Struck-off lawyer Barry Hart has been adjudicated bankrupt but has immediately said he will appeal the decision to the Court of Appeal.
In the High Court at Auckland early this afternoon Associate Judge Hannah Sargisson dismissed Hart's attempt to adjourn a bankruptcy notice filed against him by ANZ Bank.
The application was therefore granted, but the appeal puts Hart in financial limbo.
ANZ's application to bankrupt Hart is based firstly on an order for $34,689 in court costs against him, but is backed up by another application for over $20 million in debts owed by Hart on mortgages taken out on eight rural properties in west Auckland.
Hart has opposed the mortgagee sale of the properties, claiming the bank mishandled the sale of his properties and didn't get the best price for them.
He failed in the High Court but will again argue that case in the Court of Appeal next March, aided by new evidence on market valuations of the properties.
Hart had wanted the bankruptcy proceedings to wait until after that matter was decided because he believed he could be awarded monetary damages of an amount that would off-set his debt to ANZ.
Sargisson said the fact that Hart's application to delay the bankruptcy was oral and not a formal application for a stay of the proceedings did not play in his favour.
"It's quite clear that there has been an act of bankruptcy and that the bank is prima facie entitled to its order of adjudication," the judge said.
"This is not a case where I can be confident that in the short term Mr Hart has any reasonable chance of success and in that case it would be unfair that the creditor be expected to delay its application."
She also did not believe that Hart's Court of Appeal case was strong enough to warrant delaying the bankruptcy process.
"It's plain that Mr Hart was not in a position to pay the costs order on which the bankruptcy notice was based. His only hope is that he will eventually have a successful outcome on a damages claim which he is not presently able to bring and won't be able to bring unless the Court of Appeal allows his appeal," said Sargisson.
"If this is a case where Mr Hart might yet have a successful claim for breach of the mortgagee's duty then it is one that can be pursued with the leave of the court or the Official Assignee."