Hotchin trusts lose bid to strike out asset freeze orders in appeal court
The Court of Appeal has turned down a bid by trusts related to Mark Hotchin's family to throw out claims there wasn't a direct link between the assets held in trust and the family beneficiaries.
Justices Mark O'Regan, Terence Arnold and Douglas White dismissed the appeal by KA No 4 Trustee and KA No 3 Trustee, whose assets include Hotchin's incomplete multi-million dollar mansion on Auckland's Paratai Drive, according to a judgment released today.
The trusts were seeking to strike out interim preservation orders made by Chief High Court Judge Helen Winkelmann earlier this year.
The trustees claimed the High Court ruling imposed a punitive element as it led to property being frozen "merely because the holder of the property had some association with the relevant person."
The Appeal Court rejected the claim, saying "it would be surprising if a protective regime such as the provisions in this case left outside of its net any issues held in discretionary trusts.
"Such vehicles are often established for the express purpose of placing assets beyond the reach of creditors, and can be vulnerable to successful challenges on the basis that the intention of the establishment was to defeat creditors," the judgment said.
The bench of judges decided it would be too early to strike out the Financial Markets Authority's pleading at this stage, and that it would be more appropriate for it to proceed to discovery and a substantive hearing.
The trustees also sought to strike out an FMA claim that there was an arguable case the KA4 trust was a "sham", saying the regulator hadn't supported its argument with enough detail.
The judges accepted the FMA's pleading was "simplistic and needs amplification and refinement" and needs amending, but didn't need to be struck out at this stage.
The FMA was awarded costs.
Comments from our readers
No comments yet
Add your comment:
NZ dollar holds near 5-year high vs. Australian dollar on interest rate paths
Wellington Electricity settles with regulator over price path breach
Indicative bids on Transpacific Industries' NZ unit close today
Delegat's sees 10 percent lift in 2014 profit, warns strong currency may hit bottom line
Infratil on-market buyback completed at $2.38 a share, or $59 million
Forest owners easier target on health, safety lapses under new regime, MBIE’s Smol says
SkyCity earnings to get kicker from Adelaide redevelopment in 2017, brokerage says
Postie Plus plans to sell SchoolTex unit for $9 million to reduce debt, invest in core business
SFO passes on more than 90 percent of complaints, says function isn't compromised by lean budget
Taxpayers may be called on for more help in completing UFB network