R v Bublitz
[2017] NZHC 1059
•19 May 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CRI-2014-004-002293 [2017] NZHC 1059
THE QUEEN
v
PAUL NEVILLE BUBLITZ BRUCE ALEXANDER MCKAY RICHARD TIMOTHY BLACKWOOD LANCE DAVID MORRISON
Hearing: 4 - 9 May 2017 Appearances:
D Johnstone, B Finn and D Robinson for the Crown
R Reed, H Ford and Y Wang for Mr Bublitz
G Bradford and S Withers for Mr McKay
S Kilian, D Dufty and F Hawkins for Mr Blackwood
Mr Morrison in person
J Dixon as Amicus CuriaeResults:
10 May 2017
Reasons:
19 May 2017
REASONSJUDGMENT OF WOOLFORD J [Reasons to abort trial]
This judgment was delivered by me on Friday, 19 May 2017 at 4:30 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Counsel/Solicitors:
Meredith Connell, Crown Solicitor, Auckland
Ms R Reed, Barrister, Auckland, for Mr Bublitz
Mr G Bradford, Barrister, Auckland, for Mr McKay
Mr S Kilian, Kilian & Associates, Solicitors, Auckland, for Mr Blackwood
Mr L Morrison, Palmerston NorthMr J Dixon, Barrister, Auckland, Amicus Curiae
R v BUBLITZ [2017] NZHC 1059 [19 May 2017]
Introduction
[1] The Lord Chief Justice of England and Wales has commented that:1
In fraud cases the volume of documentation obtained by the prosecution is liable to be immense. The problems of disclosure are intractable and have the potential to disrupt the entire trial process.
[2] So it has proven to be in this long running trial of four company directors of two failed finance companies, Viaduct Capital Ltd (Viaduct) and Mutual Finance Ltd (Mutual), undertaken by the Financial Markets Authority (FMA). The case started on 8 August 2016. On 23 March 2017, the Crown provided to defence a list of documents from the files of Deloitte (the Deloitte list), who were the investigative agents for the FMA, which were not disclosed on various grounds such as irrelevancy or litigation privilege. The list identified 14,619 documents. At that stage, the prosecution had closed its case and the evidence called on behalf of the principal defendant, Mr Paul Bublitz, was nearing its end. Such late disclosure was an admitted breach of the Criminal Disclosure Act 2008.
[3] The taking of evidence continued until 27 March 2017, but the trial has been at a standstill since then because of unresolved disclosure issues that arose following the provision of the Deloitte list and a further list of undisclosed documents from the files of the FMA itself (the FMA list). Defence counsel have taken the view that many of the withheld documents are properly disclosable. All counsel have worked hard to resolve those issues, with 5,506 documents recently disclosed. These disclosure issues will, however, probably require another two months to fully resolve, according to Crown counsel. It is only then that the trial could proceed. Defence counsel have already signalled their intention to apply to recall a large number of witnesses to question them about the recently disclosed documents.
[4] All four defendants made an application to abort the trial on the basis that the timing and volume of the late disclosure substantially impacted on their right to
present an effective defence. I heard argument on the defendants’ applications over
1 Lord Chief Justice of England and Wales Control and Management of Heavy Fraud and other Complex Criminal Cases – A Protocol issued by the Lord Chief Justice of England and Wales (Ministry of Justice, 22 March 2005) at [4].
four days – 4, 5, 8 and 9 May 2017. On 10 May 2017, I granted the applications, aborted the trial and indicated that my reasons would follow. These are my reasons.
Previous applications
[5] There have been two previous applications to stay the proceedings or dismiss the charges against the defendants. I heard the first application for a stay of proceedings over two days on 21 and 22 November 2016.2 It was largely made on the basis of prejudice arising through the length of the trial. At that time, the Court had been sitting almost continuously for more than 70 working days, or 14 weeks. I made the observation that it was entirely possible on the present progress of the trial that the evidence would not be completed until May or June of this year. I stated that this was “unnecessarily burdensome on all concerned”.
[6] I dismissed the first application for a stay because I was then of the opinion that the high threshold for a stay had not been met. I considered a number of alternatives to a stay to counter any ongoing prejudice. Ultimately I discharged the defendants on a large number of charges for reasons of case management to try and keep the trial within manageable bounds. I took this step on the basis that otherwise the burden on the defendants, counsel, the Court and all others would become intolerable and that scarce public resources would be wasted.
[7] I heard the second application to dismiss the charges against the defendants on 2 February 2017.3 It was largely made on the basis that the Crown’s decision over the Christmas vacation not to call Mr Barry Jordan, an expert witness from Deloitte, on the issue of accounting standards, and instead to call another expert, Ms Denise Hodgkins also from Deloitte, was prejudicial because the defence had formulated its case on the basis that Mr Jordan was to give evidence. The defence submitted that the whole trial had proceeded on the basis that crucial evidence about the investigation of the case was to be given by Mr Jordan, and that other Crown
witnesses would have been cross-examined differently if Ms Hodgkins had been
called from outset.
2 R v Bublitz [2016] NZHC 2863.
3 R v Bublitz [2017] NZHC 114.
[8] I dismissed the second application to dismiss the charges because I was unable to perceive any significant unfairness in the defence now being unable to cross-examine Mr Jordan about his role in the investigation. Nor was I persuaded that Ms Hodgkins’ evidence was significantly different to Mr Jordan’s on the proper interpretation of accounting standards. Again, to counter any possible prejudice, I advised counsel that I would take a liberal attitude to any applications to recall Crown witnesses because of the perceived unfairness of the Crown’s decision not to call Mr Jordan. I also advised counsel that I was not going to draw any adverse inferences against the defence for not putting the entirety of its case to all major prosecution witnesses. As a consequence of my ruling, several Crown witnesses were recalled and subject to further cross-examination.
Background
[9] The defendants were charged on 11 March 2014. Not guilty pleas were entered on 29 September 2014. On 4 February 2015, a trial of 12 weeks duration commencing on 9 February 2016 was allocated. Disclosure has been a troublesome issue from the beginning of the prosecution. Difficulties with disclosure were identified in an application to adjourn the trial heard by Venning J on 28 October
2015.4 The officer-in-charge of the prosecution swore a 112 paragraph affidavit on
20 October 2015 setting out the process of disclosure up to that point. Venning J was of the view that the difficulties identified at that point should be resolved in sufficient time prior to trial to enable the trial to commence on 9 February 2016. Venning J did, however, adjourn the trial to 8 August 2016 to allow Mr Bublitz time to pursue further opportunities to obtain legal representation.
