This is the first in a series reporting on CIV 2014-096-428, Bartercard NZ Ltd vs Nicholas Down, being heard in Lower Hutt District Court, Wednesday 11th & Thursday 12th April 2018. I will be
updating posts in as close to real-time posting as I can, and keeping commentary to a minimum due to court reporting rules. Once the case is presented though, the gloves will come off. This post is a brief introduction to the case. I explain how the two parties got into conflict and what their respective arguments are. A lot could be at stake with this case and both parties clearly want their day in court. I use surnames only with a legend for details.
Down joined BC in 2003. He is an auctioneer and general trader. Autistic, he has supreme deal-making skills and is the consummate horse-trader-from-hell, probably the only dude who rivals me in terms of slipperiness & native capacity to crunch a deal that I know. They call me the “The Crazymaker”. Down and I appear to be peas in a pod.
BC headhunted Down, Hamilton & Hebbink the guilty party that signed him up. Over the years Down and BC fought like cats and dogs, but always kissed and made up. Down did auctions aplenty, wheeled and dealed and had an incredible fee structure, 1+1, when the going rate was 6.5+6.5 and Gold Card members had 6.5+0. The reason for this is that he was a top trader, not so much in volume (he only did a few million in his time) but because of the quality of the benefit to the BC system. He would bring in hard goods that sold very well.
In 2013 BC advised Down that he was no longer permitted to auction. Essentially: relationship over. No longer able to trade Down couldn’t repay his overdraft. BC slapped him with the usual story – pay up or we’ll close your account. Down told them to stick it. They did and sued for $80k.
Four years later and it finally hits the courtrooms.
BC the Plaintiff says the usual:
- You joined
- You obtained an overdraft, goods & services
- You signed a PG
- We followed due process according to the BC rules
- You didn’t [breach of contract]
- You owe – cash
- Oh and BTW we can do anything we like and you’ve been a bad boy (for years)
Half way through the preliminary legal argy-bargy BC slipped in interest to the claim, which will send any judgment if they win well over $100k. If successful, this will all mean bankruptcy for Down, something BC is very keen to see as animosity exists in no small measure!
Down, the Defendant, says quite a bit actually:
- You head-hunted me
- You gave the overdraft
- If I was allowed to trade I could repay it, in trade
- You can’t in all fairness do what you have done [estoppel]
- Even if you are, I should only pay you what is Fair Market Value [doctrine of penalties]
- FMV is only 20c in the dollar
He also says that they’ve cost him heaps and have a bad attitude towards him blah, blah, blah.
The breaches of contract relate to this specific case . . . the “doctrine of penalties” however has wider ramifications for all Bartercard members and indeed all commercial trade exchanges globally. The first issue is whether the Bartercard currency is devalued. The second issue is what is FMV. The third issue is whether or not BC can require repayment in cash at full cash value when FMV is less, and this is due to the legal concept of “doctrine of penalties”. If the doctrine of penalties can be applied in this case, then Down is only “up for” FMV and BC will have a huge dent to a rather lucrative cash conversion income stream from closed accounts in debit. It will also potentially bring unwelcome attention to the subject I have been blogging about for years – the Bartercard Trade Currency has a huge trade deficit and is grossly overvalued when viewed on par with the local currency.
There you have it. There’s a truckload more such as procedural BS, and side issues such as perjury, crookedness within the legal fraternity and court processes and decisions that on the surface put favouritsm towards those who pay lawyers and against those who do it themselves, but hey, that’s life. It’s not always fair is it, especially in a court environment?
So let the games begin. When they select a new Pope the smoke arises to indicate agreement. When smoke arises from the courtroom it won’t mean that everybody has agreed, it will mean that the lions are getting their comeuppance and the fight is getting underway proper. For the record, it should be noted that I am Down’s McKenzie Friend in this case and that I have provided strategic advice to Down since 19/3/2017 on a commercial basis. He is also a minor shareholder in one of my companies, Bounty Hunters NZ Ltd.
BC = Bartercard Exchange Ltd (formerly Bartercard NZ Ltd).
Down = Nicholas Down.
FMV = Fair Market Value.
Hamilton = Ross Hamilton, ex Hamilton Rep.
Hebbink = Paul Hebbink, current National Sales Manager.