Media on Henry and Peters
August 20th, 2008 at 6:17 am by David FarrarThe NZ Herald reports:
The immediate past president of the Bar Association, Jim Farmer, QC, says the Law Society could be interested in the way Mr Henry is paid. …
Mr Henry told the committee that none of Mr Glenn’s $100,000 was used to pay for the $40,000 paid to Mr Clarkson’s solicitor for the costs settlement in March 2006.
How can he know this? If $100,000 from Glenn went into Henry’s bank account and he paid $40,000 to Clarkson from the same account, then it is all mixed in together. Possibly the $100,000 went into his business account and he paid the $40,000 from his personal account – in which case that conclusion would be more warranted. This would be the correct way of doing it, as the $40,000 Henry paid is not a tax deductible expense. It was not a debt he owed, so he should have paid it out of his after tax income, not his pre-tax income.
And while they are not issues for the Privileges Committee, I have received expert advice that the $40,000 payment was a gift to Peters and should have had gift duty paid on it by Henry. If Henry failed to pay gift duty on it, then Peters is liable for the gift duty.
Dr Norman raised the question of the $40,000 costs and said yesterday he had received a tip-off that it could be an interesting line of questioning. He said the $40,000 payment was more clear-cut than the Owen Glenn donation. “It’s absolutely black and white.”
Mr Peters had a personal debt and Mr Henry paid for it, he said.
“If you have got a debt and someone pays it for you then you should declare that someone had paid it, even if you don’t know who did.
Russel Norman is quite correct that the $40,000 is black and white compared to the other issues.
“There is just some pool in which debits and credits seems to float. It’s incredible – in the order of hundreds of thousands of dollars both ways – and it is very hard to prove anything.”
One question is why is it done in this way? Why not set up a legal trust with some trustees to fundraise for the legal bills? Have WInston declare his beneficial interest in the trust. That is how Nick Smith did it, and would seem to be a far more appropriate way to do it.
Dr Farmer described the relationship as “extremely unorthodox”.
Being paid by some third party [Owen Glenn] and the client not knowing was unheard of, he said.
So was the personal payment of $40,000 by Mr Henry.
“I think it might be of concern to the Law Society,” Mr Farmer said.
“Is it right for a barrister to receive $100,000 from a third party where there has never been a fee note rendered to the solicitor instructing him? I would have thought the Law Society would have real concerns about that.”
The president of the Auckland District Law Society, Keith Berman, said it was also very unusual.
“The issue which is uncertain is whether Brian is handling money on behalf of a client or just receiving money in payment of a bill. But as I understand it, he doesn’t issue a bill.”
Interesting issues indeed.
Tracy Watkins writes in the Dom Post:
But Mr Henry’s disclosure that he personally paid the $40,000 in court-ordered legal costs against Mr Peters means it could be considered a gift.
Mr Peters and Mr Henry were at odds over who made the payment, with Mr Peters suggesting he had paid it himself.
How can you not know whether or not you paid $40,000 to Bob Clarkson? If it was $400 maybe, but $40,000?
Related posts:
- More on Peters and Henry
- Peters has breached the Register Rules
- NBR on tax on Owen Glenn gift
- Glenn to co-operate
August 20th, 2008 at 6:39 am
I could do with a free lawyer.
Can’t bring myself to think about my last fee note, or the one before that, or the one before that.
I hasten to add this was for corporate work.
On every occasion they took the money from the proceeds.
A lawyer that is free is unheard of, and I am friends with quite a few in that trade.
As I point out occasionally, that 95% of lawyers give the others a bad name!
Vote:August 20th, 2008 at 7:22 am
It is merely an insight into Winston Peter’s arrogance tht he actually believes us (the electorate parliament and SFO) to be so stupid that this chicanery is acceptable.
Vote:August 20th, 2008 at 7:24 am
The situation is now clear.
There was no bill for Mr Henry’s fees as he donated his time. Mr Owen Glenn gifted $100k to Brian Henry. The donated time and gift to Mr Henry allows Mr Peters to escape the need to declare the debt and its payment because there was no debt.
The problem is that Mr Glenn said in his email reported by the Herald that he had given the money to New Zealand First. The Privileges Committee will need to clarify who Mr Glenn thought he was donating the money to. It seems odd he would make a $100k gift to a lawyer.
The bigger problem is that Winston did have a $40k court awarded debt that Mr Henry paid. That should have been declared in the MPs’ register of Pecuniary Interests and permission sought from the PM as required by the Cabinet Manual. Mr Peters can hardly claim he was unaware of the debt or of the fact that someone other than he paid it!
