12 May 2017

Multi-million fraud trial scrapped after nine months

6:54 pm on 12 May 2017

A multi-million dollar finance company fraud trial - believed to be New Zealand's longest running criminal trial - was aborted this week.

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Photo: RNZ / Alexander Robertson

The trial, against executives of a failed finance company, was initially set down for 12 weeks in August last year, but ended up tying up a dozen lawyers and a High Court judge for nine months.

The executives from Viaduct Capital and Mutual Finance were charged with theft in a special relationship and making false statements. Mutual Finance went into receivership in 2010 owing about 450 investors some $17 million, while a related company, Viaduct Capital, was put into receivership in the same year, owing 110 depositers $7.8m.

Nine months after the trial started in the High Court in Auckland, it was aborted on Wednesday.

Experienced criminal barrister Tony Bouchier, a past president of the Criminal Bar Association, said the costs involved would have been high.

"It's got to be a seven figure sum. You've got not only the judge, court staff, the building, the prosecutors, the defence counsel, the witnesses - it's a trial that's been going nine months - it would be a million dollars plus to-date."

In his initial judgement, Justice Woolford said there were breaches of the Criminal Disclosure Act, which requires the Crown to disclose relevant documents to the defence.

The reasons behind the late disclosure were not yet known.

Justice Woolford said the disclosure came after the Crown had finished its case and one of the four defendants had finished theirs.

He said the problem could not be fixed, and the trial was scrapped.

Justice Woolford said if the trial continued it may have had to have been put on hold for another two months while the disclosure was sorted out.

That could have meant recalling witnesses and one of the defendants might have had to run his defence case again.

Justice Woolford said he hoped to release his full decision by the end of next week.

Dozens of charges in case

The case against the four executives from Viaduct Capital and Mutual Finance was expected to be the last prosecution in a series against finance company executives.

The four defendants - Paul Bublitz, Bruce McKay, Richard Blackwood and Lance Morrison - are due back in court in July.

Mr Bublitz had originally faced 49 charges when the Crown opened its case in August last year. By the time the trial was aborted, that was down to 13.

Mr McKay had been facing 41 charges but that was whittled down to seven.

Lawyers are remaining tight-lipped until the full decision has been released.

Mr Bublitz's lawyer, Rachael Reed, declined to comment until after Justice Woolford had released his full decision.

Greg Bradford, who represents Mr McKay, said the legal team always believed the Crown's case was too broad. He said the experience for his client had been devastating.

The Financial Markets Authority, who brought the prosecution, would not comment. A spokesperson said they were still considering the initial judgement.

The Ministry of Justice said determining the costs of the case so far would be complicated and they could not respond before deadline.

As well as the months of court time, there were two Crown lawyers and one from the FMA. Three of the defendants had eight lawyers between them and a fourth was self-represented.

There was also an Amicus lawyer appointed to assist the court.