Harriman v Police [2014] NZHC 2213 (12 September 2014)

Last Updated: 3 October 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2005-004-14921 [2014] NZHC 2213

BETWEEN	ALLEN LOUIS HARRIMAN Appellant
AND	NEW ZEALAND POLICE Respondent

Hearing:	2 September 2014
Counsel:	TW Fournier for Appellant MR Harborow for Respondent
Judgment:	12 September 2014

_{JUDGMENT OF FOGARTY J}

This judgment was delivered by me on 12 September 2014 at 4.30 p.m., pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ...............................

Solicitors: Christopher Morrall, Christchurch

Meredith Connell, Auckland

HARRIMAN v POLICE [2014] NZHC 2213 [12 September 2014]

Introduction

[1] Mr Harriman seeks an award of costs of $7,723.13 incurred by him in successfully defending two representative charges of importing a controlled drug and selling a controlled drug to persons unknown.

[2] On 21 June 2006, the Crown Solicitor at Auckland laid an indictment against

Mr Harriman of nine charges. The first two charges were as follows:

1 THE CROWN SOLICITOR AT AUCKLAND charges that ALLEN LOUIS HARRIMAN between 1 December 2001 and 26 June 2005, at Auckland, imported into New Zealand a controlled drug.

REPRESENTATIVE CHARGE

2 THE said Crown Solicitor further charges that ALLEN LOUIS HARRIMAN between 1 December 2001 and 26 June 2005, at Auckland and elsewhere within New Zealand, did sell a controlled drug to a person or persons unknown.

REPRESENTATIVE CHARGE

[3] The remaining seven charges were more orthodox in that the drug concerned was defined as “a class B controlled drug MDMA” or “a class A controlled drug heroin” or “a class A controlled drug methamphetamine”.

[4] In June 2007, count 2 was discharged under s 342(1) of the Crimes Act 1961 on the basis that the account did not disclose an offence in law.

[5] On 14 December 2007, Harrison J discharged Mr Harriman on the first count, by this stage amended informally to being a count of importing MDMA (ecstasy).¹

[6] These two counts had been severed from the trial indictment as originally laid because they were variously subject to ss 344A and 347 applications.

[7] At the time of the laying of the indictment, the prosecutors were subject to the Prosecution Guidelines of 1992. These set out two considerations for deciding

¹ R v Harriman HC Auckland CRI-2005-404-14921, 14 December 2007.

when to prosecute: an evidential threshold test and a public interest consideration. As to the evidential threshold test, the guidelines provide:

3.1 Evidential Sufficiency

The first question always to be considered under this head is whether the prosecutor is satisfied that there is admissible and reliable evidence that an offence had been committed by an identifiable person.

The second question is whether that evidence is sufficiently strong to establish a prima facie case; that is, if that evidence is accepted as credible by a properly directed jury it could find guilty beyond reasonable doubt.

[8] That test is essentially the same test for s 347 of the Act. It would be clearly improper for the prosecution to lay a charge incapable of being proved beyond reasonable doubt.

[9] Section 5 of the Costs in Criminal Cases Act 1967 provides:

5 Costs of successful defendant

(1) Where any defendant is acquitted of an offence or where the [charge] is dismissed or withdrawn, whether upon the merits or otherwise, ... the Court may, subject to any regulations made under this Act, order that he be paid such sum as it thinks just and reasonable towards the costs of his defence.

(2) Without limiting or affecting the Court's discretion under subsection (1) of this section, it is hereby declared that the Court, in deciding whether to grant costs and the amount of any costs granted, shall have regard to all relevant circumstances and in particular (where appropriate) to—

(a) Whether the prosecution acted in good faith in bringing and continuing the proceedings:

(b) Whether at the commencement of the proceedings the prosecution had sufficient evidence to support the conviction of the defendant in the absence of contrary evidence:

(c) Whether the prosecution took proper steps to investigate any matter coming into its hands which suggested that the defendant might not be guilty:

(d) Whether generally the investigation into the offence was conducted in a reasonable and proper manner:

(e) Whether the evidence as a whole would support a finding of guilt but the [charge] was dismissed on a technical point:

(f) Whether the [charge] was dismissed because the defendant established (either by the evidence of witnesses called by him or by the cross-examination of witnesses for the prosecution or otherwise) that he was not guilty:

(g) Whether the behaviour of the defendant in relation to the acts or omissions on which the charge was based and to the investigation and proceedings was such that a sum should be paid towards the costs of his defence.

(3) There shall be no presumption for or against the granting of costs in any case.

(4) No defendant shall be granted costs under this section by reason only of the fact that he has been acquitted or [that any charge] has been dismissed or withdrawn.

(5) No defendant shall be refused costs under this section by reason only of the fact that the proceedings were properly brought and continued.

[10] In this disputed application for costs, the consideration disputed by counsel before the Court was s (2)(b).

[11] Little turns on the discharge of count 2. In 2007 the Court of Appeal, in the case of R v Fonotia,² held that there was no offence of “selling a controlled drug”, the reasoning being that the relevant section required proof of the class of drug supplied (or sold). ³ Shortly after that decision, the case was called and the count was quashed.

[12] The argument for costs turns on the attendances of counsel for the hearing before Harrison J in the High Court.

[13] At the hearing on 14 December there were two independent applications. The Crown was seeking a direction for propensity evidence to be admitted at the trial. The other application was by Mr Harriman for an order discharging him from the trial.

[14] I have already referred to the first two charges being severed from the original indictment. On the remaining charges, Mr Harriman was committed for trial

_{in the High Court. At the commencement of the trial in December 2006,}

² _{R v Fonotia [2007] NZCA 188.}

³ At [20].

Mr Harriman pleaded guilty to one charge of importing MDMA and another charge of possession of that drug for supply, both on 24 July 2005 (counts 7 and 8). At the conclusion of the trial he was found guilty of separate counts of importing MDMA, on 26 June 2005; conspiring with others to import MDMA, between 26 June and

24 July 2005; conspiring to import heroin between the same dates; and possession for supply, on 24 July 2005 (counts 3, 4, 5 and 9).

[15] By way of a s 344A application, the Crown sought to admit evidence of the discovery of the MDMA tablets on Mr Harriman at Auckland International Airport and his convictions for importing the same in mid-2005. The application relied on the provisions as to propensity evidence in ss 40 and 43 of the Evidence Act 2006 which came into force on 1 April 2007.

[16] Most of the reasoning of the Judge was naturally on the question of whether or not the other offending for which Mr Harriman was convicted laid the foundation for propensity evidence.

[17] In respect of counts 1 and 2, the Crown relied upon a history of short round- the-world trips of 8 - 11 days from Auckland, via Singapore, to Vienna and back. There were trips in September and November 2004, April, June and July 2005, the latter two resulting in proof that he was bringing in ecstasy in June and July.

[18] Allied to that, the Crown had financial records showing that from 2001 onwards the defendant was frequently depositing large amounts of cash into his bank account. This continued through to 2005.

[19] Coupled with the proven importations in June and July 2005 on seven different counts, the Crown sought to persuade the jury beyond reasonable doubt that on at least one occasion, between 1 December 2001 and 26 June 2005, he imported a controlled drug. Likewise, on at least one occasion, he sold that controlled drug to a person or persons unknown.

[20] Relevant paragraphs of Harrison J’s propensity reasoning are as follows:

[9] Mr Tantrum submits that the probative value of what he says is the propensity evidence – discovery of the MDMA tablets on Mr Harriman at Auckland International Airport and his convictions for importing in mid

2005 – is very high. He relies on the factors set out in s 43(3) Evidence Act

2006. His argument proceeds on the premise that these events fall within the statutory definition of propensity evidence as: s 40(1)(a):

... mean[ing] evidence that tends to show a person’s propensity to act in a particular way or to have a particular state of mind, being evidence of acts, omissions, events, or circumstances with which a person is alleged to have been involved...

[10] Proof that the mid 2005 convictions and conduct satisfy this statutory requirement is the threshold step for the Crown. While I am ultimately basing my decision on other grounds, I am not sure that the test is met here. What is propensity evidence is, of course, intensely practical or circumstantial. But there has to be a reliable framework within which to work.

[11] In my respectful view, there are problems with the statutory definition. An immediate circularity is apparent in saying that propensity evidence is evidence ‘that tends to show a person’s propensity’. The New Shorter Oxford English Dictionary defines propensity as an inclination, tendency, leaning or disposition. A definition that relies on tending to show a tendency is not instructive.

