National asks about mortgage role

Finance firm National Mortgage Brokers questioned in the High Court at Auckland yesterday Money Managers' role in promoting a $36.5 million contributory mortgage.

Opening the defence, Bret Gustafson, acting for National, asked if Money Managers' clients knew the firm made a commission when it promoted investment products to them.

"Did it owe a duty to give advice that was in the best interest of the client being advised?" he asked.

He also said Money Managers had threatened National that it would remove clients from the scheme and charge a fee for replacing them.

Money Managers is suing National for $753,000 in commission it claims is due for marketing a contributory mortgage to fund Greg Olliver on his Long Bay property project north of Auckland. Central to National's defence in the case is a telephone discussion held in December 2001 between National and Money Managers about the deal.

Money Managers had acted as a broker in promoting the large contributory mortgage yet it was not registered.

It had, therefore, breached the Securities Act (Contributory Mortgage) Regulations. The case continues.