26 July 2018

Bankruptcy: Minter Ellison v. Hampton

Discharged from bankruptcy in July 2018, David John Hampton has been disqualified from managing any business for the next four years after the High Court reviewed his history of failures to meet tax obligations and bankruptcy disclosures.
Mr Hampton’s differences with Inland Revenue stretch back to 1994 and include various tax entities owned in part with his former wife, Ms Sissons: the Chesterfield group and a family trust, Anolbe. Mr Hampton’s major gripe is that Inland Revenue welshed on an informal arrangement in which tax liability was to be suspended while the status of various GST refunds was finalised.  He was convicted and fined for failing to file personal tax returns for four years in the 1990s.  A Chesterfield company was convicted on multiple counts of failing to file tax returns, GST returns, PAYE returns and ACC reconciliations.  Mr Hampton was convicted under the Goods and Services Tax Act of intentionally misleading Inland Revenue over a transaction value.  In turn, he is suing Inland Revenue alleging misfeasance in public office.
The High Court was told he was bankrupted in 2013 on a $105,000 debt owed law firm Minter Ellison and $1.3 million owed Inland Revenue.  Both Insolvency Service and Inland Revenue objected to Mr Hampton’s automatic discharge from bankruptcy.  Justice Venning ruled in favour of a discharge, but subject to restrictions on management of any business.
There was evidence of complicated related party transactions within the Chesterfield group described as ‘asset shuffling’ intended to defeat legal proceedings.  There were complaints about his dealings with Insolvency Service.  The court was told Mr Hampton was late in making disclosure of assets and did not provide full details.  The major asset disclosed was a Daihatsu house truck, with no identifying details sufficient to enable valuation.  He failed to disclose the existence of a property at Augusta Street in Christchurch as either a personal asset or an asset of his family trust. The existence of Augusta Street was discovered after a mortgagee sale where Mr Hampton claimed the net proceeds of $89,900. He later changed his position, stating the funds belonged to his family trust.
Mr Hampton was also criticised for not updating his address and employment status with Insolvency Service.  He told the court he had been working in remote locations, driving logging trucks.
Minter Ellison v. Hampton – High Court (26.07.18)
18.149