Barry Hart ordered out of house as bankruptcy looms
One-time top criminal lawyer Barry Hart is facing bankruptcy after losing a damages claim against his bank ANZ.
Associate Judge David Abbott has also decided Mr Hart’s sister can not buy the 72ha Waimauku property he lives on, and has cleared the way for ANZ to put it up for mortgagee sale.
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.
At Auckland HIgh Court last month, ANZ also sought orders for vacant possession of the tenth, unsold property in Mr Hart’s 952ha Waimauku estate, where Mr Hart lives with his wife.
That application was made as Mr Hart was seeking damages from ANZ in relation to the mortgagee sales, arguing the bank breached duty of care by not fetching the best price.
But in his just-available reserved decision Associate Judge Abbott found ANZ had not mishandled the sale of the properties and said the bank had a right for vacant possession.
The judgment reveals Mr Hart and entities associated with him still owes ANZ $34 million.
Mr Hart had offered to redeem the mortgage against the property by paying $25,000 above the highest tender, and his 75-year-old sister Audrey Propst was writing the cheque.
However, he told the court ANZ had refused to give him a sum to redeem the mortgage on the property.
Associate Judge Abbott, in his judgment, said the amount necessary to satisfy the debt over Mr Hart’s home was the “total indebtedness” and Mr Hart’s tender did not meet that amount, which was more than $31 million.
The judge also dismissed Mr Hart's arguments the house was subject to an equitible lease and residential tenancy.
Associate Judge Abbott said ANZ was entitled to vacant possession of Mr Hart's house within 10 days of service of the court’s order on Mr Hart.
Costs awarded against Mr Hart are to be determined.
Mr Hart has already been ordered to pay ANZ $28,000 to cover its earlier legal costs to fight his successive the interim injunction applications and remove caveats over the properties.
ANZ issued a bankruptcy notice agaisnt Mr Hart requiring payment of those costs.
Mr Hart opposed this application, contending that his claim against ANZ afforded him equitable set-off. His opposition to the bankruptcy application failed with his damages claim.
Associate Judge Abbott found steps taken by ANZ to fetch the best were sufficient to meet its duty of reasonable care.
“ANZ will suffer a substantial loss as a result of the prices obtained and, as it seems unlikely that they will be able to recover the most part of this loss (if anything further), it can be assumed that it shared the same interest as the plaintiffs in achieving the maximum price possible for the security properties," the judge said in his decision.
Mr Hart still owes ANZ $20.5 million and his company's Woodhill Stud and Woodhill Holdings owe $16.2 million.
The former lawyer, whose company BJ Hart is in liquidation, saw his colourful career brought to a halt last month when he was struck off after a lawyers' disciplinary tribunal found him guilty of professional misconduct in grossly overcharging some of his clients.
He has appealed the ruling and remains suspended until the appeal is heard in December.
Associate Judge Abbott issued his reserved judgment on this matter to Mr Hart and the bank, and to commercial legal publications, but not to the public. However, a rare "justice tax" was imposed on the media, required to pay a fee of $36.30 for the decision.