Butcher v New Zealand Serious Fraud Office

[2021] NZHC 276

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1263

[2021] NZHC 276

UNDER

the Judicial Review Procedure Act 2016

BETWEEN

CARL DAVID GEORGE BUTCHER

Applicant

AND

NEW ZEALAND SERIOUS FRAUD OFFICE

First Respondent

NEW ZEALAND POLICE

Second Respondent

Hearing:	3 February 2021
Counsel:	Applicant in person (via VMR) E M Watt for respondents
Judgment:	25 February 2021

RESERVED JUDGMENT OF TOOGOOD J

[Strike out application]

This judgment was delivered by me on 25 February 2021 at 11am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:
Meredith Connell, Auckland for respondents

Copy to:

The applicant

BUTCHER v NEW ZEALAND SERIOUS FRAUD OFFICE [2021] NZHC 276 [25 February 2021]

Introduction

[1]    Mr Butcher has brought  judicial  review  proceedings  against  both  the  New Zealand  Serious  Fraud  Office  (the  SFO)  and  the  New Zealand  Police   (the Police). His application relates to events that occurred or are alleged to have occurred in 2009, 2010, 2012 and earlier. In broad terms, Mr Butcher’s claim is founded on two allegations:

(a)The alleged failure of the Police and the SFO to investigate or prosecute allegedly fraudulent or unlawful steps taken during the liquidation of Dragon Flyte Farms Limited (Dragon Flyte), a company of which   Mr Butcher and his then wife were 30 per cent shareholders, his wife’s parents owning the remaining shares. Particular concerns relate to the property at 590 Trounson Park Road, near Dargaville of which the company was the registered proprietor.

(b)The alleged failure of the Police to respond appropriately to alleged incidents of threatening or violent behaviour against Mr Butcher and members of his family, which he reported in 2009 and 2010.

[2]    This judgment addresses an application by the SFO and the Police to strike out Mr Butcher’s statement of claim.

Background facts

[3]    On 4 December 2003, Dragon Flyte was incorporated as part of a joint venture between Mr Butcher and his wife, Lydia, and Lydia’s parents, Robert and Alison Burgess. Some parts of the interests of the joint venture partners were represented by professional trustees, the Burgess interests having 70 per cent of the original shareholding and the Butcher interests the remaining 30 per cent.

[4]    It appears that the relationship between the Butchers and the Burgesses was a difficult one, at least insofar as the joint venture is concerned. In March 2005, the parties entered into an equity share partnership to farm dairying land at 590 Trounson Park Road near Dargaville, the shares in the partnership reflecting the

70/30 shareholding in Dragon Flyte. Additional land was purchased in 2007. During the 2008-2009 year, the partnership experienced some difficulties which resulted in the National Bank giving notice it would withdraw its support unless the company significantly improved its liquidity position.

[5]    The Butchers and the Burgesses went to mediation in March 2009 to discuss the bank’s concerns and other issues. The result was an agreement that the equity partnership should be wound up and the dairy herd and plant sold so the proceeds could be used to reduce debt. The land was to be leased out and put on the market for sale simultaneously with a two-year programme for the sale, and other assets were to be sold also. Adjustments were to be made to reflect different capital contributions made by the parties over the preceding four years.

[6]    In February 2010, the Burgesses and the Butchers signed a shareholders’ resolution to put Dragon Flyte into liquidation, but in September 2010 the Butchers filed an application seeking a declaration that the liquidators had not been validly appointed and seeking further directions about the conduct of the liquidation.

[7]    On 22 February 2011, Associate Judge Bell made an order, with Mr Butcher’s consent, appointing alternative liquidators without determining the validity of the original appointments.1 It appears there was no dispute the company was insolvent and that there was a loss of trust between the Burgesses and the Butchers. Associate Judge Bell directed that the company should be liquidated on the grounds that it was unable to pay its debts and that it was just and equitable to make such an order.