[12] What might constitute propensity evidence in a particular situation was considered in R v Hanson [2005] 1 WLR 3169 (CA) at para 9 as follows:

There is no minimum number of events necessary to demonstrate such a propensity. The fewer the number of convictions the weaker is likely to be the evidence of propensity. A single previous conviction for an offence of the same description or category will often not show propensity. But it may do so where, for example, it shows a tendency to unusual behaviour [not at issue here] or where its circumstances demonstrate probative force in relation to the offence charged: compare Director of Public Prosecutions v P [1991] 2 AC 447, 460-461. Child sexual abuse or fire setting are comparatively clear examples of such unusual behaviour but we attempt no exhaustive list...

[13] Leaving aside the semantic problems with the statutory definition in s 40(1)(a), I am not necessarily satisfied that convictions for three discrete acts in June and July 2005 display a predisposition, tendency or leaning for a certain type of behaviour, especially where it occurred some time after the alleged offending. Three separate acts, performed closely in time, do not seem to demonstrate what might be called a propensity. The position might be otherwise if they could be linked to a discrete earlier event which cumulatively showed a pattern or course of behaviour.

[14] The Evidence Act 2006 is said to codify existing principles. But it is difficult to imagine that 20 or even 15 years ago, when the Court of Appeal decided R v Accused (CA247/91) [1992] 2 NZLR 187, that the Crown would rely on Mr Harriman’s 2005 convictions and conduct to justify what was then known as the similar fact or discrete conduct test.

[15] I note that our Court of Appeal has recently cited the passage from Hanson at para 9: R v Taea CA442/07 31 October 2007 at [38]. But it was not called on to consider the s 40(1)(a) definition. That issue may fall for consideration by the Court of Appeal on another day. In Taea the Court’s focus was more on s 43(3), which I shall now consider.

[21] The Judge then goes on to distinguish the case of Taea on the facts as containing evidence independently of propensity evidence and the actual commission of the crimes of supplying methamphetamine. Then he went on:

[20] This case is very different. The Crown’s argument presupposes the existence of a course of relevant criminal conduct. But there is no proven conduct other than the facts of travel and receipt of unexplained income. There is no independent evidence to establish the actual commission of a crime at all during the relevant period; that is, that a Class B controlled drug was ever imported, which is the central part of the previous course of conduct the Crown seeks to prove. Again R v Accused (CA247/91) makes this requirement essential.

[21] The propensity evidence would sit in isolation to demonstrate events occurring afterwards and unrelated to what is said to have occurred in the previous four years. A Judge directing a jury would have no point of reference for the so-called propensity evidence to the circumstances of this charge. Unlike Taea’s case, it would not provide probative support for a particular fact or facts in issue. In practical terms, the Judge would never be able to properly direct a jury that the propensity evidence, coupled with receipt of unexplained income and overseas travel – which separately or together do not establish any criminality – could assist in providing a proper or reliable foundation for drawing an inference of guilt of importing on other occasions.

...

[24] I repeat Mr Tantrum’s proper concession. Without the propensity evidence the Crown has no case against Mr Harriman at all. Mr Tantrum accepts that evidence of frequent overseas travel and substantial unexplained income could never provide a sufficient evidential foundation for the Crown’s case.

[22] Mr Fournier invited me to find that Harrison J’s judgment clinched the issue as to whether or not the Crown had a prima facie case for laying the two counts when it did, on 21 June 2006.

[23] It is, however, not as simple as that. Harrison J’s judgment was delivered nearly 18 months later. Mr Harborow argued that the propensity issue could have been decided the other way in favour of the Crown, that the decision of the High Court was not a foregone conclusion. He noted that Harrison J’s judgment, delivered

on the day of hearing, did not review all the evidence intended to be relied upon by the Crown in respect of counts 1 and 2. Harrison J did not refer to the evidence of the European trips in 2004 and in April 2005. I have referred to these above. These were clearly business trips. One does not fly from Auckland to Vienna and back for

8, 9 or 11 days for a holiday. In addition, the Crown had an intercept on Mr Harriman and recorded him as saying, “After arriving in Auckland on 26 June with 12,000 ecstasy, that that was a better trip than the last couple of trips”.

[24] Had the Court gone to trial, the Crown would have invited the jury to draw an inference that the defendant would not be making regular business trips without success and that in the context of the proven trips, as a result of which he brought in ecstasy, they were entitled to draw the conclusion that on the earlier trips he went to Vienna to get ecstasy. Given the cost of that exercise and the scale of the proven offending, he was going there in order to buy drugs in commercial quantities.

