Stadium: Who is being protected?

Received from Russell Garbutt
15 July 2014 at 4:30 PM

What is an advertisement, and what content of an advertisement needs to be able to be verified?

Readers of the Otago Daily Times, and followers of the on-going stadium debate which shows no signs of lessening in its intensity may be intrigued to know just where the sensitivities of the ODT lie.

Let us look at some simple facts which cannot be in dispute.

The Carisbrook Stadium Trust which was acting as an agent of the Dunedin City Council, decided to publish a full page advertisement in the 31 May 2008 issue of the ODT. The advertisement was headed up “The Facts about the New Stadium”.

In this advertisement it was claimed that “The funding target establishes a debt free stadium. On this basis the business plan for the stadium shows that it makes a profit. Unlike nearly all other Council owned facilities it will not need annual funding support. This assessment has been confirmed by two of New Zealand’s leading accountancy firms”.

This is published and accessible and the wording of the advertisement cannot be interpreted in any other way as the heading refers to all that followed as “facts”.

The advertisement also claimed that the Trustees of the CST were “committed to delivering this stadium, under budget, on time and to achieve its financial, social and economic goals”.

Now of course some advertisements for wrinkle cream use all sorts of phrases like “clinical tests prove etc etc”. Many people are ready to pounce on claims that are unable to be substantiated, or are untruthful, or are misleading, or cannot be proven. In other words, the makers of the wrinkle cream need to be able to show that there were indeed “clinical tests”. The fact that the clinic may have been part of the company making the cream is sometimes understood, and in any case, the makers of the cream hardly ever claim that “totally independent clinical trials using double blind processes found what we are claiming is true”.

But this is not some pot of wrinkle cream.

The CST claimed a number of facts in their advertisement that they said were verified by two of New Zealand’s leading accountancy firms.

So, I submitted a very brief letter to the Editor of the ODT that simply asked this:

Dear Sir

In light of the continuing operating losses of the Awatea Street Rugby Stadium, and the on-going debt costs from its construction, it would be interesting to be informed of just who the two leading NZ accountancy firms were that confirmed the Carisbrook Stadium Trust’s claims published in the ODT in 2008 that the stadium would be built debt free and would return an annual operating profit. Maybe these two companies could now tell us how the reality differs so much from the published claims.

Yours sincerely

The ODT has informed me that my letter was noted but not selected for publication. This is newspaper speak for it’s been binned.

Why should this be?

Should the ODT not be interested in ensuring that an advertisement of a major size on a subject that had divided the City was not at all misleading in the same way that claims were made that may not be able to be substantiated, or could be shown to be unfactual?

Is the ODT particularly sensitive to the views of those that decided to publish this advertisement?

Had the ODT entered into any understanding or arrangement that the paper would support the stadium project which may have led to less than stringent standards of advertising being followed in this case?

But perhaps more telling is that to my knowledge, the ODT has not followed up on the obvious story of just who these two leading NZ accounting firms were that supported the claims of a debt free stadium and an annual operating profit. My point is that time and distance show us that these claims were so at odds with the claims made and published, that serious questions remain unanswered on just how the CST and these two companies got it so wrong.

Maybe another newspaper sees the story that the ODT doesn’t?

[ends]

CST advert ODT 31.5.08 detail

odt may 31 2008-1 (pdf cleaned)

█ Legible copy: CST Advertisement, ODT 31 May 2008 (PDF, 200 KB)

Related Posts and Comments:
9.7.14 John Ward, no mention of stadium or CST trusteeship
23.5.14 Stadium | DCC Draft Annual Plan 2014/15 ● Benson-Pope…
9.5.14 DCC Draft Annual Plan 2014/15 Submission by Bev Butler
12.3.14 Carisbrook Stadium Trust: Financial statements year ended 30.6.13
8.3.14 Carisbrook Stadium Trust subject to LGOIMA
24.2.14 Carisbrook Stadium Trust: ‘Facts about the new Stadium’ (31.5.08)
22.2.14 Carisbrook Stadium Trust costs
24.1.14 Stadium: It came to pass… [stadium review]

Posted by Elizabeth Kerr

29 Comments

Filed under Business, Construction, CST, Democracy, Economics, Hot air, Media, Name, New Zealand, NZRU, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums, Town planning, University of Otago, Urban design

29 responses to “Stadium: Who is being protected?