[8]    On 27 April 2012, Associate Judge Bell issued a judgment,2 holding that the property at 590 Trounson Park Road was a wholly owned asset of the farm company and that Mr and Mrs Butcher had no interest in the land. At [71], the Associate Judge found that the liquidators were entitled to sell the property. Although Mr Butcher

1      Butcher v Bennett and Hoyle HC Whangarei CIV-2010-488-630, 22 February 2011 (minute of AJ Bell).

2      Finnigan v Butcher [2012] NZHC 810.

appealed against the judgment,3 he did not pursue the appeal and an application for extension of time to appeal was dismissed by the Court of Appeal.4

[9]    On 21 September 2012, Associate Judge Bell held that the original liquidators had been validly appointed.5

[10]   On 8 July 2013, Associate Judge Abbott refused an application by Mr Butcher for leave to commence a proceeding applying for an order terminating the liquidation of Dragon Flyte.6

Issues relating to the Police response to incidents

Brooks incident

[11]   On 14 October 2009, Mr Butcher became involved in a physical confrontation with a neighbour, Frank Brooks. A Police occurrence report prepared at the time records that on 14 October 2009, Mr Brooks, aged 71, was allegedly assaulted by  Mr Butcher who is said to have used a wooden handled shovel to beat Mr Brooks several times. This resulted in Mr Butcher being charged with wounding. The prosecution did not proceed, however, because Mr Brooks died of unrelated causes before the matter went to trial; the Crown was no longer able to lead evidence refuting Mr Butcher’s claim of self-defence. Mr Butcher alleges his arrest by the Police on that charge and his subsequent remand in custody removed him from his home, leaving his family defenceless.

Murphy incident

[12]   In 2010, Mr Butcher complained to the Police about another dispute, this time with a neighbour named John Murphy, that had occurred on 4 April 2010. Mr Butcher and Mr Murphy both had rights to graze a strip of land owned by a forestry company. The two men got into an argument over whether Mr Butcher and his dogs had agitated Mr Murphy’s cows that were grazing the strip of land. Mr Butcher told the Police that

3      Butcher v Finnigan [2012] NZCA 250 at [8].

4      Butcher v Finnigan, above n 3.

5      Finnigan v Butcher (No 2) [2012] NZHC 2463 at [51].

6      Butcher v Dragon Flyte Farms Ltd [2013] NZHC 1735.

during the argument Mr Murphy had threatened to get his gun and shoot Mr Butcher. A bystander who was working with Mr Murphy on a fencing job near where the herd was grazing told the Police that Mr Murphy had threatened to shoot only the dogs and not Mr Butcher or his family. It appears no further action was taken by the Police, given the conflict between the accounts of the two men and the bystander.

Hussey incident

[13]   Mr Butcher also pleads that the Dargaville Police were “under [the] instruction of a gang leader to not respond to 111 calls for help” by Mr Butcher or his family, “in advance of an orchestrated attack on Mr Butcher at his home”. The “gang leader” was alleged to be a Mr Hussey. Mr Butcher said he thwarted the “assault” on his home and family without Police assistance and that Mr Hussey was later prosecuted.

[14]   The complaint against the Police is that they failed to investigate adequately his complaint that he and his family had been threatened by Mr Murphy. Evidence from the Police indicates that Mr Butcher’s allegations about his altercation with   Mr Murphy were investigated initially but it was decided that no further action was warranted. The file relating to the altercation between Mr Murphy and Mr Butcher was destroyed prior to the issuing of this proceeding.

Police complaints

[15]   In April 2010, Mr Butcher made a complaint to the Independent Police Complaints Authority (the Authority) relating to the failure of the Police to investigate the Murphy matter, but the Authority concluded that the Police conduct in relation to the complaint was appropriate and that no further action was justified.

[16]   The Police say, through counsel, that they have been unable to identify from the information provided by Mr Butcher whether he made any complaint to them about their handling of the Hussey allegations.

