Hitchinson v R
[2010] NZCA 388
•20 August 2010
IN THE COURT OF APPEAL OF NEW ZEALAND
CA749/2009
[2010] NZCA 388BETWEENPETER JUSTIN HITCHINSON
Appellant
ANDTHE QUEEN
Respondent
Hearing:14 June 2010
Court:Chambers, Winkelmann and Fogarty JJ
Counsel:P J Davey for Appellant
M A Woolford for Respondent
Judgment:20 August 2010 at 4 pm
JUDGMENT OF THE COURT
The appeal is dismissed.
____________________________________________________________________
REASONS OF THE COURT
(Given by Winkelmann J)
[1] The appellant, Mr Hitchinson, was found guilty by a jury of six counts of theft by a person in a special relationship, an offence pursuant to s 220 of the Crimes Act 1961. He was sentenced by Judge Joyce QC on 6 November 2009 to three years, four months imprisonment. Mr Hitchinson appeals against his conviction on counts 6 and 7 of the indictment which charged:
6 ….. Peter Justin Hitchinson, between 8 September and 13 November 2006 or thereabouts, at Whangarei or elsewhere in New Zealand, having control over property, namely US$195,448.69, on terms and in circumstances that he knew required him to deal with that property in accordance with the requirements of another person, namely Donald Currie, intentionally dealt with the property otherwise than in accordance with those requirements and thereby committed theft.
7 ….. Peter Justin Hitchinson, between 17 October and 23 November 2006 or thereabouts, at Whangarei or elsewhere in New Zealand, having control over property, namely US$65,000, on terms and in circumstances that he knew required him to deal with that property in accordance with the requirements of another person, namely Barry Reiher, intentionally dealt with the property otherwise than in accordance with those requirements and thereby committed theft.
[2] In respect of count 6, the grounds of appeal are that:
(a)the Judge erred in allowing two emails to be admitted as evidence which were, on Mr Hitchinson’s case, evidence of previous consistent statements by Mr Currie and therefore inadmissible by reason of the prohibition contained in s 35 of the Evidence Act 2006 (the Act) against the admission of previous statements of a witness consistent with the witness’s evidence, and
(b)the Judge was wrong to direct the jury that Mr Hitchinson could not rely on a subsequent written acknowledgment by Mr Currie of Mr Hitchinson’s use of the funds as a ratification of that use and hence as a defence to the charge.
[3] In relation to count 7, the appellant argues that the Judge erred in admitting evidence of an email from the complainant which the appellant says was inadmissible, again by reason of the s 35 prohibition.
[4] A fourth ground of appeal contained in the notice of appeal, concerning the Judge’s failure to discharge the jury, was abandoned at the hearing.
Appeal in relation to count 6
Factual background
[5] Mr Hitchinson, through his company, FHXT Fund Managers Ltd (FHXT FM), offered to invest funds for clients in online foreign currency trading. Investors' funds were deposited with a foreign exchange trading platform. Each investor was allocated a client account showing their funds. FXHT FM took commission from the trading and any profit in excess of an agreed amount, with all other profits accruing to the client’s account.
[6] From June 2005 to September 2006, the online foreign currency trading platform used by FXHT FM was Foreign Exchange Clearing House Ltd, also known as “Forex Swiss”. Client funds were traded online through the Forex Swiss platform by Mr Hitchinson and an associate of his. Clients who invested with FXHT FM entered into a written client agreement which provided:
2.3 The client hereby mandates FXHT Fund Managers Ltd to operate a managed account on behalf of the client.
2.4 FXHT Fund Managers Ltd will not handle or transfer funds or financial instruments on behalf of the client.
2.5 All monies received (including profits) will accrue to the account of the client and will be held by Forex Swiss [or FX Active] in the Client’s own trading account.
[7] In early 2006 Mr Currie invested three sums, NZ$30,000, NZ$680,000 and again NZ$30,000 with FXHT FM, although subsequently withdrawing US$154,000 in May 2006.
[8] In late August and September 2006 the Curries were travelling in Australia. There was a chain of emails around this time in which the Curries sought clarification from Mr Hitchinson as to the state of their investment and requested a simplified statement to assist them in understanding it. In his deposition statement and at trial Mr Currie said that in September 2006 Mr Hitchinson phoned him and told him that FXHT FM was changing trading platforms as Mr Hitchinson was not happy with the current platform’s performance. Mr Hitchinson said that he thought that the current platform was making mistakes so they were opening another platform which would give the Curries a better return. He told the Curries that their funds would be transferred to their bank account and that they would then have to put them into another account for investment through the new platform.
[9] Subsequently, on the evening of 7 September 2006, the Curries received a phone call from Westpac Bank, Sydney telling them that US$195,448.69 had been deposited into their account. They went to the bank first thing the following morning and transferred the money as they had been instructed by Mr Hitchinson.
The Curries’ email
[10] On 11 September 2006 Mr and Mrs Currie sent Mr Hitchinson an email. Evidence produced at trial established that the email had been received on Mr Hitchinson’s computer. The subject line of the email is ‘Transfer Done’, and the text of the email reads as follows:
Hello Justin,
We had a foreign woman ring us from Sydney Westpac Bank about 6.30 Thursday evening to let us know about the large sum of U.S. dollars (195,448.69) that was deposited into our account and wanted our signatures and verification of our identities and what we were going to do with the money. We told her it was our investment and our fund manager was changing the investment platform. In order to get the signatures a.s.a.p. we went to Cairns Bank first thing Friday morning. They faxed through all our relevant details and we asked them to confirm the transaction by ringing us. They did this within the hour but did not deduct the $50 nor the $1000 which we requested and in order to change things at that stage it would delay things until Monday so we said to let it go through as is. This means we are still short and would like an extra $2,500 transferred into our account this week. This should make it worthwhile doing the transaction, and help us with our touring.
The letter for Centre Link you can forget about, but we would still appreciate having a summary of the financial accounts of how we stand and how we can check on this from now on. (What is it in NZ dollars, U.S. dollars and Aussie dollars?) round figures. We understood from our conversation over the phone that there were two sums of money, one $195000 and an amount of $86000, should this make a total of $281000 @ 2.25%? If this is so how have you divided this up for our monthly income etc. Please confirm.
How did you enjoy Fiji?
Cherrio for now,
Don and Rose.
[11] The funds were not invested in foreign exchange trading by Mr Hitchinson. Over the three weeks following the fund transfer, he used the Curries’ capital to pay his personal and company expenses, to top up other investor’s accounts and to pay a small amount to the Curries. The latter payment was purportedly a payment of interest, but was in reality a return of a portion of their own capital. Mr Hitchinson’s defence to the charge of theft was that in a telephone conversation in early September, Mr Currie agreed that Mr Hitchinson could treat the balance of the funds invested as a loan to FXHT FM. The background to this agreement was that he had told Mr Currie that the company needed this money to avoid liquidation because of heavy losses incurred in trading clients’ funds. The reliability and credibility of Mr Currie’s account that he had invested the money with Mr Hitchinson for foreign exchange trading was therefore critical to the Crown’s proof of count 6.
[12] Prior to the hearing of the charges against Mr Hitchinson, his counsel objected to the admissibility of the September email on the basis that it was a previous consistent statement. That issue was dealt with by Judge Joyce in a pre-trial ruling.
[13] He also dealt with one Mr Reiher’s email that is relevant to count 7 which we address later.
[14] The Judge said of both emails:
[25] The two emails do not, on their own, have the capacity to prove the truth of matters of asserted fact to which they allude but they are, naturally and logically, part and parcel of the tales respectively told by Reiher and Currie.
[26] Save for the fact of their being on record (because of the method of communication used) they are in no different category from communications to like effect made over the telephone or conveyed face to face, a recounting of which would be an ordinary and natural part of the course of evidence.
[27] Moreover, they are communications to which the accused had every apparent chance to respond at the time. They are not things written or communicated behind, as it were, his back or otherwise without his knowledge.
[28] In my view s 35 has got nothing directly relevant to do with either of these two emails.
[29] But they are patently relevant in terms of s 7 of the Evidence Act and there is no basis for arguing an unfairly prejudicial effect in terms of s 8(2).
[30] They offer no bar to the right of the accused to offer an effective defence and, returning to s 7, are in the part and parcel category to which I have alluded.
[31] They form part of that evidence which, if accepted, has a tendency to prove matters of consequence to the determination of this prosecution.
[15] He ruled that the two emails were admissible.
Karen Leslie’s email
[16] On 1 November 2006 Mr Hitchinson’s office assistant Ms Karen Leslie sent him an email which read:
Hi Justin, Have just spoken to Mr Currie, they would like to come and see you next Tuesday at 11, are you in the office next Tuesday and Wednesday? Their account details are ASB Whangarei Branch 12-3090-004-8633-00. What they would like to know is how much money they have invested so that they can look at either purchasing a property or look for one to rent, i.e. will their interest payments cover their expenses. Also is it possible for them to get a statement or statements showing their account activity from when they first invested their money until now? They also have been to see their lawyer because the money is part of their family trust. They would like you to have statements for them to have a look at when you come to see them on Tuesday. I hope this is fine with you, Dan Simperingham would like you to give him a call, 094343543 or his cellphone 0274179198. There has been one call from a prospective client, I am sending him a brochure and business card today. Karen Leslie.
[17] Ms Leslie did not refer to the email in the course of her evidence at trial because it was discovered by the Crown’s expert witness on the hard drive of Mr Hitchinson’s computer only after her evidence concluded. The Crown applied for its admission. Counsel for Mr Hitchinson opposed the application on the basis that the email was inadmissible by reason of s 35 because the narration in the email of Mr Currie’s statements was consistent with Mr Currie’s evidence.
[18] The issue in relation to Ms Leslie’s email arose during the course of trial. The Judge concluded that Ms Leslie’s email was a previous consistent statement of Mr Currie in that it recorded a statement made by him (a witness) at a time other than at the hearing, and was consistent with his evidence. But the Judge was also satisfied that Mr Hitchinson’s defence entailed a challenge to Mr Currie’s veracity or accuracy on the basis that his evidence was a form of recent invention.
[19] He found it significant that in his video interview Mr Hitchinson claimed that around September 2006 the Curries knew and accepted that their money (or at least a substantial part of it) had been applied otherwise than simply for their investment benefit. The Judge noted that it was put to Mr Currie in cross-examination that his memory was letting him down because he had failed to recall that he had agreed, in the course of a telephone conversation with Mr Hitchinson at the end of August or beginning of September 2006, to the alternative application of the money. Mr Currie rejected that proposition. It was then put to him that as late as 29 November 2006 when he signed another document ratifying Mr Hitchinson’s use of the money (which we come to shortly), everything was fine. The Judge concluded that the s 35(2) exception (rebuttal of recent invention) applied.
Legal principles
[20] Section 7 is one of the cornerstones of the Act. It provides:
Fundamental principle that relevant evidence admissible
(1)All relevant evidence is admissible in a proceeding except evidence that is—
(a)inadmissible under this Act or any other Act; or
(b)excluded under this Act or any other Act.
(2)Evidence that is not relevant is not admissible in a proceeding.
(3)Evidence is relevant in a proceeding if it has a tendency to prove or disprove anything that is of consequence to the determination of the proceeding.
[21] Section 35(1) of the Act contains the prohibition against the admission of previous consistent statements. It provides:
A previous statement of a witness that is consistent with the witness's evidence is not admissible unless subsection (2) or subsection (3) applies to the statement.
[22] That prohibition is to be read together with the definition of ‘statement’ in s 4 of the Act which provides that the term includes:
(a)a spoken or written assertion by a person of any matter; or
(b)non-verbal conduct of a person that is intended by that person as an assertion of any matter
[23] There are two exceptions to the blanket prohibition in s 35(1). Relevant to this appeal is that provided in s 35(2) which reads:
A previous statement of a witness that is consistent with the witness's evidence is admissible to the extent that the statement is necessary to respond to a challenge to the witness's veracity or accuracy, based on a previous inconsistent statement of the witness or on a claim of recent invention on the part of the witness.
Was the Curries’ email of 11 September admissible?
[24] Mr Hitchinson argued that the Curries’ email was a previous consistent statement and that the Judge’s finding that it was not was contradicted by his subsequent finding that Ms Leslie’s email was a previous consistent statement which could nevertheless be admitted under s 35(2). Counsel for Mr Hitchinson submitted that if Ms Leslie’s email constitutes a previous consistent statement, so too must the Curries’ email.
[25] As to the significance of the admission of the emails, Mr Hitchinson’s counsel refers to the treatment of them by the Judge in the course of his summing up. He argues that as a result of these directions the Judge invited the jury to rely on self-serving emails, giving rise to a miscarriage of justice. The relevant passage of the summing up is as follows:
[132] In this case, and to the extent that such is available, I would expect you as the judges of fact to find it useful, perhaps on occasion quite telling and at least instructive, to put the evidence of the witnesses alongside the contemporaneous documents, the documents that were created at the time these events were occurring, including of course the emails, and then to consider whether what was written by or on behalf of a witness, the accused of course included because he was a witness, fitted with what they had told you was going on – or so far at least as they then and actually knew at the time was going on – going on when these documents were created.
[134] These are all matters for you but examples might be, is what this witness says they knew or understood at the time consistent with what they wrote or recorded at the time? If not, what do we find to be the explanation for that? Is this a document that the writer must have known conveyed misinformation? If that is the case what, having regard to the evidence and all common sense, do we find to be the explanation for that?
[26] Section 35 was not intended to exclude relevant and probative evidence which is not repetitive, and which can be categorised as a previous consistent statement only in the sense that it is consistent with the general tenor of the witness’s evidence. As the District Court Judge said in his later ruling, it is important to bear in mind the purpose of s 35 when construing it. As he did, we also consider the following comment by the Law Commission relevant to this issue:[1]
The intention of [s 35] is to prevent the parties from inundating the Courts with voluminous amounts of repetitive material in order to shore up a witness’s consistency.
[1] Law Commission Evidence: Code and Commentary (NZLC R55, vol 2, 1999) at [C167].
[27] We agree with the District Court Judge’s analysis in his pre-trial ruling that the Curries’ email is not evidence falling within the s 35 prohibition. This was an email which was sent at or near the start of the period when Mr Hitchinson used the funds for his own purposes. It was part of the evidence relied upon by the Crown to establish both the terms upon which Mr Hitchinson received and held the money, and also his knowledge of those terms. Indeed, Mr Davey, for Mr Hitchinson, was inclined to agree that Mr Currie could have given evidence recounting the content of this email – but, he argued, he could not produce it. The email is of course the best evidence of the communication that occurred and must be admissible. In short, it was Mr Currie’s evidence. It was not a repetition of it.
[28] In Rongonui v R[2] the Supreme Court discussed the application of s 35 to evidence of words spoken during events the subject of the charge. The Court said:[3]
We do not consider the concept of a previous consistent statement, as used in s 35, can have been intended to apply to words spoken in the course of the events in issue. For the purposes of s 35 they are not to be regarded as “consistent” statements. There is nothing in the legislative history of the Act to suggest that Parliament meant to bring res gestae statements within the scope of s 35(1). The previous consistent statement rule, which the Law Commission indicated was being codified in s 35, was concerned with statements made after the events in issue. The rule was designed to prevent witnesses bolstering their testimony by reference to something they had said to the same effect on a previous occasion. Usually the statement was in the nature of a report on or a reference to an event which had already occurred. The statement was consistent because the witness’s previous account of the events was to the same effect as the witness’s evidence in court. The key present point is that a witness is not giving an account of relevant events when the words are spoken during those events. Such words are not an account of the event; they are part of it. Hence s 35(1) does not apply to this kind of evidence.
[2] Rongonuiv R [2010] NZSC 92.
[3] At [46].
[29] This reasoning applies with equal force to written communications occurring during the course of events.
Was Ms Leslie’s email admissible?
[30] It seems likely this email, unlike the Curries’ email, was sent after the misapplication of funds. It does not therefore form part of the events in issue. The objection that was taken in relation to this email was not that it was consistent with the earlier evidence of Ms Leslie (which it was not, since she did not give evidence in relation to the content of the email) but that it was consistent with Mr Currie’s evidence as to the terms on which he had deposited the money. Mr Hitchinson argues that the Judge was wrong to hold that the s 35(2) exception applied. Moreover, because of the Judge’s indication during argument of his view that the email was not a previous consistent statement, Mr Hitchinson was not given an opportunity to be heard on the application of the exception.
[31] The definition of “statement” was discussed by Simon France J in R v Holtham.[4] At issue in that case was whether a text message from an unknown sender (in code) requesting the supply of drugs was admissible to support the inference that the recipient would supply drugs. If the messages constituted “statements” under the Act, they were inadmissible hearsay, as the maker of the statement could not be identified to give evidence. The Judge concluded that it was an essential characteristic of a statement that the person “asserting” (the word used in both paras (a) and (b) of the definition of statement) intended to make that statement or assert that fact or opinion. The definition of statement therefore did not encompass “implied assertions”.
[4] R v Holtham [2008] 2 NZLR 758 (HC).
[32] In Rongonui the Supreme Court considered whether the evidence of a complainant in a rape trial that after the alleged attack she told others “what had happened”, amounted to a previous consistent statement, even though the complainant did not detail what she told her friends. The majority held that it did. It said this evidence was given not long after the Crown opening in which the Crown set out its narrative. In that context, and in the context of the complainant’s evidence as a whole, the evidence undoubtedly would have been understood as meaning she had told her friends that she had been sexually assaulted.
[33] The issue arises: does that holding entail a rejection of the approach taken by Simon France J in Holtham as to the meaning of “statement”? We do not think that it does. In Rongonui the majority said that the failure to refer to the content of the complaint was a “device” because the inference which the jury were bound to draw was that the complainant had made statements in terms substantially the same as her evidence in Court. There was, effectively, an intentional importation of what the witness had previously said.
[34] In Holtham, although the Judge used the expression “implied assertion”, the point is that there was no assertion, implied or otherwise, by the author of the text that the text recipient was a drug dealer. That was merely an inference available to be drawn from the communication, because it was the underlying assumption informing it.
[35] Likewise in this case, when Mr Currie made contact with Ms Leslie he was not asserting that his money was invested in foreign exchange, although that undoubtedly was the assumption underlying his communication. The record in the email of Mr Currie’s questions and comments is not evidence of a statement in the form of a report or complaint of the type referred to by the majority and, separately, by Elias CJ in Rongonui. The communication has probative value because it is evidence that Mr Currie behaved in a manner consistent with his account of the terms on which he paid the money to Mr Hitchinson. His communication gains that probative value because, on the Crown case, it was a communication that pre-dated Mr Currie’s discovery of how Mr Hitchinson had dealt with his funds. The email therefore is admissible as evidence under the provisions of s 7 of the Act as relevant evidence. As previously observed, we do not consider that s 35 was intended to exclude evidence of this kind which was not a repetition of evidence given by Mr Currie – he did not refer to this query at all – but was merely consistent with the overall effect of his evidence.
[36] If, however, we are incorrect in our view that s 35 does not apply to this statement, we nonetheless think the email was admissible. The Judge ruled that the email was admissible on the grounds that it fell within the s 35(2) exception. If s 35 did apply, we have no doubt that the Judge’s analysis that the exception was engaged was correct. Although we have heard counsel for Mr Hitchinson argue for a contrary conclusion, we are satisfied that the reasons the Judge gave are sound.
[37] There is also an alternative basis on which the email would be admissible, notwithstanding the application of s 35. It seems clear on the evidence that Mr Hitchinson received Ms Leslie’s email. He did not respond to it. His silence in the face of this email could make the email itself admissible.
[38] The reasoning is this. At common law the Crown could not call evidence of an accused’s silence in the face of police questioning as this would breach the accused’s right to silence. But the common law permitted an inference of guilt to be drawn from a defendant’s silence in the face of an allegation put by someone with whom the defendant was “on even terms”. Professor Richard Mahoney has summed up the common law in these terms:[5]
Practically speaking, this phrase [“on even terms”] referred to a lay person who did not wield any of the power that is associated with an enforcement body such as the police. At common law, if it would have been reasonable for an innocent person to have denied an allegation put by someone with whom the defendant was on even terms, an inference of guilt could be drawn from the defendant’s silence.
[5] Bruce Robertson (ed) Adams on Criminal Law – Evidence (looseleaf ed, Brookers) at [EA32.01] (3). And see fuller discussion at [ED6.03](2).
[39] The Law Commission discussed this matter in its preliminary paper on police questioning.[6] Its tentative view was that evidence of silence should be admissible except where it was a response to “official questioning”. It favoured leaving “unchanged our present law concerning silence in response to an allegation when the parties are on even terms”.[7] That preliminary view was then confirmed in the Commission’s final report.[8] The dichotomy between evidence of silence in the face of official questioning and evidence of silence in the face of non-official questioning is now covered, in part, by s 32 of the Evidence Act, which reads as follows:
[6] Law Commission Criminal Evidence: Police Questioning (NZLC PP 21, 1992).
[7] At [80].
[8] Law Commission Evidence: Reform of the Law (NZLC R55, vol 1, 1999) at [124]-[127].
32 Fact-finder not to be invited to infer guilt from defendant's silence before trial
(1)This section applies to a criminal proceeding in which it appears that the defendant failed—
(a)to answer a question put, or respond to a statement made, to the defendant in the course of investigative questioning[9] before the trial; or
[9] “Investigative questioning” is defined in s 4 of the Act. The definition is to the same effect as the concept of “official questioning” to which the Commission had referred.
(b) to disclose a defence before trial.
(2) If subsection (1) applies,—
(a) no person may invite the fact-finder to draw an inference that the defendant is guilty from a failure of the kind described in subsection (1); and
(b) if the proceeding is with a jury, the Judge must direct the jury that it may not draw that inference from a failure of that kind.
(3) This section does not apply if the fact that the defendant did not answer a question put, or respond to a statement made, before the trial is a fact required to be proved in the proceeding.
[40] The drafting of the Act is somewhat obscure. Section 32 in itself does not rule evidence either admissible or inadmissible. Rather, what it does is prohibit the fact-finder drawing an inference that the defendant is guilty in certain circumstances. That prohibition would, however, in the circumstances where it applies, indirectly render the evidence of silence inadmissible, as such evidence has relevance only if it is available for the drawing of an inference of guilt. It would seem from the scheme of the Act that, where s 32 does not apply, the fact of silence and the question or statement to which the silence relates are admissible pursuant to the general admissibility section, s 7.
[41] In summary, therefore, the law now is that pre-trial silence in the face of an assertion contrary to the defendant’s testimony or stance at trial may be relevant evidence under s 7 provided:
(a)The silence occurred in circumstances where the defendant could have been expected to refute the assertion if untrue; and
(b)It did not occur in circumstances where s 32(1) applies.
[42] Of course, in order to know what a defendant was being silent about, one needs to know the assertion to which he or she was not responding. So the assertion has to come in in order to make the evidence of silence explicable and indeed admissible.
[43] Frequently that assertion will also be a previous consistent statement, if the person who made it is later a witness who gives evidence to similar effect. In our view, on a correct reading of the Act as a whole, and particularly when viewed in the light of its legislative history, s 35(1) is, by implication, subject to a further exception. In circumstances where a defendant’s silence is admissible, the question or statement to which that silence relates is admissible (by sidewind), even in circumstances where it might amount to a previous consistent statement.
[44] This is entirely logical. If a complainant said to her attacker, “you raped me last night” and the defendant responds “I know I did, but don’t tell anyone”, the defendant’s admission and the assertion prompting it are both admissible under s 27(1), and s 35 expressly does not apply: see s 27(3). If the complainant made the same assertion and the defendant did not respond, evidence of the defendant’s silence and the accusation to which it relates are admissible, not under s 27 (because the defendant has made no “statement”[10]) but under s 7. But the reason for adducing evidence of silence in the face of an accusation is the same reason we let in the admission in the face of an accusation: in both cases, inferences of guilt may be drawn. For the same reason s 35 does not apply where an admissible admission is made, so too it should not apply in cases where evidence of silence is admissible. In both cases, the evidence makes sense only if we know what prompted the defendant’s reaction (whether admission or silence).
[10] We do not accept that a defendant’s silence constitutes “a statement” for the purposes of s 27, given the definition of “statement” in s 4: contrast R v Saunokonoko [2008] NZCA 393 at [21]. In support of our view, see Richard Mahoney “Evidence” [2009] NZ L Rev 127 at 130.
[45] We now apply this reasoning to the present case. Section 32(1) is not engaged. Further, the circumstances of the receipt of this email were such that Mr Hitchinson could have been expected to respond. The Curries were his clients. They had a right to know, contractually and ethically, what was happening to the money they had entrusted to him. Any financial adviser could in those circumstances have been expected to respond to their assertions and to put them right if those assertions demonstrated they were mistaken as to their understanding of the arrangement. Mr Hitchinson’s failure to respond to the Curries’ assertions, as contained in Ms Leslie’s email, was admissible. The assertions to which he failed to respond were therefore admissible under s 7, even if they had amounted to prior consistent statements.
[46] For all of these reasons, the appeal in relation to the admission of Mr Currie’s and Ms Leslie’s emails into evidence cannot succeed.
Was the Judge’s summing-up relating to the 29 November 2006 acknowledgement correct?
[47] Mr Hitchinson also appeals count 6 on grounds relating to the direction to the jury given by the Judge in summing up in relation to an agreement dated 29 November 2006. This agreement had been prepared by Mr Hitchinson and signed by Mr and Mrs Currie, and stated:
This is to confirm that I [sic] Mr and Mrs Currie acknowledge that the amount of $275,484.00 has been utilised by FXHT Fund Managers Limited for running cost’s [sic] and expanding of the business and no [sic] longer being traded. The amount of $6,198.39USD will be paid monthly to Mr and Mrs Curries’ bank account. We acknowledge that this amount $275,484USD will be replaced over a period of 18 months as of today and will not be withdrawn.
We understand and acknowledge the above.
This done and signed on 29/11/2006 at Whangarei
[48] In accordance with his indication to counsel in advance of summing up the Judge gave the following direction to the jury:
[55] I come next to the 29 November 2006 document that the Curries signed at the request of the accused, the one that talked about the Currie money having been used to meet running costs and to expand the business and so on.
[56] As I understand it, the defence submits that this document is consistent with an arrangement having been made with Mr Currie in early September, whereby those monies would become an advance to the accused’s company, or him, rather than be held for investment as originally stipulated.
[57] The Crown, on the other hand, says – again as I understand it – that this document comprises nothing better than something the accused was able to gull the Curries into signing and which evidences no more than a vain attempt by the accused to get himself off the hook with them in the matter of already intentionally mis-applied monies.
[58] Matters of fact in this, as in all other respects, are entirely for you, but this much, as a matter of law, I must make clear: If you should find that the Crown had otherwise proved its case against the accused in respect of the Currie money, then this document could not then operate to free or release him from guilt in that respect because, as a matter of public policy, the law says that there cannot be any such release.
[49] Following trial the Judge gave his reasons for this direction. He said that although the agreement did not expressly purport to release the accused from risk of criminal prosecution, it had the object of either the Curries ratifying the earlier unauthorised use of the funds or acknowledging the understanding Mr Hitchinson said was reached in September 2006. The former interpretation would render it an agreement having the tendency to affect the course of justice, and so was illegal or void. He referred to a number of authorities to support this proposition including Slater v Mall Finance & Investment Co Ltd[11] and leading texts including Burrows Finn and Todd Law of Contract in New Zealand.[12]
[11] Slater v Mall Finance & Investment Co Ltd [1976] 2 NZLR 1 (HC).
[12]John Burrows, Jeremy Finn and Stephen Todd Law of Contract in New Zealand (3rd ed, LexisNexis, Wellington, 2007) at [13.4.3].
[50] Mr Hitchinson submits that the Judge was in error in directing that the agreement could not be relied upon as ratification. He argues that as a matter of general principle it is possible for one person to ratify an unauthorised act which another person has purported to do on the first person’s behalf and the ratification constitutes the relation of principal and agent retrospectively. As a result it acts retrospectively to authorise the application of funds. He referred us to the case of Re Tiedemann and Ledermann Freres.[13]
[13] Re Tiedemann and Ledermann Freres [1899] 2 QB 66.
[51] We are satisfied that the Judge did not err in his direction to the jury. He identified that the relevance of the document to the defence case was that it corroborated Mr Hitchinson’s account that in September Mr Currie had authorised Mr Hitchinson’s use of the money. He was also correct in directing the jury that such ratification could not, as a matter of law, provide a defence to the charge. Mr Davey’s submission focused upon the enforceability of contracts which have the effect or intention in some way of stifling a prosecution. But the enforceability of the contract was not the issue. The issue was whether the contract could have relieved Mr Hitchinson from criminal liability. Mr and Mrs Currie could not have relieved Mr Hitchinson of criminal liability, even had they intended to, whether or not the contract was enforceable, because the offence was complete at the time of the misapplication of the funds.
[52] In any case, we make the additional point that we cannot see how the agreement relied upon is capable of the construction Mr Davey argues for. There is nothing in the agreement that evidences an intention to excuse Mr Hitchinson’s misapplication of the funds. Nor was there any evidential foundation laid for that version of events, either in cross-examination of Mr Currie or in Mr Hitchinson’s evidence.
