A high-profile lawyer who represented one of the "Urewera 4" and owes $550,000 to the IRD has been declared bankrupt by a High Court judge.
Jeremy Newland Bioletti appeared in the High Court at Auckland resisting an application by the Commissioner of Inland Revenue to adjudicate him bankrupt.
During the hearing, before Justice Graham Lang, the court heard how Bioletti owes about $550,000 in tax, interest and penalties to Inland Revenue.
The arrears date back more than half a decade and Bioletti's lawyer, Paul Chambers, said his client had offered to pay a lump sum of $180,000 obtained from his mother to the IRD in a payment proposal.
As part of this repayment plan, Bioletti had also offered to pay $37,000 annually for the next four years.
Given the amount owing, Justice Lang said the proposal was "flawed" and that the repayments would need to be around $75,000 a year.
Bioletti represented Te Rangikaiwhiria Kemara during the "Urewera 4" trial and has also acted for disgraced lawyer Barry Hart.
Chambers said Bioletti earned $130,000 in the last year once his business expenses were taken into account. If Bioletti continued to earn this amount, there would be around $85,000 left once tax for each was taken out.
About $30,000 would remain to pay back the debt once Bioletti's family expenses were deducted and Justice Lang said the lawyer's payment plan was "hopelessly optimistic".
During the hearing, the judge said Bioletti's long term financial future, based on the existing debt, looked "pretty bleak".
Chambers said Bioletti was in this position because of a reduction in legal aid rates and that he had also experienced some difficulties in clients paying bills.
A shakeup to the legal aid system in 2009 had also contributed. These changes meant people on legal aid could no longer select their own lawyer to represent them in the likes of complex fraud cases, which is one of Bioletti's specialty areas.
Following the change, lawyers for these cases were selected by legal services, Bioletti said.
Justice Lang said this went some way to explaining Bioletti's level of indebtedness.
"They do not however explain why he has made no attempt, in recent years at least, to make any payments for current or past tax indebtedness," Justice Lang said.
The judge said Bioletti continued to have the benefit of the whole of his income and that there was not a realistic prospect of the lawyer repaying the debt in the foreseeable future.
"The need to maintain commercial morality also indicates an order of adjudication should be made," Justice Lang said.
Bioletti had submitted it would not be just and equitable for the court to make such an order but Justice Lang said a person who fails in such a "manifest manner" to meet their obligations under the tax system could "scarcely complain" when the IRD took steps to enforce the debt in bankruptcy proceedings.
The judge then adjudicated Bioletti bankrupt just after midday.
Bioletti has been a lawyer since 1984 and the order means he is no longer able to continue to work in sole practice.