The
High Court overturned fraud convictions and a $198,000 reparation order made
against Stephen Howe, former Buckley Systems CFO, saying that while Howe’s
actions were suspicious the Crown had not proved its case beyond a reasonable
doubt.
Central to Howe’s fraud defence was a
statement by Mr Bill Buckley, founder of Buckley Systems, to Howe when promoted
that Howe’s pay as chief financial officer was to match that of the the
company’s chief executive officer Mr Mike Lightfoot: “whatever Mike gets, you
get”. The CEO was then getting a salary
package enjoying a contractual maximum of $296,000 and was also running a a
team of racing cars at Auckland’s Western Springs Speedway heavily sponsored by
Buckley Systems. Bill Buckley is a
former speedway champion.
Based in the Auckland suburb of Mt
Wellington, Buckley Systems specialises in precision electro-magnets. A related business builds and services
speedway race cars.
The court was told Howe took the view
that his remuneration package was to include not only a base salary matching
that of the CEO, but also additional payments equating to the level of Buckley
sponsorship provided for its speedway race team managed by the CEO. To this end, Howe billed Buckley Systems for
extra payments variously coded as “bonus”, “fees equalisation” and “differential”. Howe was convicted of fraud in the District
Court. A person with Howe’s commercial
experience could not have plausibly considered that racing sponsorship would be
part of the CEO’s remuneration, Judge Sinclair said. Sponsorship and remuneration are different
concepts.
In the High Court, Justice Hinton
overturned the convictions. Howe did not
draw atttention to the racing sponsorship alignment payments, but he did not
hide them either. The Crown had not
proved to the criminal standard that Howe believed his actions were unlawful,
she said.
Howe was appointed CFO in August
2010. He was dismissed in April 2013.
Howe
v. R. – High Court (9.05.16)
16.077