Purucker v Huebler
[2023] NZHC 1134
•11 May 2023
IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY
I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE
CIV-2018-442-000058
[2023] NZHC 1134
BETWEEN MARINA ALEXANDRA PURUCKER
Plaintiff
AND
IRIS HUEBLER
First Defendant
AND
RAINER WOLFGANG HUEBLER
Second Defendant
Hearing: 8 May 2023 Counsel:
G Dewar and J Pietras for Plaintiff First Defendant self-represented
G Downing for Second Defendant
Judgment:
11 May 2023
JUDGMENT (No 2) OF ISAC J
[Application under s 47(2) Evidence Act 2006]
The issue
[1] In this civil proceeding, Ms Purucker alleges that the defendants unlawfully appropriated $873,364.93 from her bank accounts.1 She wishes to adduce certificates of conviction as conclusive evidence that Ms Huebler, the first defendant, committed the offences for which she has been convicted, namely five charges of theft by a person in a special relationship involving $700,000.
1 The first defendant, Ms Huebler, is currently serving a sentence of four years’ imprisonment following her plea to five charges of theft by a person in a special relationship. There is no suggestion the second defendant, Mr Heubler, was a party to his partner’s fraud but rather that moneys stolen from the plaintiff were deposited into a joint bank account over which he had authority and that he is liable for money had and received accordingly.
PURUCKER v HUEBLER [2023] NZHC 1134 [11 May 2023]
[2] At a pre-trial teleconference on 26 April 2023, Ms Huebler indicated she intended to apply for permission under s 47(2) of the Evidence Act 2006 to offer evidence tending to prove that she did not commit the offences of which she has been convicted. In a Minute issued later that day, I indicated that I would address the application at the commencement of the trial.
[3] Having heard from the parties at the outset of the trial on 8 May 2023, I determined that Ms Huebler should not be permitted to offer evidence tending to prove that she did not commit the offences of which she has been convicted. This judgment sets out my reasons.
Legal and factual context
[4]Section 47 of the Evidence Act provides:
47 Conviction as evidence in civil proceedings
(1)When the fact that a person has committed an offence is relevant to an issue in a civil proceeding, proof that the person has been convicted of that offence is conclusive proof that the person committed the offence.
(2)Despite subsection (1), if the conviction of a person is proved under that subsection, the Judge may, in exceptional circumstances,—
(a)permit a party to the proceeding to offer evidence tending to prove that the person convicted did not commit the offence for which the person was convicted; and
(b)if satisfied that it is appropriate to do so, direct that the issue whether the person committed the offence be determined without reference to that subsection.
(3)This section applies—
(a)whether or not the person convicted is a party to the proceeding; and
(b)whether or not the person was convicted on a guilty plea.
…
[5] The effect of s 47(1) is to make a conviction in subsequent civil proceedings conclusive evidence that the person convicted committed the offence where the conviction is relevant to an issue in the trial. However, if there are exceptional
circumstances—a threshold requirement—s 47(2) enables a judge to permit a party to call evidence tending to prove that the person convicted did not commit the offence, despite proof of the conviction.2 In this way, the combined effect of the two subsections is to create a presumption, rebuttable only in exceptional circumstances.
[6] Section 47 is in almost identical terms to s 49, which concerns evidence of convictions in criminal proceedings. The Supreme Court in Morton v R explained that s 49 provides a convenient way of proving offences already established to the criminal standard of proof, preventing the criminal justice system being “vexed by collateral challenges to concluded determinations of criminal responsibility, with potentially inconsistent outcomes”.3 It prevents the re-litigation of resolved matters, which saves time and expense and also protects victims of crime from repeatedly having to give evidence which has already been accepted by a court.4 These observations apply equally to s 47.
[7] In X v Attorney-General, the Court of Appeal considered that the Supreme Court’s observations in Morton v R will be relevant to determinations under s 47 in civil proceedings.5 The relevant approach is summarised by the learned authors of Mahoney on Evidence in these terms:6
(a)“Exceptional circumstances” is not a “free-standing standard”, but must be assessed against the text and purpose of s 47(1). The purpose of s 47(1) is to confirm that a plaintiff is not required to prove the commission of an offence relevant to a cause of action following criminal conviction.
(b)The natural starting point is to consider whether there is reason to think that the conviction may have been wrongly entered, and whether it would be unfair to treat a particular conviction as conclusive against a particular party.
