The judgement of Harrison DCJ on 9 April 2019 was nothing short of emphatic.
The background is pretty simple, Graham Hare
, now deceased, was for a time was involved in a business called Bell Jr Limited
with Matthew Blomfield
, Paul O’Connor
, and disgraced lawyer, Ronald Bruce Johnson
aka BJ to his mates.
The timeline is as follows – Blomfield and O’Connor resign as Directors on 20 March 2014, so they cease to have any control of that company, and Johnson is appointed on 12 May 2014 to take the reins, likely on behalf of Hare, who at that point was still alive.
Johnson was also the solicitor for Bell Jr Limited.
On or about 20 March 2013 the Charlie Trust advanced the sum of $85,000.00 to Bell Jr Limited for the proposes of making a loan to a client of Bell Jr. The loan was to be repaid on or before 1 December 2013. All pretty simple and standard stuff.
All the relevant loan documentation was prepared by lawyer, Bruce Johnson.
On April 16 2014, Messers O’Connor, Blomfield and Hare entered into a settlement agreement – this was essentially to resolve their respective financial obligations to each other. This settlement was post the director resignations of both Blomfield and O’Connor, and prior to Bruce Johnson being appointed as a director.
In a 2 February 2015 email from Johnson, he states to Hare and his own lawyer, Andrew Francievic
that he was making arrangements to repay the loan. By 23 February 2015 no funds have been forthcoming to make the payment and Francievic writes to Johnson making a formal demand for the outstanding debt with costs and interest totalling $98,196.71.
Over the succeeding months Johnson took steps to recover the funds, and in a letter dated 18 December 2015 Johnson advises Francievic, that as a director of Bell Jr Limited he had accepted a full and final settlement of $90,000.00 for the outstanding loan. At that stage Bell Jr owed money to the IRD, to an employee for holiday pay, and some outstanding barristers fees.
Johnson offered $70,000.00 as full and final settlement of all outstanding matters between, Hare, the Charlie Trust, Buzz Trust, Bell Jr, and ex directors Blomfield and O’Connor, and then current director, Bruce Johnson. The offer was declined.
The following week on 23 December 2015 Franicevic wrote to Johnson at his law firm, Central Park Legal
, advising, inter alia, that the Charlie Trust is entitled to all monies held in trust as per the security agreement held by the trust from Bell Jr, so consequently was requiring payment in full of all monies collected.
Franicevic demanded payment in the sum of the full $90,000.00 and reserved the right to recover the shortfall from any parties he considered liable.
Little the did the family know of the battle they were about to have when tidying up the business affairs of Hare.
Some 2 years passes by, and Hares widow, Rose Wall requests that her lawyer, Andrew Franicevic contacts Johnson at Central Park Legal requesting the release of the $90,000.00 that should be held in Trust as the matter is still unresolved, only to be informed by Johnson that he had since distributed the $90,000.00 as directed by Messers Blomfield and O’Connor.
So we have 2 ex directors from years back, now instructing a lawyer, who indecently is the current director of Bell Jr, to distribute funds to them – neither Blomfield or O’Connor had any right what so ever to those funds, and they were both well aware that those funds were not theirs, and that they were due to be paid back to the Trust of Hare. In simple terms we would suggest that is theft.
A short time later legal proceedings were issued in the Auckland District Court against Bruce Johnson.
Johnson had no authority to distribute the funds, and he had obligations as a solicitor knowing that $90,000.00 was only for the benefit of the Trust, not 2 ex directors who had not been involved in the company for years.
His Honour Harrison DCJ accepted the submission from the Plaintiff that Johnson was holding (or should have been as the case is here) the $90,000.00 on behalf of the Trust under express trust.
The Judge went on further to say that he was satisfied that Bell Jr never had any beneficial entitlement to the funds, and that the payment out of those funds to 2 ex directors without the consent of the Trustees constituted a breach of trust on the part of Johnson, particularly in his capacity as a solicitor.
The Judge went further to say that it is inexplicable that Johnson would distribute these funds apparently to Messrs Blomfield and O’Connor, and not the Charlie Trust.
Johnson was of course also in breach of his fiduciary obligations to account to the Charlie Trust.
The judgement was found in favour of the Plaintiff, Rose Wall as Trustee of the Charlie Trust, for the sum of $118.676.40 plus interest totalling over $60,000.00, giving a total judgement of $179,696.20.
Due to the egregious breach of trust and an absence of adequate explanation, Johnson was ordered to pay indemnity costs to the Plaintiff. In other words Johnson had to pay in the full the legal fee costs incurred by the Plaintiff.
Johnson is no stranger to running foul of the the NZ Law Society, having had several bans over the recent years for his conduct as a solicitor. On 28 May 2021 Johnson was once again suspended from practice for 6 months
, and was required to pay over $17,000.00 in costs to the Standards Committee. Johnson was also prohibited from practising on his own account, whether in partnership or otherwise, from 1 January 2022 until authorised by the Disciplinary Tribunal to do so.
So the question still lingers…… how did Blomfield and O’Connor think they had any legal right to take the $90,000.00?
The information in this story was taken from publicly available records online.
When author Margie Thomson was researching her defamatory book Whale Oil she seemed to have missed this court case – you have wonder why once again she kept deliberately ignoring substantive facts from court cases about the poor character of Matthew Blomfield.
Spring says “it’s just not part of the narrative she was interested in”.