  1. At best look or to give CST the benefit of the doubt, they were grossly optimistic by being deceived or deceptive toward us ratepayers like the poor people of Mangawhai whose council rashly overspent on a seemingly essential service which was far too costly for the purpose or the ability of ratepayers to afford. But in fact the position seems to be that CST were deceptive just to ensure the thing would be built and it’s a monstrosity. I say that because it is not and will not run at a profit and most folk knew that before it was built and said so at that time. God, please help us!

  2. Russell Garbutt

    Raymac, the interesting thing is that Mr Farry, Chair of the CST that inserted this advertisement, to my knowledge seems unable to recall the names of these two leading accountancy firms. Amazing lack of recall. There are possibly reasons why he can’t identify the companies of course and I leave it up to you to think what they could be. I couldn’t possibly comment.

  3. Bev Butler

    Just so people do not forget the names of the CST Trustees:

    Carisbrook Stadium Trust

    Malcolm Saba Farry – Chairman of the Trust, former Director of The Highlanders

    Arthur William Baylis – Chartered Accountant

    Ronald Douglas Anderson – Director/Shareholder of Arrow International

    Stewart Arthur Barnett – Businessman

    Kereyn Maree Smith – currently CEO of the NZ Olympic Committee, previously CEO of the Academy of Sport and the Centre of Excellence for Amateur Sport

    John Francis Ward – Accountant of Invercargill and Chancellor of the University of Otago (resigned 8/9/09)

    Sir Eion Edgar – Chairman of Forsyth Barr (appointed 8/9/09)

    All Trustees were handpicked by Malcolm Farry.

    • Hype O'Thermia

      Well, with such able people still within coo-ee, I’m sure if the question about the identity of the accountancy firms were put to them at least one of them would remember. They can’t all be suffering from amnesia and/or dementia, that would be a bit much to pass off as coincidence.

  4. The matter of the two of NZ’s ‘leading accountancy firms’ not being named after 16 months of procrastination on the part of Malcolm Farry, despite being asked under the Local Government Official Information and Meetings Act, could lead one to suspect that either those firms did not in fact confirm the viability, or they did not exist. Either way it is incumbent on Malcolm Farry to verify or remain in contempt of the law. That is a crime against the people, and it is incumbent on the owners, the DCC, to insist on the truth being exposed. Failure to do this transfers fault onto the Mayor and Council as protectors of the citizens’ treasure.

  5. Russell Garbutt

    I would also imagine that if I was a principal of a firm that had verified such claims I would be doing everything in my power to ensure my firm remained hidden. Assuming the claim was true. But if no firms exist or they did not support the claims then all “leading” accountancy firms are under suspicion. Maybe all firms that fit this rather narrow criteria should be asked if it was them? Who do you think should be on the list? So much easier if Mr Farry started complying with lawful requests.

  6. One firm, possibly. Two firms, unbelievable.

  7. Bev Butler

    Maybe we should put up a list of all NZ leading accountancy firms and see which firms want their names removed from the list. A process by elimination.

    • cinimodjunior

      What an inspirational thought. Could someone within our team have the resources to do that? A simple Yes/No question might be: “Is your firm one of those associated with the CST’s ‘summary of facts’ (date ODT) in which it was confirmed by two leading accountancy firms that the proposed Awatea St stadium would not require annual Council funding support?” What say you?

  8. Mike

    I wonder if CST are still LGOIMA-able

  9. Russell Garbutt

    Yes Mike they are. But 16 months after the first request to release the information and still nothing. And why the ODT’s reluctance to ask? I think I know the answer to that and I’m sure that will also be revealed in due course.

  10. Bev Butler

    Yes, Mike, the CST are subject to LGOIMA. Paul Orders released two legal opinions stating they were after I made a complaint to the Ombusman. I currently have another complaint in with the Ombudsman regarding release of the names of the accountancy firms referred to in the ODT advertisement, and Mr Farry has still not produced the information requested. Mr Farry could be prosecuted under the Ombudsman Act for obstruction should the Ombudsman choose to do so.

