Delamere v Serious Fraud Office
[2009] NZCA 142
•22 April 2009
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ORDER IN FORCE PROHIBITING PUBLICATION OF CONTENTS OF AFFIDAVIT FROM JURY FOREPERSON
IN THE COURT OF APPEAL OF NEW ZEALAND
CA380/2008
[2009] NZCA 142BETWEENTUARIKI JOHN EDWARD DELAMERE
Appellant
ANDSERIOUS FRAUD OFFICE
Respondent
Hearing:10 February 2009
Court:Hammond, Chambers and Ellen France JJ
Counsel:Appellant in person
S J E Moore SC and A M Killeen for Respondent
Judgment:22 April 2009 at 11 am
JUDGMENT OF THE COURT
ALeave to admit new evidence is declined and the appeal is dismissed.
BCosts are reserved.
REASONS OF THE COURT
(Given by Ellen France J)
Table of Contents
PARA NO
Introduction [1]
Factual background [2]
The charges [4]
The High Court judgment [15]
Grounds of appeal [24]FIRST APPEAL GROUND: CONSIDERATION OF RELEVANT FACTORS [29]
Sufficiency of evidence [30]
The manner of the SFO’s investigation [42]
Did Mr Delamere establish he was not guilty? [53]
Mr Delamere’s behaviour [61]
Second appeal ground: reliance on an irrelevant factor? [62]
Third appeal ground: failure to consider the Bill of Rights? [65]
Fourth appeal ground: charges under s 229A [67]
Conclusion [68]COSTS [70]
Introduction
[1] Following a jury trial, the Hon Tuariki Delamere was acquitted on charges of using a document with intent to defraud, dishonestly using documents and of making a false document with intent. Mr Delamere unsuccessfully sought an award of costs under the Costs in Criminal Cases Act 1967: HC AK CRI 2005-004-004972 30 May 2008, Courtney J. He now appeals against that decision. The appeal raises questions about the various considerations relevant to the decision under s 5(2) of the Costs in Criminal Cases Act whether or not to award costs.
Factual background
[2] Mr Delamere is an adviser to persons seeking to immigrate to New Zealand. The particular focus on this occasion was applicants under the “business investor category” (“BIC”). The New Zealand Immigration Service (“NZIS”) policy applicable to business investor applicants required them to invest at least $1 million in an “acceptable investment” in New Zealand for a period of two years. One of the requirements of an acceptable investment was that it was capable of providing a commercial return.
[3] Mr Delamere devised a scheme that avoided an applicant having to use his or her own funds. In brief, Mr Jiang who was an associate of Mr Delamere and who was also an applicant under the business investor category, invested $1 million in a New Zealand company incorporated by the appellant. The company was called New Zealand Golden Harvest Investment & Trust Limited (“Golden Harvest”). Mr Jiang was the sole director and shareholder. The New Zealand company then invested the $1 million into a bank account of a friendly Hong Kong company (Harvest International Travel Services Limited, “Hong Kong Harvest”) which in turn sent the money back to New Zealand in the name of a different applicant. This was repeated on seven occasions between September 2001 and February 2002. As Courtney J said at [21] the “longest the funds remained in Golden Harvest’s account on any occasion was 37 days”. The Serious Fraud Office (“the SFO”) alleged that the scheme was fraudulent.
The charges
[4] Counts 1 to 7 on the indictment alleged fraudulent use of a document (s 229A(b) of the Crimes Act 1961). The documents in issue included the telegraphic transfers of money from Hong Kong to New Zealand, an “advice of investment” form from Golden Harvest, and a letter from a New Zealand bank confirming that money had been transferred from Hong Kong to New Zealand. These documents were provided to NZIS in relation to the initial applications for two-year residence visas for each BIC applicant.
[5] The SFO case was that while the documents may have been literally true, as a package, they gave a false and misleading picture of the nature of the investments to which they referred. That was because they suggested that the applicants had each transferred $1 million from Hong Kong to New Zealand and invested the funds in Golden Harvest. The SFO said that there was no genuine investment. As Courtney J says in the costs judgment at [42] the SFO, which ran the prosecution:
[F]ocused very much on the fact that the same $1 million was simply “recycled” and that because of the terms of the agreement with Golden Harvest, there would never be a true return on the funds deposited.
[6] Counts 8 to 11 alleged dishonest use of a document (s 228(b) of the Crimes Act). These documents were generated in the context of satisfying NZIS that the money had been in New Zealand for two years. The documents included letters from chartered accountants certifying the money had been invested for two years. The evidence at trial showed a pattern of difficulty (not surprisingly) in obtaining such letters.
[7] The SFO case was that the assertions in these documents were false. That was because the funds had not remained in New Zealand but instead had been transferred to and from Hong Kong several times during the period. The SFO also said that, whatever the appellant said at trial about the legality of the scheme and his belief in it, queries he had made of various people about whether they thought the scheme was legal showed that he was not really certain that it was lawful.
[8] The remaining counts, 12 to 20, were allegations of making a false document with intent (s 256 of the Crimes Act). It seems that problems arose when Mr Jiang got to the point that his two-year “investment” period was up. He applied for an indefinite returning resident’s visa. NZIS asked him for documents showing where the money had been placed between September 2001 and March 2002, the period of the money transfers to and from New Zealand and Hong Kong. The records Mr Jiang provided showed that over the period the money was invested in Golden Harvest. NZIS asked for the bank statements for Golden Harvest. When Mr Jiang told Mr Delamere about this, Mr Delamere told him he did not have to provide the statements. He also suggested Mr Jiang sell his shares in Golden Harvest so he had no ability to send the company’s documents to NZIS. Mr Jiang agreed and sold his interest to an employee at the appellant’s nightclub and restaurant.
[9] Mr Delamere then suggested to Mr Jiang that Mr Jiang should assign his beneficial ownership of the funds going to Hong Kong to a company controlled by the appellant, called New Zealand International Investment Funds Company Limited (“NZIIFC”). The result was that NZIIFC inherited Hong Kong Harvest’s liability to Golden Harvest. It appears the purpose of this assignment was to avoid Hong Kong Harvest’s reluctance to assert that $7 million had been invested with it by Golden Harvest.
[10] About this time Mr Delamere created the documents which gave rise to the remaining counts (12 to 20). In particular, counts 12 and 13 concerned two letters dated 10 April 2002 and 9 April 2003 on Hong Kong Harvest letterhead. The evidence was that they had been created on the appellant’s computer in July 2003 and backdated. The letters were signed, apparently, by “Benny Chow” (Benny Chau, a director of Hong Kong Harvest), although Mr Delamere said in an interview with the SFO that he “probably did” sign the letters. He later resiled from this admission and suggested that it was Mr Jiang who had done so. The purpose of the letters was to provide confirmation by Hong Kong Harvest that it was indebted to Golden Harvest for $7 million. Although the letters were printed, the appellant said he had never used them.
[11] Count 14 related to a letter dated 28 October 2003, again generated from Mr Delamere’s computer, this time on 6 November 2003, backdated and printed on Hong Kong Harvest letterhead. Addressed to Golden Harvest, it purported to confirm that Golden Harvest had over NZ$7 million invested in Hong Kong Harvest as at 24 October 2003. In an interview with the SFO, the appellant said he had created the document and he might have signed it. Only a faxed copy was located.
[12] In terms of counts 12 to 14, the SFO case was that these three letters were created to set up an apparently legitimate paper trail and to further hide the true nature of the investments.
[13] Counts 15 to 20 related to similar documents on NZIIFC letterhead. The appellant was discharged on these counts on the basis that while the information contained in the documents may have been false, the documents could not be treated as forgeries. Mr Delamere controlled NZIIFC and was entitled to create a document on behalf of that company.
[14] Mr Delamere gave evidence at trial. He maintained that he believed the scheme was lawful. After his acquittal, Mr Delamere brought a claim for costs on the following grounds: the SFO did not adequately consider whether the scheme complied with BIC policy; there was not sufficient evidence to justify bringing the prosecution; the investigation was not conducted in a reasonable and proper manner; the SFO did not act in good faith; and the effects on Mr Delamere were severe.
The High Court judgment
[15] Courtney J dealt first with the claim that the SFO had not adequately considered whether the scheme had complied with the BIC policy existing at the time. Her Honour considered at [12] that the SFO had only given the matter perfunctory “consideration”. However on her own, more thorough, analysis the Judge concluded that Mr Delamere’s scheme did not comply. The Judge considered that there was a sufficient basis to bring the charges other than those which were the subject of a s 347 discharge as we have noted at [13] above.
[16] Next, the Judge considered the reasonableness of the SFO’s investigation. Courtney J identified a number of problems with the investigation. In particular, the Judge considered that the SFO should have investigated Mr Jiang’s role more carefully and should have interviewed his wife Li Bing. The Judge also accepted that the SFO should have interviewed Richard Lim. Mr Lim was a chartered accountant who prepared a set of financial accounts for Golden Harvest for the 2002 year on Mr Jiang’s instructions. The SFO had relied on these accounts but Ms Tierney, the SFO’s accounting expert, accepted in cross-examination that there was information missing from Mr Lim’s accounts. Further, as a “counsel of perfection”, the Judge said at [75] that the SFO could have interviewed Wing Mun Wong, who was the internal accountant for Hong Kong Harvest. But, the Judge concluded, this particular failure was not one that should weigh in favour of a costs award.
[17] Similarly, the Judge said that a conventional approach would have seen the SFO call as a witness the person or persons at NZIS who were responsible for the BIC policy at the relevant time or who had direct knowledge of the events in question. Instead, the SFO called Michael Carley, who was not working at the business migration branch of NZIS during the relevant period and who had no knowledge of what was happening when the applications were being processed.
[18] The Judge summarised her findings on the manner of the investigation in this way:
[82] There were areas in which the SFO failed to ensure that there were no loose ends. In general, however, the investigation proceeded in a reasonable manner. Evidence was gathered in an appropriate way. The essential witnesses were interviewed and adequate analysis of the relevant financial records of Golden Harvest was conducted.
[83] Notwithstanding the shortcomings … sufficient evidence was gathered to justify the prosecution. I am also satisfied that the inadequacies in the SFO’s investigation did not prejudice Mr Delamere. To the contrary, they provided opportunities for undermining the SFO’s witnesses which Mr Delamere’s counsel made the most of in cross-examination.
[19] Courtney J continued at [107] that:
Witnesses who were potentially relevant were not interviewed. The manner in which Mr Jiang’s evidence was dealt with was not entirely satisfactory. However, in general, the approach taken by the SFO was appropriate. Such inadequacies as there were did not prejudice Mr Delamere.
[20] Courtney J also said she was satisfied that at the commencement of the proceedings that there was sufficient evidence to support a conviction on counts 1 to 14 in the absence of contrary evidence. The Judge said at [108]:
It was significant feature of the trial that Mr Delamere gave evidence and was subjected to very extensive cross-examination. Mr Delamere was very forthright and assertive when he gave his evidence and had substantial evidence of good character to call upon. I have no doubt that these factors were influential on the jury.
[21] As for counts 15 to 20, the Judge said those charges could not have succeeded and should not have been brought. The Judge did, however, accept the submission for the SFO that the documents on which these charges were based would have been used in evidence against the appellant in relation to other counts. Her Honour observed that the appellant’s credibility was a “major issue” in the trial and production by him of documents containing “obviously false information” would have obvious relevance: at [109]. Hence, “… in this sense there was probably little additional expense to Mr Delamere in defending those charges”: at [109].
[22] Courtney J then considered the effect of the prosecution on the appellant including the actual costs ($162,500) and the effect on matters such as reputation.
[23] Finally, the Judge rejected any suggestion of bad faith or misconduct by the SFO. The Judge concluded at [110]:
Mr Delamere has made very serious allegations against SFO staff without any evidence to support his assertions. Whilst there have been serious effects for Mr Delamere it cannot be said that the prosecution was unjustified nor that the conduct of the SFO was such as to warrant costs being awarded to him. Weighing up all of the factors I have discussed I do not consider that this is an appropriate case for the award of costs and therefore dismiss the application.
Grounds of appeal
[24] Sections 5(2) to 5(5) of the Costs in Criminal Cases Act are relevant to the grounds of appeal.
[25] Section 5(2) sets out considerations relevant to the costs decision in the following terms:
(2)Without limiting or affecting the Court’s discretion under subsection (1) … 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 information was dismissed on a technical point:
(f)Whether the information 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.
[26] Section 5(3) makes it plain that there is no presumption for or against the granting of costs. Sections 5(4) and (5) provide as follows:
(4)No defendant shall be granted costs under this section by reason only of the fact that he has been acquitted or discharged or that any information charging him with an offence 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.
[27] The authorities recognise that s 5 of the Act confers a broad discretion. The Supreme Court discussed the approach to be taken to appeals of this nature in Reid v R [2008] 1 NZLR 575 emphasising, first, that the weight given to any of the statutory criteria “does not engage matters of principle affecting the validity of [the] statutory discretion”: at [21]. Secondly, the Court observed at [23] that:
[A]n appellate court cannot hope to capture the ephemeral but significant impressions which inform the assessments and discretions of the trial judge. That is why, of course, a challenge to the exercise of discretion must demonstrate what would be termed, generally, an error of principle.
[28] The notice of appeal raises a number of grounds but, given the way in which the appeal has been developed, the issues for consideration are as follows:
(a)Did the Judge properly approach the relevant factors in s 5(2) and, associated with that, did she deal properly with the BIC policy and the appellant’s stated belief that it was lawful and with the effect of the infelicities in the SFO’s investigation on the appellant?
(b)Did the Judge err in considering an irrelevant factor, namely, that there was a public interest in not inhibiting the prosecution of serious crime through disproportionate adverse costs orders?
(c)Did the Judge err in not considering a relevant factor, namely, the New Zealand Bill of Rights Act 1990 (“the Bill of Rights”)?
(d)Was it relevant that s 229A of the Crimes Act was repealed in October 2003?
First appeal ground: consideration of relevant factors
[29] Four paragraphs of s 5(2) are directly in issue, namely: the sufficiency of evidence under paragraph (b); the manner of the SFO’s investigation in terms of paragraph (d); whether Mr Delamere established he was not guilty as referred to in paragraph (f); and Mr Delamere’s behaviour under paragraph (g). Some of Mr Delamere’s arguments also reflect an underlying theme that the SFO was not looking for the truth. That raises an issue to some extent at least about paragraph (c), that is, whether steps were taken by the SFO to investigate matters which suggested that the defendant might not be guilty. The issues relevant to that argument overlap with those relating to the sufficiency of evidence and we deal with these matters together.
Sufficiency of evidence
[30] Mr Delamere says, first, that the scheme did comply with the BIC policy, and was consistent with how NZIS had interpreted it. He says that over the relevant period, BIC applicants were permitted to meet the investment requirement using borrowed funds. He also says that NZIS at the time did not require investment funds to be sourced from funds and assets listed by an applicant in their BIC application form. Mr Delamere seeks to draw an analogy with funds invested with a trading bank because at any particular point in time he says the bank will not necessarily hold the total funds invested. Secondly, Mr Delamere emphasises that he believed that the scheme complied with the BIC policy. Given that, he submits the allegations against him could never have been sustained. Mr Delamere also submits that because of the SFO’s failure to properly consider the policy and his stated belief that the scheme complied with it, matters that suggested he was not guilty were overlooked.
[31] There was evidence about difficulties that had arisen in relation to the interpretation of the BIC policy and the policy was changed in late 2002 to try to rectify some of these issues. Despite this material, we agree with Courtney J for the reasons she gives that the prosecution had sufficient evidence at the commencement of the proceedings. It is plain, as the Judge concluded, that the policy contemplated that the money would be invested for an unbroken period and would generate a return. Neither occurred here. The policy and the scheme were, in these respects at least, irreconcilable.
[32] The appellant’s further argument that the position under the scheme equated with the position in terms of trading banks misses the point. The trading bank customer may have no control over the use to which the bank puts his or her money. However, that customer has nonetheless invested in the bank’s business and the bank is carrying on a genuine commercial activity for which the money will be used. As Courtney J said at [39], the bank’s business depends on the constant flow in and out of deposits. By contrast, Golden Harvest did not have any commercial purpose other than generating a fee for itself and Mr Delamere’s company to share. There was no commercial activity in which the applicants invested and there were no deposits as such. Courtney J put it this way at [39]:
The repeated transfer of the same fund in different names does not constitute an investment. The debt that remained between Golden Harvest and the applicant, on which no interest would actually be paid, could not be viewed as an investment in everyday language and certainly not as an “acceptable investment” as it is defined in the BIC policy.
[33] The SFO did not have to accept the appellant’s statement that he believed the scheme complied with the BIC policy. It is important also that the SFO was relying on a combination of factors to establish that Mr Delamere did not have an honest belief in the lawfulness of the scheme as we now discuss.
[34] In terms of counts 1 to 7 (using a document fraudulently), as Courtney J notes at [43], the SFO relied on circumstantial evidence to show Mr Delamere’s dishonest intent. That evidence was as follows:
(a)The stated objective of the BIC policy was to contribute to New Zealand’s economic growth. It was aimed at persons prepared to make a financial commitment to New Zealand. As the former Minister of Immigration who had approved the policy, Mr Delamere could be taken to know exactly what its purpose was.
(b)During his interviews with the SFO, Mr Delamere went to some lengths to explain what he considered the correct interpretation of the policy to be. In his first interview he acknowledged that if NZIS knew the money had been transferred offshore within a short time of being deposited in Golden Harvest, the application for residence would be declined. He went on to say that he considered that NZIS’s interpretation was incorrect.
(c)Mr Delamere had sought informal opinions from a lawyer and an investment consultant about the legality of the scheme but did not take up the lawyer’s suggestion that he obtain a formal opinion.
(d)Golden Harvest maintained several bank accounts which the SFO said was a deliberate ploy to obscure the movement of monies.
(e)Some of the investment agreements entered into by the applicants as part of Mr Delamere’s scheme were unsigned, others had been signed by Mr Delamere on behalf of all the parties except the applicant. This was the case even though Mr Delamere claimed to believe that Mr Jiang was an owner of Hong Kong Harvest. Many of the agreements appeared to be signed by Mr Jiang, who denied that the signatures were his.
(f)There was no loan agreement between Golden Harvest and Hong Kong Harvest evidencing the basis on which the monies had been transferred by Golden Harvest to Hong Kong Harvest.
(g)Mr Delamere’s company charged applicants who participated in the scheme a substantially greater fee than usual.
[35] As the Judge said, the documents in issue in relation to these counts did purport to show that the applicants’ funds had been transferred into New Zealand and that the investment in Golden Harvest was a genuine one attracting interest at the rate shown. In doing this, the documentation portrayed the investment in a completely misleading way.
[36] In terms of counts 8 to 11 (dishonestly using a document), the SFO relied on the evidence already discussed. In addition, the SFO pointed to the following facts which are set out at [48] of Courtney J’s judgment:
(a)A Golden Harvest bank statement showed that each “investment” had been broken within a short time, with the money being returned to Hong Kong for use by another applicant.
(b)A chartered accountant approached to provide certification of the investment had declined to provide a certificate without further information. In particular, the accountant wanted to confirm that the investments apparently totalling $7 million did actually exist in Hong Kong. When this accountant declined to provide the certificate without further information, Mr Delamere uplifted the financial documents and sought certificates from another accountant.
(c)Although the two other accountants approached did provide certificates, the evidence showed that they were given a minimal level of information. Both said later that had they known exactly what was involved they would not have given the certificates.
[37] In terms of counts 12 to 14 (making a false statement with intent), in addition to the evidence already referred to, the SFO relied on the following common evidence for each of the counts:
(a)Correspondence between the appellant and Mr Jiang, after Mr Jiang’s application had been denied by the NZIS.
(b)The replacement of Mr Jiang as director of Golden Harvest with one of the appellant’s employees.
[38] As to the letters which bore what purported to be Mr Chau’s signature (counts 12 and 13), the SFO relied on the following facts:
(a)The letters were created on the appellant’s computer and on Hong Kong Harvest letterhead.
(b)The letters were backdated, printed, signed and filed.
(c)During an interview with the SFO, the appellant admitted he had probably signed the two letters.
(d)Copies of the signed letters were presented to the first accountant approached for certification purposes on 22 October 2003.
(e)Hong Kong Harvest bank statements show the contents of the letters to be false.
[39] In terms of count 14, the SFO also relied on the fact that the letter was printed, signed by the appellant and a copy put on file.
[40] On the basis of all of this evidence, the Judge was correct to conclude that there was sufficient evidence of the charges with the exception of those on which the appellant was discharged under s 347. Courtney J did consider the impact of the counts that were the subject of a discharge. It was open to Her Honour to conclude that the effect of the discharge in the context of the costs application was minimal given the underlying evidence would have been admissible anyway.
[41] It follows from the above that this was a strong SFO case. It is not a case where the SFO overlooked matters that suggested Mr Delamere was not guilty.
The manner of the SFO’s investigation
[42] There are two aspects to the argument on this topic. The first aspect arises from the appellant’s submission that the Judge attached too much weight to the absence of prejudice to him as a result of gaps in the SFO’s investigation. Secondly, Mr Delamere says that the gaps were such that this was not a reasonable and proper investigation. In other words, the Judge was wrong to find that he was not prejudiced. We take each in turn.
