R v Love [2016] NZHC 1958 (19 August 2016)

Last Updated: 23 May 2018

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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CRI-2013-485-379 [2016] NZHC 1958

THE QUEEN

v

_{RALPH HEBERLEY NGATATA LOVE}

Hearing:	19 August 2016
Appearances:	G J Burston, M J Ferrier and R Parlane for Crown C R Carruthers QC and B Farquhar for Defendant
Judgment:	19 August 2016

(ORAL) JUDGMENT OF LANG J

_{[on application for discharge under s 347 of the Crimes Act 1961]}

R v LOVE [2016] NZHC 1958 [19 August 2016]

[1] Dr Love faces two charges laid in the alternative. They are obtaining property by deception¹ and corruptly obtaining a secret commission.²

[2] The Crown case has now concluded. Mr Carruthers, counsel for Dr Love, has now applied for an order that Dr Love be discharged on both charges on the basis that there is insufficient evidence on which a properly directed finder of fact could find Dr Love guilty.³

[3] There is no dispute regarding the legal principles to be applied in this context. They are derived from well known cases such as R v Flyger and Parris v Attorney General.⁴ In Flyger the Court of Appeal said:⁵

A Judge should not normally make an order for discharge pursuant to s 347(3) where there is before the Court evidence which, if accepted, would as a matter of law be sufficient to prove the case. The Judge’s function in these circumstances is not to attempt to predict the outcome but to examine the evidence in terms of adequacy of proof if accepted.

[4] Mr Carruthers summarised the principles to be distilled from the cases in the following propositions which I am content to adopt:

(a) It is not for a Judge to predict the outcome of a trial.

(b) The key task is to assess whether there is some evidence not inherently flawed that would establish the guilt of the accused. If there is, the matter must be left to the jury.

(c) In undertaking the assessment of Crown evidence on a s 347 application, that evidence should be viewed “at its highest”.

(d) Unless the case is clear cut in favour of the defendant, it should be left for the jury to decide.

¹ Crimes Act 1961, s 240(1).

² Secret Commissions Act 1910, s 8.

³ Crimes Act 1961, s 347. The charges were laid prior to the commencement of the Criminal

Procedure Act 2011.

⁴ R v Flyger [2001] 2 NZLR 721 (CA); Parris v Attorney-General [2004] 1 NZLR 519 (CA).

⁵ R v Flyger, at [13].

[5] I consider that those general principles apply equally to a trial before a Judge sitting without a jury.⁶

Elements of the first charge

[6] In the present case the Crown must prove three elements in relation to the first charge. The first is that Dr Love obtained property. The second and third are that he did so by deception and without claim of right.

[7] The Crown advances its case on several alternative bases. For present purposes I proceed on the basis of just one of these. This is the allegation that Dr Love obtained property by means of a fraudulent stratagem used with intent to deceive any person.

The obtaining of property

[8] The first issue is whether Dr Love received any property. I do not propose to summarise the transactions that led to the ultimate payments on which the Crown relies. There is clear evidence, however, that payments were made from entities associated with Redwood Group and Equinox Group to a company called Pipitea Street Developments Limited (PSDL). That company had been formed by Dr Love’s partner, Ms Skiffington, and Mr Shaan Stevens. From PSDL, funds totalling $1.4 million were transferred in two tranches to a joint bank account in the name of two trusts that had been settled a short time earlier by Dr Love and Ms Skiffington. From that account, and on the same day, the sum of $1.4 million was transferred into another account in the name of the trusts. That account was in debit to the extent of approximately $1.8 million.

[9] Dr Love and Ms Skiffington were personally liable in respect of that loan by virtue of a term loan agreement they had entered into with the Westpac Banking Corporation when they purchased a house property situated at 12 Moana Road, Plimmerton in December 2007. The effect of the payments into that loan account was to reduce Dr Love’s liability to the bank by the amount paid into the account. I am

_{therefore satisfied that it is arguable that Dr Love received property.}

⁶ Haw Tua Hau v Public Prosecutor [1982] Academy 136 at 151-152 (PC).

Deception and without claim of right

[10] The second and third issues are whether or not Dr Love obtained the property by deception and without colour of right. For present purposes those two concepts shade into one.

The arguments

[11] The Crown contends that Dr Love received the property by deception because he knew that Redwood Group and Equinox had offered to pay the Tenths Trust, of which Dr Love was Chairman, the sum of $3 million in order to purchase the right to lease the property controlled by the Trust and situated at 1-15 Pipitea Street, Thorndon. The Crown contends that Dr Love did not pass on that offer to his fellow trustees and that, a short time later, he received the benefit of payments made to PSDL. That company in turn had entered into a services agreement with the developers under which PSDL was to receive the sum of $3 million.

