22 Dec 2010

Crown ordered to pay former Feltex directors' costs

6:45 pm on 22 December 2010

The Crown has been ordered to pay five former Feltex directors nearly $1 million in costs.

The five - John Feeney, John Hagen, Peter Hunter, Tim Saunders and Peter Thomas - were charged with failing to disclose in the company's 2005 half-year accounts that it was in breach of its loan with the ANZ bank.

But in August, Auckland district court judge Jan Doogue rejected the charges, saying there wasn't a skerrick of evidence to back any of them.

In her judgment on costs, released on Wednesday, Judge Doogue orders the Ministry of Economic Development, which took the prosecution, to pay $952,000 to the former directors for legal and other costs of defending the action.

Prosecution 'should never have gone ahead'

They had sought payment of $1.4 million but Mr Saunders told Checkpoint the award was very satisfying and they couldn't have hoped for more.

Mr Saunders says the prosecution should never have gone ahead, and a very clear message has now been sent to regulators that they should do their homework before prosecuting.

The ministry will appeal against the ruling.