[10] When the trial commenced on 8 August 2016, the first witness called by the Crown was an investigating accountant from Deloitte, Mr Jason Weir. During his cross-examination, Mr Weir asked to see counsel for the Crown and for Mr Bublitz to discuss a memorandum he had prepared, which set out in table form the potential source of documents which may upon analysis assist the defendants. Mr Weir appeared to propose a complete review of correspondence and all other documents
held by Deloitte that may relate to the case.
4 R v Bublitz [2015] NZHC 2799.
[11] As an example, Mr Weir identified his Deloitte email account which had been forensically copied and indexed. He was, however, unsure if optical character recognition had been completed and also stated that guidance was needed on the issue of privilege. He then stated that filters (key words and date ranges) would need to be applied, but as at 23 September 2016 it appeared that the number of documents returned by the filters may be in excess of 10,000.
[12] After discussions with the Court, Crown counsel undertook to review the documents identified by Mr Weir and disclose those that were relevant and not subject to a claim of privilege. As a result, the Crown disclosed a further
171 documents to the defence in October 2016.
[13] Unfortunately, a list specifying documents that were relevant but withheld under the Criminal Disclosure Act 2008 was inadvertently not provided to counsel for the defendants at the time. That error was a breach of the requirements in the Criminal Disclosure Act 2008: ss 13(2)(b) and (5). Where documents are withheld, defendants are entitled to know “as soon as is reasonably practicable” what those documents are in order to be able to challenge the grounds on which they are withheld.
[14] The Crown provided the Deloitte list to counsel for the defendants on
23 March 2017. That list contains 14,619 documents withheld either as irrelevant or on some other ground as against the 171 that were disclosed in October 2016.
[15] As at 23 March 2017, the Crown had closed its case and Mr Bublitz had elected not to give evidence. He did, however, call evidence and on 10 March 2017 opened his case. After making an opening statement, he called three witnesses, a solicitor, Mr Michael Foley, an investment banker, Mr David Wallace, and an accounting standards expert, Mr Mark Hucklesby. It was during cross-examination of Mr Hucklesby by the Crown that the Crown provided defence with the Deloitte list.
[16] The taking of evidence continued until 27 March 2017, but the trial has been at a standstill since then because of unresolved disclosure issues that have arisen following the provision of the Deloitte list.
[17] Since the conclusion of the evidence on 27 March 2017, the Crown has disclosed numerous documents and provided other lists of documents withheld. The following chronology is largely taken from defence counsel’s submissions. On
31 March 2017 the Crown disclosed 23 documents that had previously been categorised as irrelevant, but not withheld on other grounds. On 2 April 2017, the Crown advised the defence that 53 documents previously listed as irrelevant were now to be recategorised as relevant, but subject to litigation privilege and still withheld. The defence has made several enquiries with the Crown in relation to some of the documents in this category. I have been advised that rulings may be required from the Court on a number of documents in this category.
[18] On 3 April 2017, the Crown provided defence counsel who had provided an undertaking of confidentiality with a USB media device containing 1,858 documents it considered irrelevant, although it acknowledged that they were case related. The Crown has not consented to these documents being fully disclosed. It has taken defence considerable time to review all these documents and consider them in the context of the case.
[19] On 4 April 2017 the Crown disclosed a further 46 documents that had previously been categorised as irrelevant, but not withheld on other grounds. On
6 April 2017, the Crown disclosed email correspondence with a witness, Mr Damien Grant, the receiver of a number of companies connected with Mr Bublitz. On 7 April 2017, the Crown disclosed a Deloitte engagement letter. Then on 10 April 2017 the Crown disclosed three emails concerning a defendant who pleaded guilty, Mr Peter Chevin. Two of the emails concerned FMA enquiries as to whether Mr Bublitz instructed Mr Chevin to destroy documents and had previously been categorised as irrelevant. The other was previously withheld under s 16(1)(c)(iii) of the Criminal Disclosure Act 2008 as analytical material.
[20] In a memorandum dated 10 April 2017, defence counsel categorised the documents provided pursuant to the undertaking of confidentiality as follows:
(a) Draft briefs of evidence;
(b) Correspondence with the witnesses and meetings with them;
(c) Correspondence setting out the breadth of Mr Jordan’s role and his views before he was ever engaged to be an expert witness in the trial; and
(d)Additional material prepared and seemingly finalised by Deloitte and presented to the FMA, which contained opinions by Mr Weir and Mr Jordan.
[21] I have been advised that the Crown would object to the disclosure of much of this material and rulings would again be required from the Court.
[22] The Crown then responded in a memorandum in which it listed 10 categories which the Crown proposed to use to identify documents from the Deloitte files for the purposes of obtaining rulings from the Court, so as potentially to avoid an individualised assessment of every document.
[23] Later in a memorandum dated 20 April 2017 the Crown expanded its list of categories to 12. It also identified a number of documents in each category and the Crown’s proposals as to how issues of disclosure could be resolved. It is, however, clear that a number of rulings, whether of a high level nature or otherwise, will be required from the Court as counsel are still well apart on the question of whether documents are properly disclosable.
[24] As an example, in relation to just one of the categories, Category 12 – draft briefs of witnesses — I was provided with a USB media device on 28 April 2017 containing a spreadsheet listing 183 documents upon which a ruling from the Court will be required.
[25] Because of the difficulties encountered with disclosure of material from the Deloitte files, on 11 April 2017 defence counsel requested that the Crown confirm whether a list of all relevant documents withheld by the FMA and Meredith Connell (Crown counsel’s firm) had ever been provided as required by s 13(2)(b) of the Criminal Disclosure Act 2008. Crown counsel advised that no such list had ever been provided. The lists (in abbreviated form in respect of Meredith Connell’s files) were provided over two weeks later, on 28 April 2017. The FMA list contains approximately 19,700 documents with about 1,835 documents identified as disclosable.
