John Patrick, a Hawkes Bay organic grape grower, was made bankrupt in the High Court at Napier yesterday. Photo / File
A farmer who lost his home and business after he couldn't repay his bank believes New Zealand needs its own inquiry to hold banks to account.
But the Bank of New Zealand says it followed every due process in dealing with Moteo Ridge - the winery business of John Patrick.
Patrick, a Hawkes Bay organic grape grower, was made bankrupt in the High Court at Napier yesterday, after losing a court battle he took all the way to the Supreme Court.
Patrick, his wife and two sons emigrated to New Zealand from the United Kingdom in 2006, bringing $800,000 with them.
He says they invested about $700,000 in buying a lifestyle property with a vineyard on it.
Court documents show he borrowed $1.14 million from the BNZ to buy the property and the bank provided further finance to develop the business.
By mid 2014 Patrick believed the business was running well and he had leased further land and had relationships with a number of wineries.
He told the High Court at Napier that the businesses' total assets amounted to about $1.5m for the property, with an additional $900,000 in equipment.
But then in August 2014 he struck problems when the bank bounced a cheque for $32,000 and he claims the BNZ advised him it was withdrawing the companies' overdraft facilities, and that he should cancel the companies' contracts and leases.
Patrick claims the removal of the overdraft facilities caused him to default on his loans and stopped him from being able to run what he says was a profitable business.
The house and equipment were put up for sale and Patrick had to cancel contracts and leases on two other farms as he couldn't guarantee that work could be done.
He laid off staff and shut down his workshop.
"I tried to tell them what they were doing was stopping us from running the business."
In 2014, he complained about the bank's conduct to the Banking Ombudsman. There were delays in that complaint being addressed, resulting in a $9500 payout by the BNZ.
But the ombudsman found no misconduct by the bank.
By November 2015, the bank demanded its money be repaid after the business missed two loan payments.
According to court documents, at a meeting facilitated by the Banking Ombudsman, and which Patrick thought was solely intended to advance a mediated solution, bank representatives served notices under the Property Law Act 2007 and appointed receivers PriceWaterhouse Coopers.
PwC's first report shows the family's business, Moteo Ridge, owed $1.03m to the bank and the associated Dansam Family Trust owed $792,625.
By the end of the receivership in October 2017, the bank was still owed $950,790 after all the assets were sold.
In June 2017, the bank took a summary judgment against Patrick for $1.1m.
Since then, he has taken his fight to the High Court, Court of Appeal and the Supreme Court in a bid to tell his side of the story.
In the High Court, associate judge Warwick Smith ruled the bank was entitled to take summary judgment.
Patrick's application to add more evidence to his case in the Court of Appeal was declined and his appeal to the Supreme Court was dismissed.
The 58-year-old says he now has no assets and in two months he will have no job as his former farm, which he still manages, has been sold and his contract is ending.
He sees similarities between his situation and that of farmers who have given evidence in Australia's Royal Commission into misconduct in the finance sector.
"They happily lend more and more money, then just close them down."
"There needs to be a change in New Zealand law - a Royal Commission."
But the bank says it folllowed due process through a lengthy series of issues with Moteo Ridge.
"At each stage of the process including an investigation by the Banking Ombudsman, a hearing in the High Court and a subsequent decision from the Court of Appeal - each relevant authority has supported the actions taken by BNZ," said a spokeswoman for the bank.
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