A former director of finance companies which collapsed losing $18 million of investors' money has told the High Court he does not have any assets, despite having properties worth millions of dollars in a family trust.
Albert "Ed" Jull was sole director of Waipawa Finance Company from 1991 till 2005 and a director of Waipawa Holdings from 1991 until 2004. The companies collapsed in 2008, and the sole director at the time, Warren Pickett, was jailed on multiple fraud charges.
More than 200 investors believed they had a total of $19m invested in the finance company, and the majority of them were paid out 10.5 cents for every dollar invested.
In a judgment from Justice Joe Williams in the Napier High Court, five creditors, who the judge found had in total lost approximately $8.5m, successfully obtained a judgment against Jull last year.
When Jull failed to pay they sought a bankruptcy order, and Jull was adjudicated bankrupt following a judgment delivered by Associate Judge John Matthews in the High Court at Rotorua last month. That judgment recorded that the present indebtedness from the judgment of Williams was for $218,216.
The two judgments set out the background.
The Julls are a Hawke's Bay family of long standing who made successful investments in brewing, liquor retailing and farming in the first half of last century.
They formed Waipawa Finance as a cash investment vehicle in 1949.
Pickett became the Julls' accountant in 1971, and they formed Waipawa Holdings, another finance company, together in 1975.
The companies paid high interest rates but never issued a prospectus. According to court documents, Jull left day-to-day matters to Pickett, whom he trusted.
Williams said the companies "morphed into a kind of joint ponzi scheme" in the 1990s.
Jull pulled most of his money out of the companies and moved to Taupo in 2004, and Williams found he retired as a director late in 2004.
In ruling Jull bankrupt in the High Court at Rotorua last month, Associate Judge Matthews said Jull had claimed to creditors that his only income was government superannuation and his only assets were a life policy and about $25,000, and he owed $256,306 to his family trust.
Jull was a trustee of the AEJ Jull Family Trust.
Matthews' decision refers to evidence showing combined rateable values for two trust properties of $2.6m.
The decision records that Jull provided an affidavit saying that he did not have any income other than National Superannuation but suggested that the affidavit "lacked candour" as it failed to mention how much Jull took as drawings or the second property owned by the trust.
The judgment records that Jull's lawyer, Magnus Macfarlane, said Jull was "tricked" by Pickett and he "did not recklessly gamble with depositors' money".
But Matthews, like Williams, found Jull bore responsibility for the creditors' losses.
"I reject without hesitation the submission that in this case the public might not expect Mr Jull to be held accountable," the judge said.
He accepted Jull had little in the way of personal assets, but he held "residual concerns" and noted that his accountant had told the court he drew salaries from the companies he directed.
The amount of these salaries was not disclosed, he said.
The judge doubted Jull lived on his $13,000 super.
Jull was declared bankrupt on June 19.
CREDITOR URGES BUSINESSMAN TO 'MAN UP' AND PAY
According to Justice Joe Williams' judgment, Penne Chote lost $167,000 when the finance companies went under in 2008.
Creditors received just 10.5 cents for each dollar when they were liquidated.
The Dominion Post understands that last year's High Court ruling meant she was entitled to be paid $28,828.88 by former director Albert Jull.
She said she was disappointed that Jull "hadn't fronted up to his responsibility" as ruled by the High Court.
"I'm the youngest of the creditors . . . at 52 I still have 20 years work ahead of me. This has had a major impact on our lives, yet Mr Jull's life carries on as ever," she said.
John and Lynette Mogey, who Williams found lost $5.2m when the companies collapsed, were owed $60,553.69 following last year's ruling, The Dominion Post understands. John Mogey was furious that Jull had managed to "slither through the escape hatch of bankruptcy" and "hide behind the skirts of his family trust rather than front up and pay his creditors".
"Now he must ‘man up' and pay what is a relatively small amount to his creditors," he said.
Other creditors party to the action were Robert and Narelle Little, who Williams found lost $3.1m, and who the Dominion Post understands were owed $73,682.69 by Jull.
- The Dominion Post