New Zealand First Party v Director of the Serious Fraud Office

[2020] NZHC 2528

PUBLICATION OF THE JUDGMENT IS PROHIBITED UNTIL 5 PM TUESDAY 29 SEPTEMBER 2020 UNLESS OTHERWISE ORDERED BY THE COURT OF APPEAL

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1721

[2020] NZHC 2528

BETWEEN

NEW ZEALAND FIRST PARTY

Applicant

AND

THE DIRECTOR OF THE SERIOUS FRAUD OFFICE

Respondent

Hearing:

25 September 2020

Appearances:

A F Pilditch for the applicant

J C L Dixon QC and R J Williams for the respondent

Judgment:

25 September 2020

ORAL JUDGMENT OF PALMER J

Solicitors:

A F Pilditch, Barrister, Auckland J C L Dixon QC, Auckland Cook Morris Quinn, Auckland Serious Fraud Office, Auckland

NEW ZEALAND FIRST PARTY v THE DIRECTOR OF THE SERIOUS FRAUD OFFICE NO 2 [2020] NZHC

2528 [25 September 2020]

What happened?

[1]                  On Thursday 24 September 2020, I issued a judgment in these proceedings.1 In summary, it said:

[1]    The Director of the Serious Fraud Office (SFO) intends to issue a public statement announcing that the SFO has filed a criminal charge of “obtaining by deception” against two defendants in the New Zealand First Foundation (the Foundation) electoral funding case. The two defendants are not Ministers, sitting MPs, candidates at the election or members of their staff. The New Zealand First Party (NZ First) applies for orders prohibiting the Director from issuing the statement until after a government has been formed following the General Election on 17 October 2020. NZ First also applies for this application and all matters relating to it to be suppressed until the same time.

[2]    I do not consider NZ First’s case for judicial review is particularly strong, on the basis of the evidence and information before me. There is no evidence before me that the Director’s decision to issue the public statement was influenced by political considerations or that the timeframe she announced for the investigation’s completion was set because of the election. I accept there is a risk of confusion and a negative impact on its electoral prospects. However, I consider there is a significant public interest in the New Zealand voting public being informed during an election campaign about criminal charges of serious fraud against people or organisations related to political parties. Ultimately, I consider the public interest in transparency outweighs the inconvenience of the announcement to NZ First. It will be up to the political system including the media, rather than the judicial system, to ensure the transparency of the announcement is not obscured by confusion and misinformation.

[3]   In order to allow NZ First to consider this judgment and its position, I make an interim order suppressing the judgment, the application and all matters relating to it, which lapses at 5 pm Friday 25 September 2020 unless the Court otherwise orders.

[2]The statement the Director now proposes to issue says:

SFO files charges in relation to NZ First donations

The SFO has filed a charge of ‘Obtaining by deception’ against two defendants in the New Zealand First electoral funding case.

As the defendants have the right to apply for name suppression, we are unable to name them at this time. We note, however, that neither defendant is a Minister, a sitting MP, a candidate in the upcoming election, or a member of the staff of a Minister or MP.

The SFO has no further comment.

1      New Zealand First Party v Director of the Serious Fraud Office [2020] NZHC 2502.

[3]                  In a separate  proceeding  filed  in  the  High  Court  this  morning,  Friday  25 September 2020, one of the defendants, X, applied for different interim orders:

(a)prohibiting the Director from issuing the statement until after the first mention of the charges in the District Court on 29 October 2020; and

(b)suppressing that application and all matters relating to it until the District Court has finally determined an application by X for suppression of identity.

[4]                  That application was set down for hearing at 11.45 am and counsel for X and the Director were to appear. But at 9.53 am, X withdrew the application on the basis the matter was before the District Court under s 200 of the Criminal Procedure Act 2011 (the Act). That was heard by Judge S M Maude, of the North Shore District Court. The SFO was not advised of the hearing and did not appear. I understand the 24 September 2020 judgment was not before Judge Maude. He observed “suppression should not be granted in a substantive form on a without notice basis on the papers”.2 But he appears to have granted the interim order sought until a half-day hearing is allocated in the District Court as a matter of urgency.3 The order granted appeared to prohibit:4

publication of X’s name, any details identifying X and publication of any image of X on any television or social media site run by anybody and publication of any picture or still or moving image of X associated with [two entities].

[5]                  The SFO appealed that order. The appeal has just been heard in the High Court by Moore J, the duty judge today. Mr Dixon QC advises that Moore J has allowed the appeal and will issue a minute to that effect shortly. He advises Moore J indicated he will replace the District Court order with an order suppressing the name, address and occupation of the defendants until the first call on 29 October 2020, under s 200 of the Act, to which the SFO did not object. But, apparently, there will be an appeal of

2      Director of the Serious Fraud Office v X, DC North Shore, CRN 20044500393, 25 September 2020, at [9].

3 At [10].

4 At [8].

Moore J’s decision and an application made that District Court orders remain in place pending the appeal.

[6]                  At 3.21 pm today NZ First applied for leave to appeal the 24 September 2020 judgment to the Court of Appeal and to extend the interim orders suppressing that judgment, NZ First’s application and all matters relating to it and suppressing the proposed SFO statement. I convened a hearing of the application around 4.50 pm.

