Former Mainzeal director Richard Yan has fended off bankruptcy proceedings yet again.
A High Court judge said today that while Yan was clearly wealthy by New Zealand standards, he couldn't work out whether he had enough to the pay $18 million he was ordered to pay in 2019.
The liquidator for Mainzeal sought to bankrupt Yan, having won a $36m judgment against Yan and other former directors of the construction firm. Yan, who has been resident in China since 2016, has not paid personally to secure the sum awarded against him as the parties head to the Court of Appeal.
In 2019 Justice Francis Cooke found the Mainzeal directors liable for breaching directors duties and ordered that Yan pay $18m.
Hard to tell
In a decision released today, associate judge Peter Andrew said the Yan family clearly had the financial means to live in the jurisdiction of their choice and it would be surprising if Yan's remuneration were not substantial.
However he said: "It is not entirely clear from his evidence whether he might be in a position to provide security in a sum less than $18m and, if so, how much. "
"In viewing the evidence as a whole, I am left with some doubt and reservation as to whether Yan really is unable to provide security beyond that which he has offered thus far," the decision dated July 10 said.
While the liquidators had identified $10m worth of property in New Zealand, the judge noted that they were held in family trusts, which meant Yan couldn't sell them.
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He also claimed that shares in Richina Pacific allow him to control it, but he doesn't have an economic interest in it. His position was that he had insufficient personal assets in China to pay the money.
Timing was a key factor for the judge, who noted the Court of Appeal hearing is on July 27.
"The appeal hearing is imminent, and, in my view, it would be quite unrealistic for the Official Assignee to come to any position on the appeal within the next few weeks."
He said because the appeal date was so soon there was no point ordering he pay a smaller sum.
"In these circumstances, I find it would not be appropriate at this very late stage to impose security on Yan personally as a condition of an order halting the bankruptcy proceedings. In my view, it is essential that the appeal proceed, as scheduled, without the late imposition of conditions which might interfere with or disrupt the appeal process."
The decision was the second on Yan's bankruptcy. Associate Judge Roger Bell decided in November that he could not halt proceedings.