Vote:August 20th, 2008 at 7:39 am
Henry is a Barrister. He is not permitted to hold client moneys FULL STOP> He knows that even the most junior Barrister knows that so what is Henry playing at. Coming back to the $40,000 that was a debt owed by Peters. Henry paid it, that is a gift??? from Henry to Peters. Or was that money paid by Henry from money people believed was being donated to Peters. And therefore did those people KNOW their money was going to be used by his Barrister to settle debts owed by Peters. And Peters is telling us he knew NOTHING about all this. It simply defies belief especially as Peters claims all this knowledge. Why he even chased Fay Richwite on some highly complex tax deals, smart man that. But he claims ignorance on his own tawdry affairs. That his Barrister is doing some highly unauthordox things not permitted by the Law Society WITH HIS or his PARTY”S money. Get a grip Peters.
Vote:August 20th, 2008 at 7:44 am
No-one yet seems to have asked how it is Mr Peter’s personal debts have been paid with money donors thought was going to the party. No-one yet seems to have asked Mr Henry if there have been any other ‘personal accounts’ he has settled for Mr Peters over the years. No-one yet seems to be really digging in this veritable shit pile.
Vote:August 20th, 2008 at 7:54 am
Adolf. I wouldn’t be so sure about that. (The problem for Peter’s will be finding a fan big enough, when the smellest shit vein is hit)
Vote:August 20th, 2008 at 7:58 am
Thinking about it.
We should have no issue.
WP has done a splendid job.
His Labour mates are also spot on. They do everything for the benefit of the economic wealth of NZ.
Helen Clark is the best person to lead us until she is infirm, or unable to govern.
God, these drugs are good!
Vote:August 20th, 2008 at 8:12 am
It’s a duck!
Vote:August 20th, 2008 at 8:17 am
Rodney, you’re right – but appears that WP knew what the result of Henry’s claiming that he (Henry) paid the $40k. I read that WP has now tried to claim that he (Peters) paid that particular bill. It should be easy enough for the “powerful” *cough* privileges committee to get the cheque details and find out exactly who paid what.
Vote:August 20th, 2008 at 8:17 am
Duck? I suppose that is the correct response when the shit hits the fan!
Vote:August 20th, 2008 at 8:22 am
If Henry undertook legal work for Peters for free, then that is still a gift. The value of that gift should still be listed in the register of pecuniary interests.
Vote:August 20th, 2008 at 8:25 am
The bottom line here is that Peters money handling skills are exactly those that landed Al Capone in the big house in the end.
Pretty much where Scare Face Peters is looking to spend Christmas if he doesn’t pony up with more than his assertion that he hasn’t broken the law because that dog just wont hunt.
Vote:August 20th, 2008 at 9:37 am
There is a transcript of an interview with an NBR reporter and Mr Henry now on the NBR site.
Vote:It may be of interest to the readers. Mr Henry’s approach to barristerial practice and payment of fees seems to quite remarkable.
August 20th, 2008 at 9:38 am
Giving, giving, giving. I just seem to keep on giving! All my tax payments are a gift to the rest of the population.
As for others who give. Well. I get stung with gift tax on anything over the threshold, so why doesn’t Whinnie or his mates?
If there is no bill, then any transfer of money to a lawyer in respect of the work done is a gift. Then again, I wonder if Whinnie has EVER claimed legal expenses as deductible from his income for tax purposes? If he has, and there wasn’t a bill from the lawyer, then that is, indeed, tax fraud (compounding any unpaid gift tax). As the master of whine, Whinnie himself, said, “we should throw the book at these fellas!”
Vote:August 20th, 2008 at 9:41 am
Did Peters himself, say not that long ago, “I have paid hundreds of thousands of dollars to my lawyers”.
Vote:I am sure I saw him say this within the last 2 months while attacking the media.
If so, end of this farce isn’t it??
August 20th, 2008 at 10:32 am
I am still struggling to grasp the GST effect on these transactions. Is it not mandatory for you to pay GST on money you pay to people who provide you with services. Brian Henry says that he has provided his time to Winstone Peters as donations and there is no obligation on Winston to pay back, but Winstone does pay him back some money and the remainder he collects as donations which effectively amounts to payments for his time. Would this not attract GST on those payments.
This is indeed a very good loophole to avoid paying GST for services you receive. I can have my builder or plumber come in and fix my house and I am under no obligation to pay the money as they donated their time for free. I out of my goodness do decide to drip feed the payment back to them as I wish and avoid paying GST to them and they in turn do not file GST returns.
Is this not setting a very bad example to the rest of the country on how to avoid your- obligations on GST.
