Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Belgrave Finance auditor loses bid to quash negligence claim

Belgrave Finance auditor loses bid to throw out accusations of negligence

By Paul McBeth

Nov. 13 (BusinessDesk) - Accounting firm Hayes Knight has lost a bid to throw out accusations it breached its duty of care in signing off on Belgrave Finance accounts, and is one of several parties being sued by the receivers of the failed lender.

Associate Judge John Matthews dismissed an application to strike out Belgrave's case against Hayes Knight, provided the claim was amended to more clearly demonstrate the auditor's alleged culpability, he said in a Nov. 7 judgment. Belgrave has filed six causes of action against former directors Shane Buckley and Steven Smith, their associate Raymond Schofield, solicitors Davidson, Armstrong & Campbell and Hayes Knight.

The judge agreed with Belgrave's lawyer, Bruce Stewart QC, who argued the losses were caused "by the very fact of continued trading" and that it was an issue for a trial to determine, rather than a strike out application.

Belgrave claims that had Hayes Knight done a "careful, diligent and professionally appropriate" audit, the lender wouldn't have issued the 2007 prospectus and would probably have been placed into receivership earlier than it ultimately was in 2008.

From the time of the offer document, the lender advanced some $3.8 million, including to Schofield and related entities, and received $4.9 million from debenture stockholders which it was unable to repay.

Stewart "acknowledges that the plaintiff will have to prove these contentions at trial, but says that if proved the losses claimed are the recoverable consequence of Hayes Knight's negligence," the judgment said.

Judge Matthews ordered Belgrave to "clearly plead relevant facts to show that the losses claimed were the result of the decision to continue to trade."

Costs were reserved, though the judge said his immediate view was to let them lie where they fell.

In August, former Belgrave director Buckley was sentenced to three years in jail after pleading guilty to 19 charges of theft by a person in a special relationship, and four charges of false statement by promoter under the Crimes Act. He also pleaded guilty to one Securities Act charge of making an untrue statement and one Companies Act charge of making a false statement to a trustee.

The Serious Fraud Office has levelled similar charges against Smith and Schofield, who are due to stand trial in April next year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Hager Raid: Westpac Wrong To Release Bank Records To Police

The Privacy Commissioner has censured Westpac Banking Corp for releasing without a court order more than 10 months of bank records belonging to the political activist and journalist Nicky Hager during a police investigation into leaked information published in Hager's 2014 pre-election book, 'Dirty Politics'. More>>

ALSO:

EARLIER:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news