[25] So the Crown argued the propensity case was not hopeless when one takes all the evidence into account. Mr Harborow invited the Court not to forget the detailed financial evidence of the frequency of cash deposits into his bank account. Neither the common law on similar facts, nor the application of ss 40 and 43 of the Evidence Act, have proven easy for the bar and judges.

[26] It is difficult after this lapse of time, more than seven years after the judgment of Harrison J, to put one’s mind into the profession’s appreciation of the scope and application of propensity evidence under the Evidence Act when it came into effect in April 2007. Mr Harborow argued that the willingness of the High Court to admit propensity evidence, guided by the Court of Appeal and now the Supreme Court, has waxed and waned over the years. He emphasised the critical time to assess the judgment of the Crown prosecutor was prior to and independent of the judgment of Harrison J in the High Court in December 2007. I agree.

[27] At the end of vigorous oral argument, in the best traditions of the bar, I was left with the judgment that the evidence held by the Crown at the time they laid the indictment was sufficiently strong for the Crown counsel to have in good faith formed a judgment that they had enough evidence which, if accepted as credible by a

properly directed jury, could find the defendant guilty of the first count. That judgment is not disagreeing with the analysis of Harrison J.

[28] The question is, what is the consequence of that judgment when applying the criteria in s 5(2), particularly (b). The judgment clearly answers the first question in subs 2(a):

Whether the prosecution acted in good faith in bringing and continuing the proceedings.

[29] But the second question is clearly objective. My judgment as to the good faith of the prosecution does not answer criterion (b).

[30] Mr Fournier’s submission was that when applying subs 2(b), I was bound to

follow the judgment of Harrison J. He did not elaborate.

[31] I consider that the Crown is bound by the findings of Harrison J and, as quoted above, they are quite firm. I refer to [24] of his judgment. The common law of res judicata and issue estoppel applies where appropriate to criminal proceedings. The common law abhors the possibility of different rulings on the same issue between the two parties. I have noted already the overlap between the prima facie threshold of the prosecutors 1992 guidelines and s 347. I will not allow the same issue to be litigated between the parties. Therefore, Harrison J’s judgment applies to resolve the application of s 5(2)(b), in favour of the defendant.

[32] For that reason, I conclude that at the commencement of the proceedings, the prosecution did not have sufficient evidence to support the conviction of the defendant in the absence of contrary evidence on the first count.

[33] Mr Fournier submitted that the remaining criteria were in the facts of this case not necessary to take into account as they were not “appropriate” as that term is used in the opening lines of subs (2). I agree. I also note that Mr Harborow did not argue to the contrary.

[34] Rather, Mr Harborow relied upon dicta of the Court of Appeal in R v Connolly⁴ where the Court set out the positive reasons why costs should be awarded to defendants, arguing implicitly that those positive reasons are not made out in this case.

[35] In R v Connolly the Court of Appeal said as follows:⁵

(a) People accused of criminal offences can be put to a great deal of expense in defending themselves. Unlike defendants in civil actions, they cannot simply compromise their positions because their liberty, reputation and pocket may all be at risk ...

(b) If a prosecution has been brought for a malicious or improper reason, the defendant should receive costs.

(c) It is reasonable that, if a prosecution has been conducted in a negligent manner (for example if the facts have not been properly investigated) that the defendant should receive costs.

(d) Costs should not be awarded simply because a defendant has been acquitted. This arises because of the “lucky to get off factor” as well as because the verdict is expressed negatively as “not guilty”.

(e) In cases where the prosecution has been reasonably conducted, but the defendant has been able to show he or she is definitely or probably innocent by showing a deficiency in the prosecution case or bringing credible witnesses to shed a more favourable light on the circumstances, it will be reasonable for a costs award to be made in favour of a defendant.

[36] Paragraph (e) is applicable to this case. I have made a finding of fact that these additional two charges were laid in good faith. That finding is not inconsistent with the clear finding of Harrison J that no inferences could be drawn by taking all the trips to Vienna in combination.