Mr Butcher’s complaint against the SFO and the Police about the liquidation

[17]   The essence of Mr Butcher’s complaint against the SFO and the Police about the liquidation of Dragon Flyte is that they failed to investigate a complaint made by

him to the SFO over allegations of fraud and other misdeeds by the Burgesses and others who were involved in the events surrounding the liquidation of Dragon Flyte. Mr Butcher alleges the Court’s orders in the liquidation proceeding were based on false evidence. In particular, Mr Butcher alleges that he acquired ownership of the property at 590 Trounson Park Road, which remained nevertheless in the name of the company and which was sold in the liquidation process.

[18]   Evidence produced by the respondents in support of the strike out application indicates that the SFO has no record of Mr Butcher ever having made a complaint to it in relation to the liquidation.

The arguments

[19]   Against the background of those facts, the respondents argue that the statement of claim:

(a)discloses no reasonably arguable causes of action, and

(b)is frivolous or vexatious or otherwise an abuse of the process of the Court.

[20]   Mr Butcher opposes the strike out, arguing among other things that the evidence of the SFO that it has no record of the complaint is unreliable. He refers in respect of the claim against the Police to his evidence that the late Mr Brooks was the aggressor in the altercation in which Mr Brooks apparently received serious injuries requiring hospital treatment. Mr Butcher relies on the fact that he was acquitted of the wounding charge. He disputes the account of the Police interview of Mr Murphy and Mr Murphy’s account of the argument in which Mr Murphy is said to have threatened him. Mr Butcher does not address the Hussey matter in his submissions.

The principles to be applied

[21]   Mr Butcher does not dispute the legal principles that should be applied to the respondents’ strike out application. As counsel for the respondents submitted, the principles for an application based on an assertion that the pleadings disclose no

reasonably arguable cause of action under r 15.1(1)(a) of the High Court Rules 2016 are well settled:7

(a)it is assumed that the facts pleaded in the statement of claim are true, except to the extent that the allegations are entirely speculative and without foundation;

(b)the pleaded causes of action must be so clearly untenable that they cannot possibly succeed;

(c)the jurisdiction to strike out should be exercised sparingly and only in a clear case where the Court is satisfied it is sufficiently informed;8

(d)if appropriate, the Court may have regard to facts not in dispute.9

[22]   In Couch v Attorney-General, the Supreme Court said that the claim must be “so certainly or clearly bad” that it should be precluded from going forward.10 The principle applies to a strike out application in a judicial review proceeding.11

[23]   A frivolous proceeding is one which trifles with the Court’s processes,12 or one that lacks “the seriousness required of matters for the Court’s determination”.13

[24]   The catch-all expression in r 15.1(1)(d) “otherwise an abuse of the process of the court” refers to all other types of abuse of process such as attempts to relitigate matters already determined by the Court or commencing or pursuing a proceeding in relation to a claim that is so stale that a fair trial is no longer possible.14

7      Attorney-General v Prince [1998] 1 NZLR 262 (CA) at 267; Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 at [33].

8      Attorney-General v Prince, above n 7, at 267; Couch v Attorney-General, above n 7, at [33].

9      Attorney-General v McVeagh [1995] 1 NZLR 558 (CA) at 566.

10     Couch v Attorney-General, above n 7, at [33].

11     Southern Ocean Trawlers Ltd v Director-General of Agriculture and Fisheries [1993] 2 NZLR 53 (CA) at 63.

12     Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2013] NZCA 53 at [89].

13     Deliu v Hong [2011] NZAR 681 (HC) at [22].

14     Robert Osborne (ed) McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR15.1.05(2)].

Decisions on this application

[25]   I accept and agree with the analysis of Mr Butcher’s claims by counsel for the respondents and I am satisfied that the entire proceeding should be struck out.