[26] On 12 April 2017 further documents were provided by the Crown on a counsel to counsel basis for review, subject to the undertaking of confidentiality already provided. On 13 April 2017 the Crown disclosed 31 folders containing FMA correspondence with witnesses (roughly estimated at about 4,000 pages), which fell outside of the Deloitte list. Counsel had been unable to review all of the documents for the purpose of making this application to abort the trial. On 13 April 2017 the Crown separately disclosed nine documents from the Deloitte files. Then on
21 April 2017 the Crown disclosed 870 documents in Categories 1-9 identified in the memorandum dated 20 April 2017. On 26 April 2017 the Crown disclosed about
20 emails relating to a witness, Megan Blenkarne, of the Securities Commission. Then on 2 May 2017 the Crown provided 1,907 documents from the FMA’s files (slightly more than the 1,835 identified in the FMA list provided on 28 April 2017). Also provided was a comprehensive index listing documents which continued to be withheld from disclosure. I was not advised of any further developments after the hearing of the application to abort the trial started on 4 May 2017.
The law
[27] The defence sought to abort the trial due to prejudice arising from late disclosure. Unlike previous applications, this did not amount to an application to stay the proceedings in their entirety or to dismiss the charges, but rather that this particular trial should be aborted as a mistrial. The defence submitted that this application therefore does not require the defence to show any abuse of process; the requisite threshold to abort a trial is lower than that for a stay of proceedings.
Jurisdiction
[28] Criminal jury trials are not infrequently aborted in a range of situations. The Court has the power to discharge juries and abort trials both under its inherent jurisdiction and statutorily under s 22 of the Juries Act 1981.5 Section 22(3)(a) provides for the Court to discharge the jury during the hearing of a case where “a casualty or emergency makes it, in the Court’s opinion, highly expedient for the ends of justice to do so”. A casualty or emergency will include unforeseen occurrences or “mishaps” requiring the judge to intervene at trial.6 Effectively “something must
have gone wrong with or affecting the trial process”.7
[29] Whether it is highly expedient for the ends of justice to discharge a jury will turn on “whether there is a reasonable danger or reasonable apprehension of a miscarriage of justice in the circumstances”.8 The need to abort often comes about due to problems with disclosure, for example unauthorised disclosure to the jury of prejudicial material during the trial. Where an appropriate direction by the judge cannot sufficiently counteract the unfairness, it will be necessary to discharge the jury and abort the trial.
[30] While jury trials are not infrequently aborted, the same cannot be said of judge-alone trials. Counsel have struggled to find many examples of judge-alone trials being aborted in New Zealand. This does not mean, however, that such a remedy is not possible.
[31] Heath J discussed the possibility of aborting a judge-alone trial in the face of late disclosure of prejudicial evidence in R v Sullivan (No 8).9 In that decision, the Judge was concerned with an application by the Crown for evidence to be admitted through a witness late in the trial, after the Crown had previously stated unequivocally that it did not intend to call that particular witness. Heath J pointed to s 368 of the Crimes Act 1961, since repealed by the Crimes Amendment Act (No 4)
2011. That section allowed the court to “either adjourn the further hearing of the
5 R v Marshall [2004] 1 NZLR 793 (CA) at [15].
6 Buddle v R [2009] NZSC 117, [2010] 1 NZLR 717 at [20].
7 R v Hetherington [2015] NZCA 248 at [39].
8 R v Marshall, above n 5, at [16].
9 R v Sullivan (No 8) [2014] NZHC 1019.
case or discharge the jury from giving a verdict, and postpone the trial” where the court was of the opinion that the accused was taken by surprise, in a manner likely to be prejudicial to his or her defence, by the production of a new witness by the prosecution. Heath J added: 10
As I am conducting the trial without a jury, the second option must be characterised as one that would see the trial aborted, with a direction for a re- trial.
[32] Heath J was not suggesting that the statute permitted the Court to abort a judge-alone trial. Rather, Heath J was pointing to the apparent conclusion that an equivalent remedy must be available in judge-alone trials.
[33] Courts have inherent and implied powers, as part of their inherent jurisdiction, to control and regulate their processes and proceedings.11 The breadth of the inherent jurisdiction means that the ability to declare a mistrial in a judge- alone setting is clearly within its scope:12
… it is both unwise and unnecessary to seek to define the scope of the Court’s inherent jurisdiction. Broad principles governing its exercise is all that is required. The Court may invoke its inherent jurisdiction whenever the justice of the case so demands. It is a power which may be exercised even in respect of matters which are regulated by statute or by rules of Court providing, of course, that the exercise of the power does not contravene any statutory provision. The need to do justice is paramount.
[34] The Court’s inherent jurisdiction “is to be developed and exercised in harmony with the relevant legislation”.13 It is consistent for a similar power as that provided for in s 22 of the Juries Act to be available in respect of judge-alone trials.
[35] The inherent jurisdiction extends to the power to grant a stay of prosecution where there has been conduct by or on behalf of the prosecutor that amounts to an abuse of process.14 It would be incongruous if the Court’s inherent jurisdiction
extended so far as to permit the Court to stay proceedings as a whole where a fair
10 At [21].
11 Master Jacob, “The Inherent Jurisdiction of the Court” (1970) 23 CLP 23, Wilson v R [2015] NZSC 189, [2016] 1 NZLR 705 at [119], Fox v Attorney-General [2002] 3 NZLR 62 (CA) at [32], Connelly v Director of Public Prosecutions [1964] AC 1254 (HL).
12 R v Moke [1996] 1 NZLR 263 (CA) at 267.
13 R v Moke, above n 12, at 269.
14 F v The District Court at Hamilton [2015] NZCA 600 at [1].
trial is impossible, but not to allow the Court to abort a trial where that particular trial was unfair, but future trials might not be. Before granting a stay of prosecution on the grounds that proceeding with the trial would tarnish the court’s own integrity (one of two categories available), the Court must be satisfied that there are no alternative remedies which adequately address the interests at stake.15 Aborting the trial is one potential remedy less extreme than a stay that the Court should be able to consider.
[36] The exercise of the inherent jurisdiction is particularly appropriate where the powers are used to ensure a fair trial. In Wilson v R, the Supreme Court went so far as to say that courts have “a duty to exercise such powers where fair trial cannot be provided” in light of the New Zealand Bill of Rights Act 1990.16 Sections 24 and 25 of the New Zealand Bill of Rights protect the rights of a defendant, providing for rights of persons charged and minimum standards of criminal procedure.
