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

 

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Fruit & Veg Crackdown: Auckland Fruit Fly Find Under Investigation

The Ministry for Primary Industries (MPI) is investigating a find of a single male Queensland fruit fly in a surveillance trap in the Auckland suburb of Grey Lynn... MPI has placed legal controls on the movement of fruit and some vegetables outside of a defined circular area which extends 1.5km from where the fly was trapped in Grey Lynn. More>>

ALSO:

Scoop Business: Westpac NZ Reaches $2.97M Swaps Settlement

Westpac Banking Corp’s New Zealand unit has agreed to pay $2.97 million in a settlement with the Commerce Commission over the way the bank sold interest rate swaps to farmers between 2005 and 2012. More>>

ALSO:

Going Dutch: Fonterra Kicks Off $144M Partnership With Dutch Cheese Maker

Fonterra Co-operative Group, the world’s largest dairy exporter, has commissioned a new dairy ingredients plant in Heerenveen, in the north of the Netherlands, its first wholly-owned and operated ingredients plant in Europe. More>>

ALSO:

Scoop Business: NZ Retail Sales Beat Estimates

New Zealand retail sales rose more than expected in the fourth quarter, led by vehicle-related transactions, food and beverages, adding to evidence that cheap credit and a growing jobs market are encouraging consumers to spend. More>>

ALSO:

Delivery Cuts Go Ahead: 'Government Money Grab' From NZ Post

"It's a money grab by the Government as the shareholder of New Zealand Post" says Postal Workers Union advocate Graeme Clarke about the changes announced by NZ Post. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news