Bankrupted once in Australia and twice in New Zealand over a five year period, Hawkes Bay property developer Garth Bowkett Paterson was barred from ongoing litigation over a subdivision on the banks of the Tukituki River with his litigious behaviour described by the Court of Appeal as frivolous, vexatious and abusive.
Paterson was bankrupted by Australian tax authorities in 2015. Subsequent bankruptcies in New Zealand in 2016 and 2020 followed a failed subdivision of lifestyle blocks in Hawkes Bay and extensive litigation against interests associated with Stefan Lepionka who had bought lots in the subdivision and then bought out Westpac as first mortgagee when Paterson’s GLW Group Ltd ran out of cash to complete the subdivision.
Lepionka Investments bankrupted Paterson in 2016 for non-payment of a court costs order. Lepionka Investments was later found by the High Court to have improperly benefitted from its exercise of Westpac’s rights to sell as mortgagee, but damages were left to be assessed after market prices were known on completion of the subdivision and sale of lifestyle blocks. Whilst bankrupt, Mr Paterson engineered a string of caveats over lots at the subdivision variously in the names of GLW Group and a supposed family trust claiming rights to the land. The High Court ordered removal of the caveats, ruling there was no evidence to support the claims and that Mr Paterson was attempting to frustrate Lepionka Investments’ sale of lots in the subdivision. Despite a court order barring him from lodging any further caveats, further caveats were lodged by interests associated with Mr Paterson. His second New Zealand bankruptcy in 2020 followed a failure to pay another court costs order awarded in favour of Lepionka.
Damages due to GLW Group by Lepionka Investments for its improper exercise of mortgagee sale powers were settled out of court after GLW Group went into liquidation. The liquidator’s report identifies Lepionka agreed to pay $100,000 damages.
Mr Paterson, still bankrupt, took legal action attempting to have both Stefan Lepionka and Lepionka Investments convicted and fined for breaching the Property Law Act. Terms of the $100,000 out of court settlement with GLW Group’s liquidator precluded any further legal action against either Stefan Lepionka or Lepionka Investments, the Court of Appeal ruled.
Paterson v. Lepionka & Co Investments Ltd – Court of Appeal (3.08.21)
21.132