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).
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 you are 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.
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).
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.
(d) Pursuant to Rule 21.52 (b) of the Rules of the Institute of Chartered Accountants of New Zealand, the disciplinary tribunal made an order prohibiting publication of the names of the clients.
In accordance with Rule 21.35 of the Rules of the Institute of Chartered Accountants of New Zealand, the disciplinary tribunal directed that the decision of the tribunal be published in the Chartered Accountants Journal, the
New Zealand Gazette and the New Zealand Herald with mention of the member’s name and locality.
Right of Appeal
Pursuant to Rule 21.41 of the Rules of the Institute of Chartered Accountants of New Zealand which were in force at the time of the original notice of complaint, the member may, not later than 14 days after the notification of this tribunal to the member of the exercise of its powers, appeal in writing to the appeals council of the institute against the decision.
No decision other than the direction as to publicity shall take effect while the member remains entitled to appeal or while any such appeal by the member awaits determination by the appeals council.
Dated this 9th day of October 2006.
R. J. O. HOARE, Tribunal Chairman.