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Last Updated: 26 May 2014
IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY
CRI 2011-076-1948 [2014] NZHC 1105
THE QUEEN
v
EDWARD ORAL SULLIVAN ROBERT ALEXANDER WHITE and LACHIE JOHN McLEOD
Hearing:
|
12, 13, 17, 18, 19, 21, 24, 25, 26, 27, 31 March 2014
1, 2, 3, 4, 7, 8, 9, 14, 15, 16, 28, 29, 30 April 2014
1, 2, 5, 6, 7, 8, 9, 13, 14, 15 and 22 May 2014
|
Counsel:
|
C R Carruthers QC, N F Flanagan, P W Gardyne and E Rutherford for
Crown
P H B Hall QC, M A Corlett and K H Cook for Mr Sullivan
R B Squire QC for Mr White
J H M Eaton QC for Mr McLeod
H B Rennie QC and P O'Neil for Financial Markets Authority
|
Judgment:
|
23 May 2014
|
JUDGMENT (NO. 10) OF HEATH J
This judgment was delivered by me on 23 May 2014 at 10.00am pursuant to Rule
11.5 of the High Court Rules
Registrar/Deputy Registrar
R v SULLIVAN [2014] NZHC 1105 [23 May 2014]
The applications
[1] Mr Sullivan, Mr White and Mr McLeod are being tried on charges
involving dishonesty arising out of the collapse of South
Canterbury Finance Ltd
(South Canterbury). Mr Sullivan and Mr White were, at material times,
directors of that company. Mr McLeod
was its Chief Executive
Officer.
[2] On 15 May 2014, another question concerning disclosure was
raised on behalf of the accused. Counsel expressed
disquiet at an alleged
failure of the Crown to disclose information that was available to the Financial
Markets Authority (the Authority).
There had been evidence that there
was a degree of collaboration between the Serious Fraud Office (the
agency that
initiated charges against the accused) and the Authority, in
relation to the former’s investigation.
[3] As a result of that development I adjourned the trial to enable
counsel for the accused to apply under s 30 of the Criminal
Disclosure Act 2008
(the Act) for additional disclosure against the Crown.1 Timetabling
directions were made.2
[4] As the Crown took the view that it had no obligation to disclose information in the possession or control of the Authority, as distinct from the Serious Fraud Office, I directed that the accused could apply, in the alternative, for a non-party disclosure hearing to obtain documents from the Authority. On 19 May 2014, I made an order for a non-party disclosure hearing (the non-party application), to be held on
22 May 2014. Both applications were to be heard together.
Background
[5] On 14 May 2014, while South Canterbury’s auditor, Mr Pearson was giving evidence, it became apparent that he had previously been interviewed by the Authority. It seemed likely that this was done as part of the Serious Fraud Office’s investigation into the possibility of fraudulent behaviour by directors, executives and employees of South Canterbury. That conclusion was supported by earlier evidence
from Serious Fraud Office’s Case Manager, Ms Tierney. She said
that Mr Loader, a
1 R v Sullivan (No 9) [2014] NZHC 1023.
2 Ibid, at para [12].
director of Ernst Young responsible for conducting a peer review of the audit
for a particular financial year had also interviewed
by the Authority, as part
of the Serious Fraud Office’s investigation.
[6] Disclosure of relevant documents relating to Mr Pearson’s
interview was not made by the Serious Fraud Office until
after Mr Pearson
referred to it in evidence. Likewise, a transcript of Mr Loader’s
interview was made available around the
same time.
[7] The accused’s disclosure applications encompassed a
wide range of documents. Prior to the hearing,
a considerable volume of
them were provided by the Authority to the Serious Fraud Office, so that it
could make disclosure. Some
remained the subject of claims of privilege, or
confidentiality. Others were said to be irrelevant.
The criminal disclosure regime
[8] I discussed the scheme of the disclosure regime, and the place of s
30 in it, in an earlier judgment, delivered on 6 May
2014.3 In
order to make this judgment more comprehensible to those not involved directly
in this case, I repeat what I said in that decision.
