Lawyers for the three jailed directors of Capital + Merchant say the actions of their clients were "not good enough" but this did not mean they had breached the Crimes Act.
Appearing before the Court of Appeal in Wellington yesterday, Bruce Gray, QC, said Justice Edwin Wylie had asked the wrong question when he convicted Neal Nicholls and Wayne Douglas of a series of charges of theft by a person in a special relationship.
Capital + Merchant went into receivership in November 2007 owing 7000 investors $167 million.
Nicholls and Douglas were later jailed for 71/2 years each under charges brought by the Serious Fraud Office, and former chief executive Owen Tallentire was jailed for five years.
Tallentire has separate legal representation but his lawyer, Nathan Gedye, simply reaffirmed Gray's argument against the conviction.
Gray told the court that to prove his clients were guilty of the charges brought against them, Justice Wylie would have to have been satisfied beyond reasonable doubt that they had intended to breach Capital + Merchant's trust deed.
However, his sentencing notes suggested he simply inferred it from the "not attractive" facts of the transactions to which the charges related.
"I'm not going to tell you these transactions were terrific, or even good enough. I understand that they're not," Gray said.
"I'm not here to tell you good processes were followed, because they weren't.
"But I am here to say that His Honour failed to consider explicitly the question he posed for himself: 'Was there an intention to breach the trust deed'?"
He argued that the evidence showed there was a misguided view among the directors that the transactions could be completed without breaching the trust deed. Doubt and scepticism about the intentions of directors was not enough.
"What is required is proof."
During sentencing in the High Court in August, Justice Wylie said the directors had been driven by self-interest and greed, with one transaction "devoid of any semblance of morality".
The Crown will make its submissions on the appeal today.
- Taranaki Daily News
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