'Wolf of Weed Street' hit with $70k costs judgment after 'destructive and cavalier' behaviour in court

The “Wolf of Weed Street” has been stung with a large bill for costs after a judge ruled he made unsubstantiated allegations against his former associates in a failed medical cannabis company.

Ross Smith, founder of Bay of Plenty-based company Medicann, must pay his former chief executive, Brendon Ogilvy, $43,168 and liquidators Paul Manning and Kenneth Brown of BDO $28,381 – a total of $71,549.

The costs arise from a hearing in the High Court at Tauranga.

The liquidators had sought directions on whether Smith’s shares in the company had become void prior to it being placed in liquidation. Associate Judge Peter Andrew ruled they had.

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During the hearing, Smith – who alleges the company was stolen from him – accused Ogilvy of fraud and dishonesty.

Associate Judge Andrew said in his ruling on costs that the claims were not credible.

“I accept that the destructive and cavalier approach taken by Mr Smith ... was unreasonable and did contribute unnecessarily to the time and expense of the proceedings.

“On this basis an award of increased costs against Mr Smith is justified.”

Smith told Stuff the liquidators were the ones to blame for high costs, spending $180,000 of investors’ money on something that “could have been handled by submissions in half a day”.

“That’s the way the New Zealand court system works,” he said.

He wasn’t worried about the legal bill.

“I’ve moved on, I don’t care. It’s f... all. Mate, I’ve spent more than that on lunch, it’s as worrisome as a cloudy day in my world.”

Smith formed Medicann in 2018 after cashing out of medical cannabis companies in Australia. More than $1 million was raised from businesspeople in Bay of Plenty, much of which was spent before the company went into liquidation.

Ogilvy told the original hearing he was concerned that some of the claims made in an Information Memorandum given to investors were not true.

In his application for costs, he accused Smith of taking an “unreasonable and meritless opposition to the application for directions for the ulterior motive of exhausting the funds in the liquidation so there was little or no distribution ... to the shareholders”.

Judge Andrew said there was some basis for reaching that view but generally, costs were to reflect how parties acted during litigation, not before it.

He also noted that the parties had gone to mediation in November 2019 and Smith had been offered a payment of $100,000, a settlement that never eventuated.

“The result of the proceedings is that Mr Smith ... is clearly in a far worse financial position than he would have been had he accepted the settlement offer. In my view, Mr Smith has to accept some significant responsibility for that outcome,” the judge wrote.

He ordered a 25 per cent “uptick’ in costs against Smith, but declined an application by Ogilvy and the liquidators for indemnity costs, which would have covered total expenses.

Manning said the liquidators were satisfied with the outcome and were now consulting with a liquidation committee, on behalf of shareholders, on next steps.

Ogilvy said he was delighted with the outcome.

Smith said he planned to retire and move to a property he had purchased in Ko Samui, Thailand.

“The Thailand medical cannabis scene is amazing, I’ll probably give away my services up there.”

Smith said cheap, high quality cannabis grown in places such as Thailand and Colombia meant New Zealand medical cannabis companies didn't stand a chance.

“Australia has had medical cannabis for five years and even after $50m of investment not one has made a cent.

“It’s all over for medical cannabis companies in New Zealand – you’re all f...ed boys, it’s over.”