The Queen v Rodney Michael Petricevic Cornelis Robert Roest Peter David Steigrad

JurisdictionNew Zealand
JudgeVENNING J
Judgment Date05 April 2012
Neutral Citation[2012] NZHC 665
Docket NumberCRI-2008-004-029179
CourtHigh Court
Date05 April 2012
The Queen
and
Rodney Michael Petricevic Cornelis Robert Roest Peter David Steigrad

[2012] NZHC 665

CRI-2008-004-029179

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

Reasons for guilty verdicts — accused were directors of failed finance company Bridgecorp — charged with offences under s242 Crimes Act 1961 (false statement by a promoter), s377(2) Companies Act 1993 (false statements) and s58(3) Securities Act 1978 (criminal liability for misstatement in registered prospectus) — alleged false statements made in prospectus — whether accused had knowledge of false statements — whether an omission was a false statement — whether accused entitled to rely on advisors — director's duties.

Appearances:

B Dickey, W Cathcart and T Molloy for Crown

C B Cato for Mr Petricevic

P Dacre and R Butler for Mr Roest

B Keene QC, M E Cole, S Nicolson and J F Anderson for Mr Steigrad

REASONS FOR VERDICTS OF VENNING J
Table of Contents

Para No

Summary

[1]

Judge alone trial

[6]

General background

[10]

Legal considerations

[28]

Prejudice/sympathy

[33]

Lies

[34]

Expert evidence

[37]

The position of the co-accused

[40]

The charges

[42]

Count 1 — Section 242 Crimes Act 1961 — False statement by a promoter etc .

[45]

Count 1 — Mr Petricevic

[49]

Count 1 — Mr Roest

[85]

Count 2 — Section 242 Crimes Act 1961 — False statement by a promoter etc.

[100]

Count 2 — Mr Petricevic

[106]

The 31 March interest run

[108]

Count 2 — Mr Roest

[142]

Count 3 — Section 242 Crimes Act 1961 — False statement by a promoter etc.

[149]

Count 4 — Section 242 Crimes Act 1961 — False statement by a promoter etc.

[155]

Count 5-Section 242 Crimes Act 1961 — False statement by a promoter etc.

[166]

Count 6 — Section 242 Crimes Act 1961 — False statement by a promoter etc.

[173]

Count 7 — Section 377(2) Companies Act 1993 — false statements

[178]

Count 8 — Section 377(2) Companies Act 1993 — false statements

[189]

Count 9 — Section 58(3) Securities Act 1978 — criminal liability for misstatement in registered prospectus

[198]

Particular (a): That Bridgecorp would/did not provide credit or advance loans other than in accordance with good commercial practice and internal credit approval policies

[232]

(i) Kinloch/Bendemeer

[238]

(ii) Dhuez/Akau

[243]

(iii) Myers Park Apartments Ltd

[250]

(iv) Victoria Quarter Depot Site

[252]

(v) Gateway to Queensland Real Estate (NZ) Ltd

[256]

(vi) West Auckland Residential Developments Ltd (WARD) loan

[260]

(vii) The loan to Barcroft

[266]

(viii) The background to Barcroft — Momi Bay

[268]

Particular (b): That Barcroft Holdings Limited was not a related party

[291]

Particular (d) — That in the period 30 June 2006 to 21 December 2006 no circumstances had arisen that would adversely affect the trading or profitability of the charging group or the value of its assets or the ability of the charging group to pay its liabilities due within the next 12 months

[317]

Particular (e)(i) — That Bridgecorp managed liquidity risk by maintaining a minimum cash reserve on bank deposit

[345]

Particular (e)(ii) — The omission of a material particular being the actual deterioration in Bridgecorp's liquidity since year end 30 June 2006

[349]

Count 9 — Mr Petricevic's belief

[376]

Count 9 — Mr Roest's belief

[393]

Count 9 — Mr Steigrad's position

[402]

Count 10

[420]

Particulars

[421]

Count 10 — Mr Petricevic

[427]

Count 10 — Mr Roest

[429]

Count 10 — Mr Steigrad

[433]

Count 11

[455]

Particulars of untrue statement

[456]

Count 11 — Mr Petricevic

[465]

Count 11 — Mr Roest

[472]

Count 11 — Mr Steigrad's position

[476]

Extension certificate

[478]

Count 12

[522]

Count 12 — Messrs Petricevic and Mr Roest

[529]

Count 12 — Mr Steigrad

[530]

Count 13

[531]

Count 13 — Messrs Petricevic and Mr Roest

[536]

Count 13 — Mr Steigrad

[537]

Count 14

[538]

Particulars of untrue statement

[539]

Count 14 — Messrs Petricevic and Mr Roest

[544]

Count 14 — Mr Steigrad

[545]

Count 15

[547]

Particulars of untrue statement

[548]

Count 15 — Messrs Petricevic and Roest

[555]

Count 15 — Mr Steigrad

[556]

Count 16

[557]

Count 16 — Messrs Petricevic and Roest

[565]

Count 16 — Mr Steigrad

[566]

Count 17

[567]

Count 17 — Messrs Petricevic and Roest

[574]

Count 17 — Mr Steigrad

[575]

Count 18

[576]

Count 18 — Messrs Petricevic and Roest

[584]

Count 18 — Mr Steigrad

[585]

Conclusion

[586]

Summary
1

At material times Messrs Petricevic, Roest and Steigrad were directors of Bridgecorp Limited (Bridgecorp) and Bridgecorp Investments Limited (BIL). All three have been charged with 10 counts under's 58 of the Securities Act 1978. In addition, Messrs Petricevic and Roest have also been charged with six counts under's 242 of the Crimes Act 1961 and two counts under's 377(2) of the Companies Act 1993. The charges arise out of the alleged failures of the accused as directors of Bridgecorp and BIL.

