Ponzi investor appeals decision
the funds on behalf of the client and paid out McIntosh in November 2011 ‘‘to allow the Ponzi to continue’’.
‘‘If McIntosh had not been paid out, the money should have been available to creditors upon liquidation.’’
McIntosh’s lawyer Justin Smith, QC, argued the funds had resulted in a change in position for his client and that McIntosh ‘‘gave value’’ by investing funds with RAM.
If McIntosh gave value for the money or altered his position in the reasonably held belief that the transfer of the property to him was valid, then liquidators would not be able to touch it.
Smith said the High Court failed to take into account about $200,000 in costs incurred from the date McIntosh bought a Palliser Rd property in Roseneath.
Had McIntosh known of RAM’s pending insolvency, he would not have committed to invest in property and planned subsequent development, Smith said.
Even when he was made aware of RAM’s bankruptcy, Smith argued his client had no other choice but to carry on: he would have incurred more costs by holding the redevelopment, and if he sold the property his expenditure would not be covered.
Before he was able to withdraw the money from RAM, McIntosh was ‘‘continually pressing Ross for repayment’’ and to ‘‘please advise’’ when the money would be in his account, and asking for a statement and progress report.
‘‘He was the best part of a million dollars in the hole,’’ Smith said.
A group of investors in RAM watched the ‘‘complicated’’ legal arguments unfold.
One investor questioned if liquidators won the cross appeal, how far back they would go.
‘‘They will try to get it back from everyone but it’s likely most have spent the money,’’ Smith said.