  11. Anonymous

    The ODT know very well what this is about. It shatters the pretence that the editorial team is independent. They are either prey to pressure or are, in fact, willing partners to sanitising the news. After all, can you imagine the Smith Bros appointing a truly independent editorial staff? LOL.
    Do they take Proctosedyl?

  12. Rob Hamlin

    What pretence?

  13. Anonymous

    I understand they tell people they are so when questioned about their relationship to the paper’s owners. Of course no-one, with a brain, believes their hand on heart denials.
    They are apologies for being real men. Not that they are on their own. Brown nosing is the fate of people desperately dependent on the largesse of those who employ them, especially when power is exerted to toe the line.
    Look at them fronting up on Channel 39. Very unsophisticated. Embarrassing.

  14. Cars

    “God, only helps those who help themselves”

    The two accounting firms have an out

    https://dunedinstadium.files.wordpress.com/2014/07/cst-advert-odt-31-5-08-detail.jpgo

    Their judgement of profitability was based on a number of assumptions, the supposition that the stadium would not be debt funded, and all of the assumptions of CST would hold true. Clearly those assumptions do not, and therefore the accounting firms judgement rests on the inaccuracy of prediction.

    My mother used to use the term they “helped themselves” for instances where people stole from others. So perhaps God has had a role in this.

  15. Ode Dious Times
    Once in time it was thought very nifty, could purchase the news for just a buck fifty. Truth, fidelity, proudly the flag, now sadly an, untrusty old rag. Once brash and bold, grandly uncouth, purveyor of only the unvarnished truth. Run by the large, avuncular Ed, fussed as he daily put it to bed. This once proud, Baron of press, now stands astride a pool full of cess. Soul sold for just the ‘quo pro quid’, to the scheming, smiling, devious Yid. One with the smiling disarming look, concealing the manners of a dental crook. He doesn’t know right from wrong, as he earnestly chases, an elusive gold gong. A probing press, would seriously look, and see instead, a de-feathered chook. Then truthfully expose, that soiled parson’s nose. The public would see, how tainted was he, and to in a flash, the dash for the cash. It all would seem a dastardly scheme, defraud and empty, the treasury clean. We see the plot, now all fair and square, time to let, the dog see the hare. Right must be done, true, full and fair, but reported in press, you won’t find it there.

  16. Russell Garbutt

    There is no real out. How accountancy firms and auditors deal with suppositions is to give a qualified opinion. For example, these two firms could have said something like “If the CST manages to raise $55m of private unencumbered donations for construction then the stadium could achieve an operating surplus as long as attendances consistently reached 15,000 paying customers per match of which there would need to be 15 per year.”

    That sort of thing.

    There are a few scenarios here which could apply as to why the names of these two accountancy firms have not been released.

    1. No such firms exist. This scenario is that the CST made this claim in the advertisement knowing it to be false. They did so to give an air of authority to assist in swaying public and DCC opinion. Very very serious stuff for the CST and I suggest the ODT as publisher. Hard to believe that such wilful deceit could be contemplated, but not impossible.

    2. The firms exist, but they didn’t give anything like the support that was stated in the advertisement. They may have given some, or a qualified support. Still very very serious stuff for the CST and the firms and there would be a lot of reasons for both the CST and the firms to not want the identity of the firms to be revealed. Did the firms know and approve of the wording of the advertisement before publication? Or if not, did they discuss the wording with the CST after publication? Would the CST consider that some form of qualified or limited support justified the published claims?

    3. The firms exist and their support for the published claims is real, but they don’t want their names to be revealed because events have shown that their support was not warranted. In other words the quality of their work was seriously sub-standard. The claims in the advertisement were quite unequivocal and very clear and similar in many ways to a prospectus. So the question here is really about the quality of the information that led to such claims and for such financial support. Lots of reasons for this scenario to be swept under the carpet.

    4. It was all the work of a third party. Maybe an enthusiastic marketing campaign making wild claims and using unjustified and unsustainable rhetoric. All published without anyone’s knowledge or consent.

