Lim v The Queen

[2004] NZCA 257

IN THE COURT OF APPEAL OF NEW ZEALAND

CA173/04

THE QUEEN

v

ALOYSIUS SZE SIANG LIM

Hearing:28 September 2004

Coram:Glazebrook J
Potter J
Salmon J

Appearances:  A L Pinnock for Appellant

M F Laracy for Crown

Judgment:8 October 2004 

JUDGMENT OF THE COURT DELIVERED BY POTTER J

[1]       The appellant appeals against convictions in respect of 14 charges of using a document with intent to defraud under s 229A Crimes Act.  The charges cover the period 18 December 2001 to 4 June 2002.

[2]       The grounds of appeal may be summarised as follows –

a)The delay in bringing the matter to trial was “undue”;

b)On the evidence the letter which was the basis of Count 14 was not a document capable of being used to obtain a pecuniary benefit;

c)The Judge did not direct adequately with respect to the mens rea element of the offences.

Factual background

[3]       The appellant was the sole director of a company called Whirlwind Investments Limited (“Whirlwind”), trading as Professional Hairdressing Wholesalers (“PHW”).  Whirlwind sold hairdressing equipment and associated products to clients throughout New Zealand.

[4]       On 2 July 1999 Whirlwind entered into a factoring agreement with Scottish Pacific Business Finance Limited (“Scottish Pacific”) pursuant to which Whirlwind had its weekly sales invoices purchased by Scottish Pacific.  Scottish Pacific would advance Whirlwind 90% of the invoice value and then seek to recover the value of the invoice from the original purchaser from Whirlwind.  Once the money had been recovered Scottish Pacific would pay Whirlwind the remaining 10% after deduction of its fee.  The appellant personally guaranteed the advances made by Scottish Pacific to Whirlwind under the factoring agreement.

[5]       The Crown case was that between 18 December 2001 and 16 May 2002 the appellant provided to Scottish Pacific 13 documents purporting to be invoices for products supplied to a customer called Reuben Blades Hairdressing Academy (“Reuben Blades”).  Scottish Pacific duly made advances to Whirlwind against the value of these invoices.  The appellant admitted at trial that Whirlwind had never in fact supplied to Reuben Blades the products purportedly invoiced and that the invoices had not been sent to Reuben Blades by the appellant or PHW.  These 13 documents were the subject matter of Counts 1-13 in the indictment.

[6]       Count 14 related to a letter provided by the appellant to Scottish Pacific.  The letter was from Mr Eelco Wiersma, proprietor of Reuben Blades, written under the appellant’s direction which falsely confirmed delivery to Reuben Blades of the invoiced goods over the relevant period.  The Crown case was that the appellant used this document in order to regain Scottish Pacific’s confidence and thereby retain the benefit of the factoring agreement.

Delay

[7]       The appellant made an application for stay of proceedings pursuant to s  25(b) of the New Zealand Bill of Rights Act 1990 on the grounds of delay.  It was declined in a reserved judgment of District Court Judge Lance on 15 January 2004.  The appellant claims that the District Court Judge erred in declining the application for stay and in particular finding that –

a)By May 2003 the earliest available fixture was not until October 2003, there being no evidence to support that finding;

b)The fixture vacated on 10 March 2003 may not have proceeded as scheduled in any event as a 7 day fixture was required, that finding also being unsupported by evidence;

c)The complainant’s reasons for its delay in completing disclosure, were not relevant to his application; and

d)The prejudice that he had suffered by reason of the delay “was unfortunate but not exceptional”;

e)(By implication) that it was necessary for the appellant to show that he had suffered prejudice.

[8]       The appellant was arrested on the day following the last date of the alleged offending.  The overall delay between the appellant being arrested and charged on 5 June 2002 and the first trial in October 2003 which resulted in a hung jury, was approximately 16 months.  The various steps in the proceeding are set out in a comprehensive chronology included in the District Court judgment, which for ease of reference is attached to this judgment.

[9]       The appellant’s argument focused on the failure of the Crown to make timely discovery and in particular of a “customer history log” of the complainant Scottish Pacific.  Scottish Pacific for whatever reason (and that appears never to have become known) was unco-operative about making discovery, in particular of the customer history log. 

