Former
professor at Victoria University’s School of Business and prominent kaumatua
Ralph Heberley Ngatata Love was convicted of obtaining $1.38 million by
deception in diverting funds from a central Wellington office development
constructed for the benefit of Wellington and Taranaki Maori. Authorities were alerted when Love’s name
surfaced on the periphery of a tax fraud investigation.
Love was chairman of the Tenths Trust in
late 2006 when it was negotiating with property developers over development of its
commercial sites in Pipitea Street, central Wellington. After purchasing neighbouring properties from
government for one million dollars, Tenths was in a strong negotiating
position. It is now part owner of a
completed office building on the combined sites worth some $80 million with a
rent roll of about $6.5 million.
An Inland Revenue investigation during
2010 into a GST fraud being perpetrated by two Wellington accountants alerted
authorities to Love having an unexpectedly large amount of spare cash. Love and his partner Lorraine Skiffington passed
$1.5 million through the two accountants tax fraud scheme on the advice of a Mr
Shaan Stevens who himself was subsequently convicted as being a party to the
GST fraud.
The High Court was told Love deceived the
Tenths Trust during negotiations for the office development in Pipitea
Street. Love let the trustees think
negotiations were still in progress when he had already agreed a deal with the
developers, a deal which included a separate side arrangement requiring staged
payments of three million dollars to a company called Pipitea Street
Development Ltd. Evidence were given
that the developers were very cautious about this side deal and sought
reassurance as to where the money was going.
They were told it was to meet prior Treaty settlement expenses. A total of $1.35 million was paid under this
side deal before original plans for the development were restructured. The three million dollars had been promised
as a premium to get leasing rights to the Pipitea site. Plans to lease were canned when it was later
decided the developers and the Tenths Trust would instead become joint owners
of the completed development.
The court was told $1.385 million paid
under the side deal was used to repay in part a $1.8 million mortgage taken out
weeks previously by Ms Skiffington and Love to buy a house at Moana Road,
Plimmerton.
In court, Love denied any knowledge of
the side deal or use of the money to help finance the Moana Road purchase. Justice Lang ruled the evidence indicated otherwise. Love did not disclose to the Trustees the
developers’ offer to pay a three million premium for a right to lease Pipitea
Street. A law firm acting on behalf of
the Trust during negotiations was kept in the dark about the full extent of any
side deal. Emails made it clear Love was
involved in negotiations over the side deal.
A draft copy of the side deal was found in waste paper picked up by a
document destruction company from Love’s home in 2012. Trustees of the Tenths Trust were not told of
the side deal and the developers were asked to keep details confidential. In 2008 Love contacted lawyers acting for the
developers upset and annoyed that one of their staff inadvertently included a
draft of the three million side deal when posting documents to lawyers acting for
the Trust.
R.
v. Love – High Court (1.09.16)
16.134