Exposing bankrupt proves costly

A couple who wanted a small town to know about a bankrupt have ended up thousands of dollars out of pocket because they hurt the man's feelings.

The Human Rights Review Tribunal has ordered Graeme and Jan-Marie McDowell to pay Eric Thomas Yeo $5000 for his "loss of dignity, humiliation, and injury to feelings".

The McDowells have also been ordered to pay another $2500 to Mr Yeo for legal costs.

"I think the decision stinks," Mr McDowell said. "For the simple reason that we are the ones that didn't do anything wrong."

The three-person panel on the tribunal found that Mr Yeo suffered significant humiliation and loss of dignity after the McDowells spread news of his creditworthiness among patrons at their cafe-bar in the central Otago town of Cromwell.

The McDowells in February 2001 sold a dairy to Mr Yeo, which collapsed later in the year.

Despite Mr Yeo's company still owing the McDowells about $65,000 for the business, Mr Yeo and his wife did not file petitions for their own bankruptcies until July 2002.

In between, Mrs McDowell agreed to cash a personal cheque for Mr Yeo for $180. That was before "things turned to custard".

When the cheque bounced, it was pinned to a wall in the McDowells' bar for patrons to see.

The tribunal said, however, that it was not the cheque's public display that was the main issue.

The McDowells had also allowed patrons to view an Insolvency Service letter, which contained personal details about Mr Yeo and his wife.

Mr Yeo felt "flattened and gutted" when he heard what was being done.

In evidence he said, "I felt that my private life had been intruded on in a major way and I had trouble understanding why the McDowells should have behaved as they did."

The McDowells claimed that because everything in the insolvency letter was true, there could not have been any humiliation, loss of dignity or injury to feelings.

But the tribunal disagreed. It was critical of the way the McDowells handled the sale of the business to Mr Yeo and the way they went about recovering their debt.

Before the relationship soured, Mr McDowell and Mr Yeo had been friends for more than 20 years.

The most frustrating thing for the McDowells is that they are now personally liable for paying the $7500 to Mr Yeo. But Mr Yeo is not personally liable for the $65,000 he owes them.

The tribunal held that it was Mr Yeo's failed company, Lake Dunstan Ltd, that owed $65,000 to the McDowell's company, The Junction Ltd.