Submissions

[7]                  Mr Pilditch, for NZ First, indicated he was concerned at the haste with which the application for leave is being heard and would prefer it to be heard next week.  Mr Dixon for the SFO is concerned if there is a lack of haste. If I do not hear the application today the SFO will consent to leave being granted. I indicated that I would hear counsel’s submissions on whether leave should be granted and then decide whether I needed to hear more from them next week. Having heard counsel, I consider I am in a position to decide the question on the basis of their submissions.

[8]                  Mr Pilditch, for NZ First, submits the judgment partly rested on a lack of evidence, and was based on purely on the correspondence NZ First had which compromised the ability of NZ First to articulate matters, given the circumstances it was placed in. He submits the grounds for the appeal have merit. He submits the timing of the notice by the SFO to NZ First of the intention to make the public statement is an indication of arbitrariness and unreasonableness. He submits there is a real issue as to whether the SFO’s practice of making public statements about charges is reasonable without a high level of caution and a careful balancing of interests. He submits that public statements that have the capacity to pre-empt the court’s criminal justice jurisdiction would not uphold the integrity of the criminal justice system. He submits it risks undermining s 202 of the Act. Mr Pilditch submits there is a risk that the SFO statement would identify X, especially now the SFO has made clearer who is not charged, which NZ First supports. Mr Pilditch submits NZ First does not say there should never be publication of the charges, but it is a matter of timing. He submits the information about the charges is not politically relevant in affecting the public interest but is capable of fuelling gossip and misinformation because the information proposed

to be released does not allow the public to reach an informed view of the issues and there is nothing for the media to investigate. He submits the issues and their consequences for NZ First are significant and that the application for interim orders is effectively substantive, not “just” interlocutory. He submits damage to association can occur by near association and in making a press statement a purposive reading of the guidelines of the SFO and Crown Law requires consideration of the impact on third parties. Mr Pilditch also advises that, if I decline leave, NZ First will seek leave to appeal to the Court of Appeal because what is at stake is substantive in character.

[9]                  Mr Dixon, for SFO, submits leave should be declined because the application is without merit and the appeal cannot succeed. He submits the challenge to the decision to issue the public statement is really about the failure of the Director to take into account the impact on NZ First and there is no obligation on the Director to do so. He submits there is public interest in the public knowing the SFO has completed its investigation and that certain categories of people are not being charged, which provides the voting public with important information and responsible media with the opportunity to investigate and report. He also points to articles today criticising the SFO for not completing its investigation. Mr Dixon also advises that the SFO’s position is that the statement it intends to issue does not identify the defendants.

Should the interim order be extended?

[10]              Section 56(3) of the Senior Courts Act 2016 provides no appeal lies from any interlocutory decision of the High Court unless the High Court grants leave to appeal to the Court of Appeal. Under s 56(5), the Court of Appeal can also grant leave if the High Court refuses it. I summarised the test for leave to appeal in Li v Chief Executive, Ministry of Business, Innovation and Employment by saying it is likely to be granted where:5

(a)there is good reason to consider it before, or separately to, the substantive appeal; and

5      Li v Chief Executive, Ministry of Business, Innovation and Employment (No 2) [2018] NZHC 1171, [2018] NZAR 1134 at [22].

(b)it is sufficiently meritorious in substance and relates to a sufficiently important issue as to outweigh the cost and delay of appeal.

[11]              The arguments in the appeal must be capable of bona fide and serious argument and the issue must concern a decision of sufficient significance to the parties or a question of law or general principle of sufficient significance to outweigh the cost and any delay of the appeal.6

[12]              I do not agree with NZ First’s submissions about the merits of the case, as might be expected given that I issued the 24 September 2020 judgment. But I consider there is good reason to have that considered before the substantive appeal. I consider the proposed appeal does raise a question capable of serious argument and the case clearly involves public and private interests of sufficient importance to outweigh the cost and delay of appeal. I grant leave to appeal.

[13]              As I noted at some length in the 24 September 2020 judgment, I consider there is a significant public interest in information proposed to be made public, being made public. But, given that NZ First is appealing the decision, if I do not maintain the suppression order, I would effectively determine NZ First’s appeal against it. Reluctantly, for that reason, in order to preserve that right of appeal, I consider I am required to extend the interim suppression order I made in the 24 September 2020 judgment. But, given the public interest, I do that for the shortest time I consider reasonable: the time it will take the Court of Appeal to consider whether to maintain the interim order I am now granting if the appeal is filed immediately. I suppress the 24 September 2020 judgment, NZ First’s application that led to it, all matters relating to it including this judgment and prohibit the proposed SFO statement until 5 pm Tuesday 29 September 2020.

[14]              I note that I do not regard the order made by the District Court today as a reason to extend the suppression orders made in this Court. The SFO’s proposed statement does not identify X, X’s gender, or whether or not X was part of the Foundation or a donor. It does identify that the charges are the result of an investigation and it identifies categories of people who are not charged. There is likely to be speculation

6      At [21]

about X’s identity once the laying of charges is made public, but I do not consider the SFO’s proposed announcement identifies X or the other defendant. It does not even transgress the surprisingly broad interim order made by the District Court or the narrower order foreshadowed by Moore J.

Result

[15]              I grant leave to appeal. I suppress the 24 September 2020 judgment, NZ First’s application that led to it, all matters relating to it including this judgment and prohibit the proposed SFO statement until 5 pm Tuesday 29 September 2020 or until otherwise extended by the Court of Appeal.

Palmer J