A former Queenstown contractor allegedly owing $4.6 million says his son shouldn’t be sued for the debt.
“They’re pursuing me but they shouldn’t be pursuing [son] Stacey,” Steve Rout says.
Rout senior, who’s now based in the Philippines but holidayed in Queenstown for the past few weeks, is talking about a law suit mounted by UDC Finance.
UDC’s action follows the collapse of three Steve Rout companies between 2011-2014 with total debts of $9.2m.
Son Stacey, 31, won the first round against UDC in the Christchurch High Court recently.
Though Stacey didn’t dispute signing a personal guarantee or challenge the $4.6m figure, associate judge John Matthews nevertheless rejected UDC’s summary judgment application to make him liable for his dad’s debts.
Matthews said Stacey was mainly being sued “as a guarantor of the indebtedness of his father”.
Steve: “It’s a case of big boys bullying someone they shouldn’t. It shouldn’t be happening and we will fight it…as a family.
“It goes back to an old document none of us knew was live. We were never responsible for that amount of debt or guarantees.”
Mountain Scene reached Steve in Melbourne enroute back to the Philippines.
Steve caught up with Stacey in Queenstown last Sunday: “We’ve been through some difficult times but we’re still a tight family.”
In a court affidavit, Stacey claimed his father “pressured” him into signing a wide-ranging guarantee for UDC in 2007. Stacey said he didn’t feel able to say no.
Matthews noted Stacey left school at 16 to work for the family firm as a labourer, truck driver, then site supervisor.
UDC sought summary judgment but the judge said such fast-track applications can only be granted when “the
defendant has no defence”.
Stacey was perhaps “in a relationship of trust and confidence with his father” and “relatively young and inexperienced in business”, the judge ruled.
While Stacey was a director - but not a shareholder - of one failed firm and may arguably be responsible for its indebtedness, the judge noted that company owed just $303,000 of the $4.6m UDC claimed.
Stacey’s lawyer Andrew Riches says he doesn’t know if UDC will take its claim to a full court hearing.
Two senior UDC executives were on leave and another said nobody in the firm would comment.