By MATHEW DEARNALEY
A financially ruined farming family's battle against their bankers went to court in Auckland yesterday with a plea to quash a bankruptcy order blocking legal action.
Ian and Irene Andrews, with their son Neal, want the order annulled to let them sue the Bank of New Zealand and its receivers for allegedly underselling their farms and part of a bumper north Waikato onion crop.
Their lawyer described them as "good, honest, working people of the land" against whom society did not need bankruptcy protection.
The family were undone after a poor carrot season left them struggling for bridging finance to export more than $1 million worth of onions from their Pukekawa properties, and the bank closed on a $1.68 million overdraft.
The Official Assignee will not let them sue the bank or receivers from accountancy firm Ferrier Hodgson while they remain bankrupt, so they are seeking reinstatement by the High Court.
Master Anne Gambrill heard yesterday that the creditor which petitioned for bankruptcy last year - a Pukekohe farm supply company owed $56,000 - no longer opposed reversing the order.
The Andrews say $88,000 frozen by the receivers in accounts with another bank and lawyers is enough to pay most of their personal debt while they seek legal damages to cover the rest.
But Master Gambrill reserved her decision after hearing lawyers for the bank and receivers Michael Stiassny and Grant Graham, who say the money belongs to the family's liquidated cropping company.
The Andrews' lawyer, Iain Hutcheson, said they had been significant employers of up to 80 seasonal workers and foreign exchange earners.
He said the frozen money had been set aside to pay creditors from an extra crop grown on the family's behalf, but the receivers' lawyer, Ian Gault, told the court it had been misappropriated.
Mr Gault said his clients were seeking leave from the court to sue the Andrews after a Countrywide Bank account was used to receive $460,000 from onion sales.
Mr Hutcheson said the case was exceptional as the family had not failed to meet repayments but did what the bank asked in selling personal assets of more than $600,000 before having their debt called in.
The only alleged default was a failure to meet forecast carrot sales, and there was a dispute over the meaning of a covenant imposed by the bank that simply stated these should be 10 per cent of the budgeted figure.
He said the case differed from bankruptcies imposed to protect the community from unethical conduct, and the public interest was not served by reducing self-employed people to dependence on the state.
"This is not a situation of people running amok in a financial sense. They suffer, as farmers do, from the vagaries of seasonal fluctuations. They were fighting to get on top of it. They had in their sights a very good onion crop they hoped would just about clear their indebtedness to the bank."
Mr Gault said his clients kept in close contact with the family while trying to sell onions caught by the receivership, but Mr Hutcheson cited a letter from Mrs Andrews complaining that the crop had deteriorated substantially because of delays.
BNZ lawyer Brian Stewart said the bank gave the family a chance to find an equity partner, but a "white knight" succumbed to his own financial woes.
Bankrupt farming family seek permission to sue
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