[37] While I consider aborting the trial to be a lesser remedy than staying the proceedings for abuse of process, that is not to say that aborting a trial is not an extreme remedy. The policy reasons for exercising caution in granting a stay similarly apply to aborting a trial. Part of the rationale for not staying criminal proceedings lightly is due to the need to uphold the separation of the judiciary and the executive. The latter is responsible for exercising the discretionary public power
to initiate and continue prosecutions. Thus:17
The Courts traditionally have been reluctant to interfere with decisions to initiate and continue prosecutions. In part this is because of the high content of judgment and discretion in the decisions that must be reached. But perhaps even more so it also reflects constitutional sensitivities in light of the Court’s own function of responsibility for conduct of criminal trials. This reluctance to interfere on the ground that the prosecution is thought to be inappropriate is widely apparent in the common law jurisdictions.
[38] Much like a stay, where a judge aborts a trial due to the conduct of the
prosecution, it “is effectively reviewing the exercise of prosecutorial discretion by the executive”.18 For this reason the court must be similarly careful in relation to
15 Wilson v R, above n 11, at [92].
16 Wilson v R, above n 11, at [119].
17 Fox v Attorney-General, above n 11, at [31].
18 Andrew L-T Choo Abuse of Process and Judicial Stays of Criminal Proceedings (2nd ed,
aborting a trial. As such, aborting a trial has been called “an option of last resort” even in criminal proceedings.19 Neither remedy should be used for minor matters, nor to discipline the parties for conduct the Court considers undesirable.20 The focus must be on the impact on the trial; the analysis is forward-looking rather than backwards looking.21 Much like a stay, bad faith on the part of the prosecutor will not be required to abort the trial.22
[39] Nonetheless, the Court’s inherent power to regulate its own proceedings should not be undermined. This is highlighted by the recognition that:23
.. the judiciary accept a responsibility for the maintenance of the rule of law that embraces a willingness to oversee executive action and to refuse to countenance behaviour that threatens either basic human rights or the rule of law.
Test
[40] The test for aborting a jury trial was laid out by the Court of Appeal in Marshall. It depends on “whether there is a reasonable danger or reasonable apprehension of a miscarriage of justice in the circumstances”.24 By contrast, a stay of prosecution may be granted by the courts where there has been conduct by or on behalf of the prosecutor that amounts to an abuse of process. This will occur only where the prosecutor’s conduct renders a fair trial impossible, or where the
prosecutor’s conduct is of a kind so inconsistent with the purposes of criminal justice that proceeding with the trial would tarnish the court’s own integrity or offend the court’s sense of justice and propriety.25
[41] The defence submitted that aborting a trial requires satisfaction of a lower test than granting a stay of proceedings. Counsel submitted that the test for a
mistrial in a jury trial should be applied. The Crown, on the other hand, initially
Oxford University Press, Oxford, 2008) at 9.
19 R v R [2015] NZHC 948 at [15].
20 Discussed in the context of stay applications in F v The District Court at Hamilton, above n 14, at [75].
21 Wilson v R, above n 11, at [40].
22 Fox v Attorney-General, above n 11, at [37].
23 R v Horseferry Road Magistrates’ Court, Ex parte Bennett [1994] 1 AC 42 (HL) at 62, cited in
Wilson v R, above n 11, at [1].
24 R v Marshall, above n 5, at [16].
25 F v The District Court at Hamilton, above n 14, at [1].
submitted that the threshold to abort a judge-alone trial should be viewed as akin to the threshold to stay proceedings for abuse of process.
[42] As counsel for the Crown accepted in oral argument, appropriately in my view, the standard for aborting a judge-alone trial should not be so high as that for a stay. I consider the Marshall test is appropriate for judge-alone trials. This test requires some of the same considerations as that of a stay for an abuse of proceedings on grounds that a fair trial is impossible. However, understandably, as a lesser remedy it has a lower threshold. The test is relevant only to the particular trial; it does not ask whether a fair trial would be impossible in all situations, but rather whether circumstances are such that the current trial is unfair.
[43] It is also useful to compare this test to the threshold for an appeal against conviction arising from a judge-alone trial. Section 232 of the Criminal Procedure Act 2011 provides in relation to first appeals:
232 First appeal court to determine appeal
(1) A first appeal court must determine a first appeal under this subpart in accordance with this section.
(2) The first appeal court must allow a first appeal under this subpart if satisfied that,—
…
(b) in the case of a Judge-alone trial, the Judge erred in his or her assessment of the evidence to such an extent that a miscarriage of justice has occurred; or
(c) in any case, a miscarriage of justice has occurred for any reason.
…
(4) In subsection (2), miscarriage of justice means any error, irregularity, or occurrence in or in relation to or affecting the trial that—
(a) has created a real risk that the outcome of the trial was affected; or
(b) has resulted in an unfair trial or a trial that was a nullity.
…
[44] The test under s 232 requires a two-step process. The Court must first determine that there was an error, irregularity or occurrence relating to the trial, and secondly that this created a real risk that the outcome of the trial was affected, or that an unfair trial resulted.26 Thus an appeal against conviction arising from a trial before a judge-alone will be allowed where “there is a reasonable possibility that a not guilty (or more favourable) verdict might have been delivered if nothing had gone wrong”.27 This test is similar to the test set out in Marshall. In both instances the test requires a breach of proper trial process that results in a real risk of an unfair trial. That this test applies for appeals against judge-alone trials lends weight to the submission that the test for aborting trials set out in R v Marshall is appropriate in judge-alone settings. If nondisclosure or some other error that becomes apparent during trial would result in a first appeal court allowing an appeal, then aborting the
trial at that point is appropriate.
Degree of prejudice
[45] While the test is lower than that for a stay, it nonetheless requires a real risk or danger of an unfair trial. At times, counsel for the defence have tended towards suggesting that this merely raises a question of whether counsel would have done something differently had they had the material been disclosed at the appropriate time. Under this argument, the real risk of a miscarriage of justice comes about from the mere fact that the defence were not able to present their case in a way they otherwise might have done. The Crown, on the other hand, submits that the Court is required to examine the claim that the previously undisclosed material could have made a material difference to the outcome of the trial.
[46] While the Court cannot accurately assess what would have happened in the trial had the information been disclosed earlier, it nonetheless must be shown that the inadequate disclosure had a material impact on the fairness of the trial. As
Baroness Hale observed in Secretary of State for the Home Department v MB: 28
26 Wiley v R [2016] NZCA 28 at [23]-[24].
27 R v Sungsuwan [2006] 1 NZLR 730 (SC) at [110].
28 Secretary of State for the Home Department v MP [2007] UKHL 46, [2008] AC 440 at [57].
Of the fundamental importance of the right to a fair trial there can be no doubt. But there is equally no doubt that the essential ingredients of a fair trial can vary according to the subject matter and nature of the proceedings.
