Whangarei Harbour men admit charges; Trimmer fined $9000

Press, Volume CXIV, Issue 33493, 26 March 1974, Page 3

Whangarei Harbour men admit charges; Trimmer fined $9000

CVeic Zealand Press Association) WHANGAREI, March 25. ih ‘ P e f° re a crowded courtroom, three Northland Harbour Board officers today changed icir p eas to guilty on a total of 11 charges relating to overseas travel expenses.

The Northland Harbour Board itself pleaded not guilty to eight counts of breaching the Exchange Control Regulations. Mr Justice Mahon fined Ralph Kraeft Trimmer, aged /3 of Whau Valley Road, whangarei, $lOOO on each count, a total of $9OOO. Trimmer is the chairman of die harbour board.

John Arnold Lyall, aged 43, of Whangarei, the board’s planning officer, was fined $5OO, as was the board’s ongineer,_ James Stuart Mason, aged 52, of Parataia Crescent, Whangarei. The Crown prosecutor (Mr D. S. Morris) said the Crown had decided not to offer evidence on other charges on which the defendants had been committed for trial.

Originally, Trimmer faced 21 charges, of which 17 were joint charges.

Today he pleaded guilty to one charge of breaching the Secret Commissions Act, in that on or about July 23, 1970, being an agent of the Northland Harbour Board, he presented to the board a claim for overseas expenses incurred between April 24, 1970. and July 3, 1970, in relation to the business of the board, which to his knowledge was likely to mislead his principal.

Trimmer also pleaded guilty to eight joint charges that, with intent to deceive, he and the board made misleading statements in applications to the Reserve Bank for the purposes of the Exchange Control Regulations, in that certain sums were represented as being payable to William Coward and Co., Ltd, the board’s London agents. The Harbour board itself pleaded not guilty to these joint charges. Lyall, who originally faced nine charges, including seven joint charges, today pleaded guilty to one charge of breaching the Secret Commissions Act, in that about July 23, 1970, he submitted an overseas expense claim to the board, knowing it was likely to mislead his principal. Mason, who originally faced three charges, including two joint charges, today pleaded guilty to one charge of breaching the Secret Commissions Act, in that about February 12, 1970, he submitted an overseas expense claim to the board, knowing it was li'tely to mislead his principal.

Mr D. S. Morris and Mr P. J. Smith appear for the Crown. Trimmer is represented by Mr L. W. Brown, Q.C., and Mr R. L. MacLaren, Lyall by Mr J. S.

Henry and Mr H. Fulton, Mason by Mr R. K. Davison, Q.C, and Mr P. A. Dallas. Mr. B. C. Spring appears for the Harbour board. Crown decision Opening the hearing, Mr Morris said that since the Magistrate’s Court hearing, the evidence given had received “the most careful and anxious consideration.” In the opinion of the Crown’s advisers, the evidence justified the inclusion in the indictment of only the present charges. “The Crown considers that it is justified in adopting this course because it is considered that the counts to which a plea of guilty is to be entered adequately embrace what has been revealed by the extensive enquiries conducted,” Mr Morris said.

Making submissions on sentences, Mr Morris said Trimmer had taken part in “a carefully considered scheme to evade the then existing legislation which restricted the amount of New Zealand money which could be remitted overseas through the Reserve Bank, and be thus available for the use of a New Zealander visiting the U.K.” He continued: “At the time with which these charges are concerned, it is fair to say that the restrictions on the

transfer overseas of New Zealand moneys were much more stringent than now, and were, of course, designed to protect our overseas reserves. Funds remitted overseas (were used, in the main, to Icancel out monies previously 'advanced to, or payments made on behalf of, board members or employees by the English agents of the board. “As the evidence shows, the overseas funds were obtained by the harbour board presenting to the Reserve Bank an application for permission to remit funds overseas to pay various nominated accounts.” Police enquiries later showed that tnese accounts were for inflated amounts or for payment of services which simply had not been rendered by the board’s agents, Mr Morris said. The extra money was then transferred to a suspense account. These manipulations enabled the defendants to enjoy a much higher standard of living while overseas than could have been enjoyed by a New Zealander who did not flout the then existing legislation, and who, in spending overseas, remained within the law. “That was the effect of this scheme, but the gravest feature of these charges, in the Crown’s submission, is that they show an involve-

ment in the use and manipulation of funds belonging to a public authority by the chairman of the authority.

“Breaches of restrictions designed to protect public monies have always been regarded in a serious light, and where the breach has been committed by a person in the position of this defendant and over a period of time, it is difficult indeed to find any excuse,” Mr Morris said.

‘•lnadequate” Mr Brown said the breaches of the exchange control regulations stemmed from a situation which no longer existed. “New Zealand travellers found allocations to them by rhe Reserve Bank quite inadequate for their needs,” he said. The evidence showed that the London agents of the board had created a fund from which expenses beyond harbour board members’ allowances could be met. Trimmer was not the originator of the scheme of accounting, Mr Brown said. It arose during a visit to London by the board’s general manager in 1969.

Trimmer pleaded guilty to accept his responsibility as chairman of the board, said Mr Brown. This did not mean that the evidence of Mr McHugh was accepted. Mr Brown said that the evidence could be challenged in many respects, and the harbour board itself had never suggested that the available funds were misapplied.

The board said that there had been no dishonesty anywhere on the board’s account.

Summing up His Honour said he was satisfied that there was a foundation for the charges, which showed an attempt to claim payment from the board for unauthorised expenditure overseas.

“It has been pointed out to me this morning that the Reserve Bank regulations have permitted the use of sterling only to the extent that would not actually cover business expenditure,” he said.

I do not question that that may to some extent be so, but I am also satisfied that substantial sums spent on private expenditure could not have been accepted bv the board.

“The matter is substantially the case of unauthorised private expenditure being recovered from the board’s expenditure.

“I do not doubt that some of the expenses from the suspense account would have been properly recognised,” his Honour said. “Private expenditure would never have been accepted by the directors of a private company or their auditor. Addressing Trimmer, his Honour said: “I am satisfied that, but for your authority, the scheme would not have survived. As a final result the three of you face these charges.” His Honour said the defendants had a striking record in public affairs and public administration. Trimmer had a wide knowledge of business matters and of national economics.

“You would have been aware more than anyone of the need for foreign exchange control,” he said. "It was a blatant scheme to avoid Reserve Bank regulations. There have been cases in other countries where people who have done this have been sent to prison.” On each of the nine counts to which Trimmer pleaded guilty, his Honour fined him $lOOO.

Lyall and Mason were also men of wide business experience and of good character and background, his Honour said.

“You now only face one charge,” he said. “I am reminded that you were faced with more.”

He said the withdrawal of these charges by the Crown stemmed largely from the fact that witnesses from England were not available on subpoena for the trial. His Honour said he paid no heed to the other charges that had not been proceeded with. “I take the view that you succumbed to lodging false claims,” he said, fining them each $5OO.

The hearing of eight charges against the Northland Harbour Board under the Reserve Bank Act was later adjourned until tomorrow morning. The board pleaded not guilty.