[26]   Although the claim lacks clarity, counsel have accurately identified the relief sought by Mr Butcher as providing the key to understanding the substance of his claims. A strike out application does not provide an occasion for assessing the merits of a plaintiff’s claim, and the alleged facts pleaded are usually assumed to be true, but the Court does not take an uncritical view and will strike out causes of action that are so clearly untenable that they cannot possibly succeed.15 In relation to the alleged failure of the Police to investigate the three alleged attacks made against Mr Butcher and his  family  by  Mr Murphy,  Mr Brooks  and  Mr Hussey  and  his  associates, Mr Butcher seeks:

orders from the High Court to [the Police]¹⁶ to give an explanation for above causes of action. I identify the decision of Dargaville Police to assist criminal behaviour repeatedly and challenge it. I believe that a Judicial Review/Inquirey [sic] into the overall behaviour of the Dargaville police in this matter and all other incidences relating to these examples of cause of action is the only way to move forward.

[27]   My reasons for agreeing that  the  Court  cannot  and  should  not  provide  Mr Butcher with what he has asked for can be summarised briefly, drawing on counsel’s helpful discussion of the applicable legal principles and the facts.

The first and second causes of action

[28]   The first and second causes of action are claims which relate to Mr Butcher’s allegations that the Police failed to investigate the Brooks, Murphy and Hussey matters. They disclose no reasonably arguable causes of action. The evidence provided by the Police establishes that the Police investigated both the Brooks and Murphy complaints. Mr Butcher does not refute that evidence, notwithstanding that he is dissatisfied with the outcome of their inquiries. Mr Butcher does not identify

15     Couch v Attorney-General, above n 7, per Elias CJ and Anderson J at [33]; Attorney-General v Prince, above n 7.

16     In his pleading, Mr Butcher incorrectly identifies the Police as the first respondent in the proceeding but it is clear that it is the second respondent against whom he seeks the relief.

that he made any complaint to the Police that they acted inappropriately in relation to Mr Hussey.

[29]   Although the courts are open to reviewing the way in which the Police make investigative decisions, the Court will not order the Police to commence an investigation or further investigate a matter which has been the subject of an inquiry.17

[30]   The Police have a wide discretion in the exercise of their powers in carrying out their law enforcement duties. It is for the Commissioner of Police and not the courts to make decisions about the way in which Police resources are employed, bearing in mind that a balanced approach to the use of limited resources is required.18 A conscious decision by the Police not to investigate or not to undertake further investigation in response to the complaint does not amount to a refusal or failure by the Police to carry out their duty. It is the exercise of an appropriate discretion vested in the Police alone.19

[31]In this case, there is no arguable basis for departing from these principles.

Third and fourth causes of action

[32]   Regarding the asserted failure of the SFO and the Police not to investigate  Mr Butcher’s sweeping and vague allegations of fraud and other misdeeds in relation to the liquidation of Dragon Flyte, Mr Butcher pleads the following at para 31 of the statement of claim:

I identify the decision of the SFO Respondent to not investigate why two seperate [sic] accounts have been produced to the High Court for the purpose of deceiving the court.

The primary solution I seek from this Judicial Review is that the Respondents lay charges as/if appropriate to the findings of active investigation being actually carried out.

[33]   Mr Butcher pleads that the decision of the SFO and the Police to do nothing and to allow the search and seizure of private property is followed by a claim for

17     See LP v Attorney-General [2016] NZHC 169 at [51].

18     Sathyan v Police Commissioner [2015] NZHC 3138 at [12].

19     Sathyan v Police Commissioner, above n 18, at [19]; Evers v Attorney-General [2000] NZAR 372 (HC) at [14].

appropriate charges to be laid and the stolen property returned to him, including, it seems, the property at 590 Trounson Park Road of which Mr Butcher claims ownership. That property, however, was sold by the liquidators.