    5. Another scenario that hasn’t been thought of.

    Behind this is the situation whereby the CST who acting as an agent of the DCC are open to the provisions of the LGOIMA. As has been said above, Mr Farry of the CST has always said that his private Trust and the things that it does are not subject to public scrutiny. This may be one of the reasons that this structure was agreed to by Jim Harland and the Chin Council. But two separate legal opinions and the opinion of the Ombudsman have shown that this belief was wrong. The CST are obliged to tell ratepayers exactly what went on within their Trust and that includes telling ratepayers just who these two leading NZ accountancy firms were. The fact is that Mr Farry has had this request for over 16 months when there is an obligation to provide such information within 20 working days is particularly troubling.

    And sitting alongside this mess is the position of the ODT who seem VERY unwilling to pursue any story that is in any way critical of the CST. Indeed very unwilling to pursue anything that shows just how this stadium came to be built when so many were opposed on grounds that have been shown to be completely justified.

    • Whippet

      Jim Harland was held in contempt of court by Judge Smith of the Environment Court. When Harland refused to carry out instructions by Judge Smith to release information required by a person involved in the case before the court.
      Jimbo felt he was above the law, and could ignore the Judge’s instruction. Interestingly, the ODT never did publish anything about this.

      • Elizabeth

        In another Court, the High Court, he had two convictions lodged against his name, as the CEO of DCC, for damage to the archaeological site at Wall Street. ODT wasn’t too keen on making hay with that either.

  17. Rob Hamlin

    THE FAIR TRADING ACT ?

    This thread started with the CST’s advert in McPravda about the Stadium. I think that perhaps we are looking at the wrong legislation to provide the hook to apply to the bottom lip of our worthy dental colleague.

    We have discovered that access to the legislation that should properly deal with this kind of thing is hedged around by government agencies that should intervene on behalf of the public, but which were all captured years ago for that very reason.

    This advert changes the ball game on this matter, and brings in another piece of legislation that can be accessed directly, and may be a potentially useful tool.

    This advert was an item of commerclal mass communication, which was deployed for the purposes of persuading the Otago public to buy a Stadium that the Carisbrook Stadium Trust and their ‘stakeholders’ wished to sell to them on the basis that it had specific commercial capabilities. A bit like a washing machine commerclal that tells you that the Gurgleglooper Mk XV washes your socks to a pearly white (even if they were blue to begin with).

    As such I think it could be argued that it is an activity that comes under the provisions of the Fair Trading Act.

    ‘How to Law’ (http://www.howtolaw.co.nz/protection-under-the-fair-trading-act-xidp392187.html), which is Austrasia’s biggest legal advice site states the following:

    “Misleading or deceptive conduct, and misrepresentations

    The FAIR TRADING ACT 1986 prohibits people in trade from engaging in misleading or deceptive conduct, or conduct that is likely to mislead or deceive. Usually conduct that breaches this rule will qualify both as misleading conduct and as deceptive conduct, and therefore the person or business in question will be liable under both headings.

    For there to be a breach of the Act it is irrelevant whether there was an intention to deceive or mislead: the question is whether the conduct could mislead or deceive. Similarly, it is not necessary for someone to have suffered a loss or to have been directly affected by the conduct in question in order for there to be a breach of the Act.

    As well as this general rule against misleading or deceptive conduct, the Act also specifically prohibits certain types of behaviour, including:
    conduct that is liable to mislead the public about the nature, manufacturing process, characteristics, or quantity of goods, or about their suitability for a particular purpose conduct that is liable to mislead the public about the nature, characteristics, or quantity of services, or about their suitability for a particular purpose in relation to an offer of employment, conduct that is misleading or deceptive, or is likely to mislead or deceive, as to the availability, nature, terms, conditions, or any other matter relating to the employmentfalse or misleading representations about the price, standard, quality, place of origin or history of goods, or about a particular use or benefit of goods, or that goods have a particular endorsement or approval
    false or misleading representations about the price, standard or quality of services, or that services have a particular endorsement or approval.”

    What is lovely about this is that the final paragraph puts CST firmly in the gun were a case to be brought against them on the basis that the claimed accounting company assurances as to the Foobar’s performance did not actually exist at the time the claim was made and disseminated via the advert . They would have to produce the evidence.