Result on count 6
[53] The grounds of appeal in relation to count 6 fail for the reasons set out above.
Appeal in relation to count 7
Factual background
[54] Count 7 involved Mr Reiher. Mr Reiher was an existing foreign exchange investor with FXHT FM. Sometime in 2006 he expressed an interest in investing in the company and in October 2006 he prepared a shareholders’ agreement for this purpose. Mr Reiher’s evidence at depositions and trial was that the investment in shares did not proceed as the agreement was never finalised. But at about the time of those discussions he made a further investment of US$65,000 in the belief that the funds would be deposited to his existing foreign currency trading account and traded by FXHT FM on his behalf.
[55] The email from Mr Reiher which was the subject of challenge, was dated Wednesday 6 December 2006 and read as follows:
Justin
I understand that you have taken $65,000 US of funds I sent to you for my trading account and used them for other purposes. This is EXTREMELY SERIOUS.
I require all my advanced funds to be repaid immediately to my National Bank account from where they came. I understand there is the amount of over $120,000 that is correctly in my trading account and you have over $17,000 in a trading account of your own. I want all of this sent to my Nat Bank account now and you must make arrangements with me to transfer either other funds or property to me to balance the [account immediately]. Failure to [get] a satisfactory arrangement with me by 12 noon today will prompt me to take very serious action.
Baz
[56] Mr Reiher said that following this email he had a phone conversation with Mr Hitchinson in which Mr Hitchinson admitted taking the money. Mr Hitchinson said he had no idea how he was going to repay it so he asked Mr Reiher for an acknowledgment of debt. Following on from this conversation on 8 December, Mr Reiher sent an email to Mr Hitchinson intending to attach an acknowledgment of debt form, but which he mistakenly failed to attach. Mr Hitchinson requested he re-send the form, and Mr Reiher did so on 10 December. Mr Hitchinson signed the acknowledgment of debt.
[57] Mr Hitchinson’s defence was that the sum of US$65,000 was the NZ$100,000 part payment for the purchase of shares in a related company, FXHT Ltd. He relied on a share purchase agreement that Mr Reiher had prepared at the time to evidence this. He said that the first time Mr Reiher raised an issue with him about the US$65,000 was in the 6 December email. In his evidence he did not deny receiving it, and made no mention of the telephone conversation Mr Reiher claimed occurred. On his account of events, following the email Mr Reiher visited him with two companions. He threatened Mr Hitchinson and his fiancée, and it was only because he was under duress that Mr Hitchinson signed the acknowledgment of debt. Mr Reiher denied threatening either party.
Was Mr Reiher’s email admissible?
[58] The admissibility issue in relation to this email was dealt with in the pre-trial ruling dated 25 September 2009, the relevant passage of which is set out at [14], above. We are satisfied that the Judge was correct to rule the email admissible although we reach that conclusion through different reasoning.
[59] In isolation the email has little probative value as Mr Reiher simply asserts that which he had already asserted in evidence.
[60] Mr Hitchinson had used Mr Reiher’s money otherwise than in accordance with his instructions. We therefore accept Mr Hitchinson’s argument that the email is a previous consistent statement by Mr Reiher. But what was important and relevant evidence was Mr Reiher’s account that in a telephone conversation after this email, Mr Hitchinson admitted he had stolen the money.
[61] The email was also part of the chain of events that led to the signing of the acknowledgment of debt. It is apparent from the evidence and counsel’s addresses that what led up to Mr Hitchinson signing that acknowledgment was very much in issue at trial. Both what Mr Hitchinson said on the phone and what he agreed with in the acknowledgement of debt, if accepted by the jury, could be understood as admissions by him. Under the Act, admissions by a defendant are admissible under s 27(1). Section 27(3) expressly states that s 35 does not apply to evidence offered under s 27(1). The email comes in by sidewind as without it the admissions are unintelligible. It becomes “part of [the defendant’s] statements and therefore admissible”.[14]
Result on count 7
[14] R v Barlien [2008] NZCA 180, [2009] 1 NZLR 170 at [60]. See also R v H [2009] NZCA 16 at [16].
[62] The ground of appeal relating to count 7 fails.
Result
[63] For these reasons, all of the grounds of appeal fail. The appeal is dismissed.
Solicitors:
Crown Law Office, Wellington, for Respondent
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