Charges against Reeves Moses directors were dismissed, but mortgage manager loses on all counts
Former Reeves Moses mortgage manager Peter Van Nieuwkoop — now a director of his own contributory mortgage companies — was found in the Auckland District Court today to have breached the Securities Act & its regulations.
But although Judge Barry Morris said he’d convicted Mr Van Nieuwkoop on all matters, convictions weren’t entered, so any question of whether he can still run a company is in abeyance.
Mr Van Nieuwkoop was remanded until Tuesday 14 May for sentencing.
Judge Morris plonked down copies of his reserved decision as he entered the courtroom, then got on with discussing with counsel (Brian Dickey for the Registrar of Companies, Grant Illingworth for the defendant) where to go from here.
Appeal against directors’ dismissals complicates decision
The future of the case is complicated by the listing of an appeal by the Crown against dismissal of some charges last year against Reeves Moses directors Roger Moses & Gary Stevens (similar charges to those faced by Mr Van Nieuwkoop, but from a different position of responsibility), due to be heard on Friday 26 April.
The 2 directors did not give evidence in the Van Nieuwkoop case because of the appeal.
Mr Van Nieuwkoop had 1 charge against him dismissed at the start of his trial because it was repeated on the charge sheet. Judge Morris said in the first paragraph of his decision that 36 charges were laid against Mr Van Nieuwkoop in December 2000. Deducting 1 would take the guilty decisions to 35. The judge appended a schedule of the charges, listed according to the 4 projects involved. The schedule shows 34 charges.
Mr Illingworth reminded the judge today that some were alternatives. When the precise number is worked out, that will reduce the number of convictions.
Mr Illingworth also said he would seek at the time of sentencing to have Mr Van Nieuwkoop discharged without conviction.
Judge finds mortgage manager was principal officer
Judge Morris said his central task was to establish whether Mr Van Nieuwkoop was a principal officer of Reeves Moses Hudig Mortgage Brokers Ltd at the time of the alleged Securities Act/Regulations breaches in 1999.
The prosecution contended that Mr Van Nieuwkoop “was responsible for & ran the management of the mortgage book.” The defence argued that Mr Van Nieuwkoop wasn’t mortgage manager, but had a whole range of duties. The judge agreed he had a lot of duties, but said he was still mortgage manager.
“By the very nature of his defined role & the importance of it, and notwithstanding the huge pressures which I see as a mitigating factor only, not a defence, I find that the defendant was the principal officer as defined above,” Judge Morris said.
Mr Van Nieuwkoop said in evidence he wrote $176 million of mortgages in his 2Â½ years at Reeves Moses. The trial was about 4 projects where the firm came out badly, with deficiencies in offer documents which breached the securities laws.
In his evidence, Mr Van Nieuwkoop accepted he’d done wrong, but tried to lay the blame on the firm’s directors, Roger Moses & Gary Stevens.
Judge says he’s been given iceberg treatment
Judge Morris didn’t get into that argument, but at the verdict court hearing complained that he had never been given the complete picture, with no evidence from the informant: “I haven’t been given the mushroom treatment, but I have been given the iceberg treatment. I’ve been given the bits that are apparent, but I haven’t been given the bits below the water.”
The judge said it wasn’t his job to regulate securities law, but he had an important role in imposing the appropriate penalty — without an overview. “That’s something that I need to have,” Judge Morris told the lawyers.
To get that overview, he needs to be given some indication at the sentencing hearing of the roles of the directors (by that time the appeal against their dismissals will have been resolved), and Mr Van Nieuwkoop’s comparative position at Reeves Moses.
Although another district court judge, John Hole, found the directors not guilty of the same charges (from the perspective of their different roles in the business), the second judge’s consideration of penalty may be varied according to the presentation of the directors’ positions in this overview.