    Even more delightful is the paragraph above it, which informs us that that ‘intent’ (that rock upon which so many white-collar cases founder) does not apply to breaches of this Act.

  18. Hype O'Thermia

    Accountants can only work with the “facts” supplied. If they did honest calculations based on false information believing it to be true, they cannot be accused of misdeeds. So why don’t they come forward and say why they made those statements, and who supplied them with false information?
    Meanwhile suspicion falls on all accountancy firms that they probably produce random results, whatever the client asks and pays for, then run away and hide when accountability time rolls around.

  19. Rob, how does one progress this to a complaint under the Fair Trading Act? Not much point in fulminating ‘ad infinitum’, but no-one stepping up to the plate and moving. Should Russell and Bev, being in possession of the bulk of the supporting evidence, collectively, with our support lodge a complaint? It seems that we could all wait till hell freezes over before either the CST or the ODT will move without some serious prodding from an independent official body.

  20. Anonymous

    The correct venue was to complain to the Advertising Standards Authority at the time. However, that opportunity is long gone.

  21. Elizabeth

    Another meaty Act is rather applicable. No statute of limitations.

  22. Rob Hamlin

    I’m not sure that you’re right there Hype. The ASA polices its own voluntary system. The Fair Trading Act is legislated and state funded action under it is managed by the Commerce Commission who have this to say about it:

    “The Commission is responsible for enforcing the Act, but anyone – consumers and businesses alike – can rely on and take their own legal action under the Act. The Commission is also empowered to take enforcement action and will do so when allegations are sufficiently serious to meet its enforcement criteria.”

    Looking at these enforcement criteria and how the CC has been subject to the same capture process, I suspect that private pursuit may be the only way, but there appears to be no statute of limitations – this makes sense as certain products sold deceitfully may not reveal their true colours for several years – this particular dud being an alleged example of that.

    Also the lack of requirement for intent makes a direct private pursuit much more possible. Seems almost written for the small guy to have a go – I’m surprised it hasn’t been repealed or had the nuts cut of it in some other way.

  23. Elizabeth

    Fun Old Times!

    ### radionz.co.nz Sun, 21 Sep 2008
    http://www.radionz.co.nz/national/programmes/sunday/20080921
    10:10 The Sunday Group – Dunedin Stadium Project
    Originally aired on Sunday Morning, Sunday 21 September 2008
    Bev Butler, Tim Calder, Michael Deaker and Malcom Farry discuss the pros and cons of the proposed new stadium in Dunedin.
    Audio | Download: Ogg  MP3 Audio duration: 33′ 37″ 

    • Elizabeth

      Received from Jeff Dickie.
      Fri, 25 Jul 2014 at 5:10 p.m.
      Subject: The stadium’s ongoing financial rort [ODFT rejected letter]

      [begins]
      On Friday, 25 July 2014 4:40 PM, Cushla Turner wrote:

      Dear Jeff,
      I’m sorry, I just sent you an email to advise that your letter to the editor has not been selected for publication, but by mistake I sent it in reply to an earlier email from your address. It should have been sent in reply to the letter below. Apologies for any confusion.

      Kind regards,
      Cushla Turner
      Editor’s Secretary
      Otago Daily Times

      ————————————

      On 24/07/2014 1:31 PM, Jeff Dickie wrote:

      [Letter to the ODT editor]
      In 2008 I was interviewed on National Radio and debated the stadium issue with Malcolm Farry. Every single potential issue I raised as a concern has come to pass, and many more besides. The history of false promises and ill conceived financial projections are now legend and Dunedin is now the laughing stock of the South Pacific. The Chin administration’s negligence has been followed by the Cull’s incompetence and we are witnessing a failed grandiose project’s death by a thousand cuts. Compounding this is continued massive spending on further silly projects. It should be a huge concern for every ratepayer.

      Jeff Dickie, Woodhaugh
      [ends]

      • Mike

        That’s actually quite interesting, I tried to make essentially the same point in a posting to the ODT forum this past week – pointing out that STS’s submission in its court case that was dismissed by the judge because it was in a spreadsheet has not only come to pass but in retrospect was a rather rosy scenario compared with our current reality – but that bit was chopped out.

        I guess this is a bit of a sore point at the ODT.

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