2

In summary the charges are:

  • (a) Count 1 – On 30 March 2007 Messrs Petricevic and Roest made a false statement in the Prospectus Extension Certificate for Bridgecorp's Term Investments Prospectus dated 21 December 2006;

  • (b) Count 2 – Between 30 March 2007 and 2 July 2007 Messrs Petricevic and Roest made a false statement in Bridgecorp's Term Investments Prospectus dated 21 December 2006;

  • (c) Count 3 – Between 7 February 2007 and 2 July 2007 Messrs Petricevic and Roest made a false statement in Bridgecorp's Term Investments Investment Statement dated 21 December 2006;

  • (d) Count 4 – On 30 March 2007 Messrs Petricevic and Roest made a false statement in the Prospectus Extension Certificate for BIL's Capital Notes Prospectus dated 21 December 2006;

  • (e) Count 5 – Between 30 March 2007 and 6 July 2007 Messrs Petricevic and Roest made a false statement in BIL's Capital Notes Prospectus dated 21 December 2006;

  • (f) Count 6 – Between 7 February 2007 and 6 July 2007 Messrs Petricevic and Roest made a false statement in BIL's Capital Notes Investment Statement dated 21 December 2006;

  • (g) Count 7 (as amended by leave on 15 February 2012) – Between 30 April 2007 and 1 May 2007 Messrs Petricevic and Roest made a false statement in the Director's Certificate dated 30 April 2007 to Covenant Trustee Company Limited in relation to the affairs of Bridgecorp;

  • (h) Count 8 – Between 19 April 2007 and 1 May 2007 Messrs Petricevic and Roest made a false statement in the Director's Certificate dated 19 April 2007 to Covenant Trustee Company Limited in relation to the affairs of BIL;

  • (i) Count 9 – Between 21 December 2006 and 7 February 2007 all accused distributed a prospectus, namely Bridgecorp's Term Investments Prospectus dated 21 December 2006, that contained an untrue statement;

  • (j) Count 10 – Between 7 February 2007 and 30 March 2007 all accused distributed a prospectus, namely Bridgecorp's Term Investments Prospectus dated 21 December 2006, that contained an untrue statement;

  • (k) Count 11 – Between 30 March 2007 and 2 July 2007 all accused distributed a prospectus, namely Bridgecorp's Term Investments Prospectus dated 21 December 2006, that contained an untrue statement;

  • (l) Count 12 – Between 21 December 2006 and 7 February 2007 all accused distributed BIL's Capital Notes Prospectus dated 21 December 2006, that contained an untrue statement;

  • (m) Count 13 – Between 7 February 2007 and 30 March 2007 all accused distributed a prospectus, namely BIL's Capital Notes Prospectus dated 21 December 2006, that contained an untrue statement;

  • (n) Count 14 – Between 30 March 2007 and 6 July 2007 all accused distributed a prospectus, namely BIL's Capital Notes Prospectus dated 21 December 2006, that contained an untrue statement;

  • (o) Count 15 – Between 21 December 2006 and 7 February 2007 all accused distributed an investment statement dated 21 December 2006 relating to Bridgecorp's term investments, that contained an untrue statement;

  • (p) Count 16 – Between 7 February 2007 and 2 July 2007 all accused distributed an investment statement dated 21 December 2006 relating to Bridgecorp's term investments, that contained an untrue statement;

  • (q) Count 17 – Between 21 December 2006 and 7 February 2007 all accused distributed an investment statement dated 21 December 2006 relating to BIL's Capital Notes Investment Statement, that contained an untrue statement;

  • (r) Count 18 – Between 7 February 2007 and 6 July 2007 all accused distributed an investment statement dated 21 December 2006 relating to BIL's Capital Notes Investment Statement, that contained an untrue statement.

3

Two other directors, Messrs Davidson and Urwin, were charged in respect of the 10 counts under the Securities Act. Mr Davidson pleaded guilty on 2 September 2011 and was sentenced by Andrews J on 7 October 2011. Mr Urwin was arraigned with the present accused and pleaded not guilty. After the Crown had opened but before the first witness was called, Mr Urwin changed his pleas to guilty. He is for sentence later this month.

4

Earlier today I found Messrs Petricevic and Roest guilty on all counts. I found Mr Steigrad guilty on counts 10, 11, 13, 14, 16 and 18 and not guilty on counts 9, 12, 15 and 17.

5

These are my reasons for returning those verdicts.

Judge alone trial
6

In R v Connell 1 the Court of Appeal stated that a Judge hearing a criminal trial without a jury is required to deliver:

… a statement of the ingredients of each charge and any...

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