[9] The purpose of the Act “is to promote fair, effective, and
efficient disclosure of relevant information between the
prosecution and the
defence, and by non-parties, for the purposes of criminal
proceedings”.4 Disclosure is required to promote an accused
person’s rights to a fair trial, and equality of arms. Those objectives
are affirmed
by the New Zealand Bill of Rights Act 1990.5 As the
Law Commission made clear in a report that was partially responsible for
introduction of the regime:6
A person accused of a crime must be made aware of the nature and extent of
the allegation; without adequate disclosure, a defendant
will be unable to
prepare their defence properly. The extent to which defendants should be
entitled to disclosure of information
from the prosecution depends upon a fair
balance between the general public interest and the important personal
3 R v Sullivan (No. 7) [2014] NZHC 925.
4 Criminal Disclosure Act, s 3(1).
5 New Zealand Bill of Rights Act 1990, ss 25(a) and 24(d) respectively.
6 Criminal Prosecution (NZLC R 66, 2000) chapter 8, para 193.
rights of individual citizens. Defendants should not be handicapped by a
lack of relevant information and by an imbalance of resources
available to them
in preparing a case compared with those resources at the disposal of the State.
...
[10] In seeking to achieve the correct balance, Parliament created two distinct regimes. One requires the prosecution to disclose information in its possession, or under its control. The other is concerned with disclosure required from non-parties to the criminal proceeding. The former puts an affirmative obligation on a prosecutor to disclose certain types of documents within stipulated times. The latter requires the Court to be satisfied that it is appropriate to force an outsider to the prosecution process to provide information in its possession or under its control. In both types of case, the Act specifies grounds on which relevant information may be
withheld, as part of the balancing exercise to which the Law Commission
referred.7
[11] Disclosure by a prosecutor has two stages; “initial
disclosure”,8 and “full disclosure”.9
If a defendant believes that a prosecutor has not disclosed all relevant
information, or has wrongfully withheld information on one
or more of the
grounds set out in ss 16, 17 and 18 of the Act, he or she may
request “additional disclosure”.10 When considering
an application for additional disclosure the Court exercises a supervisory
function to ensure that information that
has been wrongfully withheld is
disclosed.11
[12] The regime for non-party disclosure is different. The Court is involved from the outset. The starting point is an application to the Court for a non-party disclosure hearing.12 If the application for a non-party disclosure hearing were granted,13 service of the application and a summons for the non-party to produce the information would be required.14 The non-party is summoned to attend at the court
on a specified day and to bring the information requested.15
At that time, a non-party
8 Section 12.
9 Section 13.
10 Section 14.
11 Section 30.
12 Section 24.
13 Section 25.
14 Section 26.
15 Section 26(3).
disclosure hearing (at which the non-party is entitled to be heard)16
takes place. After that hearing, a judicial determination is made about
whether a non-party disclosure order should be made.17 A
variety of factors, designed to balance competing public and private
interests, are taken into account in conducting that
exercise.18
The s 30 application
(a) Jurisdiction
[13] Section 30 of the Act provides:
30 Court order for disclosure of information
(1) The defendant may apply to the Court for an order that a particular
item of information or type of information in the possession
or control of the
prosecutor be disclosed on the grounds that—
(a) the defendant is entitled to the information under section 12,
13, or 14, as the case may be, and—
(i) the prosecutor failed to disclose the information; or
(ii) the prosecutor refused under section 14, 16, 17, or
18 to disclose the information, and—
(A) none of the reasons described in section 16,
17, or 18 for which information could be withheld applies to the information;
or
(B) in the case of a refusal under section 17, the information ought to
have been disclosed under section 17(3); or
(C) in the case of a refusal under section 18, the information ought to
have been disclosed under section 18(2); or
(b) even though the information may be withheld under this Act, the
interests protected by the withholding of that information
are outweighed by
other considerations that make it desirable, in the public interest, to
disclose the information.
(2) If the Court is satisfied, on an application made under this
section, that the defendant is entitled to the disclosure of any particular
item
of information or type of information, or that any particular item
of
16 Section 27.
17 Section 29.
18 For example, see s 29(1)(b), (2) and (3).
information or type of information should be disclosed to the defendant
under subsection (1)(b), the Court may order that the item
or type of
information be disclosed to the defendant.
(3) An order made under this section may be made subject to any
conditions that the Court considers appropriate.
(Emphasis added)
[14] The s 30 application is made against the Crown, as
“prosecutor”. The first question is: who is the
“prosecutor”,
for the purposes of the Act? That term is defined by
s 6(1) of the Act. In the form in which it was expressed before the Criminal
Procedure Act 2011 came into force,19 s 6(1) stated:
