The Queen v Morris [2007] NZCA 578; (2008) 23 NZTC 21,790 (14 December 2007)

Last Updated: 29 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA476/07

[2007] NZCA 578

THE QUEEN

v

CHRISTOPHER CLIFF MORRIS

Hearing: 20 November 2007

Court: O'Regan, Williams and MacKenzie JJ

Counsel: C R Carruthers QC, and D A Ewen for Appellant
J C Pike for Crown

Judgment: 14 December 2007 at 11 am

JUDGMENT OF THE COURT

Leave to appeal is granted but the appeal is dismissed.

____________________________________________________________________

REASONS OF THE COURT

(Given by MacKenzie J)

Introduction

[1] This is an appeal against a ruling given on 30 August 2007 by Judge Barry in the District Court at Wellington on an application pursuant to s 344A of the Crimes Act 1961. It raises the issue of whether this Court may, or should, exclude, on a retrial, evidence which was not called at the earlier trial.
[2] This prosecution has a long and chequered history. The appellant was charged with 67 counts of using a tax document, namely an IR3 income tax return, with attempt to defraud, contrary to s 229A of the Crimes Act 1961 (as that section stood prior to the Crimes Amendment Act 2003). The Crown case is that the appellant and another person had devised a scheme, using a tax agency business, to defraud Inland Revenue. The alleged scheme involved the agency claiming refunds totalling $2.8 million, by claiming the deduction of expenses against resident withholding tax said to have been paid on behalf of a large number of tax payers. The Crown case is that the claims were fictitious and made on behalf of tax payers who were unaware of the claim.
[3] In support of its case, the Crown placed strong, indeed pivotal, reliance on the evidence of an Inland Revenue investigations officer, Mr McBride. He was to give evidence of documentation from the IRD records concerning the returns of the tax payers concerned, and the refund claims. When the matter came to trial before Judge Gaskell and a jury on 9 February 2004, a point was taken as to whether Mr McBride was precluded from giving evidence by the secrecy provisions in s 81 of the Tax Administration Act 1994. To determine that point a verdict of acquittal was directed and a case was stated to this Court, which in R v Morris [2005] 2 NZLR 684 (“Morris No 1”), held that s 81 did not preclude the giving of Mr McBride’s evidence. A new trial was ordered.
[4] That trial took place before Judge Barry and a jury in Wellington. The appellant was found guilty on all 67 counts, and appealed to this Court. In its judgment delivered on 3 October 2006 R v Morris (2006) 22 NZTC 20,056 (“Morris No 2”), this Court held that Mr McBride’s evidence of what appeared in the Department’s records was hearsay and inadmissible. The Court sought submissions of counsel on the appropriateness or otherwise of directing a re-trial. The outcome was that a re-trial was ordered.
[5] At the behest of the defence, the Crown brought the present s 344A application, essentially to determine the defence contention that the Crown cannot adduce, at the new trial, direct evidence from the tax payers concerned to establish the relevant facts to which Mr McBride’s inadmissible hearsay had related. The present appeal is against Judge Barry’s ruling that the evidence of those tax payers is admissible.

The rival contentions

[6] Mr Carruthers QC for the appellant submits that the Crown should not be permitted to call the evidence concerned. He bases that submission on two propositions:

• (a) That as a matter of principle, based on the authority of Reid v R [1980] AC 343 (PC), such evidence should be excluded; and
• (b) That considerations of fairness, and abuse of process, should lead to the exclusion of this evidence.

[7] Mr Pike, for the Crown, submits that:

• (a) There is a binding determination, in Morris No 2, that there should be a retrial, and the decision in Reid does not establish a principle which governs the issue of whether, at a new trial, the prosecution can call evidence, not called at the earlier trial, to repair the gaps left by the inadmissibility ruling; and
• (b) This Court does not have jurisdiction to hear this appeal, since there is no question about the admissibility of the proposed evidence: rather it involves an interpretation of this Court’s judgment in Morris No 2, or whether the calling of the proposed evidence would be an abuse of process. Neither of these issues, Mr Pike submits, falls within s 379A of the Crimes Act.

Discussion

[8] In Reid, Mr Reid’s appeal against his conviction for murder, based principally on the quality of the identification evidence adduced at trial, was allowed by the Court of Appeal of Jamaica. A re-trial was ordered. He appealed to the Privy Council against that order. That appeal was allowed. Lord Diplock, delivering the advice of the Privy Council said at 348:

It would conflict with the basic principle that in every criminal trial it is for the prosecution to prove its case against the defendant, if a new trial were ordered in cases where at the original trial the evidence which the prosecution had chosen to adduce was insufficient to justify a conviction by any reasonable jury which had been properly directed. In such a case whether or not the jury’s verdict of guilty was induced by some misdirection of the judge at the trial is immaterial; the governing reason why the verdict must be set aside is because the prosecution having chosen to bring the defendant to trial had failed to adduce sufficient evidence to justify convicting him of the offence with which he has been charged. To order a new trial would be to give the prosecution a second chance to make good the evidential deficiencies in its case – and, if a second chance, why not a third? To do so would, in their Lordships’ view, amount to an error of principle in the exercise of the power [to direct a judgment and verdict of acquittal or order a new trial].

[9] Mr Carruthers submits that the principle there stated, namely that the prosecution should not be given a second chance to make good the evidential deficiencies in its case extends not only to the question of whether a re-trial should be ordered, but also to the issue of what evidence may properly be adduced at a re-trial.
[10] It is to be noted here that this Court in Morris No 2 gave specific consideration to Reid when considering whether to order a re-trial. The passage to which we have referred was set out in that judgment. This Court said:

[52] When this evidence is taken in the context of the overwhelming circumstantial case of a fraudulent scheme described at [11]-[12] above, we are satisfied that this is not a case in which it would be appropriate to allow the appeal on the basis that the verdict of the jury was unreasonable or unsupported by the evidence. For the same reasons we do not accept the submission made by Mr Carruthers that this is a case in which the prosecution has adduced insufficient evidence to justify a conviction by a reasonable jury which had been properly directed, so that the comments of the Privy Council in Reid do not apply to the present case.

[53] The case miscarried on account of the reliance placed on the evidence of Mr McBride which we find to be inadmissible. There remained evidence sufficient to establish the falsity of the tax returns. But, because the jury were left to consider the case on the basis that Mr McBride’s evidence was admissible, the verdicts are unsafe. Considering the matter in the round, we determine that it is appropriate in this case to exercise our discretion to direct a new trial.

[11] The issue on this appeal is whether, where the application of the principle in Reid does not lead to a re-trial being refused, the Court may limit the evidence which may be adduced on the re-trial.
[12] The powers of this Court on the allowing of an appeal are contained in s 385 (2) of the Crime Act. That subsection provides:

(2) Subject to the special provisions of this Part of this Act, the Court of Appeal or the Supreme Court must, if it allows an appeal to which subsection (1AA) applies, quash the conviction and in its discretion direct a judgment and verdict of acquittal to be entered, or direct a new trial, or make such other order as justice requires.

[13] In this case, that discretion has been exercised in favour of directing a new trial. That new trial must be conducted in accordance with the procedure contained in Part 12 of the Act. Section 367 will apply to that trial. Under subs (1), counsel for the prosecution “shall be entitled to examine such witnesses as he thinks fit”. That apparently absolute discretion is limited by other rules of law and by the Court’s inherent power to regulate trials in the interests of justice, but the general principle as to the evidence which may be called at a trial, including a re-trial, is that contained in s 7(1) of the Evidence Act 2006 which provides as follows:

(1) All relevant evidence is admissible in a proceeding except evidence that is—

(a) inadmissible under this Act or any other Act; or

(b) excluded under this Act or any other Act

None of the exclusionary provisions in ss 29 and 30 of that Act apply to the situation here.

[14] It is to be noted that under s 385(2) three options are open to this Court in the exercise of its discretion:

• (a) To direct an acquittal;
• (b) To direct a new trial; or
• (c) To make such other order as justice requires.

[15] Here, the second option has been exercised. We would prefer to leave open, for further consideration in a case where it may arise, whether the power to make such other order as justice requires may enable the Court to impose some limitations on the form which a re-trial is to take. That does not arise here, because that is not the option which this Court in Morris No 2 adopted. The essence of the matter is that the principle in Reid is one which falls to be considered and applied by the Court which is exercising the discretion under s 385(2). It does not involve a discretion which may be exercised at some later stage in the process.

Fairness considerations

[16] Mr Carruthers also bases this appeal on the proposition that it would be unfair to the appellant to enable the Crown to plug a hole which had been identified in its case, by the allowing of the appeal in Morris No 2. Mr Carruthers submits that, on the facts of this case, where the Crown was put on notice as long ago as 2004 of the objection to Mr McBride’s evidence, considerations of fairness to the appellant dictate that the Crown should not be permitted to revisit its earlier decision. The Court in which any trial is conducted has powers available to it to deal with an abuse of process, or conduct on the part of the prosecution which is oppressive, unfair or unconscionable. The principal power is that contained in s 347. Those powers do not extend to enabling the Court to direct that admissible evidence may not be called.
[17] Further, the exercise of the trial court’s discretion under s 347 is not subject to appeal. For these reasons, we consider that the broader appeal to fairness considerations on which this appeal is based cannot succeed.

Jurisdiction

[18] It is not necessary for us to deal with the jurisdiction point. On the view we have taken, the position is that the evidence is admissible, and the only possible basis for its exclusion would be the exercise of the fairness discretion. However, we have reached that conclusion only after consideration of the parties’ arguments on the point. In those circumstances we have determined the appeal on the merits rather than on jurisdictional grounds. But we acknowledge the force of the Crown's submission that, on the view we have taken on admissibility, the issue raised by the appellant does not engage s 344A of the Crimes Act (or the provision for appeals from s 344A rulings, s 379A(1)(aa)).

Result

[19] For the reasons we have given, we give leave to appeal but dismiss the appeal.

Solicitors:
Crown Law Office, Wellington