What would generally be a low-key, sedate affair was emotionally charged as Mr Woods’ answers - during a public examination into fraudster accountant Ray Walker’s bankrupt estate - rubbed many in the Federal Court public gallery the wrong way.

The public examination is attempting to find out what Walker did with more than $10 million he stole from 70 clients, mainly ageing Hunter residents.

Registrar Thomas Morgan was forced to call in security after Mr Woods complained about an exchange outside the courtroom during the lunch break with one of Walker’s victims.

Mr Woods was questioned for hours on Tuesday by barrister Anthony Spencer, SC, for the bankruptcy trustee Ray Tolcher, about the years he spent working alongside Walker at his Newcastle accounting firm.

In a series of tense exchanges, Mr Spencer accused Mr Woods of being “entirely indifferent” to what happened to a retired couple’s money and lacking “compassion” for Walker’s victims. “I ask you to consider what you are saying very carefully and answer honestly, not cavalierly,” a frustrated Mr Spencer said.

Almost 30 of Walker’s victims packed the courtroom, at times booing and cheering audibly from the public gallery as Mr Spencer labelled Mr Woods’ handling of one client as “not good enough”, showing “no particular care” and “hopeless”.

Mr Woods said he knew nothing about the missing money and he had no reason to question Walker who he worked under for almost a decade. “I presumed he was capable,” Mr Woods said. Walker killed himself in July 2015 after his $10 million Ponzi scheme was uncovered. 

The court heard Mr Woods started working as an accountant for W Walker and Company in 2006, a Newcastle firm operated by Walker and his accountant son, Brett.

The Walkers were in a formal partnership up to 2008 when a restructure saw accountants at the firm working in the same office but as separate legal entities. 

In 2014, Mr Woods purchased clients from both Ray and Brett Walker to establish his own business, DM Woods and Co, but still operated under the W Walker and Company group.

After Ray Walker’s death in 2015, Mr Woods started Active Accounting Group with Brett Walker, who is his brother-in-law. Brett Walker is married to Mr Woods’ sister, Renee.

The court heard that during his time at W Walker and Company, Mr Woods was promoted to clients as a self-managed super fund (SMSF) “specialist” after he completed a six-month, post-graduate course.

Central to the evidence was Mr Woods’ involvement in looking after the SMSF of Diane and Allan Williams, Maitland-based clients Mr Woods purchased from Ray Walker in July 2014.

Mr and Mrs Williams, who lost more than $300,000 of their life savings to Walker, were in court to hear Mr Woods admit failings in the handling of their SMSF, particularly in relation to a $30,000 investment it had in a unit trust overseen by Walker.

Walker’s clients lost hundreds of thousands of dollars in the unit trust after he sold the central asset, the former Cosmopolitan Hotel in Carrington, without their knowledge.

When pressed by Mr Spencer about his knowledge of the Williams’ SMSF investment in the unit trust, Mr Woods admitted he didn’t know how the units had been valued. Mr Woods said despite requesting financial statements from Walker on “various occasions”, including when an external auditor asked for them in September 2014, they were “not forthcoming”.

Mr Spencer told the court “alarm bells should have been ringing”, to which Mr Woods replied: “No, not really.” The Williams’ super fund invested $30,000 in the unit trust in 1999. Property within a SMSF is meant to be independently valued every three years.

“You had no idea how the financial statements were prepared, moreover you didn’t care,” Mr Spencer said.

Walker eventually emailed Mr Woods and said the value of the units remained the same, $30,000. Mr Woods agreed that “in hindsight” the investment remaining at exactly the same value was “nonsense”.

“You couldn’t put it into property and have it hold its value, only cash would do that,” Mr Spencer said.

Mr Woods replied that he “had no idea what the investment was”.

“If you’d have asked some basic questions you would have known it [$30,000] was not there,” Mr Spencer said.

The court heard Woods dealt with three clients, dating back to 2012, that had trouble finding out “basic information” about the unit trust from Walker. “It’s a bit of a recurring theme… You let the side down didn’t you,” Mr Spencer said.

“Maybe I should have asked more questions,” Mr Woods replied.

Mr Woods told the court after Walker’s fraud was discovered W Walker and Company’s website, email signatures and business cards were changed to remove the word “partner”.

This was done after Brett Walker received legal advice that partners can be held legally responsible for a firm’s debt.