Hanover investor drops $697 claim

Hanover co-owner Mark Hotchin. Photo / Brett Phibbs

A small investor in Hanover Finance has dropped his $697 Disputes Tribunal claim against the company.

This follows High Court action by Hanover to prevent the tribunal hearing the claim.

But Hanover co-owner Mark Hotchin said it did not pressure Michael Fallows, and the decision yesterday to discontinue the claim was made off the claimant's own bat.

Mr Fallows wanted Hanover to repay the $500 he invested on behalf of his 14-year-old daughter Katie, plus interest, because, he said, it misled him in its prospectus.

The matter was to have been heard in Tauranga on Monday.

Had the tribunal ruled in Mr Fallows' favour, it could have paved the way for thousands of other small Hanover investors to make claims.

Mr Fallows based his argument on information supplied by property developer Mark Cooper, who is in a long-running dispute with Hanover.

Mr Cooper had prepared a three-metre-long wall chart for the tribunal, detailing the Californian condominium projects he worked on with Hanover.

He claims these should have been declared in the company's prospectuses as related-party lending.

Mr Hotchin told the High Court that Mr Cooper was "driving and controlling" Mr Fallows' claim and his involvement was an abuse of the tribunal process.

Hanover and Mr Cooper have accused each other of connecting the two disputes for their own ends.

Hanover has a moratorium agreement with its 16,500 investors under which it has promised to repay $527 million over five years.