But the Supreme Court says he will have to overcome “formidable obstacles” if he is to succeed.
Hotchin had wanted to make Guardian Trust and Perpetual Trust jointly responsible for any compensation to investors, claiming they would have breached their duties if the directors were found at fault. He later dropped the claim against Perpetual.
A judgement released today allowed his appeal. But if he is to succeed it will have to be proved that the Hanover directors were negligent - something which they have so far denied.
Hotchin was a director of a number of finance companies which ceased trading in July 2008. Guardian Trust was the trustee for the securities offered by Hanover Finance.
On December 7, 2007, Hanover Finance registered a prospectus containing an offer of secured debenture stock under a trust deed between Hanover Finance and Guardian Trust dated July 18, 1985.
The prospectus was continuously distributed between December 7, 2007 and July 23, 2008, when Hanover Finance suspended the offer. The assets of Hanover Finance were not sufficient to meet its obligations.
The FMA filed proceedings against Hotchin and others alleging that the Hanover Finance prospectus contained untrue statements and that this had caused loss to investors. Similar allegations were made regarding the directors’ certificates issued to obtain extension of the prospectus.
Overall, it was claimed that the Hanover Finance prospectus conveyed a misleading impression as to Hanover Finance’s financial position and failed to give proper emphasis to matters material to risk.
After a Supreme Court hearing last year, the FMA and Hotchin settled out of court for $18m. The Supreme Court unanimously held that a settlement did not prevent a third-party claim for contribution proceeding.
Hotchin claimed that the Guardian Trust was liable to contribute to any compensation he was required to pay to the FMA and joined Guardian Trust as a third party to the FMA proceeding. Guardian Trust applied to strike out the third-party claim.
The FMA issued a statement saying the decision did not affect its settlement with Hotchin.
"Hotchin is seeking a contribution from Guardian Trust towards the compensation he had to pay the FMA for distribution to investors. Any sum that might be recovered by Hotchin against Guardian Trust therefore does not impact the amount of money that was recovered on behalf of investors by the FMA. This decision only says that Hotchin’s claim against Guardian Trust can proceed. The substantive question of whether his claim will succeed has not been answered and that issue is still before the Court."
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