Vote:August 20th, 2008 at 11:21 am
Rodney – not sure whether your first paragraph was written with tongue firmly implanted in cheek, but two things stand out.
i) If Mr Henry has done legal work for Winston Peters gratis, surely that is a gift of his time. What is the going rate for an Auckland barrister? If Henry did the legal work for the Electoral Petition free of charge, that would be a huge donation of kind that Peters has failed to disclose for the 2005 year,
ii) If Mr Henry has done legal work for Winston Peters gratis, what the about the “hundreds of thousands of dollars on my own money” that Peters “bpasts” of having spent on legal fees?
Something smells fishy – a rotten batch of scampi perhaps?
Vote:August 20th, 2008 at 11:25 am
Sod the GST – my question is more about the Income Tax. Has Henry been declaring income to the IRD for these transactions? Lets be quite specific about whether any of this money has ended up being used by Henry – whether “donated” or not?
I’m sure the IRD should be auditing someone’s accounts here…
Vote:August 20th, 2008 at 11:50 am
Gst is chargeable at the time the goods or services are provided so the IRD need to check if Henry’s returns reflect Gst on the $100,000 portion of the bill paid with Owen Glenns donation, this would be due when the donation was made if on payments basis or at the time the services were provided if on invoices basis. Gift tax is also an issue the IRD need to satisfy themselves has been properly accounted for. Me wonders if Henry is not offering himself as a sacrificial lamb for Peters as a failure by IRD to investigate/audit will put them in the same perceived situation of being politically influenced as the Police/Justice system/Civil service/Crown law – the list is too long to make here. The law society must also be concerned that a Barrister has admitted being less “Forthcoming” with the media than the priviledges committee” but has no intention to deceive – but isn’t that exactly what being less forthcoming is designed to be – a partial explanation that would lead the recipient to a conclusion without the benefit of all the information that may lead to an entirely different conclusion – in a word – deception. Now a barrister may have a duty to present a clients side of things in the most favourable light and retain the mantra of truthfullness on the basis they did not know the client had witheld details, but this is not available when representing yourself. Rodney Hide should be asking the PM when Peters asked her permission to accept the $40,000 gift from Henry and if she agreed when – the supplementary would be what is view on this not being declared on the Ministers interest register.
Vote:August 20th, 2008 at 12:47 pm
All this talk of GST & Income tax implications is overlooking one key point.
THE POLITICIANS OF THE LABOUR-LED GOVT ARE ABOVE THE LAW. END-OF-STORY!
Vote:August 20th, 2008 at 12:49 pm
If Henry is not billing this work how come he is soliciting payment from third parties? Unbilled work has value. Is Henry simply saying to others “I do work for Peters, pay me…?”
Payments to Henry on account of “unbilled” work must be income to Henry as it arises out of his trade and he makes his living from it. This has GST implications too.
Who does Henry bill when he expects payment or does he appropriate these as gifts (in the way of income to him), which would have otherwise been paid to Peters to settle accounts in the regular way?
If Peters has no knowledge of these payments made by others to pay unbilled accounts how can Peters consent to the application of them by way of setoff against “unbilled” work?
Gilbert &and Sullivan would have relished this as would have Pooh Bar and the Sergeant of Police. Oops, I forgot, the Police excuse themselves on anything other than National Party investigations.
Vote:August 20th, 2008 at 2:59 pm
Is Darth Winston the master or the apprentice?
When is the IRD gonna haul his ass into court? They don’t let small things like not charging for something stop them from assigning a value to a transaction and taxing accordingly. There’s also the small matter of the law against entering into commercial arrangements or structures for the purpose of avoiding tax. Sounds like a pretty clear case of that to me.
Looks like someone at the IRD needs to get off their thumbs and start investigating.
Vote:August 20th, 2008 at 4:07 pm
The president of the Auckland District Law Society, Keith Berman, said it was also very unusual.
“The issue which is uncertain is whether Brian is handling money on behalf of a client or just receiving money in payment of a bill. But as I understand it, he doesn’t issue a bill.”………………………………….It concerns me when an official who may have to make certain judgements and recommendations refers to the subject by a christian name, surely it should be Mr Henry or Brian Henry not just “Brian” that implies a presumption of justification and innocence before the fact, as occurred in respect of Tony VEITCH by his newscaster associates. I.M.O. Unprofessional.
Vote:August 20th, 2008 at 4:22 pm
I keep saying this, but isn’t it sickening to see letters to the media from people sticking up for Winston? There can’t be much he can’t get away with in the opinion of his blind loyal supporters.
Vote:August 20th, 2008 at 5:58 pm
Well, if a (once) prominent member of my family can avoid an investigation for signifiicant tax evasion (perhaps because he’s mates with the local, IRD branch manager, and despite a tip-off or two to the IRD), then surely Winston can swing something here?
Vote:August 20th, 2008 at 8:43 pm
You’re right, This is hilarious
http://www.nbr.co.nz/article/transcript-interview-with-brian-henry-34168
Vote: