Far North district councillor and property valuer Steven McNally has failed to obtain High Court approval for a repayment of 6c in the dollar owed to FM Custodians.
The way is now open for FM Custodians to enforce bankruptcy unless Mr McNally can come up with the money in eight days.
FM Custodians obtained judgment against Mr McNally for $856,353.37 in June 2012. It had sued him for alleged negligence in a property valuation.
He valued a property and the bank subsequently loaned 70% of the value. The homeowners were unable to maintain payments and the funder lost money on the subsequent mortgagee sale.
FM Custodians successfully sued Mr McNally for over-valuing the property and obtained judgment against him for the $856,353.37.
Although he offered to pay $50,000 over five years, FM Custodians refused to accept his part-payment offer.
Associate judge Roger Bell says in his ruling that the debt to FM Custodians swamps the other creditors and it would be owed more than 75% of his total debts “and therefore FM Custodians would be able, by its own vote, to abort any proposal that Mr McNally might put forward".
“It now remains open to FM Custodians Ltd to enforce the bankruptcy.”