R v Bublitz [2018] NZHC 323 (5 March 2018)

Last Updated: 22 March 2018

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI-2014-004-002293 [2018] NZHC 323

THE QUEEN

v

PAUL NEVILLE BUBLITZ BRUCE ALEXANDER MCKAY RICHARD TIMOTHY BLACKWOOD

Hearing:	2 March 2018
Appearances:	DG Johnstone for the Crown R Reed QC for Mr Bublitz GNE Bradford for Mr McKay SM Kilian for Mr Blackwood
Judgment:	5 March 2018

JUDGMENT OF WOOLFORD J

[On Application for Leave to Amend Crown Charge Notice]

This judgment was delivered by me on Monday, 5 March 2018 at 4:00 p.m. pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Meredith Connell, Crown Solicitor, Auckland Ms R Reed QC, Barrister, Auckland

Mr G Bradford, Barrister, Auckland

Mr S Kilian, Kilian & Associates, Auckland

R v BUBLITZ & ORS [2018] NZHC 323 [5 March 2018]

Introduction

[1] On 10 May 2017, I aborted this trial because of late disclosure by the Crown.¹ At the time, Mr Bublitz faced 13 charges, Mr McKay faced seven charges and Mr Blackwood faced six charges. The defendants are to be retried in this Court on 6 July 2018. Twenty-two weeks have been allocated for the retrial.

[2] The Crown now applies for leave to amend the Crown charge notice. It seeks to add seven new charges, amend various charges and withdraw one charge.

[3] The Crown submits it is in the interests of justice to grant leave for the following reasons:

(a) The additional charges are founded in the evidence called at the first trial.

(b) The trial Judge will have to consider the allegations that underlie the additional charges in any event. In other words, the conduct that is the subject of the additional charges will be an integral part of the Crown’s case at the retrial, as it was at the first trial.

(c) Guilty verdicts on the remaining charges will not adequately cover the scope of the defendants’ criminality, particularly now that a substantial number of charges have been dismissed for case management reasons.

(d) Case management reasons do not preclude the formal determination of the additional charges, especially given the trial Judge will have to consider the allegations in any event. Any delay attributable to the formal determination of these charges will be insubstantial.

(e) There is no prejudice to the defendants in terms of conducting their defence, and no prejudice arises simply because there will be an insubstantial delay.

¹ R v Bublitz [2017] NZHC 1059.

[4] The defence opposes the addition of seven new charges and the amendment of charge five. They say, in broad terms, if these charges were so significant to the Crown’s case, it would have pursued them in the first trial. The factual and legal basis for the charges was available then. The defendants also argue the additional charges will force them to incur further expenditure, and that it adds unnecessary complexity to the trial.

The law

[5] The Crown is entitled to add new charges to the Crown charge notice within a prescribed time period:²

191. Power of Solicitor-General or Crown prosecutor to add new charges

(1) Without the leave of the court, the Solicitor-General or a Crown prosecutor may, on filing a notice under section 189 in relation to a proceeding, or before the trial and within any prescribed period after filing that notice, file in the court hearing the proceeding a notice to add any new charge or charges to that proceeding.

...

[6] The time periods are set out in the Crown Prosecution Regulations 2013. Regulation 6 provides:

6 Notice periods when amending, adding, or withdrawing charges

...

(2) The court may, on an application by the prosecutor, extend a notice period specified in subclause (1) in the interests of justice.

[7] In the present case, the application is made well beyond the relevant period. Accordingly, the Crown seeks leave to amend the charge notice.

[8] The parties agree as to the overall legal test and have referred me to authorities under the predecessor section, s 345D of the Crimes Act 1961. Under that section the Court had a discretion to grant the prosecution leave to file an amended indictment, if the Court was satisfied that to do so would be conducive to the ends of justice. The

² Criminal Procedure Act 2011, s 191.

new section does not appear to have been the subject of any significant judicial consideration.

[9] In R v P, the Court of Appeal said in relation to s 345D:³

[15] Where the Court is satisfied that an amended charge is available on the evidence and the ends of justice so require, the Court should generally grant the prosecution’s application to amend the indictment in the manner and to the extent sought by the prosecution. Where the charge selected by the prosecutor is available on the evidence, it will be a rare case where the Court would take a different view as to what it is to be included in the indictment.