[47] Not every departure from best practice will make a trial unfair:29
It is important to remember that… the assessment of the fairness of the trial is to be made in relation to the trial overall. A verdict will not be set aside merely because there has been irregularity in one, or even more than one, facet of the trial. It is not every departure from good practice which renders a trial unfair, as Lord Bingham made clear in a passage in Randall, which was referred to with approval in Howse. He said that it is at the point when the departure from good practice is ‘so gross, or so persistent, or so prejudicial, or so irremediable’ that an appellate Court will have no choice but to condemn a trial as unfair and quash the conviction as unsafe.
[48] Thus a miscarriage requires “more than an inconsequential or immaterial mistake or irregularity”.30 In my view, the fact alone that counsel could have done something differently had they had that information is not enough to reach the threshold. This would allow for a trial to be aborted wherever there was failure to disclose anything relevant that could have been used, even if patently inconsequential to the defence case. Quite clearly that would be unworkable and unjustifiable. The test must be directed to the ultimate question of whether the non- disclosure gave rise to prejudice. Prejudice must be more than negligible.
[49] This finely balanced question is accounted for in the Marshall test for discharge of a jury. The question of “whether there is a reasonable danger or reasonable apprehension of a miscarriage of justice in the circumstances” requires the judge to consider the likelihood of actual prejudice to the defence. The judge is not required to undertake an analysis of the actual merit of the documents, but to assess whether there is a reasonable risk that the lost opportunity could have had an impact on the proceedings. Accordingly, I have considered the impact that specific documents recently disclosed that relate to Mr Jordan’s role, a draft Deloitte report and a draft brief of evidence of Mr Grant, the receiver of a number of companies connected with Mr Bublitz, may have had on the case to confirm that prejudice may
indeed arise from their non-disclosure.
29 R v Condon [2006] NZSC 62, [2007] 1 NZLR 300 at [78].
30 Matenga v R [2009] NZSC 18, [2009] 3 NZLR 145, at [30].
[50] In the context of adequate disclosure by the prosecutor, the Court of Appeal considered:31
The issue is whether such non disclosure has created a real risk of a miscarriage of justice. Conventionally such a real risk might be perceived if, being evidence, the information might reasonably have left the jury in a state of reasonable doubt, or being other information might have been used by the defence in meeting the Crown case, or might otherwise have affected a significant decision in respect of the defence case… The application of the principle must have regard to materiality in the circumstances of a particular case and additionally, in some cases, credibility.
[51] Counsel in this trial identified additional relevant indicia helpful in assessing the impact of the nondisclosure. These include timing, quantity and importance to strategic decisions. While I accept these indicia are helpful, they are helpful only to the extent that they address the ultimate question of whether the failure to disclose resulted in a reasonable danger or apprehension of an unfair trial; that is to say, one which does not “adequately protect… the defendant from a wrongful conviction”.32
[52] I note, however, that the indicium of quantity requires careful consideration. It is true that where a large quantity of relevant documents is not disclosed, it may be more likely that cumulatively the use of those documents would have had an impact on the trial. However, it is also possible that one single document may be crucial to
the defence case.33 Quantity is by no means decisive.
[53] Moreover, the quantity of documents is less helpful as a marker of a reasonable danger of an unfair trial where it could be ameliorated by time. A miscarriage of justice does not arise simply as a result of a long trial. It must be demonstrated that the length of the trial has the practical consequence of making the trial unfair. Thus in Kellard v R, a jury trial that lasted 252 working days, the
English Court of Appeal held:34
The first question to be decided is whether the length of the trial in itself is a sufficient ground for characterising these convictions as unsafe or unsatisfactory. The Court is firmly of the opinion that it is not. If it were otherwise, cases would have to be tried within a time limit.
31 R v Takiari CA273/98, 22 July 1999 at [19].
32 Choo, above n 18, at 18.
33 See, for example, R v Aitken (No 7) HC Rotorua, CRI-2008-070-6480, 13 June 2011.
34 Kellard v R [1995] 2 CR App R 134 (UKCA) at 149.
The correct approach is to consider whether the length of the trial created a situation at any point whereby a fair trial was not possible. Does the case reveal any feature which tends to establish that any of those taking part in the trial were by reason of its length unable to discharge their function?
[54] The Court of Appeal concluded that despite the excessive length of the trial, there was no danger of the jury being confused; the issues were clear and the jury particularly qualified to resolve the central question of dishonesty. Notwithstanding the prejudice to the appellants caused by such a lengthy trial, that did not make the trial unsafe.
[55] It has similarly been held that late disclosure in jury trials will not result in the trial being aborted where time could allow for the defence to address the evidence.35 It is only where additional time through an adjournment or otherwise will not be a sufficient remedy that a mistrial ought to be declared and the trial aborted.
Impact of judge-alone trial
[56] The Crown submits that the test should be different where a case is heard by a judge-alone. Evidently the considerations will be different where a trial is heard by judge-alone rather than by jury. A judge-alone trial may be adjourned to accommodate changes in the wider proceedings, for example further disclosure. This approach has been taken many times thus far in the current proceedings. Similarly, disclosure of inadmissible evidence is considered less likely to affect a judge than a jury; while inadvertent disclosure during trial is a not uncommon reason for discharge of juries in trials, a judge frequently hears questions of inadmissibility alongside admissible evidence.
[57] It is clear that a judge-alone trial will not be so easily aborted. This is apparent from the dearth of examples of aborted judge trials in New Zealand. Heath J similarly pointed to the distinction in R v Sullivan (No 8), noting “[i]t would be rare to abort a trial conducted without a jury given the greater degree of flexibility
inherent in such a trial”.36 Nonetheless, there are many potential situations in which
35 R v R [2015] NZHC 948 at [15].
36 R v Sullivan (No 8), above n 9, at [21].
a judge-alone trial might need to be aborted in the interests of fairness for similar underlying concerns to jury trials. That is especially so in a case like the current proceeding, which is undeniably extraordinary in nature.
[58] The impact the disclosure might have had on the overall presentation of the defence case remains relevant in a judge-alone trial, as it would in a jury trial. Late disclosure will have a significantly larger impact on the fairness of a trial where it comes after presentation of the defence case has started.37 The defendant has the right to decide how they wish their case to be run on the full documents they are entitled to use.38 Such selection impacts upon the way in which evidence is presented and emphasised. This generally cannot be fully rectified in retrospect by recalling witnesses or re-opening the defence case. Strategic decisions as to priority and narrative are equally important in a judge-alone trial.
[59] The same is true of cross-examination. While witnesses may be able to be recalled, this will not replicate the cross-examination that could have taken place had all relevant documents been correctly disclosed at an appropriate time. Defence counsel is unable to structure the entirety of the cross-examination in light of all the evidence. Similarly, cross-examination is unable to make use of all the documents that should have been available to build up a narrative. It is necessarily disjointed. Even if the Judge is presumed to be less affected by the disjointed nature of the witness’s evidence, the fact that defence counsel is not able to question in relation to all the relevant documents at once might easily result in different answers. They will be less able to build up layers of cross-examination to “trap” a witness, as Ms Reed suggested. It is highly likely that cross-examination in totality will be less effective.
[60] The importance of cross-examination to an effective defence is highlighted in several of the authorities referred to by counsel for Mr Bublitz. In R v Aitken, Joseph Williams J aborted the trial for a second time following delayed disclosure, noting the importance of the defence ability to properly cross-examine. He held that
“[a]n effective defence involves more than just calling witnesses in aid of the
37 R v Sullivan (No 10) [2014] NZHC 1105 at [32], F v The District Court at Hamilton, above n 14.
38 Garraway v R [2014] NZCA 67 at [31]-[32].
defence’s case. It also means being able to test the prosecution”.39 Similarly in R v Marshall, the Court of Appeal held that disclosure of documents was necessary to secure a fair trial as the documents were “likely to have materially assisted the defence to conduct a more effective cross-examination of the complainant than that in fact undertaken”.40 In the eventual trial in R v Aitken, Joseph Williams J found that late disclosure of a further document “pre-empted [the defence’s] options in a way that was inherently unfair”.41 It was not enough that the defence could cross- examine another witness on the same document, or recall the witness. Had the document come out earlier, there was a higher possibility that in cross-examination counsel for the defence would have achieved desired concessions. The absence of the document earlier in the trial meant that the defendant’s best opportunity to deal with that document was “irretrievably lost” and “the defence case [was] unfairly crippled”.42 This would have entitled the defendant to a new trial.
[61] Moreover, there may be instances where a judge cannot be expected to compensate for errors or occurrences in the trial. It may be difficult for a judge to hear a new approach by the defence having already heard the defence case purportedly in its entirety without viewing the arguments in light of previous submissions. Venning J referred to the potential risk that existed even in a judge- alone trial in an application to admit propensity evidence:43
Even though Mr Hamilton faces a Judge alone trial, a point noted as relevant in Otimi v R [2012] NZCA 216, the admission of the evidence may tend to colour the Judge’s consideration of Mr Hamilton’s case so that the Judge may, without intending to, give disproportionate weight to the propensity evidence.
[62] While I accept Mr Johnstone’s submission that difficulties short of irremediable, material prejudice can be addressed more comfortably in a judge-alone trial than in the context of a jury trial, I do not accept that this makes the test set out in Marshall irrelevant to judge-alone trials. It may be more difficult in a judge-alone setting to demonstrate a real danger or misapprehension of a miscarriage of justice,
but this can be done within the confines of the test.
39 R v Aitken (Ruling No 7), above n 33.
40 R v Marshall, above n 5, at [46].
41 R v Aitken, above n 33, at [96].
42 At [109].
43 Hamilton v R [2013] NZHC 3101 at [34].
Analysis
Breach
[63] The Crown was clearly in breach of the requirements of the Criminal Disclosure Act 2008. First, by failing to disclose relevant documents as required by s 13(2)(a). Secondly, by failing to disclose a list of relevant information withheld by the defence as required by s 13(2)(b). The breach was particularly problematic given it began to be rectified only after the principal defendant’s case was nearly complete.
[64] It is clear from s 13 that the obligation to disclose is incumbent on the prosecutor. This duty has both principled and practical underpinnings. Not only is the Crown required to disclose information to allow for equality of arms, but also because of the practical reality that the information relevant to the trial is in its hands. The obligation is further strengthened by the nature of the prosecutorial role. Crown prosecutors are required to act fairly.44 Heath J emphasised the impact of
prosecution obligations when it comes to disclosure in R v Sullivan:45
... [the prosecutor’s] role is not as an adversary party, but, rather, as a “minister of justice” with the obligation of disclosing all relevant information to the accused. Disclosure issues must always be considered on the basis that information in the possession or control of the Crown is not something held by it for the purpose of securing a conviction. Rather, as Sopinka J aptly put it in R v Stitchcombe:
I would add that the fruits of the investigation which are in the possession of counsel for the Crown are not the property of the Crown for use in securing a conviction but the property of the public to be used to ensure that justice is done.
[65] The errors in disclosure thus far are accordingly the responsibility of the Crown. It is not the defence’s responsibility to enquire further about lists or documents if not provided, especially given the defence may not be aware of the documents they do not have. There is no waiver of the prosecution’s obligations if the defence does not enquire. I appreciate, however, that the burden of disclosure on the prosecution is enormous in a case of this kind. Efficiency is also a relevant principle emphasised in the Act. But it is not acceptable for relevant information to
be withheld in the interests of efficiency.
44 Crown Law Solicitor-General’s Prosecution Guidelines (1 July 2013) at 4.
45 R v Sullivan (No 10), above n 37, at [34].
[66] The admitted breaches of the Act are not in dispute. All parties accept that there were considerable errors in disclosure. There is, however, no suggestion that the disclosure breaches arose out of any bad faith on the part of the Crown. I do not consider, and I do not understand the defence to have submitted, that the Crown held back any documents or any lists in an attempt to derive benefit for themselves at trial. Non-compliance with disclosure obligations was inadvertent. Nonetheless, the scope of non-compliance was extensive. The volume of late disclosure is seemingly unprecedented in New Zealand.
