Richard Blackwood's lawyer said the consequences of the FMA's case against the businessman have been significant. Photo / Greg Bowker
Richard Blackwood's lawyer said the consequences of the FMA's case against the businessman have been significant. Photo / Greg Bowker
A former director of a failed finance firm has lost his bid to recoup more than $75,000 in costs after arguing he was the victim of prosecutorial overreach and had his fraud convictions quashed.
Richard Blackwood was one of a wider group of businessmen charged by the Financial Markets Authority(FMA) over allegations involving multimillion-dollar crimes during the global financial crisis (GFC).
The long-running saga, which involved a costly aborted first trial, eventually saw Blackwood, Bruce McKay and Paul Bublitz found guilty of several but not all of the charges they faced in February 2019.
The trio were accused by the financial watchdog of deliberately misleading investors and potential investors in an attempt to rescue failing investments during the financial collapse of 2007–2008.
McKay and Blackwood were serving as directors of Viaduct Capital, while Bublitz was a board member for Mutual Finance, when the two firms went into receivership in 2010 - owing investors $17 million.
Blackwood was sentenced to nine months' home detention after being convicted by the now-retired Justice Kit Toogood of four charges of theft by a person in a special relationship. He was also found not guilty of one charge of making a false statement by a promoter.
McKay, who was also the chief financial officer of Viaduct and sentenced to 12 months' home detention, had his appeal dismissed.
Richard Blackwood, Paul Bublitz and Bruce McKay, pictured in February 2019 when hearing their verdicts. Photo / Doug Sherring
Blackwood seemingly felt slighted by the FMA's prosecution against him, which his lawyer Marc Corlett QC argued should never have been brought because of the absence of evidence to prove the charges.
He sought a sum of $76,526.75 in indemnity costs after the successful appeal.
Blackwood was seen by the court to have played a lesser role to McKay and Bublitz. He was engaged on contract as a loan originator for Viaduct and was paid fees on a success-only basis.
Although he was appointed a director of Viaduct after the resignation of another director, he did not receive director's fees and had little to do with the management of any of the relevant companies.
Both Viaduct Capital and Mutual Finance were part of the Government's GFC insurance scheme - meaning any losses would be passed on to the taxpayer.
Corlett said the case's consequences for Blackwood had been significant, through the considerable expense to have his convictions quashed and serving more than half of his home detention.
Today, the Court of Appeal released its decision and said while Blackwood was successful with his appeal, he had also not been found innocent.
"That this court came to a different conclusion to that reached by [Justice] Toogood does not suggest prosecutorial overreach or misconduct. Rather, it suggests the opposite, that the proper inference to draw from proven facts was one on which reasonable minds might differ, particularly applying the very high standard of proof required," Justice Murray Gilbert said in the court's written reasons.
"We do not accept that there was no proper basis for the charges to have been brought against Mr Blackwood ... We do not consider there is anything out of the ordinary that could justify an award of costs for the appeal."
Last month, Bublitz also failed in his application to the High Court to recover $1.14m in costs after his partial acquittal.
The FMA's prosecutions had included others, including former Mutual Finance board member and chartered accountant Lance Morrison.
He was part of a first trial alongside Bublitz, McKay, and Blackwood which lasted nine months before being aborted in May 2017 after prosecutors failed to disclose some 14,619 documents.
The FMA dropped its case against Lance Morrison. Photo / Greg Bowker
The High Court's Justice Mark Woolford earlier described the FMA's blunder as unprecedented and an "extreme example of procedural failure".
It resulted in several charges being dismissed against the four men, including the FMA completely dropping its case against Morrison.
Justice Woolford also ordered the FMA to pay $10,000 each to Blackwood, Bublitz, McKay, and Morrison and $10,000 to the Ministry of Justice for the foul-up. Morrison was paid a further $75,000 towards the costs of his defence.
Property developer Peter Chevin was also charged and pleaded guilty to nine charges of theft by a person in a special relationship. He was sentenced in 2017 to nine months' home detention.
Nick Wevers, the former chief executive of Blue Chip and a director of Viaduct Capital, was another member of the group charged but died in 2014. The FMA withdrew the charges against him after his death.
In ongoing separate High Court proceedings, the Companies Registrar is also seeking to permanently ban Bublitz and McKay from acting as a director.
