NBR on tax on Owen Glenn gift
July 25th, 2008 at 2:15 pm by David FarrarA fascinating article in NBR (offline) on what Brian Henry says regarding tax on the Owen Glenn gift:
Mr Henry said last Friday that he had solicited the money from Mr Glenn. He told NBR this money was paid directly to him as accounts for costs – basically an arrangement for fees incurred in a case to date.
As I understand it, it is highly highly unusual for a barrister to get paid directly, let alone to go out seeking donations for his costs.
He said these were treated just as fees would be and so tax had been paid on the amount. “It’s my fees. It goes into my fees bill that goes to the IRD in the usual way.”
This is of course expected. You get your fees paid and you pay income tax. But that is separate to whether there is gift duty.
However, he said that Mr Peters had no legal obligation to pay him fees incurred in the legal proceedings and so there was no donation that was needed to be declared under Parliament’s register of pecuniary interests.
Essentially, Mr Henry said, there was no debt until he issued a final invoice (called a “fee note”) to the instructing solicitor in the case, who would invoice Mr Peters. However, he admitted Mr Peters had paid him directly in the past as a contribution to legal costs.
Brian Henry is arguing that as he had not actually issued an invoice yet, then there was no debt and no gift. But I am unsure if the lack of an invoice means there is no debt- the debt is incurred I would have thought when you contract someone to perform services for you – even if not yet invoiced for it. Otherwise thousands of people could rort the tax system by having someone pay for services on their behalf before an invoice is issued for it.
The substance is would Winston Peters have ended up paying an extra $100,000 to Brian Henry if Owen Glenn had not donated on his behalf. Absolutely. Both Henry and Peters have said he picks up the shortfall.
“There doesn’t have to be an invoice – he can pay on account of costs. He says I can afford to pay you this today and I say thank you.”
However, Bar Association president Jim Farmer QC said interim payments should not be accepted by barristers except for work actually done.
“A barrister must render a fee note if he wants to be paid,” he told NBR.
Sounds like Mr Henry’s practises are highly unusual, to say the least.
Sources close to the litigation in question – where Mr Peters tried to overturn the 2005 election result in Mr Peters‘ former seat of Tauranga – say Mr Peters “really had his bacon saved” when money came in for costs.
That’s because the respondent, National MP Bob Clarkson, had threatened Mr Peters with bankruptcy proceedings after the $40,000 costs order in favour of Mr Clarkson was not met within three weeks.
And that is an interesting aspect. What if some of the $100,000 went to the court costs not just Henry’s expenses. How can you claim that is not a gift?
Also if Peters was in dire financial straits, doesn’t that make it more likely he would have been in the loop?
NBR inquiries have turned up some uncertainty about how the costs award to Mr Clarkson was paid.
“I gave him about three weeks,” said Mr Clarkson. “Since he’s got a lot of rich friends I thought it’d take about three weeks. It didn’t turn up so we sent a note saying that proceedings would be taken if it wasn’t paid. And the money turned up.”
The cover letter with that payment was from Brian Henry, and the money was paid by a bank cheque. But the bank cheque meant the issuer could not be identified. It was not a bank cheque issued under Mr Peters‘ instructing solicitor’s trust account.
So either Owen Glenn or maybe even a second secret donor paid the court costs to Bob Clarkson? This just simply has to be investigated.
For his part, Mr Henry can’t remember where the payment for the costs order was made from. “I couldn’t answer that.”
Mr Peters‘ instructing solicitor in the case, Dennis Gates, would not comment when asked by NBR if the payment was with money out of his solicitor’s trust account.
It just gets murkier and murkier.
Related posts:
- More on Peters and Henry
- Peters has breached the Register Rules
- Media on Henry and Peters
- Glenn to co-operate
July 25th, 2008 at 2:19 pm
Methinks Brian Henry should stay quiet. The foot is well and truly in the mouth and must be extracted!
Vote:July 25th, 2008 at 2:31 pm
I guess Henry is just saying what he’s been told to say. No doubt he’ll be hung out to dry when all the forced lies catch up with him. Bit like Basil Faulty in wig. Wonder how much it costs to put ones legal career on the line?
Vote:July 25th, 2008 at 2:42 pm
Not just Henry. What about Wayne Peters in the Herald:
“Yesterday, Wayne Peters said client confidentiality meant he could not confirm the existence of the Spencer Trust or whether he administered it.
He said he would make an exception if anyone made an allegation that was untrue.”
