Failed car salesman a hazard - judge

Last updated 05:00 10/02/2013

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A twice-bankrupted used car salesman has been banned from operating a business for a further three years after a judge ruled he was a dishonest commercial hazard.

Patrick Antony Darby, 67, was bankrupted in February 2008 owing $2.5 million, including $2m to collapsed finance company Capital + Merchant.

The Official Assignee objected to his discharge after three years, citing an "absence of commercial morality", and applied to the High Court in Auckland to extend the term of Darby's bankruptcy.

In a reserved ruling delivered last week associate judge Roger Bell added three years to Darby's bankruptcy and noted: "He has limited, if any, appreciation of his lack of business expertise."

Reports of receiver Staples Rodway, appointed by Capital + Merchant, for Darby's motor finance company Hillcrest Services, catalogue a long struggle for documentation and even a tussle over computers that led to an assault charge being laid against the director.

The Official Assignee compiled 1500 pages of evidence against Darby, including disclosures he had continued to use the credit card of his dead wife, and set up numerous new businesses using aliases and seven front-people while bankrupt.

One of the front-people used by Darby to set up a business while bankrupted was described by Justice Bell as "a Thai lady who worked as a cook".

The 2008 bankruptcy was not Darby's first appearance on the insolvency register: In 1990 he was bankrupted over a $479,401 debt. In 1970 and 1994 Darby was convicted for obtaining under false pretences.

The Official Assignee also claimed Darby had hidden assets from creditors after discovering he owned a collection of classic Chevrolet cars throughout his first and second bankruptcies.

Justice Bell said Darby gave an "unconvincing and implausible" explanation of his car ownership.

"His explanation is that he disposed of the vehicles before this first bankruptcy, even though the registration records were not changed to reflect the change of ownership. After his discharge from his first bankruptcy, he says he bought back some of the vehicles."

"Hypocritically, Mr Darby holds himself out as creditworthy. A refrain in his examination was to say, ‘Never a day early, never a day late,' as his way of showing that he honoured his debts. The more he said it, the less he was persuasive."

Justice Bell said it was important to protect the public from Darby's attempts at running a business.

"I have very little confidence that if he were to go into business again he would manage it lawfully, successfully and without loss to those he might deal with."

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- Sunday Star Times

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