[10]     On 7 February 2003 a summons was issued to Mr Cooper of Scottish Pacific which was served on him on 14 February 2003 requiring him to attend trial and to produce the relevant documents.  The procedure followed by the Crown was in accordance with the decision in R v Moore (CA 69/01, 3 May 2001).  Scottish Pacific may have been the complainant in the case but for the purpose of compelling disclosure it was treated as a third party and ultimately when requests for disclosure had not been met, the procedure to compel disclosure by a third party was followed.  Mr Cooper and Scottish Pacific responded to the summons in advance of trial by providing disclosure by 1 May 2003.  Pursuant to the procedure detailed in Moore, Mr Cooper’s response to the summons could have been delayed until trial which inevitably would have necessitated an adjournment to enable the defence to consider the documents then produced.

[11]     The Crown could not compel disclosure by Scottish Pacific other than through the third party summons procedure.  Nor was the Crown in a position to provide reasons for Scottish Pacific’s delay in providing disclosure.  As the District Court Judge stated, those reasons, whatever they were, were irrelevant to the application for stay.

[12]     There is no suggestion that the Crown caused the delay.  The Crown did not ignore disclosure requests from the defence.  It pursued them and provided disclosure as it became available.  The Crown acted in a way that was appropriate and reasonable in the circumstances, issuing the summons to Mr Cooper in accordance with the procedure in R v Moore when it became apparent that Scottish Pacific declined or was at least reluctant to comply with requests for disclosure.

[13]     By s 3 of the New Zealand Bill of Rights Act 1990, the Act applies only to acts done –

a)By the legislative, executive or judicial branches of the Government of New Zealand; or

b)By any person or body in the performance of any public function, power, or duty conferred or imposed on that person or body by or pursuant to law.

[14]     No agency of the Government was here at fault.  The Crown did what it could and should have done to compel Scottish Pacific to make the disclosure requested by the defence and to which the defence was entitled.  Any fault by Scottish Pacific that caused delay does not give rise to a breach under the Bill of Rights Act.

[15]     The Judge correctly stated the position at para [13] of his judgment –

In my view what distinguishes this case from most others, where delay in disclosure has occurred, is that here it was third party disclosure.  A summons had been issued and served on the complainant in February 2003 requiring him to appear and produce detailed documentation.  R v Moore applied.  The Crown could have waited until the trial.  Pragmatically it did not do so and provided the material by 1 May 2003.  I think Ms Reed’s submission is valid and the complainant’s reasons for the delay in disclosure are irrelevant to this application.

[16]     Given the difficulties that arose in obtaining disclosure from Scottish Pacific, the delay in bringing the charges to trial were explicable and not unreasonable.  The delays were centred on the difficulties in obtaining disclosure and the consequential “systemic factor” which intruded, as the Judge expressed it.  Because disclosure was not available, a stand-by fixture on 10 March 2003 had to be vacated, and of course, any other stand-by dates that may have become available between then and May, could not be utilised.  Once the disclosure issues were resolved by 1 May 2003, October 2003 was apparently the earliest date upon which a firm fixture for a trial estimated to require seven days, could be allocated.  That may be viewed as unfortunate but the delay was not unreasonable, and the overall period of 16 months from arrest to the first trial, cannot in the circumstances, be regarded as undue.

[17]     Prejudice or absence of prejudice is always a significant factor when the Court is considering delay in the context of the right to a fair trial (R v Harmer (CA 324/02; CA 352/02, 26 June 2003)).  Mrs Pinnock for the appellant submitted that the prejudice in this case was not that the appellant would be prevented from obtaining a fair trial, but the type of prejudice identified in R v Morin [1992] 1 SCR 771; (1992) 71 CCC (3d) 1 as “security of the person”. She accepted that “stigmatisation of the accused” could not be asserted because the guilty verdicts confirmed the charges brought against the appellant, but contended there was prejudice involved in the requirement of the appellant frequently to travel to Auckland for Court appearances; interruption to his work and that he could not pursue and develop his work as an accountant; inability freely to travel to see his family in Malaysia (though she accepted that with specific variation of bail conditions he travelled twice to Malaysia while he awaited trial). She accepted that quashing of conviction may not be appropriate but submitted that the prejudice could be recognised by some other remedy.

[18]     We can only concur with the District Court Judge that the prejudice claimed by the appellant was “unfortunate but not exceptional”, particularly post-trial when verdicts have been entered.  Prejudice will be a particular concern to the Court if the prejudice alleged is a right to a fair trial.  There is no concept of presumptively prejudicial delay; each case must be evaluated on its particular circumstances: Martin v Tauranga District Court [1995] 2 NZLR 419 (CA)); (R v Grant (CA  471/95, 29 May 1996); R v Harmer (supra).

