Hanover delay on the cards

Mark Hotchin and five others associated with Hanover companies are being sued by the FMA. Photo / Brett Phibbs

Hotchin heads to Supreme Court against trustee.

Financial Markets Authority action against six former men linked to Hanover could be delayed if Mark Hotchin wins a case against the failed finance group's trustees in the Supreme Court, says his lawyer.

The former Hanover director is continuing to challenge the High Court throwing out his bid to join the trustees into the FMA case.

Yesterday he won leave to appeal to the Supreme Court in a decision from Justices John McGrath, William Young and Susan Glazebrook.

Hotchin and five others associated with Hanover companies are being sued by the Financial Markets Authority for allegedly misleading or untrue statements in finance company prospectuses.

The case is due to go to trial in July next year and expected to take 12 weeks in the High Court at Auckland.

The FMA is seeking compensation for investors who put $35 million into Hanover Finance, Hanover Capital and United Finance between December 2007 and July 22, 2008.

Hotchin last year attempted to join two trustee companies - New Zealand Guardian Trust Company and Perpetual Trust - into the FMA's civil case against him.

Hotchin argued the trustees held a duty of care to investors and that they should contribute to any damages payable if the FMA's case succeeds. But the trustees fought the attempt and the Chief High Court Judge Helen Winkelmann struck out Hotchin's application to join them in the civil action.

Hotchin then challenged the decision in the Court of Appeal, but it was dismissed in August. The Court of Appeal's Justice Rhys Harrison said Hotchin's claim for equitable contribution was "unarguable".

Hotchin yesterday was granted leave to appeal that ruling to the Supreme Court.

Asked if a successful appeal at the Supreme Court could delay the main FMA case, Hotchin's lawyer Nathan Gedye said it was possible.

"If we win in the Supreme Court then it means the trustees will then become parties to the action and they will have to be part of any trial because they are integral to all the evidence and all the issues and I think it's doubtful that any Supreme Court appeal can get heard and determined within a timeframe which would enable trustees to join in the trial, so it's possible but that would be up to the judge," he said.