prosecutor means the person who is for the time being in charge of the
file or files relating to a criminal proceeding; and includes—
(a) any other employee of the person or agency by whom the prosecutor
is employed who has responsibilities for any matter directly
connected with the
proceedings; and
(b) any counsel representing the person who laid the information in
the proceedings; and
(c) in the case of a private prosecution, the person who
laid the information and any counsel representing that
person
[15] Adams on Criminal Law20 refers to the
Solicitor-General’s Prosecution Guidelines (the Guidelines). A copy
of the Guidelines in force as at 1 July 2013 was made available to me. While
not having force in law, they
are of assistance in understanding the
Crown’s perception of its disclosure obligations. Clause 16.1
provides:21
16.1 Proper disclosure is central to preventing wrongful convictions.
Under the Criminal Disclosure Act 2008 a “prosecutor” is the
person in charge of the file or files relating to
a criminal
prosecution. Where the proceeding is a Crown prosecution, a Crown prosecutor
will have custody of the trial file but
the person in charge of the files is
the person designated by the enforcement agency as the officer or employee
responsible for the
file. The Crown prosecutor should not be considered the
“prosecutor” for the purposes of the Act. In any other
prosecution (whether conducted by a Crown prosecutor or not)
19 On 1 July 2013; see s 8 of the Criminal Disclosure Amendment Act 2011 and cl 2 of the Criminal Disclosure Amendment Act 2011 Commencement Order 2013. The informations in this proceeding were laid before that date, so the old law applies: s 397 of the Criminal Procedure Act 2011.
20 Adams on Criminal Law (looseleaf ed) para CD6.01.
21 The Serious Fraud Office is an enforcement agency to which the Guidelines apply.
the prosecutor as well as the officer or employee designed by the relevant
government agency as the person responsible for the file
is relevantly a
“prosecutor” in terms of the Act.
[16] The preponderance of evidence satisfies me that the Authority was
not a “prosecutor”. It was not “the
person who is for the
time being in charge of the file or files relating to a criminal
proceeding”. That was a designated
officer of the Serious Fraud
Office.
[17] As I see it, the real issue is whether the Authority generated or
received disclosable information while undertaking investigative
functions on
behalf of the Serious Fraud Office. If it did, then the Serious Fraud Office,
(as principal) had the ability to call
for that information from the Authority
(as its agent). When the respective roles of the two law enforcement agencies
are analysed
in terms of one acting as the agent of the other, it becomes easier
to resolve the present issue. The same principle will apply
in any case where
one law enforcement agency undertakes investigative work on behalf of
another.
[18] My approach is consistent with the definition of “prosecutor” in s 6(1) of the Act.22 It envisages one person having responsibility for disclosure on behalf of the prosecuting agency. Other than in the case of a private prosecution,23 the legislative intent is to ensure that relevant information held on behalf of the “prosecutor” is disclosed, under the authority of the “officer in charge”, by whatever name he or she
is called.
[19] Information24 that is physically held (whether in
electronic or paper form) is in the “possession” of the
“prosecutor”.
Any information that is in the possession of a third
party (normally another enforcement agency) that has been asked to
undertake inquiries for the purpose of the prosecution remains under the
“control” of the “prosecutor”.
[20] However, any information that comes into the possession of the agent
(in this case, the Authority) as a result of inquiries
undertaken for purposes
other than the
22 Set out at para [10] above.
23 To which para (c) of the definition of prosecutor expressly refers.
24 Defined by s 6(2) of the Criminal Disclosure Act 2008.
prosecution does not fall within the ambit of the prosecutor’s
obligations of discovery. An example, in the context
of the present case, is
a transcript of an interview with a Crown witness in this proceeding that the
Authority undertook to determine
whether to exercise its powers to bring civil
proceedings against persons associated with South Canterbury. Disclosure of any
such
documents must remain the subject of the non-party disclosure provisions of
the Act.
(b) Disclosure issues
[21] Mr Rennie QC, for the Authority, made it clear that documents held
by the Authority that had come into existence following
inquiries made on behalf
of the Serious Fraud Office would be passed to the Serious Fraud Office for it
to make disclosure to the
accused. Mr Rennie submitted that the Authority
could only be viewed as a “non-party” for the purposes of a
disclosure
application.
[22] Mr Hall QC, on behalf of all accused, indicated some concern at the
absence of disclosure of notices issued by the Authority
under s 25 of the
Financial Markets Act 2011. During the course of the hearing, I granted a short
adjournment so that Mr Rennie
could make copies available to Mr Hall. On
resumption, Mr Hall indicated that disclosure had been helpful and, save for one
particular
issue, was content to discuss matters further with Mr Rennie in an
endeavour to resolve concerns.
[23] The outstanding issue concerned disclosure of information requested
about the interview of Mr Pearson by the Authority.
