A former finance firm's board member who was released from prison after being partially exonerated of fraud charges says he has paid an extremely high price for his crimes.
Yesterday the Herald reported that the High Court had dismissed Paul Bublitz's application to recover $1.14 million in legal costs.
In a statement via his lawyer, Rachael Reed QC said Bublitz has paid an "extremely high price for his convictions, including the costs he incurred and the impact on his business and family life".
The ex-Mutual Finance board member endured two trials over allegations of deliberately misleading investors in an attempt to rescue failing investments during the financial collapse of 2007/2008 (GFC).
The first was aborted in 2017 after an unprecedented disclosure failure of 14,619 documents by the Financial Markets Authority (FMA).
Bublitz, who began his financial career as an 18-year-old, spent $1.52m fighting the case before he exhausted his resources and continued on legal aid.
Reed said her client was "extremely disappointed" to not receive any recompense for his legal fees, which she added the FMA "wasted in the first trial".
"The FMA's disclosure breaches that led to the abortion of the first trial after nine months of court time were rightly described by the judge as 'extensive' and 'unprecedented' non-compliance with the Criminal Disclosure Act 2008," Reed said.
A second trial led to Bublitz and Viaduct Capital directors Bruce McKay and Richard Blackwood being found guilty in February last year of some of the fraud charges.
But last August the Court of Appeal overturned several of the men's convictions and also quashed Bublitz's prison sentence in favour of home detention.
As a result, Bublitz made an application for $1.14m, which amounted to 75 per cent of the costs incurred by him towards his defence, which was attributed to the charges that were dismissed or he was acquitted of.
"The FMA also pursued a huge number of charges against him that had no basis. He feels left to pay for their errors," Reed said.
Bublitz saw two of the six charges he was found guilty of quashed after he had earlier been acquitted by the High Court of six charges of theft by a person in a special relationship.
Justice Mark Woolford said he dismissed Bublitz's costs bid in part because it would "sit uncomfortably with Bublitz's four theft convictions."
"The offences of which he has been convicted are not minor or technical. They formed a substantial part of the Crown case," he said.
"The funds stolen by Mr Bublitz totalled $1.17 million. He now seeks almost the same amount, $1,145,462.50, for his costs, yet does not offer reparation."
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.
The majority of the stolen money was used to prop up Viaduct Capital, with Reed adding Bublitz did not personally benefit from the transactions he was convicted for.
Justice Woolford also said Bublitz's costs had already been indirectly taken into account in the 19-month discount on his sentence for the first trial's abortion.
And the FMA was earlier ordered to pay $10,000 each to Bublitz, McKay, Blackwood for the disclosure foul-up.
Justice Woolford said if Bublitz had been acquitted on all the charges, he would have had a strong case for a large award of costs.
Reed would not be drawn on whether her client would appeal but said Bublitz has 20 working days from the date of the judgment to consider it.
When Viaduct Capital and Mutual Finance went into receivership in 2010 the firms owed investors $17m.
In 2017, the trustee of Viaduct Capital, Prince and Partners, also settled civil proceedings brought by the FMA for $4.5m after admitting a series of failings.
In separate High Court proceedings, the Companies Registrar is also seeking to permanently ban Bublitz and McKay from acting as a director.