Bublitz loses bid to throw out FMA case

A High Court judge has ruled that the Financial Markets Authority can continue to pursue criminal charges against Paul Bublitz and others following the collapse of Viaduct Capital and Mutual Finance. The finance companies collapsed in 2010 owing $17 million.

However, in doing so, Justice Graham Lang has suggested the delays Mr Bublitz and his co-defendants Richard Blackwood and Bruce McKay have incurred in the lengthy trial process could be remedied at a later stage with monetary compensation, if they are acquitted.

The FMA had already tried the three defendants and Lance Morrison but the case was declared a mistrial by Justice Mark Woolford in May this year after sitting for nine months. The FMA has dropped charges relating to Mr Morrison since then but in July added new charges for the others, bringing the number of charges against Mr Bublitz to 19, Mr McKay 14 and Mr Blackwood seven.

In a hearing earlier this month Mr Bublitz’s lawyer Rachael Reed, QC, asked the High Court at Auckland for a stay to end the Crown’s case, claiming the integrity of the justice system was at stake.

According to the decision, Ms Reed says the trial process to date had been extremely taxing on the defendants and the Crown was “overly optimistic” in its predictions regarding the new trial. The FMA’s lawyer David Johnstone says the whole trial can be concluded in four months. He acknowledged there had been delays to date and says hearing times relating to new charges will be minimal.

In his decision, Justice Lang says, “I share some of that scepticism because the Crown’s desire to widen the scope of the trial by adding new charges at this stage appears to undermine Justice Mark Woolford’s repeated efforts to reduce the scope of the issues at the first trial.”

He adds, “I am reluctant, however, to give significant weight to those concerns because they are yet to be borne out.”

The parties will next have a hearing relating to costs of the original, aborted trial before Justice Woolford. An application by Ms Reed to remove herself as counsel is also yet to be addressed.

The FMA alleges Mr Bublitz and his co-defendants deliberately misled investors in the finance companies over the extent of related-party transactions for their benefit and for Mr Bublitz’s property company, Hunter Capital. The defendants deny the charges.

The FMA declined to comment on the case. 

Read Justice Graham Lang's decision here.

Read Justice Woolford’s decision aborting the original trial here.  

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