It is clear from the
opening part of the transcript of his interview (which is all I have seen at
present) that it was being conducted
on behalf of the Serious Fraud Office, for
the purposes of the prosecution. At the time of the interview, on 29 March 2012,
the prosecution
was already on foot, informations having been filed in December
2011.
[24] In the s 30 application, the documents which were asserted to fall
into this category were described as follows:25
(vii) a copy of all correspondence between the [Authority] and Mr Byron
Pearson concerning his draft brief of evidence and amendments,
including copies of all correspondence copied to [Serious Fraud
Office] and Meredith Connell concerning this brief of evidence.
(viii) copies of all documents sent to Mr Pearson and documents received
by the [Authority] from Mr Pearson.
[25] Mr Lunjevich holds the position as “Manager, Evidence”
in the Enforcement Team at the Authority. He is responsible
for managing the
investigating and forensic accounting team. He gave evidence in relation
to the various categories of
documents requested under both the s 30 and
non-party applications. In relation to the classes of documents that remain in
issue,
he deposed:
(vii) A copy of all correspondence between [the
Authority] and Mr Byron Pearson concerning his draft brief of evidence
and
amendments, including copies of all correspondence copied to [Serious Fraud
Office] and Meredith Connell concerning this brief
of evidence;
25 [The Authority] holds some correspondence
concerning Mr Pearson’s draft brief of evidence. However,
this is
privileged and in my view does not appear to relate to the
credibility of Mr Pearson and is not relevant. [The
Authority] does not waive
privilege in that material.
(viii) Copies of all documents sent to Mr Pearson and document
received by [the Authority] from Mr Pearson
26 No documents were sent to or received from Mr Pearson other than
correspondence and draft statements which are privileged
and not relevant.
[The Authority] has obtained some personal information from Mr Pearson in the
course of its civil claim inquiries,
which are not relevant to the criminal
proceedings.
[26] Mr Rennie indicated that litigation privilege26 was
claimed in respect of these documents. He indicated that the Authority was
prepared to make them available to the Serious Fraud
Office on the basis that
the documents were held on its behalf.
[27] I asked Mr Flanagan, for the Crown, whether there was any objection by the “prosecutor” to waiver of privilege and disclosure of these documents to the accused. Mr Flanagan confirmed that the documents could be disclosed. That being so, it is unnecessary to make an order at this stage.
[28] I record that Mr Rennie indicated that the documents may not
necessarily provide the information required by the accused,
in relation to an
alleged substantial change to Mr Pearson’s evidence between the time at
which he provided an amended brief
to the Authority and the time that he signed
the final version of his brief. Be that as it may, the documents held by the
Authority
are to be disclosed and Mr Flanagan has assured me there are no
others in existence that have not been disclosed by
the Serious Fraud
Office previously.
[29] On that basis, given the need for further communication among
counsel in respect of the documents disclosed (and to be disclosed)
as a result
of the s 30 application, that application is adjourned to be brought on at 24
hours notice if necessary.
The non-party application
[30] Mr Hall accepted that, having regard to the stance taken by the
Authority and to the ruling I had indicated I would make
on jurisdictional
issues, he did not propose to press the non-party disclosure application at this
stage. He was content to deal
directly with Mr Rennie, should any difficulties
arise.
[31] That being so, it is unnecessary for me to consider this aspect
further. The non-party disclosure application is adjourned
on the same
basis as the s 30 application.
Additional comments
[32] I expressed some frustration during the course of the disclosure
hearing about the way in which additional documents seemed
to have been coming
to light, following the evidence given by Ms Tierney and Mr Pearson. I do not
propose to ascribe blame. That
would be a pointless exercise, at this stage.
Counsel for the Crown have provided an explanation as to why disclosure had not
been
made previously. I accept their assurances, as officers of the
Court.
[33] I do wish to make some general comments about the nature of disclosure obligations, in case they become relevant later in this trial.
[34] First, as I understand the Crown to acknowledge, its role is not as an adversary party but, rather, as a “minister of justice” with the obligation of disclosing all relevant information to the accused. Disclosure issues must always be considered on the basis that information in the possession or control of the Crown is not something held by it for the purpose of securing a conviction. Rather, as Sopinka J
aptly put it in R v Stinchcombe:27
I would add that the fruits of the investigation which are in the possession
of counsel for the Crown are not the property of the
Crown for use in securing a
conviction but the property of the public to be used to ensure that justice is
done. ...
