A court case involving a Queenstown developer, an exclusive Jack’s Point property and a Dunedin city councillor has taken a new twist.
In a judgment in March, High Court judge Rachel Dunningham said Queenstown developer Chris James’ family trust “fraudulently” tried to from his failed company’s creditor.
Now, Dunningham has awarded costs against the trustees – being former Anderson Lloyd lawyer Hilary Calvert, now a Dunedin city councillor, and HGW Trustees, a trustee company for Dunedin accountancy firm Harvie Green Wyatt.
Calvert’s husband and spokesman Alistair Broad – a former director of a James trustee company himself – confirms she plans to appeal the costs decision.
He says it has wide-ranging implications for thousands of trustees throughout New Zealand.
“When she sat down and signed off a set of accounts prepared by a respected accountant she presumed they had not been altered,” Broad says.
The appeal will centre on the activities of other people in preparing and signing off accounts, he says.
The case has been brought to the attention of the New Zealand Trustees Association.
Broad says the wrongdoing was pushed off to a trustee who knew nothing about it.
“This is an unfortunate situation because any trustee could find themselves in the same situation,” he says.
”How can a lay person have any idea of what is happening behind the scenes when accounts are being prepared?”
The $740,000 was advanced by failed James Development in 2006 – and helped buy an exclusive $2.6 million Jack’s Point home site.
James has since built a three-bedroom, five-bathroom family mansion on the property.
Dunningham said in her March judgment the transaction in question “was a deliberate, if unsophisticated, device to remove the [$740,000 from failed James Developments’] balance sheet to avoid relinquishing it to [the] main creditor upon liquidation”.
That creditor was Mana Property Trustee – which was chasing $4m or more from James Developments for failing to settle on a Cromwell commercial site.
Otago Daily Times