[10] In R v Martin, the Court of Appeal said:⁴

[15] Leave to file an amended indictment is provided for in s 345D Crimes Act 1961. Such leave may be granted by the trial Judge if it is considered “conducive to the ends of justice” to do so. The consent of the accused is unnecessary. The criteria for determining such an application are the interests of all parties and include balancing the public interest as well as the rights of the accused to a fair and speedy trial. The criteria for determining an application to amend an indictment during trial are also relevant. The crucial consideration in both situations is prejudice to the accused person. The fact that an accused person may have conducted his case on one basis and be unable to recast it to meet charges that are amended during trial is determinative.

[11] In R v Arvand, the Court of Appeal said:⁵

[63] The law with respect to s 345D of the Crimes Act 1961 is well settled. See R v Rapatini [1998] 16 CRNZ 311; R v Martin 23/11/00, CA214/00; and R v C (6/12/00, CA329/00. The underlying principle is that the Judge must consider what the ends of justice require. The Court is required to take into account the interests of all parties and balance the public interest, as well as the rights of the accused to a fair and speedy trial. And, as this Court has routinely remarked, the fact that a defendant may find it more difficult to meet the charges in a new indictment, does not of itself show "prejudice" (see R v C (above) at para 25).

The additional charges – Charges 1-4

[12] Charges 1 to 4 focus on Viaduct Capital Ltd’s (Viaduct) purchase of four sets of loans on 16 February 2009. The Crown’s case is that through these acquisitions,

³ R v P CA383/05, 28 February 2006.

⁴ R v Martin CA214/00, 23 November 2000.

⁵ R v Arvand (2003) 20 CRNZ 742 (CA).

Mr Bublitz and Mr McKay entered related party transactions in breach of the Viaduct trust deed, thereby committing offences under s 220 of the Crimes Act.

[13] According to the Crown, everything that relates to these charges (“their genesis, their rationale, their documentation..., [their concealment]”) were the subject of exhaustive evidential analysis during the first trial. The Crown also says the question of breach of the Viaduct trust deed and the defendants’ knowledge of and role in such breach was fundamental to the determination of other Viaduct-related charges.

[14] In response, the defence say while the general facts underlying these charges were part of the background evidence at trial, it is inevitable there will need to be more extensive investigation and cross-examination if these charges are added. If these charges are added, they will be put to the added expense of obtaining expert evidence to determine whether these transactions were related party transactions, and further witnesses will need to be briefed.

[15] In addition, they say these charges cannot be considered essential as there are several key witnesses who gave relevant evidence at the first trial about these transactions that the Crown are not intending to call.

The additional charges – Charge 15

[16] Charge 15 alleges Mr Bublitz, Mr McKay and Mr Blackwood caused Mutual Finance Ltd (Mutual) to purchase Viaduct’s Kingseat loan in breach of Mutual’s Crown guarantee, thereby committing an offence under s 220. The Crown says this loan was also covered exhaustively in the evidence in the first trial. It further says this evidence will be just as significant at the retrial, and that the remaining s 220 charges will not adequately capture the scope of the offending.

[17] The defence accepts there was some evidence in relation to the Kingseat loan at the first trial, but questions why it was not previously considered worthy of a charge, if it is apparently fundamental to the Crown case. They point out that none of these allegations are new, and that there does not appear to be any new evidence or analysis.

The additional charges – Charge 19

[18] Charge 19 alleges Mr Bublitz and Mr McKay provided Mutual’s trustee with a false or misleading Director’s Quarterly Report (dated 31 March 2010), thereby committing an offence under s 377 of the Companies Act 1993. The Crown says the evidence in relation to this charge at the first trial was not extensive, but it was significant. This evidence was significant because it demonstrated Mr Bublitz had no compunction about making a false assertion to Mutual’s trustee, independently of any technical distinction which might later be drawn as to the scope of related party transactions.

[19] The defence’s reply is that no evidence of substance was given about this document at the first trial. If added to the retrial, they say they will need to undertake further investigation into the document and cross-examine further witnesses about it.