(c)The assessment should encompass the effect of the New Zealand Bill of Rights Act 1990, in particular ss 5 and 27 – the right to justice – which includes the right both (i) to bring and defend a civil proceeding, including against the Crown, and (ii) to have it determined in accordance with the principles of natural justice.
2 X v Attorney-General [2016] NZCA 476, (2016) 23 PRNZ 750 at [23].
3 Morton v R [2016] NZSC 51, [2017] 1 NZLR 1 at [91] per Elias CJ. See too the recent decision of the Court of Appeal in Channings v R [2022] NZCA 661 at [13].
4 At [91]; and Law Commission Evidence: Reform of the Law (NZLC R55 Vol 1, 1999) at [233].
5 X v Attorney-General, above n 2, at [24]–[25].
6 Elisabeth McDonald and Scott Optican (eds) Mahoney on Evidence: Act and analysis (4th ed, Thomson Reuters, Wellington, 2018) at [EV47.05] (footnote omitted).
[8] A question that has arisen in previous cases, as well as the present one, is the extent to which facts underlying a conviction are subject to the conclusive proof presumption in s 47. The narrow view is that the conviction establishes only the elements of the offence and nothing more.7 On this approach, facts beyond the elements—including particulars of the offences such as the value of money stolen or of illicit drugs supplied—are liable to re-litigated without the need for leave under s 47(2).
[9] A wider view is that the conclusive proof presumption extends to facts forming an essential part of the conviction. Most commonly these will be admitted by the defendant as part of the sentencing process (such as those contained in a summary of facts)8 or established at the criminal trial (such as the facts recorded within a question trail for a jury or found by the trial judge for the purpose of sentencing).9
[10] In my view, Parliament intended s 47 to operate as a form of rebuttable statutory presumption, or statutory estoppel, which prevents re-litigation in civil proceedings of the essential facts subsumed within a conviction (unless, of course, exceptional circumstances are made out).10 Constraining the provision narrowly would allow convicted defendants to relitigate matters in a civil proceeding which they have already admitted or have been proven beyond reasonable doubt, an unattractive outcome which would appear contrary to the considerations informing the provision.
[11] Against this backdrop, the exceptional circumstances proviso exists to ameliorate the otherwise strict effect of the conclusive proof presumption where it would operate unfairly or with unduly harsh consequences. However, it is clear from the language used that the threshold is a high one.
7 In Commissioner of Police v Filer [2013] NZHC 3111 at [25]–[26], Gilbert J held that Mr Filer was bound by the factual findings implicit in the jury’s verdicts, but not the factual findings in the sentencing decision.
8 See Commissioner of Police v Mclean [2022] NZHC 2634 where evidence of convictions together with the underlying summary of facts were entered into evidence under s 47.
9 In The Vintage Aviator Ltd v DeMarco [2021] NZHC 847 at [29], the plaintiff had previously been found guilty by a jury of six charges of fraud. Associate Judge Johnston held that the clear question trail provided to the jury enabled the Court to identify exactly what factual conclusions the jury reached, and that s 47 precluded Mr DeMarco from pleading a position directly contradicted by the verdicts or any of the necessary determinations the jury must have made to reach the verdicts.
10 See The Vintage Aviator Ltd v DeMarco, above n 9, at [34]–[35].
[12] In a different context, the Canadian courts have recognised that it may be an abuse of process for a party to adopt deliberately inconsistent factual positions in different civil proceedings.11 The rationale for this approach is that:12
… neither pleadings nor any other of the court processes are a game to be played according to what appears to be a strategic advantage at the time. The court expects a party to take a position which is consistent with its evidence and to maintain that position in its dealings with the court. In other words, saying something to one judge and saying the opposite to another will not be countenanced.
[13] Similar considerations based on abuse of process underscore s 47. They include:
(a)finality of litigation and maintenance of public confidence in the administration of justice by avoiding irreconcilable decisions;
(b)protection of the court’s processes from abuse by convicted litigants through the re-litigation of matters finally determined;
(c)avoiding re-victimisation of those who have already been the target of criminal offending; and
(d)ensuring access to justice and the right of parties to defend civil proceedings.
