Bridgecorp's Roest must repay $174k legal aid

Former Bridgecorp director Robert Roest. Photo / Dean Purcell

Jailed former Bridgecorp director Rob Roest must repay $174,000 of legal aid for his unsuccessful defence, a High Court judge has ruled.

The legal services commissioner, who is ultimately in charge of legal aid, earlier this month appealed a decision from the legal aid tribunal over the calculation of Roest's repayment amount.

Roest was an undischarged bankrupt at the time he applied for legal aid in 2011, which was granted just before his trial for misleading investors.

Bridgecorp collapsed in 2007 owing investors $459 million. It was one of the biggest finance company failures to hit New Zealand during the period.

Together with Bridgecorp's managing director Rod Petricevic, Roest was found guilty on all charges and jailed in 2012 for more than six years.

He was declined parole for a second time last month but could be released when his case comes back before the parole board in April.

Roest got legal aid in 2011 despite his interest in a family trust that, at the time, had net assets of $440,000.

Legal aid, made available to those who are deemed unable to afford a lawyer, is a loan that must be repaid.

A recipient must repay the lesser of either the legal aid or a prescribed amount based on their assets less their liabilities.

In Roest's case, the cost of legal services was $174,033 and this prescribed amount was $219,808, with the now-jailed director being liable for smaller amount.

But Roest appealed this decision to the legal aid tribunal, which found the commissioner had not correctly assessed the prescribed repayment amount because it had not deducted the former Bridgecorp director's bankruptcy debts, which were around $422 million.

If these debts were deducted the prescribed repayment figure would be zero and Roest would not have to pay back any legal aid.

The legal services commissioner wanted Roest to repay the $174,033 and appealed the matter to the High Court, where it was considered by Justice Raynor Asher earlier this month.

In a decision this morning, the judge said he "respectfully" differed from the tribunal's conclusion.

He said a bankrupt's debts did not have the characteristic of actual debts and that personal exposure for a claim was missing when someone was declared bankrupt.

"If a person like Mr Roest, who because his debts are frozen will not have to pay the debts personally, has them taken into account to assess his ability to pay for legal aid, the purpose of the [Legal Aid Service Act] is defeated," Justice Asher said.

"If the tribunal's approach to the meaning of 'actual debts' was correct, it would mean that if a bankrupt had trust assets of $1 million and on adjudication debts of $1 million, that bankrupt if given legal aid could on discharge rely on the $1 million indebtedness to be exempt from repayment, but not have to repay his debts as a bankrupt. This is clearly not a result intended the legislation," he said.

The judge fixed the final repayment amount at $174,003.

See the decision here: