Hobbs v Serious Fraud Office

[2012] NZHC 492

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CRI-2011-419-92 [2012] NZHC 492

IN THE MATTER OF     an appeal against the District Court Judge's refusal to grant interim name suppression

BETWEEN  GARY MALCOLM HOBBS Appellant

ANDSERIOUS FRAUD OFFICE Respondent

Hearing:         9 March 2012

Counsel:         R Mansfield for Appellant

P Morgan QC for Respondent

Judgment:      9 March 2012

(ORAL) JUDGMENT OF POTTER J

Solicitors:           Fletcher Law, Hamilton – [email protected]

Copy to:            R Mansfield, Auckland - [email protected]

P Morgan QC, Hamilton –  [email protected]

GARY MALCOLM HOBBS V SERIOUS FRAUD OFFICE HC HAM CRI-2011-419-92 [9 March 2012]

Introduction

[1]      Gary Hobbs has been charged with theft by a person in a special relationship under s 220 of the Crimes Act 1961.  As an accountant he allegedly withdrew money from his clients’ accounts without their consent.   There are 15 charges relating to two former clients of his accountancy firm.  The matter has a trial date commencing on 3 December 2012.  Mr Mansfield advises that Mr Hobbs’ defence at trial will be that he indeed had authority for the transactions which are the subject of the 15 charges.

[2]      Mr Hobbs applied for name suppression pending the trial.   His application was rejected by Judge Thomas.[1]    The Judge’s decision was essentially based on the fact  that  information  about  Mr  Hobbs’  alleged  misconduct  has  already  been published in the media.   That decision is now appealed.   Judge Thomas made an order that nothing was to be published until the appeal was determined.

Background facts

[1] Serious Fraud Office v Hobbs District Court Te Awamutu CRI-2011-072-578, 21 November

2011.

[3]      While  practising  as   a  chartered   accountant   the  appellant   assumed   a directorship in a company called South American Tobacco Group (SATG).  In his capacity as an accountant he is alleged to have attempted to solicit from his accountancy  clients,  moneys  to  invest  in  SATG.    He  is  also  alleged  to  have withdrawn funds from their investor accounts and applied it to SATG’s operating capital without their instructions.  SATG failed.  The money applied, in the vicinity of $370,000, was lost.

[4]      The appellant’s application in the District Court was on the grounds that publication of the charges which the Serious Fraud Office brings, would damage the appellant’s reputation and standing to such an extent that the ordinary principle of

open justice should be overridden.

The District Court decision

[5]      In  determining  whether  interim  name  suppression  should  be  granted  the

Judge took into account several factors in favour of the appellant, namely:

a)       The resulting damage would not only be to his own reputation but to those who work in the accountancy practice he has subsequently established;

b)The impact on that firm would be so great that it would collapse causing some sole breadwinners to lose their jobs and impacting adversely on the finances of the appellant’s family (his wife works in the business);

c)       The firm relies on the continued patronage of previous clients who have remained loyal despite Mr Hobbs being struck off the register of accountants and becoming bankrupt.

[6]      Judge  Thomas  accepted  that  if  these  were  the  only  circumstances,  the appellant would have had a strong case for interim name suppression.  However, he considered the main issue was whether previous reporting about the appellant’s situation in the public domain meant that name suppression would make little difference, such that the principle of open justice should prevail.

[7]      Previous media reports  on the action taken by the Institute of Chartered Accountants  to  strike  the  appellant  off  the  register  had  already  identified  the appellant and his relationship with SATG.  They also suggested that as a director of SATG the appellant attempted to solicit his former clients to invest, that SATG subsequently failed and that money was lost.   Further, the allegations about the money being invested without authority and the Serious Fraud Office investigating complaints about his activities were also published.

[8]      Finally, the reports stated that the appellant was bankrupt for being unable to pay judgment debts that were not unrelated to the activities of SATG, and that one of the judgment creditors is a complainant in the present proceedings.

[9]      The Judge accepted that because there had been almost a year where no visible activity has occurred, clients might believe that no further steps were taken. He also accepted that if these matters were brought to light again, the reporting would raise what had been laid to rest some time ago.  However, he concluded that the extent of prior reporting was such that there was very little about the circumstances not already publicly known.   Also, there was evidence that the appellant’s new practice did not fail after the previous publications about his alleged offending and that some clients remained despite the knowledge of the allegations.

[10]     The Judge held that publishing charges which had already been the subject of publication would not change matters and that the ordinary principle of justice being done in public should not be dispensed with.  He therefore refused to grant interim name suppression but, as I have said, gave directions to preserve the appellant’s right to appeal.

This appeal

[11]     The appeal against an exercise of the power under s 140 of the Criminal Justice Act 1985 to order name suppression is against the exercise of a discretion. The requirements for a successful appeal are limited to:

a)        error of law or principle;

b)        taking account of irrelevant considerations;

c)        failing to take account of a relevant consideration; or d)         the decision is plainly wrong.

[12]     Section 140 provides that the court may grant an order for interim name suppression.  There is no exhaustive statutory list of factors that must be taken into

account  when  considering whether such an  order would  be appropriate and  the courts have avoided laying down specific guidelines.

[13]     The correct approach is to start with the presumption of open reporting and to consider whether other factors are sufficient to displace it.  The authority of Lewis v Wilson & Horton Ltd[2] makes this clear.  The Court of Appeal said “the balance must come down clearly in favour of suppression if the prima facie presumption in favour of open reporting is to be overcome”.  There are many authorities to like effect.

[2] Lewis v Wilson & Horton Ltd [2000] 3 NZLR 546 (CA) at 559.

[14]     The cases tend to show that there may be a degree of futility in granting name suppression to an applicant whose name has already been published.  The nature and extent of previous publications must be considered and the court should endeavour to give as much protection as it can when such protection is warranted.

[15]     Mr  Mansfield  for  the  appellant  accepted  that  the  Judge  had  properly considered relevant factors except in three respects.

a)        He had not given sufficient weight to the appellant’s fair trial rights.

Mr Mansfield submitted that if these charges are now reported and that reporting links back to past publicity, the rights of the appellant to a fair trial will be prejudiced.  He submitted that matters such as the appellant’s bankruptcy, the disciplinary processes of the Institute of Chartered Accountants and the failure of the appellant’s previous firm Hobbs Rose, are not matters that will be relevant to the charges now brought   against   the   appellant   but   the   prior   publicity   will   be prejudicial.  He further submitted that directions from the trial Judge could not fully address the impact on the jury of further publicity.  He submitted that while the Judge considered the impact of publicity on other parties he did not consider or sufficiently consider fair trial rights.

b)The   Judge   gave   inadequate   weight   to   the   impact   of   further publication, which would invariably link back to past publication, on

the new small accounting practice the appellant has been able to establish.  He suggested the impact would be “immense” and would prejudice  the  ability  of  the  appellant  and  his  wife  (who  is  also engaged in the business, as well as the employees of the business) to make and derive income.

c)       The presumption of innocence and the punitive impact he submitted that such publication would have.  He suggested that impact would be disproportionate to the gravity of the alleged offending and in this case outweighs the public’s general right to know what is going on in the courts.

[16]     Mr Morgan QC, in relation to fair trial rights, said the information is already in the public domain, it is not the sort of information that is likely to be repeated frequently in the media and any publicity could be satisfactorily dealt with by the usual type of directions that would be given by the trial Judge.  He further submitted that any publicity that was given in the near future about the charges was unlikely to impact on juries through to December 2012 when the trial will be held.

[17]     He disagreed with Mr Mansfield that some of the matters already publicised may not be relevant evidence in the upcoming trial although he did accept that the matter of the striking off of the appellant by the Institute of Chartered Accountants was unlikely to be relevant.

[18]     He noted the Judge was quite correct that some people had continued as clients of Mr Hobbs in his new firm GMH Accountants Limited and submitted that if they had not been prejudiced by past publicity they will not be prejudiced by further publicity.

Conclusion

[19]     I consider the Judge was correct in the conclusion he reached.   He gave careful consideration to the extent of the publicity at [12] of his judgment.   He considered the balancing factors of open justice and the interests of the appellant.

He may not have made specific or frequent reference to fair trial rights but clearly those were matters which he appropriately included in his overall consideration.

[20]     Mr Morgan submitted that it is in the public interest for the public to know that the appellant is before the Court on serious allegations of fraud so that members of the public can make their own choice about who is to conduct their accounting business.  I have sympathy with that submission.  It lies at the heart of the principle of open justice.

[21]     I do not consider that the case made by the appellant displaces the principle of open justice.  The Judge has not been shown to be was wrong in the decision that he reached.  The appeal is therefore dismissed.