[12] In essence, the Crown alleges that the sum of $1.5 million that was originally to be paid to the Trust was instead paid to Ms Skiffington’s company. The funds were then used with Dr Love’s knowledge to reduce the mortgage taken out to purchase the Moana Road property.

[13] Mr Carruthers submits that there is no deception and no intention to deceive. He points out that at a meeting of trustees on 28 November 2006, the trustees passed a resolution authorising the appointment of an independent firm to carry out negotiations with the property developers. The developers were to meet that firm’s costs and expenses.

[14] Mr Carruthers therefore submits that Dr Love and Ms Skiffington were entitled to proceed to deal with the developers on the basis that they had the authority of the trustees to implement the proposal that the trustees had earler approved. As a result they were entitled to receive such fees as they might negotiate directly with the developers. Mr Carruthers submits that the Trust had no interest in any arrangement that the developers and PSDL might reach because that was a matter strictly between

them the developers and PSDL. The Trust could therefore not suffer detriment as a result of any arrangement that PSDL might enter into with the developers.

Decision

[15] It is important to emphasise that I am not determining the present application on the basis that I have weighed of all the evidence. I am not required to determine whether or not the Crown has proved elements of the charge beyond reasonable doubt. Nor am I required to determine whether scenarios to which the defendant points are a reasonable possibility. All of those matters come into play at the end of the case when the Court is required to reach its formal verdict.

[16] For present purposes I am satisfied that the Crown has adduced sufficient evidence of deception to permit the case to proceed further. The starting point is that Dr Love was present at a meeting with one of the developers (Mr Knight) on 22

November 2006 from which subsequent negotiations flowed. The evidence of Mr Knight establishes that he had a telephone conversation with Dr Love on the afternoon of 23 November at which tentative agreement as to the commercial terms of an agreement to lease was reached. A short time later, Mr Knight forwarded to a solicitor instructed by Ms Skiffington and Mr Stevens a draft agreement for lease. The draft agreement provided for the Trust to receive a payment of pre-paid rental in the sum of

$3 million. The agreement also prescribed the annual rental that Mr Knight says had been agreed between himself and Dr Love on behalf of the Trust.

[17] Dr Love, Ms Skiffington and Mr Stevens then saw another firm of solicitors. They instructed that firm to prepare an agreement for lease for execution by the Trust in respect of the Pipitea Street land. During the time that this firm of solicitors were involved there was no mention by Dr Love, or by any other person, of the fact that the developers had offered to pay the Trust the sum of $3 million. The draft agreement to lease that Mr Knight had forwarded on 23 November 2006 to the solicitors then acting for Ms Skiffington and Mr Stevens was likewise not disclosed to the new solicitors.

[18] The documentary evidence in respect of the meeting of trustees held on 28

November 2006 contains reference only to an option to purchase and the agreed rental contained in the draft agreement forwarded by Mr Knight on 23 November 2006. The

material that Dr Love provided to his fellow trustees made no mention of the payment of $3 million which was also contained within the draft agreement to lease.

[19] Mr Carruthers submits that by the time of the meeting on 28 November 2006, the agreement had changed. Further negotiations with the developers had led to the parties reaching agreement that the developers would not pay the sum of $3 million to the Trust. Instead, they would meet the costs to be payable under the services agreement to PSDL. For that reason he says that the Trust was never entitled to the funds and Dr Love was under no obligation to advise the other trustees on

28 November 2006 of the existence of the earlier proposal.

[20] I consider, however, that the Court could infer, and I emphasise the word

“could”, that one essential aspect of the proposal did not change at any stage between

23 November 2006 and January 2007. This was the agreement by the developers to pay the sum of $3 million in order to gain access to the Pipitea Street project. The only aspect of the agreement that arguably changed was that the developers were to pay that sum not to the Trust but to PSDL.

[21] There is evidence that Dr Love was aware of the proposals relating to the services agreement. This comes from a document that was recovered that has written on it in handwriting “Ngatata’s working copy”. Endorsed on that copy of the draft services agreement is at least one suggestion that found its way through to the final draft of the document.

[22] Taking those matters into account, I am satisfied that the Crown has adduced sufficient evidence of actual deception and intention to deceive to justify the matter going further. In addition, I note that, at a subsequent meeting of trustees early in

2007, Dr Love made no mention of the fact that he had already signed the agreement to lease on behalf of the trust on 22 December 2007. Nor did he reveal the fact that monies had been paid by the developers to Ms Skiffington.

[23] For these reasons, brief as they are, I am satisfied that the application for discharge cannot succeed. It is accordingly dismissed.

Lang J

Counsel:

C R Carruthers QC, Wellington

Solicitors:

Luke Cunningham Clere, Wellington

Bisson Moss, Napier

Serious Fraud Office, Wellington