Convicted fraudster Paul Clifford Hibbs used stolen investor money to dabble in a Marlborough wine venture: Haldon Range Vineyards. His innocent co-investors are facing demands for repayment of $167,900 by liquidators cleaning up after Hibbs.
Hibbs was jailed for eight years earlier this year after pleading guilty to Ponzi frauds perpetrated through two investment companies: Hansa Ltd and Cameron Gladstone Investments Ltd. The extent of investor losses is disputed. Liquidators for Hansa told the High Court $4.5 million is still unaccounted for out of some $8.5 million paid to Hibbs for investment through Hansa. As part of their recoveries, liquidators took action against Haldon Range Vineyards Ltd: a joint venture company owned 25 per cent by Hibbs family interests and 75 per cent by Richard Bell’s Family Trust.
Evidence was given that development of Haldon Range vineyard started in 2007. A dam was constructed to provide water. The dam proved faulty, consulting engineers were sued and then the dam had to be emptied after earthquake damage following the 2013 Seddon earthquakes. Seddon township lies fifteen kilometres downstream. Costs approaching three million dollars were spent sorting out the problem. Under the joint venture, Hibbs was responsible for one quarter of these costs. He handed over $167,900, in dribs and drabs, and then only after pressure from Mr Bell. Liquidators sued Haldon Range for return of the $167,900, getting judgment by default when Haldon Range lawyers failed to file a statement of defence in time. Mr Bell was under the impression lawyers for each side were going to talk to each other.
Now under threat of liquidation, Haldon Range got a court order setting aside the default judgment. This allows it to contest the claim. Haldon Range investors say they had no knowledge of Hibbs fraud. The High Court was told the only asset of value in Haldon Range is its accumulated tax losses. These are of no benefit to either the liquidators of Hansa Ltd or its bilked investors. They cannot take advantage of someone else’s tax losses.
Hansa Ltd v. Hibbs – High Court (11.05.18)
18.104