The Serious Fraud Office's theory about Ngatata Love's alleged fraud is wrong and payments made by developers through a company owned by his partner had no financial effect on a trust he chaired, the High Court in Wellington heard today.
Love, who can be named for the first time after a three-year name suppression order was lifted, is charged with obtaining a secret commission and obtaining significant sums by deception.
The Crown says he signed an agreement in late 2006 with Auckland property developer Redwood Group to ensure it could lease land owned by the Wellington Tenths Trust, which Love chaired, and he received service fees through Pipitea Street Development Limited (PSDL), a company owned by his partner Lorraine Skiffington, without the trust's knowledge.
The Crown says Redwood paid Love and Skiffington $1.5 million, which they used to repay a house loan. Skiffington was also charged but has been granted a permanent stay due to her ill health, while Ngatata Love's son Matene Love had already pleaded guilty to accepting a secret commission.
In day two of the 11-day trial, Love's counsel, Colin Carruthers QC, cross-examined SFO investigator Shane Mannix who worked on the investigation.
Carruthers pushed Mannix on the services agreement signed by Skiffington, fellow PDSL director Shaan Stevens, and developers Redwood, where PDSL would receive payments while the trust would only get rent from leasing the land and an option to purchase the land at a discounted market rate.
Carruthers said the payments under the agreement couldn't have had any effect on the financial position of the Tenths Trust."On that basis, the payments under the services agreement can have no effect on the Tenths Trust, can they?" Carruthers said.
"At this point, those costs were payable and were made by Redwood. That could have no effect on the Tenths [Trust] because what they got out of it was the rent and an option to purchase at a discounted market price, nothing to do with the cost of the project."
Carruthers put it to Mannix that the SFO's underlying theory was wrong, which Mannix denied. "The theory of the SFO wasn't based on just this - you're asking me to say the theory was just based on this when it wasn't," Mannix said.
"You've made a broader statement, and I'm not willing to say the entire theory of our case was wrong."Mannix said the agreement was $1.5 million to be paid to PDSL upon signing and another $1.5 million plus GST on settlement - "the money has to come from somewhere, eventually that becomes part of the consultant costs when the joint venture comes to bear."
Justice Graham Lang then clarified with Mannix that the time period up for discussion was between November 2006 and January 2007 when the agreement was signed.