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Budget Loans’ Allan And Wayne Hawkins Banned From Company Management

Management banning orders have been issued against father-and-son Allan and Wayne Hawkins, following an application by the Commerce Commission.

The Commission sought the bans under s46C of the Fair Trading Act 1986 (FT Act) following the pair’s management of the finance company Budget Loans Limited. The maximum length of a banning order under s46C is 10 years. The Commission sought to ban each director for the maximum period.

In a written decision issued today, District Court Judge Gibson said both men “represent a significant hazard to anyone dealing with any company they manage or control or are directors of. The public in general and borrowers in particular … are entitled to be protected from the respondents.”

They were directors of Budget Loans Limited, which was convicted of FT Act breaches twice in the last 10 year period, July 2010 and July 2016.

The orders ban Wayne Hawkins from being a director or being in any way concerned with the management of a company for 10 years, while Allan Hawkins is banned for 8 years.

Wayne Hawkins did not appear in Court to oppose the application. Allan Hawkins unsuccessfully opposed the application in a 3-day hearing in the Auckland District Court in November 2019.

Judge Gibson said Budget Loans used “high-handed and intimidatory tactics in dealing with debtors." 
.
He said Budget Loans conducted operations with “ruthlessness” and that Allan and Wayne Hawkins were “closely involved in the day to day operations”, and while they knew repossessions were illegal “both respondents were plainly unconcerned and dismissive”.

Judge Gibson noted that “Mr Allan Hawkins achieved notoriety in the early 1990s in relation to fraud and conspiracy convictions through his management of Equiticorp,” and “although obviously not on the same scale, there was clear dishonesty and unscrupulous behaviour in dealing with debtors of Budget … which shows very little changed in Mr Hawkins’ character in the years since the failings of Equiticorp were detected”.

Judge Gibson recorded that Allan Hawkins’ age (78) was the sole reason he received a shorter ban than his son, in that due to his age he presented a lesser a risk of repeating the illegal conduct.

For the Commerce Commission, General Counsel Competition and Consumer Mary-Anne Borrowdale said “We pursued these bans because we think it necessary to protect the public from risks of further offending under the FT Act. “

In May 2018 Budget Loans and Evolution Finance Limited were fined $720,000 on 125 charges under the FT Act and ordered to pay reparations and emotional harm payments totalling $91,000.

“Those amounts have not been paid, except for one payment of about $139, and this sum was paid when a Court seized the funds. Not only have borrowers not received reparations, payments continue to be collected,” said Ms Borrowdale.

It was the Commission’s first application for a banning order under the FT Act but it has previously obtained banning orders under the Credit Contracts and Consumer Finance Act 2003.

Background
Budget Loans and Evolution Finance
Over 6 years from 2009 to 2014 Budget Loans and Evolution Finance (together, Budget Loans) misrepresented:

  • its right to repossess goods
  • its right to recover interest and costs from borrowers
  • amounts borrowers were required to pay.

In some cases Budget Loans repossessed debtors’ property so extensively that houses were left almost bare. In other cases, it repossessed items that it should have known were of low value, and dumped them.

The directors of Budget Loans Limited and Evolution Finance Limited were Allan Hawkins and Wayne Hawkins at the time the companies were charged. Evolution Finance and Budget Loans purchased old loan books from a number of failed finance companies including National Finance Limited and Western Bay Finance Limited. The majority of loans originated between 2001 and 2006.

Banning orders

Banning orders were made available to the District Court in a 2013 amendment to the FT Act, but operate retrospectively so that the 2010 offences provided a basis for the orders to be made.

Note to editors

The banning orders were against Allan and Wayne Hawkins personally. The earlier convictions were against Budget Loans and Evolution Finance, and not against the Hawkins personally.

Timeline

July 2010

Budget Loans was

fined nearly $31,000

on 34 Fair Trading Act charges, for misleading representations about its right to recover certain costs from debtors.

December 2014

125 charges filed against Budget Loans and Evolution Finance at Auckland District Court.

July 2016

Both companies

convicted on 106 charges

, with 19 charges dismissed. The companies appeal conviction on all charges and the Commission appeals against dismissal of the 19 charges.

April 2017

The High Court dismisses the companies’ appeal and

upholds the Commission’s appeal

.

November 2017

Budget Loans’ application to appeal to Court of Appeal is dismissed.

May 2018

The companies are

fined $720,000

on 125 charges in the Auckland District Court and ordered to pay reparation and emotional distress payments totalling $109,000. Judge Sharp states it was “cynical and deliberate” offending. He said the repossessions were “reprehensible” and were “used as a direct means of coercion.”

February 2019

The companies’ appeal against sentence

is dismissed

. In the High Court at Auckland Justice Moore states the offending was “among the most serious of its kind. There is no comparable case involving such damaging, prolonged, focused, cynical, personal and economic conduct.”

February 2020

Management banning orders under FTA are issued against Allan Hawkins (8 years) and Wayne Hawkins (10 years).

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