Prejudice arising from breach
[67] The issue for determination is whether there is a reasonable danger or reasonable apprehension of a miscarriage of justice in the circumstances. In particular, is there a reasonable possibility the defence has been prejudiced in its right to present an effective defence by the timing and volume of the late disclosure together with the considerable delays to date and the inability of counsel to cross- examine Mr Jordan, the subject of two previous applications to stay the proceedings? It is the cumulative effect of all these issues that must be considered. The continuing problems with disclosure have clearly derailed the trial. The question is whether it can now be guided back on track without unfairness to the defendants.
[68] It is difficult for the Court to speculate as to how the defence case might have progressed, or how witnesses might have responded to documents, had the breach not occurred. Nonetheless, to assess the breach some consideration of the likely impact is required. Accordingly, I have considered the potential impact of three examples of specific documents recently disclosed. I have also considered the wider consequences of the breach more generally.
[69] Before detailing specific documents, it must be reiterated that neither the defence nor the Court has had sufficient opportunity to consider all the documents recently disclosed. The documents discussed in the defence submissions were merely examples of potential impact. I examine a smaller subset of documents in this judgment. It is unnecessary for me to consider further documents in depth. But
I must be satisfied that there is a real risk the breach led to unfairness. The following documents, while only examples, demonstrate the potential impact of the breach.
(i) Role of Mr Jordan
[70] By letter dated 26 August 2014, the FMA sought to engage Mr Jordan of Deloitte to provide an independent expert opinion on related party issues and potentially to act as an expert witness in the criminal proceedings which had already been instituted. In particular, the FMA sought confirmation from Mr Jordan that he had not been engaged in, nor advised on, the investigation undertaken by Mr Weir of Deloitte on behalf of the FMA.
[71] By letter dated 3 September 2014, Mr Jordan accepted engagement as an independent expert witness. As requested, Mr Jordan confirmed that he had not been engaged in, nor advised on, the investigation undertaken by Mr Weir, who had assembled the factual information which he had now been asked to review. Mr Jordan did not end up giving evidence because he was unwell, but his independent expert opinion formed the basis of the FMA prosecution.
[72] Prior to trial, defence had the documentation evidencing Mr Jordan’s engagement as an independent expert, but knew that Mr Jordan had been involved in aspects of the investigation because he had sat in on the interview of Mr Bublitz. They did not, however, know the extent of his involvement and whether that involvement could cast doubt on his independence. Mr Weir was therefore cross- examined about Mr Jordan’s role. Mr Weir acknowledged that Mr Jordan’s statement that he had not been engaged in nor advised on the investigation needed “some qualifications”, in particular that he had been used as a sounding board in the investigation, that he had sat in on two interviews and that he did the original triage report.
[73] Further documents relating to Mr Jordan’s role have now been provided to the defence. In an email exchange on 4 April 2013, 11 months before criminal charges were laid on 11 March 2014 and 17 months before Mr Jordan’s engagement as an independent expert on 3 September 2014, the FMA asked Mr Jordan “Can you confirm that you consider criminal action is appropriate”. Mr Jordan replied “From
a non legal perspective – yes. I doubt the directors would have many assets anyway. Civil for the trustee”. In an email dated 17 October 2013, Mr Jordan told one of his colleagues that he could not be appointed liquidator of one of the companies involved in this trial, Northgate Business Park Stage 2 Limited, as he was retained by the FMA to look at Mr Bublitz and Viaduct/Mutual. He stated “Northgate is a key loan that I am giving evidence on in respect of a criminal action”. Criminal charges were not, however, laid for another five months and Mr Jordan was not engaged as an independent expert for another 11 months. These emails may arguably support part of the defence case that there has been an element of selectiveness and predetermination in the evidence compiled and conclusions reached by Deloitte.
[74] Although the Crown has now disclosed some further documentation relating to Mr Jordan’s role, it is withholding a large number of other documents on the grounds of litigation privilege. The defence advised the court that if the case did proceed it would make applications under s 30 of the Criminal Disclosure Act 2008 for specific disclosure of those documents relating to Mr Jordan’s role which had been withheld on the grounds of litigation privilege because they are relevant to the defence case. They now wish to challenge every aspect of Mr Jordan’s opinion, which although not ultimately given in formal evidence, formed the basis of the FMA prosecution.
(ii) Draft Viaduct Report
[75] One of the documents now provided to the defence is a draft report from Deloitte to the FMA in relation to Viaduct dated 16 July 2012. It is said to have been prepared by Mr Jordan, Mr Weir and Ms Gore, who had been seconded to Deloitte from the FMA. Although acknowledging the draft nature of the report and the fact that its findings could be changed, in the executive summary Deloitte concludes “Despite the design and legal form of the structure, in substance Hunter Capital owned and controlled Viaduct Capital”. It is further stated that Hunter Capital was the “effective parent” of Viaduct. This is a crucial issue in the case.
[76] Prior to trial, defence knew the date of the draft report and that it had been provided to the FMA, but because it had not been disclosed to them, they did not know what evidence had been compiled or what conclusions had been reached at that stage.46 The defence was able to establish that the draft report was completed before any witnesses had been interviewed, but nothing more.
[77] Another document now provided to the defence is an email exchange between Mr Weir and Ms Hodgkins of Deloitte, who gave expert evidence on related party issues when Mr Jordan became unwell. The email exchange is dated 16 May
2012, two months before completion of the draft report on Viaduct. Mr Weir states:
I was hoping you could provide some guidance on accounting standards
please. Viaduct’s annual financial statements for the year ended 31 March
2009 were prepared under NZ IFRS. We are examining related party issues. We would appreciate if you could confirm the relevant accounting standard
to consider for this set of accounts as NZ IAS 24. Once we develop our
thinking, we may need to get your input on this issue.
Please charge your time to Financial Markets Authority – Viaduct and
Mutual.
[78] Ms Hodgkins replies:
Yes it will likely be NZ IAS 24, but you need to get the right version because it has changed a little.
[79] The next day, Ms Hodgkins confirmed that the one labelled Jan 09 was probably the right one – issued 2004 and incorporating amendments to Nov 08.
[80] The draft Viaduct report dated 16 July 2002 sets out the definition of a related party in NZ IAS 2447 and then states “one of the core underlining concepts of accounting is that the substance of a transaction (or relationship) is more important than the legal form”. The section on the definition of related party concludes:
When considering whether the key transactions that took place with Viaduct Capital outlined in the following sections, are related party transactions or not, the key thing to establish is who controls the respective entities. The substance of the relationship matters more than the legal form so in terms of our investigation of each transaction, whilst we started with the legal form of the transaction, we also look behind it (using emails and other
46 The final report dated 8 May 2013 had been disclosed.
47 New Zealand Equivalent to International Accounting Standard 24.
contemporaneous documents) to understand the substance of what was occurring.
