High Court turns down legal aid for Petricevic

Rod Petricevic. File photo / Sarah Ivey

Former Bridgecorp high-flyer Rod Petricevic will receive no legal aid from the Government to defend charges laid by the Serious Fraud Office, the High Court has ruled.

Justice Edwin Wylie dismissed Petricevic's appeal against a legal aid review panel's decision that previously declined his application for legal aid.

The panel reviewed the initial decision made by the Legal Services Agency, which also declined Petricevic's application for financial assistance.

The agency declined his application because despite being bankrupt, he is a trustee of the R.M. Petricevic Trust, which has considerable assets, and his wife Mary and adult sons are discretionary beneficiaries.

The agency said: "The information before us shows a close-knit family trust with considerable assets. There is no independent trustee. There is a history of very large advances made to Mr Petricevic, and significant benefits provided to both Mr and Mrs Petricevic on an ongoing basis. Those benefits are provided to them by themselves as trustees."

The agency added that under the Legal Service Act, Mary Petricevic's assets could be treated as Rod Petricevic's resources, and that it was entitled to take any benefit she might receive from the trust into account before making its decision.

Justice Wylie said it was known Petricevic did not personally have money for a defence, but the primary matter was whether the agency could treat assets under trust as his assets when assessing eligibility for legal aid.

The Crown said Mary Petricevic had access to the trust's assets at Rod Petricevic's discretion, and it determined that it was appropriate that the trust's assets be regarded as part of her resources.

Petricevic's lawyer Charles Cato said Mary Petricevic's interest as a discretionary beneficiary was only "an expectancy".

Justice Wylie said there was no "absolute right" to legal aid. It was for people with insufficient means to pay for legal services.

"The focus is on an applicant's 'means'. Although the word is not expressly defined in the act, in determining whether or not an applicant has sufficient means to enable him or her to obtain legal assistance, the agency must have regard to the applicant's income and disposable capital."

A financial report for the year ending March 31, 2009, revealed the trust had a total equity of $5.2 million, owning six rental properties in Auckland valued at more than $1 million with mortgage liabilities of $535,000. The trust also owns the Petricevic family home in Remuera valued at $4.4 million, with a $1.4 million mortgage. The home is for sale.

The report showed unsecured loans of $2.4 million to the trust from Bounty Properties and Navigator Finance, the latter issuing proceedings against the trust to reclaim the loan.

Mary Petricevic was advanced $250,000 by the trust and $114,050 was distributed to her during the same time period. The trust advanced Rod Petricevic $3.8 million.

As of March 31, 2009, the trust had $447,202 in its account. Between April 1 and October 3, 2010 Mary Petricevic had $52,100 deposited into her bank account in transactions from "a family trust" and one of her sons.

The agency has treated all assets under trust as Rod Petricevic's assets and income and therefore believes he can fund his defence. But the trust's accountant submitted to the court that as of January 20 the trust's cash balance was $4621.

The SFO charges are criminal offences relating to Petricevic's directorship of Bridgecorp, which collapsed in July 2007 owing $459 million to 14,500 investors. He has pleaded not guilty. The case is expected to go to trial next year.