[14] In 1999, the Law Commission recommended adopting a presumptive proof rule for convictions in both civil and criminal proceedings.13 It recommended that a conviction would create a presumption, rebuttable by proof to the contrary on the balance of probabilities, that the person committed the offence for which they were
11 Mystar Holdings Ltd v 247037 Alberta Ltd [2009]ABQB 480 at [49].
12 Halagan v Reifel [1997] Carswell BC 404 at [8].
13 Initially the Commission was attracted to a conclusive proof rule as “giving prior convictions only presumptive weight would enable convicted persons to either recover damages or avoid liability by proving on the balance of probabilities that they did not do what has already been proved beyond reasonable doubt”. However, the Commission was persuaded that a presumptive rule was preferable on the basis that “people may plead guilty, to careless driving for example, to resolve the case speedily but may well wish to contest a large civil claim arising out of the same incident”: Law Commission Evidence: Reform of the Law (NZLC R55 Vol 1, 1999) at [223].
convicted.14 However, the Evidence Bill did not adopt the Commission’s recommendation, and ss 47 and 49 were introduced as conclusive proof rules. While the explanatory note to the Bill did not explain why the Government favoured such an approach,15 the adoption of conclusive proof rules is consistent with a parliamentary intent to give stronger effect to convictions in civil proceedings.
[15] Subsequently, the Law Commission has again recommended that ss 47 and 49 should be amended to operate as presumptive rather than conclusive proof rules.16 This includes the ability for a party wishing to offer evidence rebutting the presumption to give notice to the judge before doing so. The recommendations arise as the result of difficulties in practice with the operation of s 49,17 and the focus of the Commission’s analysis is very much on that section. Nevertheless, the Commission considers it desirable to align s 47 with s 49. It notes the observations in Mahoney on Evidence that “whatever the Law Commission eventually recommends in relation to s 49 can be expected to apply to some extent also to s 47, given the similar purposes and effects of the provisions”.18 The Commission also considers that a presumptive proof rule would more closely align with the approach in comparable jurisdictions to conviction evidence in civil proceedings.19
[16] While it is clear the two provisions address the same issue—the effect of previous convictions in civil and criminal proceedings—I am unsure whether aligning the two provisions is necessarily the right approach. The policy considerations relevant to ss 47 and 49 are very different. Decisions of the higher courts dealing with s 49 have emphasised the importance of a defendant’s constitutional right to a fair criminal trial, and except in the clearest cases have tended to take a generous view of what might constitute exceptional circumstances. In civil proceedings, however, cases may arise where the interests of victims to be free from re-litigation of the underlying facts
14 Law Commission Evidence: Evidence Code and Commentary (NZLC R55 Vol 2, 1999) at 136– 137 and 140–141.
15 Evidence Bill 2005 (256-1), cl 43.
16 Law Commission The Second Review of the Evidence Act 2006 | Te Arotake Tuarua i te Evidence Act 2006 (NZLC R142, 2019).
17 See Morton v R [2016] NZSC 51, [2017] 1 NZLR 1; and Va’afuti v R [2017] NZSC 142.
18 The Second Review of the Evidence Act, above n 16, at [4.91], citing Elisabeth McDonald and Scott Optican (eds) Mahoney on Evidence: Act and Analysis (4th ed, Thomson Reuters, Wellington, 2018) at 405.
19 At [4.94]–[4.96].
of a conviction might suggest that it is undesirable to replace the existing conclusive proof presumption in s 47 for one that is subject to challenge at the election of a convicted party. The present case is an illustration of that very concern.
Factual context
[17] The plaintiff, Marina Purucker, commenced these proceedings against the defendants in 2018. The third amended statement of claim alleges that Ms Huebler was Ms Purucker’s bookkeeper from 2003 in relation to a café Ms Purucker operated in Tākaka. Between mid-2011 and October 2018, Ms Purucker is said to have travelled regularly to her native Germany to look after her parents and an aunt, spending more than half of her time overseas. She alleges that the first defendant, over a period of more than six years, between May 2012 and October 2018, fraudulently misappropriated in the order of $873,364.93 of her funds.
[18] In 2019, Police commenced a prosecution against Ms Huebler. She was charged with five counts of theft by a person in a special relationship.20 The charging documents set out the particulars of the offences but did not specify the value of the sums alleged to have been stolen. The amount of Ms Huebler’s alleged theft was instead recorded in the Police summary of facts. That document alleged that she had stolen a total of $768,651.91 from Ms Purucker, split across the five charges. The prosecution case was supported by evidence from an independent forensic accountant engaged by the Crown. He provided a detailed analysis of suspicious transactions over a six-year period.
