Hart gave court basis for striking out his appeal

The associate High Court judge who adjudicated former lawyer Barry Hart to be bankrupt made her decision after balancing all relevant discretionary factors, the Court of Appeal has found.

The adjudication of bankruptcy was made on an application by the ANZ Bank.

Hart appealed against the High Court order before the Appeal Court in Wellington last week, but the matter was struck out after Hart failed to pay $5880 security for costs.

Today, Justice Harrison gave the written reasons for the decision of the Appeal Court, which also included Justices O'Regan and Arnold, to strike out Hart's appeal.

Hart's failure to pay security for costs had satisfied the basis for an order striking out the appeal. The only issue had been whether the court should exercise its discretion to make the order, the Appeal Court said.

It found there was no evidential basis for Associate Judge Sargisson in the High Court at Auckland to have found, as Hart's lawyer had submitted on appeal, that the ANZ had used the bankruptcy process oppressively.

Litigation between Hart and the ANZ had a procedurally complex history, the Appeal Court said.

It arose from the bank's provision of lending facilities to Hart and entities associated with him from March 2006.

By November 2008, the aggregate principal advanced was $22.88 million secured by mortgages over various properties in the Waimauku area, west of Auckland.

The mortgagors defaulted in meeting their obligations to the ANZ. In August 2011, the bank made demands upon Hart and others to repay an excess of $26m then owing, including accumulated interest. 

Last October, the High Court entered summary judgment for the ANZ against Hart and others for $20.54m.

In a carefully reasoned decision, Associate Judge Abbott had concluded a claim by Hart for damages against ANZ was unarguable and he did not have an arguable defence to the bank's claim, the Appeal Court said.

An appeal by Hart against Associate Judge Abbott's decision to dismiss Hart's application to set aside the bank's bankruptcy notice was due to be heard in the Appeal Court on March 19.

Extensive litigation had gone on in the High Court arising from Hart's attempts to injunct the ANZ from exercising its powers of sale and the bank's applications for summary judgment against Hart and other mortgagors on their personal covenants to repay, the Appeal Court said.

In a decision last September, Justice Venning had concluded Hart and his related entities had abused the process of the court by acting vexatiously, frivolously and improperly, justifying an award of indemnity costs in ANZ's favour.