[35] Second, all statements, or notes of interview, from persons
who have provided relevant information to the prosecutor,
irrespective of
whether that person is to be called as a Crown witness. It is not for the Crown
to determine whether such statements
may or may not be relevant. In
Stinchcombe,28 the Supreme Court of Canada addressed this
point. For the Court, Sopinka J said:29
I am of the opinion that, subject to the discretion to which I have referred
above, all statements obtained from persons who have
provided relevant
information to the authorities should be produced notwithstanding that they are
not proposed as Crown witnesses.
Where statements are not in existence, other
information such as notes should be produced, and, if there are no notes, then
in addition
to the name, address and occupation of the witness, all information
in the possession of the prosecution relating to any relevant
evidence that the
person could give should be supplied. I do not find the comments of the
Commission in its 1984 Report persuasive.
If the information is of no use then
presumably it is irrelevant and will be excluded in the exercise of the
discretion of the
Crown. If the information is of some use then it is
relevant and the determination as to whether it is sufficiently useful to put
into evidence
should be made by the defence and not the prosecutor.
Moreover, I do not understand the Commission’s statement that
“[t]heir statements are not evidence”. That is
true of all witness
statements. They themselves are not evidence but are produced not because they
will be put in evidence in that
form but will enable the evidence to be called
viva voce. That prosecutors are reluctant to disclose statements because
use of them in cross-examination is thereby rendered less effective
is
27 R v Stinchcombe [1991] 3 SCR 326 (SCC) at 333.
28 Ibid.
29 Ibid, at 345–346. The Court was referring to a report by the Law Reform Commission of
Canada which, in a 1984 report considered criminal disclosure issues.
understandable. That is an objection to all forms of discovery
and disclosure. Tactical advantage must be sacrificed
in the interests of
fairness and the ascertainment of the true facts of the case.
(Emphasis added)
[36] That approach is not inconsistent with s 16(1)(o) of the Act, which
entitles the prosecutor to withhold information that
reflects on the credibility
of a witness who is not to be called by the prosecutor to give evidence but who
may be called by the
defendant, provided it is not relevant for any other
purpose. That exception to the general rule on disclosure is designed to enable
the prosecutor to challenge the credibility of a witness whom it has decided not
to call by reference to information in the possession
or control of the
prosecutor that does not need to be disclosed to the accused for any other
reason.
[37] Third, it is important to bear in mind the difference
between fair trial concerns (which the Act is designed
to promote) and
questions of trial strategy. This point was well made by Dobson J in R v
Graham.30 His Honour said that it was “inadequate for an
accused to pursue ... an application [for disclosure] on the basis that he or
she considers that disclosure is relevant, but is not prepared to reveal why in
order to maintain [the accused’s] right to
silence”.
[38] In an example debated at the hearing of the present applications,
there was an attempt made to obtain information about whether
Mr Graham (the
forensic accountant to be called as a Crown witness) had relied on the
transcript of Mr Loader’s interview with
the Authority, a document which
Mr Lunjevich gave evidence had been made available to him.
[39] It is unnecessary for an expert witness to list all documents considered by him or her in the process of forming an opinion; only those on which reliance is placed. If the accused wish to challenge the expert on whether he ought to have relied on opinions expressed in Mr Loader’s transcribed interview, it is open for their counsel to do so through cross-examination. If they intend to call an expert witness
to rebut Mr Graham’s testimony (and I do not know if they will)
his or her views will
30 R v Graham HC Wellington CRI-2010-085-2538, 10 May 2011 at para [16].
need to be put to Mr Graham. The point raised on behalf of the accused is
not a disclosure issue. Nor is it a fair trial issue.
It is a trial strategy
issue.
Result
[40] The application under s 30 of the Act, and the application for non-party disclosure are each adjourned for further consideration, if necessary. They may be brought on at 24 hours’ notice if any issues arise that require reconsideration of the
disclosure issues raised by the accused’s
applications.
P R Heath J
Delivered at 10.00am on 23 May 2014
Solicitors:
Serious Fraud Office, PO Box 7124, Wellesley Street, Auckland
Meredith Connell, PO Box 2213, Auckland
Gresson Dorman & Co, PO Box 244, Timaru
Rhodes & Co, PO Box 13444, Armagh, Christchurch
Duncan Cotterill, PO Box 5, Christchurch
Financial Markets Authority, 2 Takutai Square, Auckland
Counsel:
C Carruthers QC, PO Box 305, Wellington 6140
P H B Hall QC, PO Box 3750, Christchurch
R B Squire QC, PO Box 10157, Wellington
J H M Eaton QC, PO Box 13868, Armagh, Christchurch
H B Rennie QC, PO Box 10242, Wellington
M Corlett, PO Box 4338, Shortland Street, Auckland
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