[19] Subsequently, following plea negotiations between Ms Huebler’s counsel and Crown counsel shortly before trial, the total amount of the alleged theft was reduced to $700,000.21 Ms Huebler sought a sentence indication on the basis of an updated summary of facts recording the reduced total of the fraud, and accepted that indication. She was arraigned before the District Court and entered guilty pleas on all five charges.
20 Originally, Ms Huebler was also charged with a sixth count of theft against a different person, Ms McCurdy. However, that charge was dropped as part of plea negotiations.
21 Charge 3 in the updated summary of facts was reduced from $386,341.39 to $317,689.48, a difference of $68,651.91. Including the withdrawal of the charge relating to Ms McCurdy, it appears that the negotiations saw the alleged theft by Ms Huebler reduced from an original figure of approximately $850,000.
[20] Then, on the day she was due to be sentenced, Ms Huebler applied to vacate her guilty pleas. That application was heard in the District Court by Judge Ruth on 15 July 2022.22 Ms Huebler, represented by new counsel, submitted that her pleas should be vacated on that basis that:
(a)she received incompetent or incorrect legal advice, and her counsel failed to follow her instructions, in particular by failing to obtain the services of a forensic accountant;
(b)there were documents (some known, others perhaps not) which her legal team had failed to understand and which, possibly with the assistance of a forensic accountant, raised an obvious defence; and
(c)she was pressured into pleading guilty by her lawyer under significant mental distress even though she did not want to. Ms Huebler gave evidence in cross-examination that she had believed that she could “take back” her guilty pleas and have a trial.
[21] Having heard evidence from Ms Huebler and read affidavits by her former lawyers, Judge Ruth declined to vacate her guilty pleas. The Judge rejected outright Ms Huebler’s criticisms of her former lawyers, observing that she had been unable to provide them with any coherent explanation for the various transactions, and that a forensic accountant would not therefore have assisted.23 His Honour was also left with no doubt that Ms Huebler understood the consequences of her pleas, rejecting her suggestion that she thought she could have a trial despite her guilty pleas.24
[22] Accordingly, Ms Huebler was convicted of the five charges of theft encompassing theft of $700,000 from Ms Purucker, and sentenced to four years’ imprisonment.25 As with the charging documents, the conviction certificate makes no reference to the sums of money that Ms Huebler was convicted of stealing.
22 R v Huebler [2022] NZDC 13425.
23 At [22].
24 At [20] and [23].
25 R v Huebler [2022] NZDC 20111. Ms Huebler was also ordered to pay $80,000 in reparations.
[23] In the present trial, Ms Purucker intends to call evidence establishing Ms Huebler’s convictions. The effect of s 47(1) then is that the convictions are conclusive proof that she committed the offences unless exceptional circumstances are made out.
[24] Before the parties opened their cases, I heard submissions on Ms Huebler’s s 47(2) application. I considered this was necessary in order to determine the issue before cross-examination of the plaintiff’s witnesses commenced, given my determination would also determine the scope of the facts in issue and therefore the extent of relevant evidence that could be adduced by the defendants.
[25] Ms Huebler submitted the following points amounted to exceptional circumstances:26
(a)First, in a nutshell, she claimed that there has never been any fraud. She says she dealt with all of the money for Ms Purucker’s benefit in accordance with her instructions and authority, and has returned all of it to the plaintiff. Ms Huebler states that from 2010 onwards she managed Ms Purucker’s finances as a friend, not as a bookkeeper as the plaintiff alleges.
(b)Second, the Police and prosecution were “one-sided”. She pointed out that the lawyer who had first acted for the plaintiff in the civil proceedings subsequently became the prosecutor in her criminal proceedings, creating a risk of bias. She also raised queries with Police about the need for a thorough independent investigation but she was ignored. She says the Police searched her home under a search warrant but declined to take documents relevant to their investigation. She says that the amount of the alleged fraud shifted regularly in value, and she has never known the exact case she is required to answer.
26 A number of these submissions are not consistent with the evidence or factually accurate, but they are set out as a matter of record.
(c)Third, the legal advice Ms Heubler received in the lead up to her guilty pleas was improper. She submitted that her first lawyer persuaded or pressured her to plead guilty on the eve of a nine day criminal trial. Her lawyer “pushed” the plea resolution as beneficial, while simultaneously encouraging her to agree to an increased charging order over her residential property. The lawyer did not insist on obtaining a forensic accountant’s advice, or seeking a full financial investigation. She says she subsequently discovered that her lawyer had only charged 45 hours in the criminal matter.