[34]   Mr Butcher’s claim amounts to no more than a request to the Court to direct a fishing expedition. The short answer to the claims and the foundation of my conclusion that this part of the proceeding is frivolous and vexatious and an abuse of the Court’s process, however, is that these matters have already been determined by the Court. As the respondents submit, in Finnigan v Butcher,20 and Finnigan v Butcher (No 2),21 Associate Judge Bell determined that:

(a)the property at 590 Trounson Park Road was a wholly owned asset of Dragon Flyte;22

(b)Mr Butcher does “not have any interest in the land at 590 Trounson Park Road”;23

(c)the liquidators were entitled to sell the property at 590 Trounson Park Road;24 and

(d)the original liquidators were validly appointed.25

[35]   Judge Bell was scathing in his dismissal of Mr Butcher and his allegations about the liquidation, saying:26

Mr Butcher … uses extravagant language, accusing people of fraud, conspiracy and lies. This reflects ineptness in dealing with conflicts. It is a clumsy way of expressing his disagreement with what others have done or said. There is nothing in the evidence that supports his allegations of fraud, conspiracy, lies or other dishonesty.

20     Finnigan v Butcher, above n 2.

21     Finnigan v Butcher (No 2), above n 5.

22     Finnigan v Butcher, above n 2, at [71](a)(i).

23     Finnigan v Butcher, above n 2, at [71](a)(ii).

24     At [71](a)(iii).

25     Finnigan v Butcher (No 2), above n 5, at [51].

26     Finnigan v Butcher, above n 2, at [14].

[36]   As I have noted above,27 Mr Butcher’s appeals against those decisions were not pursued.

[37]   To allow Mr Butcher to maintain these causes of action in this proceeding would be to stand by and let him attempt to re-litigate matters already determined by the Court.

Delay – staleness

[38]   Relief in judicial review proceedings is discretionary. Unjustifiable delay in the bringing of proceedings, the staleness of the matters at issue and the difficulties for witnesses of fact to give reliable evidence about matters alleged to have occurred many years earlier may provide reasons for declining to provide relief of the kind sought in this case by Mr Butcher.28 Sometimes, a declaration by the Court that a decision or other conduct was unlawful or in breach of legal principle can be sufficient to deal with the problems caused by a delay in issuing the proceeding, as relief ought rarely to be refused where an error of law has been established,29 but that is not the case here.30

[39]   Even if I was inclined to make orders, contrary to the principles I have explained above, that required the Police or the SFO to make further inquiries, the events about which Mr Butcher complains are so far in the past that any such inquiry would be pointless. Although I have not decided the outcome of this application on that basis, delay and staleness are factors which weigh against allowing the case to continue.

[40]For these reasons, I strike out this proceeding.

27 At [8].

28     New Era Energy Inc v Electricity Commission HC Wellington CIV-2007-485-2774, 4 May 2009 at [64]: “[d]elay is the primary reason which influences Courts to exercise their discretion not to grant relief in applications for judicial review”, citing Turner v Allison [1971] NZLR 833 (CA).

29 Te Whanau O Rangiwhakaahu Hapu Trust v Department of Conservation HC Whangarei CIV-2008-488-548, 22 December 2010 at [141], citing GXL Royalties Ltd v Minister of Energy [2010] NZCA 185 at [67].

30 Te Whanau O Rangiwhakaahu Hapu Trust v Department of Conservation, above n 29, at [145]. Judicial Review Procedure Act 2016, s 16(1)(b): “The High Court may…grant… a declaration

….”. Further, Kapiti High Voltage Coalition Inc v Kapiti Coast District Council [2012] NZHC 2058 at [288]-[296], per Williams J, a nine-year delay not fatal, but did influence what relief was appropriate, namely declarations defendant unable to claim existing use rights.

Costs

[41]   On the face of it, the respondents, having succeeded in their application, are entitled to costs.31 The respondents shall file any application for costs on or before  22 March 2021. Mr Butcher shall file any submissions in reply on or before 12 April 2021. Costs shall be determined on the papers unless the Court directs otherwise.

Toogood J

31     High Court Rules 2016, r 14.2(1)(a).