A lawyer accused of conspiring with a former property developer to hide his links to a now-failed finance company is innocent, gained nothing from the alleged offending and was "following instructions," the man's barrister has told the High Court.
Former Central Hawkes Bay mayor and Waipukurau lawyer, Hugh Edward Staples Hamilton, is on trial in the High Court at Auckland for allegedly helping former property developer Raymond Schofield arrange the purchase of Belgrave Finance so that his identity and control of the company was hidden.
The purpose of this was to allegedly allow Schofield, who bought Belgrave in 2005 for $3 million, to borrow from the firm either directly or through other companies he controlled.
Over a two-year period after the purchase, Belgrave allegedly loaned $18 million to Schofield or entities controlled by him. Of this amount, Hamilton allegedly assisted on related-party loans worth $12.6 million, preparing documents and advising Belgrave on "these unlawful advances".
Because Hamilton was instrumental in helping with the transactions and knew they breached Belgrave's trust deed, he was liable for charges of theft by a person in a special relationship, Crown lawyer Nick Williams argued yesterday in his opening statements to the court.
But Hamilton's lawyer, John Robertson argued his client was innocent and was "following instructions in his capacity as a lawyer."
"Nothing he did was out of the ordinary duties as a solicitor. Like any conveyancing lawyer working for a bank or for a borrower," Robertson told Justice John Faire in the defence opening statements.
Working as a partner of DAC Legal - described as "a busy rural practice in Waipukurau" - Hamilton may have "been out of his depth or overworked" but gained nothing from any alleged offending, his lawyer told the court.
"The Crown's case is all about hindsight, of what Mr Hamilton should have known about what Mr Schofield intended to do. But what the evidence will show is that no-one really knew what Mr Schofield was up to including the people who knew him best."
"When it comes to the question of whether he knowingly was involved in related-party lending or misleading the public the defence says he is innocent," Robertson said.
The defence lawyer in his opening said it was an "understatement" to call the evidence in the case complicated.
"The Crown's case is all about hindsight, of what Mr Hamilton should have known about what Mr Schofield intended to do. But what the evidence will show is that no-one really knew what Mr Schofield was up to including the people who knew him best," the defence said in its opening.
"Mr Hamilton categorically denies that in his role as solicitor for Mr Schofield or in any other role he helped form a common plan with Mr Schofield and others in order for Mr Schofield to solicit funds from the public in contravention of the [Belgrave's] trust deed," he said.
Robertson said Hamilton had no responsibility to monitor the decisions of Belgrave's directors, who both pleaded guilty to charges similar to what the defendant is facing and were sentenced to jail.
"The defence would say there is a long list of other people whose job it was to monitor the director's actions and this includes auditors..." Robertson said.
Belgrave's directors Stephen Smith and Shane Buckley pleaded guilty to charges similar to those faced by Hamilton and were sentenced to four years and three years in jail respectively. Both are due to appear as witnesses in the Crown's case against Hamilton.
Schofield was also charged in the High Court case, brought by the Serious Fraud Office and the Financial Markets Authority's Fraud Office, but was granted a stay on the proceedings in December 2012 because he is terminally ill.
Hamilton's trial, set down to take eight weeks, continues this afternoon.