[19]     In summary, delay there may have been in bringing the charges to trial but the delay was not the fault of the Police or the Crown.  They did not have possession of or power over the documents of which disclosure was sought.  The Crown did what it could to compel disclosure once it became clear that Scottish Pacific was unco-operative.  The delay in obtaining disclosure gave rise to consequential systemic factors in scheduling the appellant’s trial, but the delays were explicable and not unreasonable.  The 16 month delay overall was in the circumstances not undue.

[20]     The first ground of appeal fails.

The letter the subject of Count 14

[21]     The second ground of appeal is against the finding of District Court Judge Kiernan, who was the trial Judge, that the letter the subject of Count 14 was on the evidence adduced at the trial a document capable of being used to obtain a benefit.

[22]     Count 14 charged that the appellant on or about 4 June 2002 at Auckland with intent to defraud used a document namely a letter dated 31 May 2002 from Eelco Wiersma addressed to Mr Aloysius Lim, Professional Hairdressing Wholesalers being a document capable of being used to obtain a benefit for the purpose of obtaining for himself a benefit.

[23]     Towards the conclusion of the Crown case counsel for the appellant brought an application for discharge of the appellant from Count 14 pursuant to s 347 of the Crimes Act.  The defence argued that on the evidence the letter alleged to have been used could not have achieved the purpose for which it was intended. The District Court Judge after considering submissions, the evidence relied upon and authorities referred to her, including R v Flyger [2000] 18 CRNZ 624 as to the correct test to be applied in determining applications under s 347, concluded that the issue raised was clearly a jury issue, she being satisfied that a properly directed jury could reasonably convict on Count 14.  Accordingly she declined the s 347 application.

[24]     The arguments on appeal were essentially those presented to the District Court Judge.  Referring to the judgment in R v Johnson (CA 131/03, 7 August 2003) for the distinction between “inherent capability” and “situational capability”, Mrs Pinnock submitted that while the letter from Mr Wiersma was inherently capable of obtaining a financial advantage, it did not pass the test for “situational capability” because in the circumstances that pertained, the letter was not capable of having the effect of being used for the purpose of obtaining for Mr Lim the advantage of the continuation by Scottish Pacific of the factoring facility. 

[25]     Briefly summarised, the appellant’s evidence was that on 30 May 2002 Mr Cooper of Scottish Pacific threatened him that if Scottish Pacific did not receive a letter by the next day attesting to the fact that goods had been delivered to Mr Wiersma in accordance with invoices factored, Scottish Pacific would or could terminate the service provided under the factoring agreement.  Mr Lim knew that the letter was “desperately needed” because if the factoring agreement was terminated all debts would become due.  A sudden termination would leave him with a considerable cash flow problem and with personal responsibility for a large debt as personal guarantor of the company’s indebtedness under the factoring agreement.  Mr Lim sought the required letter from Mr Wiersma and paid him $10,000 for it.  Before Mr Lim delivered the letter to Mr Cooper of Scottish Pacific Mr Wiersma apparently advised Mr Lim that he would retract his claim that the goods had been delivered, which Mr Lim advised to Mr Cooper when he handed over the letter.  But Mr Lim nevertheless handed over the letter having driven from Wellington to Auckland to deliver the letter in person to Mr Cooper.  It seems Mr Lim thought the letter would provide him with some advantage despite Mr Wiersma’s advice that he would retract it.

[26]     Scottish Pacific had doubts about the letter.  Miss Cecelia Fawdry a client manager employed by Scottish Pacific who had become involved with the PHW account, said in evidence that she had doubts about the letter and was “going to investigate it further”.  Neither she nor Mr Cooper dismissed outright the letter containing the confirmation Scottish Pacific had sought.

[27]     Clearly there was evidence upon which the jury, properly directed, could properly enter a conviction on Count 14.  If they concluded on the evidence that at the time it was used, i.e. at the time when Mr Lim handed the letter from Mr Wiersma to Mr Cooper on 31 May 2002, it was capable of being used to obtain a benefit for Mr Lim, namely the continuation of the credit facility Mr Lim had enjoyed through the factoring agreement with Scottish Pacific, they could properly enter a guilty verdict.

[28]     Mrs Pinnock placed considerable reliance on the fact that Mr Lim had repaid the PHW debt to Scottish Pacific prior to tendering the letter, but that does not dispose of the matter.  There was evidence that Mr Lim’s purpose, or a purpose in obtaining the letter as sought by Scottish Pacific, was to restore trust with Scottish Pacific and ensure if he could, ongoing credit pursuant to the factoring agreement.