(d)Fourth, there has never been a proper investigation into the alleged fraud. Ms Huebler says it is inherently unlikely that the 270 transactions alleged to have occurred fraudulently over a period of more than six years went unnoticed by the plaintiff, particularly given the two met each other weekly, and the plaintiff had access to her accounts at all times, had an accountant and is a financially astute business owner and developer. She submits that she did not have access to her records or computer, and this was the reason that her lawyer pressured her into pleading guilty. Ms Huebler says that she wants an opportunity to present her side of the story—to discuss how she returned the money—and that a forensic investigation is necessary to enable this.
(e)Fifth, while the criminal proceedings (and her guilty plea) only involved Ms Huebler, these proceedings also affect her ex-husband, the second defendant. Treating her convictions as conclusive proof that she committed the offences would be unfair to him.
Consideration
[26] Having heard from Ms Huebler, I am not satisfied that exceptional circumstances are made out. On the contrary, I consider one of the underlying policies
of s 47(1)—finality of litigation and the avoidance of abuse of the court’s process—is the paramount consideration.27
[27] Nothing Ms Huebler has raised calls into question the safety of her convictions. Ms Huebler sought and accepted a sentence indication, and personally entered guilty pleas at an arraignment. At the hearing of her application to vacate her guilty pleas, Ms Huebler (with new legal representation) raised many of the same concerns that she now raises before me, such as her concerns about the need for an “independent” forensic accountant, her previous lawyer’s failure to follow her instructions, and her mental state at the time of pleading. As Mr Pietras submitted, these issues have already been ventilated and resolved in the criminal proceedings. Judge Ruth declined to vacate her guilty pleas. His Honour evidently formed a clear view on the evidence, including that of her former lawyers, that Ms Huebler had entered guilty pleas with full understanding of the consequences of doing so. Ms Huebler was convicted and sentenced accordingly. She has not appealed her convictions. In these circumstances, I do not consider it would be unfair to treat Ms Huebler’s convictions as conclusive proof that she committed the offences for which she was convicted.
[28] Moreover, aside from general submissions, Ms Huebler has provided no evidence which tends to prove that she did not steal the money she has been convicted of stealing. I therefore accept Mr Pietras’ submission that the present case is distinguishable from X v Attorney-General, where there was new evidence going directly to the validity of the conviction in question.28
[29] Central to Ms Huebler’s complaints is that she has never had a proper opportunity to prove her innocence. However, while she insists that a formal investigation is required to enable this, she has not provided any basis for dismissing the forensic analysis undertaken by an independent witness engaged by the Crown, apart from a bald claim of “bias” on the part of the expert. Nor has she or the second defendant briefed their own forensic expert in the five years since this proceeding
27 Faloon v Planning Tribunal at Wellington [2020] NZCA 170.
28 There, X sued the Crown for damages in relation to historical sexual abuse he alleged was committed by W, and sought to rely on evidence of W’s conviction as conclusive proof that the abuse occurred. The Crown sought orders under s 47(2) on the basis of sworn affidavits by X’s caregivers that X had voluntarily recanted the allegations.
began. The defendants have had ample time to prepare their defence, and to brief an expert, had they considered that would support a claim that no funds were ever stolen. More importantly, if there is an innocent explanation for the suspicious transactions, that would be a matter Ms Huebler is wholly able to establish in her own evidence. No such evidence has been proffered in support of her s 47 application.
[30]It follows that Ms Huebler’s convictions on five charges of theft totalling
$700,000 are conclusive proof that she committed those offences and in that amount.
Conclusion and result
[31] Ms Huebler’s application under s 47(2) is dismissed. The effect of s 47(1) is that evidence of her convictions is conclusive proof that she committed those offences.
[32] However, apart from the sums covered by the convictions, Ms Huebler is permitted to adduce evidence tending to prove that she did not misappropriate Ms Purucker’s funds. In particular, before the trial commenced I directed that she was entitled to dispute the remaining $173,364.93 sought by the plaintiff in the third amended statement of claim. This sum is essentially comprised of two figures: first, a
$68,651.91 reduction in the amount covered by charge 3 which occurred as part of her plea arrangement, and second, the sum of $102,416.66, concerning the plaintiff’s claim that she was tricked into providing a sham loan to Ms Heubler (the Heritage House International advance).
Isac J
Solicitors
Thomas Dewar Sziranyi Letts, Lower Hutt for Plaintiff McFadden McMeeken Phillips, Nelson for Second Defendant
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