KEY POINTS:
The 2004 Digitech tax dodge case looks set to be dragged before the courts for the sixth time.
The Crown is seeking leave to appeal a High Court decision that it must pay interest on an estimated $1 million in costs it owes the four men acquitted in
the case.
In late 2004 investment banker John Reid and his colleagues Peter Connolly, John Currie and Peter Russel were each found not guilty on two counts of fraud. Reid, Currie and Russel were also cleared on various money laundering charges.
The Serious Fraud Office had argued that the promoters of the tax avoidance scheme defrauded both investors and Inland Revenue.
But at the 2004 trial the High Court said investors went into the Digitech scheme for no proper commercial purpose except to lessen their tax bill, so there was no attempt to deceive them.
In December 2005 the court awarded the acquitted four some costs.
The Crown appealed that award in the Court of Appeal and won, but the four took the matter to the Supreme Court late last year which upheld the original costs decision.
The four former accused then went back to the High Court last month to determine details of the cost payout, including that interest was due on the total from the date of the December 2005 order. If the Crown succeeds in having the interest issue heard in the Appeal Court, it would be the sixth set of court proceedings surrounding the tax dodge case.
One of the four acquitted, Peter Connolly, said the Crown's move was "arrogance".
It had already been told it owed costs and now it was prepared to spend more taxpayer funds quibbling over interest. "Where in the world does anyone get an interest-free loan?"
Barrister for the four, Hugh Fulton, said total costs hadn't been calculated yet, but it would be in seven figures. He said the award only entitled the acquitted men to claim costs based on the Crown rate.
"The point is that these people, who are not guilty, don't get back what they've had to pay their lawyers privately. And then even when we do get a figure, think of all the costs that we are incurring in these chain of appeals. These are ordinary people who can't afford legal costs."
The Digitech scheme involved investors purchasing shares using loss attributing qualifying companies (LAQCs), with the bulk of the price deferred for 10 years.
The investors then took out loans to pay for an insurance policy covering their losses if the shares hadn't reached a certain value by the end of the scheme.
