Hotchin trusts lose bid to strike out asset-freeze orders

Mark Hotchin

BUSINESSDESK: The Court of Appeal has turned down a bid by trusts related to Mark 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 No 4 Trustee and KA No 3 Trustee, whose assets include Hotchin's incomplete multi-million dollar mansion on Auckland's Paratai Drive, a judgment released today says.

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 says.

The bench of judges decided it would be too early to strike out the Financial Markets Authority'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 accepted the FMA's pleading was "simplistic and needs amplification and refinement" and needs amending, but did not need to be struck out at this stage.

The FMA was awarded costs.
 

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31 Comments & Questions

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We had a nice thing called "down for 10" at university. If you had made a complete c#ck up you lay down on the ground and the boys all gave you 10 good old fashion kicks.

I suggest that it is time to play "down for 10" Mark - and just accept that you are going to get a good old fashion booting. It is a lot more elegant.

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that helen winkleman is a very smart lady.......

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Your day is coming, Mark Hotchin.

Time to plea bargain and bring in your mate, Eric Watson, into the frame.

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Kudos to Helen Wrinkleman for doing right by stopping Hotchin from squirreling away his ill gotten gains. When he got granted the moratorium from the December Ellerslie meeting, he undertook to repay them if the investor's were to forgo the interest. To fool them, he and his sidekick were going to repay a few miserly cents the next March. All part of a plan to hoodwink the poor souls into believing they would get their money back.

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Nice to see the lad not getting his own way for a change .

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And no one has a problem with this man's life/assets being frozen by the State for coming up to 22 months without even a hint of a criminal charge being laid?

Rule of law, pfui: only need that in civilised, free countries.

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Nope.

Not when one uses common sense and look at the deals he put together to screw Hanover investors and benefit himself.

Am very glad judges are looking at these kind of situations and giving protection to the victims for a change.

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If his 'crimes' are so obvious, such a matter of 'common sense', why not a single criminal charge yet? Worse, looking at getting him through back door of civil FMA prosecution is a) a misuse of taxpayer money, civil cases are between Hanover and investors, and b) admittance government doesn't seem to have a criminal case. That is, there's been a abuse of power, and the state abusing it's power will always be worse, in principle, than what Hotchin has supposedly done.

You have to view this stuff dispassionately: the state can not be given carte blanche power over individuals like this.

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Mark, you are wasting your time here with reasoned, rational argument. This is about us being Pavlovs dogs and responding to the many media reports that have been saying we should despise Hotchin et al.

Of course, it's true, if Hotchin has ripped someone off then all the remedies in law are available and should be pursued. In the meantime the State has no right to do what it is doing. Unless, of course, you live in Ecuador.

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It's only the Court of Appeal. If you and Hubbard are right then surely the Supreme Court will be asked to rule on this.

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"If his 'crimes' are so obvious, such a matter of 'common sense', why not a single criminal charge yet?"

Because the law is an ass, because Hotchin knows how to exploit this to the maximum extent and because he has armies of expensive lawyers who enjoy getting large fees for twisting, turning, stalling and evasions.

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I agree.

Just charge him and ask for the case to be deferred.

If you don't charge someone where is the justice. If only he was as lovable as that big German guy with the funny name, everyone would be supporting him on this point, regardless of the fact he is obviously guilt to some extent, just like the big German.

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Yes. I believe in IP, so the jury is out on Dotcom, though the botched raid on him and the subsequent actions by the state are absurd and, therefore, alarming. And I'm not defending Hotchin, either: I'm defending the only thing that matters here: my freedom. And for those who are baying for Hotchin, while defending Dotcom, then you better examine your premises, because you're contradicting yourselves.

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Absolutely correct Mark 10/10. I too say let the trials begin and the evidence/defence put on the table.
But of course the lawyers/shysters wouldn't earn as much that way!!

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I'm sorry I said "earn", it should've been "have pulled"

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He needs to team up with Dotcom - obviously two of a kind.

