Aug 20, 2008

The $40,000 Slip Up

Tracy Watkins looks at the implications of the $40,000 slip up

But Mr Henry's disclosure that he personally paid the $40,000 in court-ordered legal costs against Mr Peters means it could be considered a gift.
Mr Peters and Mr Henry were at odds over who made the payment, with Mr Peters suggesting he had paid it himself.

So does David Farrar

There is little doubt Henry paying a $40,000 debt to Bob Clarkson on behalf of Winston Peters is payment of a debt which should have been disclosed. Ignorance of your own chequebook is no defence.
Other payments by Henry on behalf of Peters may count as a gift or payment of a debt? It is one thing not to charge for your time, but who paid the court filing fees in the defamation case? These fees can come to many thousands of dollars.
Could Brian Henry have paid off the $40,000 debt to Bob Clarkson without Owen Glenn’s donation? It is one thing not to charge for your time, but quite another to pay actual costs. If the Glenn donation preceded the payment to Clarkson (and I understand it did) then Glenn is still the person who effectively paid off that bill. Not necessarily from a legal aspect, but in a practical sense. If someone gives me $100,000 and I use $40,000 of it to pay off my mate’s debt, then that debt relief came about because of the donation.
Does Henry paying the $40,000 debt to Clarkson constitute a gift to Peters on which gift duty should be paid?