Hubbard statutory managers and legal advisers will have to pay $37,500 of Jean Hubbard's legal bill after misplacing 72 boxes of crucial documents.

A trial had been set down for October 29 this year to determine the ownership of $60 million of assets, but two weeks beforehand the statutory managers from Grant Thornton asked the court for an adjournment as they had discovered 72 boxes of documents.

Justice Chisholm adjourned it to May 20 next year.

Because of the delay Mrs Hubbard's lawyers sought $140,000 legal costs and $177,000 for wasted costs. Justice Chisholm awarded Mrs Hubbard $37,500.

"The situation giving rise to the adjournment in this case should not have occurred and does not reflect well on the statutory managers.

"Obviously the statutory managers should have realised that relevant documents were held by them long before this actually dawned on them, and their conduct could be categorised as careless. Even the inquiries on behalf of Mrs Hubbard did not alert them to the existence of the documents that were under their control."

Justice Chisholm did acknowledge it was a difficult statutory management involving a huge number of documents.

The statutory managers say the assets have been transferred by the Hubbards for the benefit of Aorangi Securities investors, while Mrs Hubbard argues on behalf of her late husband Allan's estate and herself that the transfers were not validly implemented.

Aorangi Securities was put into statutory management along with the Hubbards on June 20, 2010.

A spokesperson for the statutory managers - Trevor Thornton, Richard Simpson and Graeme McGlinn - said they would be absorbing the cost. So far statutory management and legal bills has cost Aorangi investors more than $5 million.

"At a recent hearing, the court decided that we had to pay Mrs Hubbard's lawyers the costs of assessing the additional documents. There will be no cost to Aorangi investors of this as the costs will be absorbed by both our legal advisers and ourselves as statutory managers.

"The delay in the hearing is because following Mrs Hubbard's decision to contest the ownership of $60 million of introduced assets, the statutory managers established that not all documents in their possession had been fully examined for relevance and also not made available to other counsel.

"Their assessment of the documents is that they significantly improve Aorangi's case that the $60 million of assets belong to Aorangi investors and not Mrs Hubbard."

They had also identified additional assets that they believed also belonged to Aorangi Securities.

Investor liaison group spokesman Noel Macpherson said investors would be pleased they weren't paying the $37,500 but it would still cost them more overall.

"That [paying the $37,500] is a tick for them at last. There is still six months of the statutory managers and lawyers going through all the documents which will be costing investors more than it should have."

- © Fairfax NZ News

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