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ahh it's not over until the fat lady sings..."The bench of judges decided it would be too early to strike out the Financial Markets Authority's pleading at this stage..." so the FMA has been spared the embarrassment at this stage, but is sure to get a whipping once the case comes before the court.

For the FMA to freeze only one director's assets, out of the hundreds of directors caught up in the GFC and finance company sector collapse is bordering on obscene abuse of the state. They didn't even do it for the Bridgecorp directors which is unbelievable.

The FMA has dug itself an enormous hole and this writer actually hopes the FMA is eventually given a great slap. Only then will the FMA be exposed for chasing "trophy directors".

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I have no problem with that.

You have to make an example of someone and a high profile one is the best way to do it.

Bear in mind that the judges have information supplied by FMA and SFO to make their asset freeze decision.

Are you guys suggesting that the judges are all senile and cannot apply common sense judgement?

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"This One Weather update is brought to you by Hanover, a New Zealand business with the size and strength to withstand any conditions."

Yeah right

pay the piper, the business was already down the gurgler and they ran these ads, it did not survive one business cycle. what a joke

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I'd just love to know what John Morrison thinks.

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"I'd just love to know what John Morrison thinks."

"if" not " what" : surely.

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Read, it's good for you. :-)

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Hotchin should sack his lawyers and hire Kim dot Coms. Far more serious offense, criminal charges and extradition and still the fat German gets more money to live off than most of us.

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Big difference is Kim Dotcom has more money, that he is prepared to disclose.

Its very difficult to track blind trusts; including those which lauder money through tax havens. Mr Watson has no doubt taught Hotchinsa thing or two. His solicitors involved should be charged with accessories after the fact, but the laws are weak and unfortunately thats not going to happen. .

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I look around the blogs and am a wee bit bewildered by the support these hanover scum get from the likes of cactus cat and the new hubbs. Is hotchin the new mesiah for the far right ?He and his mates need to be brought to justice,and it will happen eventually.

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I think Cactus Kate is just another low life rider on Hotchins payroll

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When you can discern the difference between a personality and a principle your observations will have more significance.

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It just goes on. Please when is enough money enough money mark. Maybe mark should ring Hendo for advice! Paying out exs can ruin you. Own up mark look after the real people we have heard you are a nice guy! What about all the people you hurt. Be a man

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Interesting how a man who claims has no money seems to be throwing cash left right and centre for up market QC lawyers at these poor attempts to undo a freezing order on his sham trust accounts, This man is a parasite and is not welcome back to NZ stay in Australia Mark you your wife and your other unwanted party. To all those backing Mark Hotchin up remember it runs in the family just look to his criminal brother John remember what he did with VTL and Nathans so think before you place your kind words for a man who would sell out his own mother if the price was right.

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I don't support Hotchin. Couldn't care less about him, in fact. I discovered along time ago that a big house, costly cars or even lots of money cannot deliver satisfaction.

What I do care about is a legal system based on equity and reason and proper process. I care about you Madoff and Patel in the corner dairy. Because if the judicial and legal behaviour toward Hotchin is tolerated then conceivably, one day, a man in a uniform will be knocking on your door.

I strongly urge you to put your enmity toward Hotchin to one side. If you are a victim of his actions then quietly seek justice by bringing your own action against him. And if you think, through that process, our justice system is flawed then join me in seeking it reformed.

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Despite being 3 years down the track the spite continues to flow forth from some commentators. At this rate old Hotchin must be thinking he's being blamed for the entire global financial crisis. Cold light of day has a couple of trusts associated with him locked into an ice-age freeze. FMA has only launched civil proceedings - not criminal and have ONLY taken freeze orders against this man - not the other directors of the company, not against Sir Tipene O'Regan, not against Greg Muir, not against Eric Watson, not against the other two directors either.

Justice must be seen to be fair. Sadly in this case no one wins (except the lawyers once again). The FMA has a lot of explaining to do.

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