No exceptions so far then, eh Wayne?
Vote:July 25th, 2008 at 2:47 pm
Just on the interim payments. I cannot speak directly for barrister sole but I suspect the difference with a solicitor taking interim payments prior to an account being rendered is that the money is held on trust for the credit of the client’s account.
Vote:July 25th, 2008 at 3:03 pm
If you were Masahiko Komura and Sahas Bandidkul you’d surely check your pockets after?
http://www.stuff.co.nz/4629944a6160.html
Vote:July 25th, 2008 at 3:13 pm
“For his part, Mr Henry can’t remember where the payment for the costs order was made from. “I couldn’t answer that.” “
Hmm – A solicitor who doesn’t have the records to show where money was paid from well within the 7 year threshold? Could just about get disbarred for that kind of misconduct I would have thought….
Vote:July 25th, 2008 at 3:15 pm
I wonder if Owen GLEN knew that his hundred grand was going no-where near NZ First but straight into a lawyer’s pocket. If this was the case wouldn’t the email he sent to Mr FISHER have stated something like “Well I paid off Winston’s court costs didn’t I” whereas it stated something like ” You want me to deny I donated to NZ First when I did”.
Vote:July 25th, 2008 at 3:15 pm
GPT1 – that still wouldn’t remove the end position of an invoice being rendered and the money taken from the trust account at that point?
Vote:July 25th, 2008 at 3:46 pm
oooooooooooooooooooo what fun!
I have to pay legal costs out of AFTER TAX money, there seems to be another rule for WP. Surely the IRD must investigate this, as well as the Law Society!
Vote:July 25th, 2008 at 4:06 pm
But the bank cheque meant the issuer could not be identified. It was not a bank cheque issued under Mr Peters‘ instructing solicitor’s trust account.
Finally, a good use for bank security cameras!
Vote:July 25th, 2008 at 4:51 pm
iiq374 (152) +4 Says:
July 25th, 2008 at 3:13 pm
“For his part, Mr Henry can’t remember where the payment for the costs order was made from. “I couldn’t answer that.” “
Hmm – A solicitor who doesn’t have the records to show where money was paid from well within the 7 year threshold? Could just about get disbarred for that kind of misconduct I would have thought….
He dosen’t say he ‘dosen’t have the records’, just that he can’t remember. But woe be-tide him if he dosen’t have the records!
The lying bastard, of course he CAN remember. I despise these lying fukwits who assume the populace are a bunch of idiots and that because he is a lawyer, the sheeple will believe him. Not likely mate!
Vote:July 25th, 2008 at 4:56 pm
Paul – that is certainly where the article would be interesting for context; was this a single interview with Brian or something that he had some time to answer to?
Vote:July 25th, 2008 at 5:03 pm
Well of course this puts the NZ Law Socisety on notice, Regardless of whether or not a complaint is laid it now has more than sufficent evidence to commence an investigaation into its member one Brian Henry Esq. One will be very interested to see if the NZLS has the intensinal fortitude to uphold its own Rules of Ethics and Professional Conduct or whether it will maintain the usual cone of silence
Vote:July 25th, 2008 at 5:06 pm
Ninth floor will have already instructed Commissioner of Inland Revenue that there is no need for him to investigate tax affairs of one Winston Peters and he would be well advised not to commence any such investigation.
Sooooooooooo no investigation Dont you just love living in a country with Politicans of such high moral and ethical values NOT
Vote:July 25th, 2008 at 5:32 pm
Im a non govt worker ,opps im a tradesman printer (I WORK) Mr Farrar When do donations start making policy ,IE rorts corruption IE lairbour and winston peters , HOW MUCH DO YOU HAVE TO PAY TO CORRUPT AND RUN OUR COUNTRY WITH DONATIONS ps OUR COUNTRIES SICK
Vote:July 25th, 2008 at 5:38 pm
If a witness, prior to being cross examined by Brian Henry, swore to be more truthful than Brian Henry;
Vote:“Would that witness be declared a hostile witness?
I can see judges having to use some thought as they counsel witnesses who take the piss out of this Henry character in court.
July 25th, 2008 at 5:41 pm
CLARKS FUCKING MY COUNTRY to death, MINE,? ME? a union member EPMU trades man PRINTER OF BOOKS when the chinese come ,the shit will hit the fan HELEN CLARK /DAVIS the distroyer of GODSOWN NEW ZEALAND, the distroyer of my job (BITCH ) ,
Vote: