Wynyard v R [2017] NZCA 104 (3 April 2017)

Last Updated: 11 April 2017

IN THE COURT OF APPEAL OF NEW ZEALAND
CA219/2015 [2017] NZCA 104
BETWEEN	GLENDA MARY WYNYARD Appellant
AND	THE QUEEN Respondent

Court:	Randerson, Lang and Clifford JJ
Counsel:	R S Reed for Appellant D R La Hood for Appellant
Judgment: (On the papers)	3 April 2017 at 10am

JUDGMENT OF THE COURT

The appellant’s application for costs is declined.
____________________________________________________________________

REASONS OF THE COURT

(Given by Lang J)

[1] Ms Wynyard was found guilty following a Judge-alone trial in the District Court on 11 charges laid under the Crimes Act 1961. All of the charges related to the manner in which Ms Wynyard had caused her company, The Media Counsel Ltd (TMC), to conduct its business during the months before it went into liquidation. Ms Wynyard appealed against conviction on eight of the charges on which the trial Judge had found her guilty.
[2] On 17 December 2015, this Court allowed Ms Wynyard’s appeal on seven charges and dismissed it in relation to the remaining charge.^[1] The appeal succeeded in respect of six charges of theft by a person in a special relationship^[2] and one charge of causing loss by deception.^[3] It failed in respect of a charge of dishonestly using a document to obtain a pecuniary advantage.^[4]
[3] On 15 April 2016, the Court quashed sentences of home detention that had been imposed in the District Court and substituted a fine of $10,000 in respect of the four charges on which Ms Wynyard remained convicted.^[5]
[4] Ms Wynyard now seeks costs in respect of the appeal under the Costs in Criminal Cases Act 1967 (the Act).

Relevant principles

[5] The Act relevantly provides as follows:

8 Costs on appeals

(1) Where any appeal is made pursuant to any provision of Part 6 of the Criminal Procedure Act 2011 the court which determines the appeal may, subject to any regulations made under this Act, make such order as to costs as it thinks fit.

...

(6) If the Court which determines an appeal is of opinion that the appeal involves a difficult or important point of law it may order that the costs of any party to the proceedings shall be paid by any other party to the proceedings irrespective of the result of the appeal.

[6] The principles governing the discretion to award costs following a successful appeal are now well established through decisions such as R v Kerr, R v Leitch, R v Rust, Hancock v R and Smith v R.^[6] In short, a decision to award costs in respect of a criminal appeal is the exercise of a broad judicial discretion but there must be good grounds for making it. An applicant for costs must therefore identify the grounds on which the Court should exercise the discretion in his or her favour. The fact that an appeal has been successful does not of itself justify an award of costs.^[7]
[7] In R v Rust, this Court observed:^[8]

We turn first to the appeal, which is governed by s 8.

In general the principles to be applied are not in dispute. In R v Leitch ... Richardson P in delivering the judgment of this Court said at p 1:

“There is no presumption for or against granting of costs and so costs are not to be granted merely because the appeal has succeeded. An application for costs is invoking the Court's discretion and must show good grounds why the discretion should be invoked in the applicant’s favour...”.

Further, in R v Kerr ... this Court observed at p 2:

“The matter is thus one of discretion, and the section provides little by way of guidelines. The mere fact that a defendant succeeds is not enough to justify an award.”

Thus, although an award is discretionary there must be good grounds for making it. Mr Toogood [counsel for the appellant] was unable to point to any particular factor which would support an award ... As is frequently the case in such a situation, the issue was one requiring a balancing exercise. The Crown’s opposition at trial, and again on the appeal, was justified. The appeal did not involve any novel issue and there was nothing to take it out of the ordinary category where there has been a wrong decision on a question of law or a misdirection which has resulted in the quashing of a conviction and the ordering of a new trial ... On examination, the only ground for an award which is discernible here is the fact that the appeal was successful. As the legislation stands, that is insufficient.

The arguments

[8] Ms Reed filed extensive submissions in support of the application for costs. In essence, however, she contended that the Crown ought to have appreciated from an early stage that it had no answer to the Ms Wynyard’s argument on the appeal because it was plainly legally correct. As a result, the Crown “improperly and unfairly maintained its opposition to the appeal on Counts 3 and 5–10 in circumstances where there was no legal basis for doing so”. She submitted that the law was clear, and the Crown ought to have conceded the appeal once it reviewed the grounds upon which the appeal was being advanced. She argued that the Court should denounce this approach because it does not accord with established prosecutorial responsibilities. The Court should do so by making an award of indemnity costs in Ms Wynyard’s favour. This would require the Crown to pay costs in the sum of $174,701.70.
[9] Ms Reed submitted that an award of costs was also justified under s 8(6) of the Act. This permits the Court to make an award of costs irrespective of the outcome of an appeal where the appeal raises a difficult or important point of law.
[10] Mr La Hood for the Crown submitted that the trial Judge had found a sufficient evidential basis on which to find the charges proved, and that the Crown’s prospects of success on appeal were not so remote that any award of costs on the appeal would be appropriate. He also submitted that the amount claimed is excessive. By way of comparison, the Crown’s costs in relation to the appeal amounted to just $4,239.65.

Decision

[11] We consider the Crown’s decision to oppose the charges needs to be viewed in light of the approach taken by the trial Judge and that taken by this Court in determining the charges in respect of which Ms Wynyard succeeded on appeal.

The charges of theft by a person in a special relationship

[12] These charges were based on the fact that Ms Wynyard arranged for payment of invoices by TMC’s clients to be made to Marac Finance Limited (Marac) rather than to Carat New Zealand Limited trading under the name Aegis (Aegis). The Crown contended that Ms Wynyard knew TMC had a contractual obligation to account to Aegis in respect of those funds, and she intentionally caused it to breach that obligation by arranging for payments to be made to Marac rather than Aegis.
[13] An unusual feature of the case was that Ms Wynyard caused TMC to become contractually bound to account to both Marac and Aegis in respect of the funds paid by its debtors. TMC entered into the arrangement with Aegis after it entered into the arrangement with Marac. As we observed in our substantive judgment, the Crown based its case on the premise that the contractual arrangement with Aegis superseded and took priority over any pre-existing obligations TMC owed to Marac.^[9] The appeal succeeded because the security documentation that TMC had entered into earlier with Marac transferred ownership of TMC’s debts to Marac. Marac therefore remained the beneficial owner of monies paid by TMC’s debtors regardless of the arrangement TMC subsequently entered into with Aegis. We concluded that Ms Wynyard could not commit the crime of theft when she caused the company’s funds to be paid to Marac because Marac owned the debts in respect of which the funds were received.^[10]
[14] The trial Judge did not deal with Ms Wynyard’s argument on this point. Rather, he accepted the Crown’s argument that Ms Wynyard committed the offences because she intentionally caused the funds to be paid to Marac when she was aware of the requirement to pay Aegis. We do not consider the Crown can be criticised for its attempt to uphold the theft convictions given the complexity of the issue on appeal and the approach taken by the Judge.

The charge of causing loss by deception

[15] In our substantive judgment we described the Crown’s case in respect of the charge of causing loss by deception as follows:

[20] This count under s 240(1)(d) of the Crimes Act alleged that Ms Wynyard caused Aegis loss by deceiving it in relation to payments that clients were to make in respect of November billings. The Crown contended that Aegis understood it would receive the proceeds of all November billings, and Ms Wynyard regularly assured Aegis that this would be the case. She also gave Aegis updates regarding payments it could expect to receive from specified clients. She did so notwithstanding the fact that she knew that those clients had already made the payments in question to Marac’s account, or that this would occur in the future. In some cases Ms Wynyard intervened personally to ensure that payments went to Marac rather than Aegis. The Crown alleged that Ms Wynyard’s deceptive behaviour caused Aegis loss because it prevented Aegis from taking active steps to ensure that November billings were paid to it rather than to Marac.

(Footnote omitted.)

[16] The Judge also found Ms Wynyard guilty on this charge because he accepted the Crown’s argument. This was to the effect that Ms Wynyard had assured Aegis that it was to receive some of the funds from TMC’s debtors when she knew those funds would be paid to Marac. Had Ms Wynyard advised Aegis of the true position, it is likely that Aegis would have taken steps to protect itself from loss. Aegis could, for example, have contacted TMC’s debtors directly to ensure that they made payment directly to it rather than to TMC or Marac. Aegis lost this opportunity because Ms Wynyard failed to advise Aegis of her true intentions.
[17] We agreed with the Judge’s conclusion on this point. However, we allowed the appeal on this charge because we were not satisfied the Crown had proved that Ms Wynyard’s undoubtedly deceptive conduct actually caused Aegis to suffer loss.^[11] Between November 2009 and January 2010, TMC had placed advertising worth approximately $10 million through Aegis. Of this sum, TMC’s clients paid approximately $2.2 million to Marac rather than to Aegis. This occurred when Marac contacted TMC’s debtors directly and instructed them to pay their debts to Marac. In addition, Ms Wynyard personally instructed some debtors to pay Marac directly. By these two means the debt owing to Marac was fully repaid. We considered that, even if Aegis had had the opportunity to contact TMC’s debtors directly, it was reasonably possible, and indeed likely, that the efforts made by both Marac and Ms Wynyard would have enabled the debt owing to Marac to be fully repaid in any event. As a result, Aegis would still have suffered the same loss it ultimately suffered.
[18] We therefore based our conclusion in respect of this charge on a different view of the facts to that taken by the trial Judge. We do not consider the Crown can be criticised for endeavouring to support the approach taken by the Judge in respect of this charge.

Conclusion

[19] Although the basis upon which we allowed the appeal in relation to the theft charges can be expressed in relatively simple terms, the process by which we came to our conclusion was far from straightforward because it required analysis of the security documentation. We consider the Crown’s approach in resisting the appeal was reasonable having regard to the unusual facts of the case. An award of costs under s 8(1) of the Act is therefore not appropriate.
[20] We reach the same conclusion in relation to the application for costs under s 8(6). Although the appeal raised an issue of some complexity we do not consider it reaches the threshold necessary to justify an award of costs under that subsection. Furthermore, we have already observed that the facts of the case were unusual and are unlikely to arise again in the future. For that reason we do not see the appeal as raising an issue of wider importance so as to justify an award under s 8(6).

Result

[21] The application for costs is declined.

Solicitors:
Crown Law Office, Wellington

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^[1] Wynyard v R [2015] NZCA 610 [Substantive judgment].

^[2] Crimes Act 1961, s 220.

^[3] Section 240(1)(d).

^[4] Section 228(b).

^[5] Wynyard v R [2016] NZCA 112 [Results judgment] and Wynyard v R [2016] NZCA 135 [Final judgment].

^[6] R v Kerr CA60/91, 15 April 1992; R v Leitch CA195/97, 22 December 1997; R v Rust [1998] 3 NZLR 159 (CA); Hancock v R [2012] NZCA 397 and Smith v R [2013] NZCA 300.

^[7] Costs in Criminal Cases Act 1967, s 8(2).

^[8] R v Rust, above n 6, at 162–163.

^[9] Substantive judgment, above n 1, at [14].

^[10] At [40].

^[11] At [29].