[43] The appellant accepts that the Judge could consider prejudice but submits that Courtney J gave too much weight to this factor.
[44] The high point of Mr Delamere’s case is that on the Judge’s approach, an applicant could never satisfy s 5 where he or she had mounted a successful defence. We agree that if that was the approach, it is problematic. However, we do not consider that is the test applied by the Judge. Rather, Courtney J has recognised that in the Act there is no presumption in favour of costs. In considering whether it was just and reasonable to award costs and in assessing the reasonableness of the SFO’s investigation it was appropriate to consider the impact of any infelicities in the investigation: Solicitor-General v Moore [2000] 1 NZLR 533 at [35] (CA).
[45] Here, the Judge does identify problems with the investigation but ultimately says that these would not have affected the SFO’s approach or the sufficiency of the case against the appellant.
[46] As to the inadequacies of the investigation, we have considered all of the matters raised by Mr Delamere. For the reasons given by the Judge we consider that the conclusion that the investigation was reasonable and proper was an available one. It is important, as the SFO submits, that there was no real factual dispute over how the appellant’s scheme operated or as to his role in it. In particular, there was no real doubt that the same money was being recycled and that Mr Delamere prepared the key documents. Further, some of Mr Delamere’s complaints really amount only to the suggestion that others should also have been under suspicion.
[47] The only matter we need to deal with specifically is Mr Delamere’s complaint about the SFO’s investigation into the apparent forgery of Mr Chau’s signature.
[48] On this issue Mr Delamere says, first, that the SFO had a report from a hand-writing expert, Dr Li Chi-Keung. Dr Li was unable to rule out the possibility that Mr Jiang was the author of the “Benny Chow” signatures. However, Dr Li’s report did not form part of the evidence at trial. Secondly, Mr Delamere notes that Dr Li was never asked to compare Mr Chau’s (“Benny Chow”) signature with that on the two letters. Finally, Mr Delamere seeks leave to admit as evidence an unsworn report from Mike Maran, who describes himself as an experienced certified handwriting analyst.
[49] Mr Maran says he has compared the “Benny Chow” signature with Mr Delamere’s handwriting. The effect of his report is that he is 90 per cent sure that Mr Delamere did not sign Mr Chau’s name.
[50] Given Mr Delamere’s acceptance during an SFO interview that the probability was that he had signed the letters, we do not consider the SFO’s decision not to call Dr Li was critical. The same comment applies to the scope of Dr Li’s report.
[51] As to Mr Maran’s report, this evidence could have been called by the defence at trial. Mr Delamere was represented by counsel at trial. No reason is advanced as to why it could not have been called at trial. We decline leave to admit Mr Maran’s report.
[52] Finally, we note that the other matters raised by Mr Delamere would have had little impact on the overall investigation and particularly not on the decision to charge him.
Did Mr Delamere establish he was not guilty?
[53] Mr Delamere next submits that the Judge erred in not considering he had established he was not guilty: s 5(2)(f). Two matters are relied on in this context. The first aspect is the short length of time for which the jury deliberated. The second factor is an affidavit from the jury foreperson. We deal with each in turn.
[54] The jury deliberated for just under two and a half hours. Over this period they were provided with lunch. The trial had extended over four weeks. In the context of a similar period of deliberations in R v T [1992] 3 NZLR 215 at 218 (HC), Tipping J said that: “… in the light of this sequence … [the jury] cannot have had much difficulty in coming to the view that the charges against T were not established”. Nonetheless, His Honour said that, whether or not paragraph (f) strictly applied to a trial on an indictment (rather than to a summary trial as the wording of s 5(2)(f) suggests) or as a relevant consideration, it was impossible to say that T had positively established he was not guilty. In our view, the same position applies here.
[55] There are dangers in drawing too much from the length of jury deliberations. Where, as here, the SFO case was sufficient to warrant the laying of the charges then, given the nature of the case, it is reasonable to assume that it was Mr Delamere’s assertion of honest belief that established a reasonable doubt. This is some distance from saying that the jury believed him. Further, believing him in any event simply meant that the jury accepted that he had an honest but wrong belief. This is a quintessential jury issue and does not in any way make it wrong to have charged him.