[29]     Whether in all the circumstances the letter from Mr Wiersma was capable of obtaining a financial benefit for Mr Lim required determination of a matter of fact.  On the totality of the evidence, the inference that it was so capable, was available.  The District Court Judge’s decision was clearly correct.

Directions on the mens rea of the offences

[30]     To prove the offences the Crown had to prove that the appellant did not have an honest belief that he was entitled to act as he did (R v Speakman (1989) 5 CRNZ 256, 258).  The appellant’s defence was that he had an honest though mistaken belief that his actions were justifiable.

[31]     The appellant submitted that the directions given by the trial Judge may have left the jury with the wrong impression that in order to prove dishonesty (intent to defraud) the Crown had only to prove that the appellant acted in knowing breach of his legal obligations.

[32]     There is nothing in this ground of appeal.  Both in a two page information sheet handed to the jury (of which counsel had prior notice), and at numerous points in her summing-up the Judge clearly and accurately stated the law and emphasised the burden of proof that rested on the Crown.

[33]     In the information sheet handed to the jury headed “Using a document with intent to defraud” the four elements that the Crown must prove are set out.  The fourth element is stated to be -

4.That the accused used the document with intent to defraud.

Then follows the explanations –

You defraud somebody if you get something from him by deliberately and dishonestly leading that person to believe something you know to be untrue.

You act dishonestly if you act in breach of a legal obligation and without an honest belief that you are entitled to act in that way. (emphasis provided)

[34]     At the conclusion of her summing-up the trial Judge directed the jury thus –

If, as in this trial, an accused claims that he had an honest belief that he was justified in breaching his legal obligation, then it is a matter for you on the evidence whether that is in fact so.  In other words whether he did have that honest belief which he maintains.  I stress that it is for the prosecution to prove that he did not have such a belief.

In other words the accused says he was acting honestly.  He does not have to prove that.  The Crown has to prove that he was acting dishonestly … dishonesty is central to these charges.  The Crown must prove dishonesty as well as of course the other elements that I have set out.  You cannot find the accused guilty unless he is shown to have acted dishonestly.

[35]     It is difficult to see how more plainly the Judge could have directed the jury in respect of this element of the offence and in relation to the appellant’s defence.

[36]     The third ground of appeal fails.

Result

[37]     All grounds of appeal fail.  The appeal is dismissed.

Solicitors: 

Crown Law Office, Wellington

CHRONOLOGY

18 December 2001-4 June 2002        Time period of alleged offending

5 June 2002  Accused arrested and charged.

6 June 2002  First Court appearance.

14 June 2002  Not guilty plea entered.

30 June 2002  Request for discovery faxed to Police.

30 June 2002  Bundle of documents provided by Police.

5 July 2002  Specific discovery requested (including

“customer history log”)

9 & 16 July 2002  Further documents provided by Police.
22 July 2002  Further request for “customer history log”.
7 October 2002  Fresh informations laid.

14 October 2002  Accused committed for trial at depositions

hearing.

31 October 2002  Letter to complainant seeking disclosure of
  documents identified at depositions and letter

to Police requesting specific documents.

21 October 2002  First callover in District Court; fixture
  allocated for standby trial on 10 March 2003
  (second callover on 5 March 2003); issue of
  3^rd party disclosure raised: Crown to ask

Police to obtain relevant documents.

2 December 2002  Fax to Crown Solicitor regarding discovery and
  email to officer in charge regarding outstanding

discovery.
5 December 2002  Response from Crown Solicitor.
8 January 2003  Email to officer in charge.
21 January 2003  Letter to Crown Solicitor.

28 January 2003  Crown Solicitor advises that Mr Cooper
  (complainant) reluctant to provide the

documents sought.
5 February 2003  Application and memorandum filed.
7 February 2003  Summons issued for Mr Cooper.

14 February 2003  Summons served on Mr Cooper.

5 March 2003  Second callover: Court informed disclosure
  issue unresolved: standby fixture vacated:

bundle of documents provided.
20 March 2003  Fixture vacated.

21 March 2003  Fax to Crown Solicitor further identifying

documents requested.

27 March 2003  Court hearing: Crown sought time to copy

documents.
10 April 2003  Box of documents delivered.

24 April 2003  Letter to Crown Solicitor requesting “customer
  history log” which had not been included in

box of documents.

1 May 2003  “Customer history log” received: trial date
  fixed for 13-20 October 2003: firm fixture:

estimate of time 7 days.
13-20 October 2003  Trial: no verdict: hung jury on all counts.

30 October 2003  At callover fixture allocated for re-trial: firm
  fixture: 9 February 2004: estimate of time 5
  days.