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NEW ZEALAND GAZETTE, No. 118

19 OCTOBER 2006

Dated at the Wellington Office of Land Information New Zealand this 16th day of October 2006.

PHILLIP ANDERSON, for Registrar-General of Land.

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General Notices

Notice of Decision of the Disciplinary Tribunal

(Member Guilty of Conduct Unbecoming an Accountant, Negligence in a Professional Capacity and Breaches of the Institute’s Code of Ethics)

At a hearing of the Disciplinary Tribunal of the Institute of Chartered Accountants of New Zealand held in public on the 3rd day of October 2006, at which the member was in attendance and not represented by counsel, Brett Christopher Hoddle, of Auckland, admitted the following particulars (a), (b), (c) (ii), (e) (i), (e) (iii) and pleaded guilty to charge (3).

The tribunal found the following particulars proven (d), (c) (i), (e) (ii), (e) (iv) and (e) (v) and the member guilty of charge (1) and charge (2).

Charges

THAT in terms of the Institute of Chartered Accountants of New Zealand Act 1996 and the Rules made thereunder, and in particular Rule 21.30, the member is guilty of:

(1) conduct unbecoming an accountant; and/or

(2) negligence in a professional capacity, that has been of such a degree and/or so frequent as to tend to bring the profession into disrepute; and/or

(3) breaching the institute’s code of ethics.

Particulars

IN THAT:

In his role as a chartered accountant in public practice and in relation to a complaint by the practice review board, the member:

(a) breached the fundamental principles of integrity and objectivity by facilitating through his trust account an arrangement between Company A and Trust B, when he knew or ought reasonably to have known that its primary purpose was to improperly reduce Company A’s tax burden; and/or

(b) whilst a trustee of the Trust B, failed to ensure that management fees of $281,250.00 were returned for GST in the period that they were invoiced and received (being March 2005); and/or

(c) in relation to the arrangement described at (a), provided conflicting explanations to practice review in relation to:

(i) the transfer of $50,000.00 to his 03 account; and/or

(ii) the transfer of $31,250.00 to his practice account; and/or

(d) provided conflicting explanations to practice review and the professional conduct committee in relation to the transfer of $10,000.00 on 3 February 2005 from his trust account to the Trust Account C and its repayment; and/or

(e) breached Professional Standard No. 2 "Client Monies and Members’ Trust Accounts" in that he:

(i) failed to correctly record details on receipt of client monies (in breach of paragraph 24); and/or

(ii) transferred client monies (being $281,250.00 and $10,000.00) without any or any proper authority and/or documentation (in breach of paragraph 26 and/or 27); and/or

(iii) made a payment of $10,000.00 from the trust account to Trust Account C in excess of the funds standing to the credit of the client (in breach of paragraph 28); and/or

(iv) provided documentation to practice review and the professional conduct committee, in the form of a loan agreement, evidencing an investment of client monies in himself by Client D, without prior written authority by Client D (in breach of paragraphs 41 and/or 43); and/or

(v) failed to accurately record the position of individual clients within the trust account, such clients being Client D and/or Client E (in breach of paragraph 50).

Reasons

The tribunal acknowledged that no clients had complained or had lost funds. The matters largely related to dealings with a client who was the member’s former employer and a personal friend and this appears to be a one-off occurrence. Apart from this one issue, the member’s practice review was satisfactory. However, the member was party to an improper tax arrangement and failed to adequately maintain his trust account. He also provided conflicting explanations to practice review and the professional conduct committee.

Orders of the Tribunal

(a) Pursuant to Rule 21.31 (c) of the Rules of the Institute of Chartered Accountants of New Zealand, the disciplinary tribunal ordered that Brett Christopher Hoddle pay to the institute a monetary penalty of $15,000.00.

(b) Pursuant to Rule 21.31 (k) of the Rules of the Institute of Chartered Accountants of New Zealand, the disciplinary tribunal ordered that Brett Christopher Hoddle be censured.

(c) Pursuant to Rule 21.33 of the Rules of the Institute of Chartered Accountants of New Zealand, the disciplinary tribunal ordered that Brett Christopher Hoddle pay to the institute the sum of $12,335.00 (inclusive of GST) in respect of the costs and expenses of the hearing before the disciplinary tribunal and the investigation by the professional conduct committee.