company BJ Hart was liquidated in June over a less than $100,000 debt to the IRD.

His collection of historic cars, including a 2011 Ferrari California and a 2002 Aston Martin DB7 was sold at auction in September to help pay his debts.

gbond@nbr.co.nz

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2 Comments & Questions

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Its about time this lawyer was made accountable. The amount of legal aid fees he has been able to siphon off the taxpayers in his so called 'bid' to bring not- guilty pleas for the most hienous crimes over the years has in itself been criminal.

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That comment shows a complete misunderstanding of the role of a lawyer and what a not-guilty plea actually is, perhaps confusing it with a not guilty verdict. We could dispense with lawyers and simply convict everyone with every offence that is alleged by the police, that would of course be hugely undemocratic.

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