[56] As to the affidavit from the jury foreperson, there is an initial question as to its admissibility. Section 76(1) of the Evidence Act 2006 reflects the general principle that a person must not give evidence about the deliberations of a jury. There is an exception to that principle in s 76(3), which applies where:
… the Judge is satisfied that the particular circumstances are so exceptional that there is a sufficiently compelling reason to allow that evidence to be given.
[57] Section 76(4) expands on the matters to be considered under s 76(3) as follows:
In determining, under subsection (3), whether to allow evidence to be given in any proceedings, the Judge must weigh–
(a)the public interest in protecting the confidentiality of jury deliberations generally:
(b)the public interest in ensuring that justice is done in those proceedings.
[58] As this Court observed in R v Fernando [2007] NZCA 485 at [83], the test imposed in s 76(3) is a “stringent” one. We are satisfied that the material sought to be admitted in this case is not close to meeting that test and so do not discuss it further other than to note that, in any event, the jury foreperson, for obvious reasons, deposes only to her own view.
[59] We add that we envisage that it would be an unusual case where the secrecy of jury deliberations could be breached to establish “innocence” in terms of the Costs in Criminal Cases Act.
[60] In the course of the hearing of the appeal, we made an order prohibiting publication of the contents of the affidavit from the jury foreperson. That order remains in force.
Mr Delamere’s behaviour
[61] The question of the defendant’s behaviour in terms of s 5(2)(g) was not directly raised in Mr Delamere’s application for costs. It was not therefore the focus of any evidence or other consideration by the Judge. However, the Judge was obviously aware that Mr Delamere had participated in interviews with the SFO. We consider Mr Delamere should have raised this matter directly at the time of the application. There is, in any event, not enough on this point to say that Mr Delamere’s behaviour made it just and reasonable that an award of costs be made.
Second appeal ground: reliance on an irrelevant factor?
[62] This issue arises because of the Judge’s comments at [6] to this effect:
Section 5(1) confers a broad discretion as to the awarding of costs. However, it is a discretion that must be exercised in a principled manner. In particular, it should be exercised bearing in mind the policy reasons identified by the Court of Appeal in R v Connolly, namely that an award of costs against a prosecuting agency could have the unintended consequence of acting as a disincentive to bring similar prosecutions in the future, and conversely, the possibility of an adverse costs order being made is likely to operate as an incentive for prosecution agencies to maintain high standards of investigation. [Footnotes omitted.]
[63] Mr Delamere is correct that the Supreme Court on appeal from the decision in Connolly said that the concern about the fiscal implications of costs awards on the prosecutorial function was misplaced. That was because of s 7(1)(a) of the Act which provides for costs to be met by the SFO through a neutral source: Reid at [13] – [16].
[64] There is, however, nothing in Courtney J’s careful and reasoned consideration of the application for costs that suggests this misstatement has played any part in the decision not to award costs. It is also unlikely, as the respondent submits, that the concept of a prosecutorial disincentive would ultimately have been seen as relevant by the Judge given her conclusions as to the strength of the case.
Third appeal ground: failure to consider the Bill of Rights?
[65] The appellant says the SFO’s failures have led to a breach of s 24(d) of the Bill of Rights Act. That section protects the rights of those charged with an offence to adequate time and facilities to prepare a defence.
[66] This submission does not raise anything which has not already been considered above. Nor is there anything in Mr Delamere’s suggestion that Courtney J gave inadequate consideration to the principles of natural justice having concluded there were some issues with the SFO’s investigation.
Fourth appeal ground: charges under s 229A of the Crimes Act
[67] Finally, we deal with the appellant’s argument that s 229A was repealed with effect from 1 October 2003, ie before the charges were laid. The section was however in effect at the time of the offending and that is the relevant time for these purposes.
Conclusion
[68] Looking at the matter overall, this was a strong SFO case. The Judge, who presided over the four week trial, concluded after a careful analysis that the infelicities in the SFO’s investigation were not such as to make a costs award just and reasonable.
[69] The costs to Mr Delamere were high both in terms of his actual costs and in a reputational sense. However, this and the other relevant factors were all considered by the Judge. No error in principle has been identified in her approach. In these circumstances we are not disposed to interfere with the decision.
Costs
[70] We did not hear from the parties on costs with respect to the appeal. Costs are reserved.
Solicitors:
Crown Solicitor, Auckland.
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