The additional charges – Charge 23

[20] Charge 23 alleges Mr Bublitz and Mr McKay provided Mutual’s trustee with a false or misleading Monthly Trustee Report for April 2010, thereby committing an offender under s 377. The Crown says this was covered extensively in Ms Groom’s and Mr Weir’s evidence. It says this charge is significant because it shows the defendants were prepared to mislead Mutual’s trustee to suit their own purposes.

[21] The defence submits there is insufficient basis on the evidence to pursue this charge. They say that this charge, on the basis of Mr Weir’s evidence alone, would not survive a s 147 application. It points out there has been no further disclosure from the Crown and there has been nothing to indicate that the Crown has made further inquiries. Additionally, they also say again that this charge will force them to incur further expenses.

Amending Charge 5

[22] The existing Charge 13 (to be renumbered Charge 5) alleges Mr Bublitz (assisted by Mr McKay) caused Viaduct to redeem capital notes totalling $1.1 million for cash between July 2009 and March 2010 in breach of Viaduct’s trust deed, thereby
committing an offence under s 220 of the Crimes Act. The renumbered Charge 5 seeks to broaden the substance of the allegations to include the issue of all capital notes and their “ongoing treatment” and to extend the date range back to the acquisition of Viaduct in February 2009.

[23] Leave to amend Charge 5 is opposed. The defence submits that the proposed amendment substantially expands the capital notes allegations against Mr Bublitz in the first trial. The capital notes, the subject of the amended charge, are not listed and there is no definition of what “treatment” means. Furthermore, the Crown is not intending to call David McMillan, a vital witness on the topic of capital notes, at the retrial.

In the interests of justice?

[24] I do not consider it would be in the interests of justice for leave to be granted to add additional charges or to amend the existing Charge 13 (to be renumbered Charge 5) for four reasons. Some of these overlap.

[25] First, the Crown says these charges will be essential to its case and necessary to reflect the culpability of the defendants. However, as defence counsel points out, if these allegations were central to the Crown’s case, they should have been pursued in the first trial. The Crown did not pursue these charges then, even though the original Crown charge notice contained 49 charges, with very lengthy particulars. The Crown said it was in error in not pursuing the additional charges, but that error has been perpetrated for many years. After a lengthy three year investigation, the defendants were charged as long ago as 2014. I do not accept that the additional charges are necessary to reflect the culpability of the defendants if found guilty.

[26] Second, and perhaps most importantly, I consider case management reasons weigh heavily against granting leave. The first trial was unnecessarily lengthy and marked by complexity. Various steps were taken to reduce the number of charges and the scope of the issues, to bring the trial back to a manageable level. The Crown’s application instead now seeks to widen the scope of the issues. This will inevitably lead to further cross-examination and will at the very least require submissions in
relation to the new charges. It may also require the briefing of further witnesses, including experts.

[27] The first trial has shown how difficult it is to make accurate predictions regarding the time this trial will take. Crown counsel’s confidence in submitting these charges will not add any significant delay may well be displaced. Given lessons learned from the first trial, I consider all reasonable and practicable steps need to be taken to make sure that the second trial is kept within bounds. It is in the interests of all involved that this case be determined in a relatively speedy and efficient manner.

[28] Third, this prosecution has already been unduly burdensome on the defendants, both financially and otherwise. It has had significant consequences for them, affecting their livelihoods, family relationships and health. It would be unfair to risk exposing them to further costs, stress and delay, well beyond what the justice system would normally expect those accused of crimes to tolerate.

[29] Fourth, a significant amount of scarce public resources has already been wasted in this prosecution as a result of inefficiencies and procedural failures. The trial has been burdensome for the court. It is in the public interest that the second trial be kept within manageable bounds. This is not only for financial reasons, but is also necessary to maintain public trust and confidence in the criminal justice system.

[30] Leave to add the seven additional charges (Charges 1, 2, 3, 4, 15, 19 and 23) and to amend Charge 5 is declined. Leave to amend the rest of the charges and to withdraw Charge 22 is granted as sought.








Woolford J