[37] Mr Fournier argues that in the course of the prosecution the Crown wrongly persisted with these charges. He contends that the unexplained income of Mr Harriman was declared to the Inland Revenue for taxation purposes. He draws attention to Mr Harriman’s trial counsel applying for further particulars in September

_{2006. Despite the Crown not being able to produce further particulars at that date, it}

⁴ _{R v Connolly [2006] NZCA 338; (2007) 23 NZTC 21,172 (CA).}

⁵ At [22].

persisted with “a pretence” it would be able to do so. He also relies on [25] of the

judgment of Harrison J where the Judge says:

The gist of Mr Reid’s letter of 11 February, following his explanation of the shift in view of the IRD was:

It seems to me that the investors, who were independently advised, received what they contracted for. They have their loan and they have their insurance policy which, if they were to make a claim under it, could be met.

[38] Mr Fournier’s client was a drug dealer. He was convicted of the other

charges. Hardie Boys J in R v Margaritis said at page 8: ⁶

Various criteria in s 5 really come down to two questions: was the prosecution reasonably and properly brought and pursued; did the accused bring the charge on his head?

[39] Given the presence of the other drug dealing charges and the coincidence of the unexplained trips as to any other business purpose, in my judgment the prosecution was reasonably and properly brought and pursued. Second, and critically for this analysis, the accused brought the charge on his own head. In the course of the case, he never offered any alternative explanation for his trips to Vienna where it could not be proved he brought back drugs. Notwithstanding the application of s 2(b), which is a factor only, for these reasons, I do not favour exercising the discretion under s 5 to grant costs.

[40] In case this case goes further, I turn to the question of the quantum of costs.

Costs

[41] The next issue was the quantum of costs. Mr Harriman was seeking indemnity costs. His application produces the invoice he was charged for counts 1 and 2. That was not disputed. There was no suggestion that the fee was unreasonable.

[42] The Crown, however, argued that s 13(3) of the Act applied. Section 13 provides:

⁶ R v Margaritis HC Christchurch T664/88, 14 July 1989.

13 Regulations

(1) The Governor-General may from time to time, by Order in Council, make regulations for all or any of the following purposes:

(a) Prescribing the heads of costs that may be ordered to be paid under this Act:

(b) Prescribing maximum scales of costs that may be ordered to be paid under this Act:

(c) Prescribing the manner in which costs for which the Crown is liable shall be claimed from or paid by the Crown:

(d) Providing for such matters as are contemplated by or necessary for giving full effect to the provisions of this Act and for the due administration thereof.

(2) Any regulations made under this Act may—

(a) Apply scales of costs, fees, or expenses prescribed from time to time under other enactments:

(b) Delegate, or empower a Court to delegate, to any person or officer the power to determine the costs to be allowed under any particular head.

(3) Where any maximum scale of costs is prescribed by regulation, the Court may nevertheless make an order for the payment of costs in excess of that scale if it is satisfied that, having regard to the special difficulty, complexity, or importance of the case, the payment of greater costs is desirable.

[43] Mr Harborow argued that the Court was bound to award costs to the scale in the regulations. He argued that by applying the regulations, Mr Harriman was entitled to recover for two appearances in Court, the appearance for the strike-out of count 2 and the appearance of counsel to argue for the strike out of count 1 before Harrison J. An allowance of 0.25 a day for the first appearance and either 0.5 - 0.75 for one day before Harrison J.

[44] The scale provides for $113 a day. On any view of it, even if the Court allowed a longer time, the Crown argued the costs award should not exceed $200.

[45] By s 13(3), the Court may make an order for payment of costs in excess of the scale if, having regard to the special difficulty or complexity of the case, the payment of greater costs is desirable.

[46] The common law of similar fact and the statute law of propensity is properly regarded by the profession as law of special difficulty. It has to negotiate the prejudicial appeal of similar fact evidence against the need for there to be a probative or rational utility in the evidence to be taken into account. It would be entirely irresponsible for counsel for Mr Harriman to just turn up without significant preparation for the hearing if the admissibility/propensity evidence. I am satisfied that this is a case where the Court would be entitled to exercise the power granted in this context in s 13(3) to make an order in excess of the scale of costs.

[47] Mr Harborow, anticipating this however, also warned that it did not follow that the Court would move from the scale allowed in the regulations under this Act to indemnity costs. I agree.

[48] I would have favoured costs in the order of 50 per cent of the invoice rendered for the services relating to these two charges, one and two, principally for the s 347 application which succeeded.

Result

[49] This application fails. In the circumstances there is no order for costs.