R v Bettle - [2013] NZHC 1455

ORDER PROHIBITING PUBLICATION OF THE JUDGMENT (OTHER THAN THE RESULT) IN NEWS MEDIA OR ON THE INTERNET OR OTHER PUBLICLY AVAILABLE DATABASE UNTIL FINAL DISPOSITION OF TRIAL. PUBLICATION IN LAW REPORT OR LAW DIGEST PERMITTED.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2010-004-10228 [2013] NZHC 1455

THE QUEEN

v

RICHARD GILBERT BETTLE VANCE ERIC ARKINSTALL

Hearing: 12 June 2013

Appearances:

B H Dickey for the Crown
T J Castle for Messrs Bettle and Arkinstall

Judgment:

17 June 2013

JUDGMENT OF KATZ J [Section 347 application]

This judgment was delivered by me on 17 June 2013at 4:15pm
Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:
B H Dickey, Meredith Connell, Auckland
D Breaden, Breaden McCardle Chubb, Paraparaumu

Copy to:
P W Forsyth, Auckland
T J Castle, Barrister, Wellington
S Mount, Barrister, Auckland

R v BETTLE & ARKINSTALL [2013] NZHC 1455 [17 June 2013]

Introduction

[1] Mr Vance Arkinstall and Mr Richard Bettle were independent directors of two sister finance companies, Dominion Finance Group Limited (“Dominion”) and North South Finance Limited (“North South”). Both companies are now in receivership and in liquidation.

[2] Messrs Arkinstall and Bettle (“A” and “B” respectively) are scheduled to appear for trial on 1 July 2013 on seven charges brought by the Financial Markets Authority (“FMA”) under ss 58(1) and 58(3) of the Securities Act 1978 (“Act”). The indictment alleges that during 2007 and 2008 certain Dominion and North South offer documents contained untrue statements regarding related party transactions, internal risk management procedures and liquidity issues.

[3] In particular, it is alleged that A and B signed registered prospectuses that omitted material particulars of related party transactions. A and B say, however ,that they had no knowledge of those related party transactions, because they were concealed from them by other directors and senior executives. Further, they say that the Crown is bound to accept in these proceedings that they did not know about the transactions. That is because, in separate proceedings relating to Dominion and North South (brought by the Serious Fraud Office (“SFO”) against other directors
and senior executives)1 the Crown called A and B as witnesses to testify that they

had no knowledge of the related party transactions.

[4] A and B submitted that if they did not know about the related party transactions, then they will have an “absolute” defence to the charges brought against them. If so, this prosecution cannot succeed. Further, even if they do not have an absolute defence to the current charges, they submitted that it would still be an abuse of process to proceed to trial against them, given the way in which the Crown conducted its case in the SFO proceedings.

[5] A and B therefore apply to be discharged on the FMA charges pursuant to either s 347 of the Crimes Act 1961 or, in the alternative, under the inherent

1 R v Whale & Ors [2013] NZHC 731 (Lang J).

jurisdiction of the Court. They say it would be an abuse of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading R v Bettle

Details

AGLC: R v Bettle [2013] NZHC 1455
Case: [2013] NZHC 1455
Decision Date: 17 June 2013

CaseChat Overview and Summary

The case of R v Bettle involved two defendants, Mr Vance Arkinstall and Mr Richard Bettle, who were directors of two sister finance companies, Dominion Finance Group Limited and North South Finance Limited. Both companies were in receivership and liquidation. The defendants were scheduled for trial on charges brought by the Financial Markets Authority under the Securities Act 1978, alleging that certain offer documents contained untrue statements regarding related party transactions, internal risk management procedures, and liquidity issues. The defendants argued that they had no knowledge of the related party transactions and that their prosecution would be an abuse of process. They applied for discharge under section 347 of the Crimes Act or, alternatively, under the inherent jurisdiction of the Court. The Crown opposed the application for discharge.

The Court found that lack of knowledge of the related party transactions did not give rise to an absolute defence, as the defendants would still need to prove that their belief in the truth of the statements was reasonable. The Court also found that there was no abuse of process, as the Crown's conduct did not warrant intervention by the Court. The facts of the case did not reach the high level of misconduct required to justify the extreme step of intervening to protect the Court's processes. The Court further found that even if the particulars regarding related party issues were objectionable, it would not taint the other particulars, which relate to risk mitigation and liquidity issues. Each particular would need to be considered on its merits at trial.

The application for discharge was dismissed.

Orders