Matthew Ridge. Photo Getty
Evidence from former All Black and Warriors' captain
Matthew Ridge will be presented in the trial of three men
associated with the collapsed firm Dominion Finance.
In a case brought by the Serious Fraud Office, former
Dominion Finance director Robert Barry Whale, former chief
executive Paul William Cropp and an accused with name
suppression face charges of theft by a person in a special
Whale faces five counts for theft by a person in a special
relationship while Cropp faces four, and the man with name
suppression faces three.
The trio pleaded not guilty as the proceedings began in the
High Court at Auckland this morning.
"All counts allege that the accused knowingly and
deliberately breached requirements of one or other of the
debenture trust deeds," Crown lawyer Brian Dickey said in his
opening statements this morning.
A debenture trust deed dictates the terms and conditions
between debenture holders (investors) and the company
accepting the funds.
Some charges in the case relate to an alleged related-party
loans made by Dominion totalling almost $14 million to a
luxury Remuera construction project.
"Both of these loans were made to fund related parties
involved a in problematic luxury apartment development
located at 2 Bassett Road in the Auckland suburb of Remuera,"
Mr Dickey said in his opening statements.
Dickey said in court this morning that the history of this
development began in 2002 when Matthew Ridge's company, then
named M3 Developers Ltd, purchased the land for the project
with a $2.58 million loan from Dominion.
"The idea was to develop 11 luxury apartments on the land,"
Mr Dickey said.
"By late 2003 and early 2004, Mr Ridge was having major
problems with the development. By 2004, the development was
literally a big hole in the ground filled with water. By June
30, Bassett Road Ltd (another Ridge company) owed Dominion
more than $6,000,000," the lawyer said.
Ridge was looking to sell the development and approached
Terry Butler and Brendon Wilson from Dominion inquiring about
anyone who could buy it, Dickey said.
Butler, a Dominion director, then contacted another man, John
Williams, to see if he wanted to purchase the development
from Ridge, the lawyer said.
Williams did not have the money to purchase it himself but
was prepared to take on the project because it was agreed it
would be financed by Dominion, Dickey said.
This happened through an entity Williams fronted - Norfolk
Manor Ltd. Norfolk was to be a joint venture in which Butler
would underwrite six units of the apartment project, Williams
would be responsible for two units and the other three units
would be pre-sold.
In 2004, Dominion received an application for finance from
Norfolk Manor for $6.6m and this was later accepted.
"The application does not contain any reference to a joint
venture agreement," Dickey said.
Ridge then signed a sale and purchase agreement to sell the
Development to Norfolk for $5m and the property title was
transferred in August 26 on that year.
"Mr Williams did not negotiate the purchase price of $5
million with Mr Ridge prior to the purchase. The price was
suggested by Terry Butler and he accepted it as part of the
deal. Mr Williams did not even meet Mr Ridge until just prior
to the sale and purchase agreement being signed," the lawyer
Ridge's evidence will be called during the proceedings,
Because of difficulties the development ran into, Dominion
made further advances to the Bassett Rd apartment project
until it was completed.
By early 2008, Norfolk owed Dominion $8.7m, the court heard.
"Because of the joint venture agreement, this was clearly a
related party loan in breach of the Dominion Trust Deed," Mr
"Whale was involved in preparing and reviewing some of the
key documentation, approving the loan and witnessing the
signing of the joint venture agreement," the lawyer said.
The trial continues.
- Hamish Fletcher of NZ Herald