[81] There is no reference to other accounting standards or commentary on what may constitute control, which is specifically defined in NZ IAS 24 as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
[82] Again, it seems to me that if the defence had been provided earlier with the draft report it could have sought to advance its case of selectiveness and predetermination through extensive cross-examination of both Mr Weir and Ms Hodgkins about the content of the report. The conclusions of the draft Deloitte report could have been more effectively challenged.
[83] As examples, I note:
(a) Appendix C sets out in table form the search terms and date ranges used in selecting the documents for review. Ultimately, just 0.2 per cent (or one in 500) of all available documents were reviewed. Further search terms were later used and a final list annexed to Mr Weir’s supplementary brief of evidence, but there was scope for the defence to question the limited nature of the search prior to the initial conclusions made.
(b)The statement that the substance of a transaction (or relationship) is more important than the legal form may not accurately reflect paragraph 10 of NZ IAS 24, which states that “In considering each possible related party relationship, attention is directed to the substance of the relationship and not merely the legal form”.
(c) There is no reference at all to NZ IAS 27 and the presumption contained therein that control is presumed to exist when the parent owns more than half of the voting power of an entity unless, in exceptional circumstances, it can clearly be demonstrated that such ownership does not constitute control. In the present case, it was
Mr Wevers’ family company that held 100 per cent of the shares in the special purpose entity that was incorporated to hold 100 per cent of the shares in Viaduct, not Mr Bublitz or his company, Hunter Capital. It could be argued that there is no analysis of what may constitute exceptional circumstances such that Mr Wevers’ family company did not control Viaduct. Mr Wevers and Mr Bublitz had also not been interviewed before Deloitte had reached its conclusion that Hunter Capital controlled Viaduct.
(d)It could also be argued that there was no structured analysis of Viaduct’s particular financial and operating policies in any detail to find out where control lies. The commentary in the PricewaterhouseCoopers “Manual of Accounting 2011” states:48
The two key financial and operating policies of an entity that will often give the best indication of who has control are the “distribution and reinvestment” policy and approval of the annual business plan. Other important financial and operating policies that will have to be considered will include: the entity’s strategic direction; ability to approve capital expenditure; and raising of finance and winding-up the entity.
While the examples cited may not be particularly apposite in the case of Viaduct, there is no reference to or analysis of Viaduct’s constitution, delegated authorities, policy and procedures manual or director’s resolutions.
(e) There is no reference to paragraph 11 of NZ IAS 24 which provides that providers of finance are not necessarily related parties simply by virtue of their normal dealings with an entity (even though they may affect the freedom of action of an entity or participate in its decision- making process). Hunter Capital was a provider of finance to the special purpose entity incorporated to hold 100 per cent of the shares in Viaduct. There is no discussion of how paragraph 11 may have
affected the issue of who controlled Viaduct.
48 Referred to by the defence expert Mr Hucklesby.
[84] Again, the defence advised the Court that if the case did proceed it would make an application for disclosure of Ms Hodgkins’ time sheets in order to ascertain the extent of her advice (or lack of advice) to Mr Weir who repeatedly acknowledged that he was not an expert on accounting standards, even though he cited and applied the accounting standards to conclude that Hunter Capital owned and controlled Viaduct in Deloitte’s draft report on Viaduct dated 16 July 2012.
(iii) Draft brief of evidence of Damien Grant
[85] Mr Grant was the receiver or liquidator of a number of companies associated with Mr Bublitz including the two special purpose entities that held the shareholdings in Viaduct and Mutual. A draft brief of evidence was prepared for him which included extracts from a letter he wrote to Kiwibank’s lawyers on
19 November 2010. Mr Grant stated in the letter that “Mr Bublitz was also the principal and had effective control of both Viaduct Capital and Mutual Finance.” This quote from the letter was qualified in the draft brief of evidence by the statement that “Apart from what I had read in the media I have no specific knowledge of Mr Bublitz’s control of Viaduct” .
[86] The draft brief of evidence has recently been disclosed. In the margin Mr Grant has written “This entire letter was a bluff”. Next to the quote “Mr Bublitz was also the principal and had effective control of both Viaduct Capital and Mutual Finance”, Mr Grant has written “No basis for this”. The statement about Mr Bublitz’s control of Viaduct and Mutual was therefore crossed out in the final brief of evidence and not lead in evidence. No explanation was however given as to why the statement had been crossed out.
[87] The issue of who controlled Viaduct was a crucial issue in the case and defence submit that they would have cross-examined Mr Grant quite differently if they knew that Mr Grant had advised the FMA that there was no basis for the assertion that “Mr Bublitz was also the principal and had effective control of both Viaduct Capital and Mutual Finance”. In the circumstances, I cannot rule out the real possibility that the defence may have been able to advance its case through
cross-examination of Mr Grant about the statements he wrote on his draft brief of evidence.
Delay
[88] The Court has not sat for six weeks prior to the hearing of the application to abort the trial. When I asked Crown counsel how much longer it would take to sort out the disclosure issues, he said he would like to say it would take only another month, but that realistically it would take another two months. That projected delay of 14 weeks is longer than the original estimate of the trial duration.
[89] I am of the view that even that is optimistic given the substantial disagreement between counsel as to what is properly disclosable. There is no doubt that the Court would be called upon to hear detailed argument over many days and make many rulings about categories of documents or even individual documents. Because of documents now disclosed, defence counsel has also advised the Court that they intend to make applications for third party disclosure to obtain what they regard as relevant material from, in particular, the National Enforcement Unit (NEU) of the Ministry of Economic Development (as it then was) who prosecuted Mr Chevin for managing Hilltop Ridge Farms Ltd, one of the companies at issue in this trial, while bankrupt. The Crown allege in this trial that Mr Bublitz had control of Hilltop such that Hilltop was a related party to him.
[90] The FMA did receive a substantial amount of material from the NEU, which has all been disclosed to the defence, but counsel now submit because of recently disclosed documents that there are reasonable grounds to suspect that there may be more relevant material in the possession of the NEU. An application for third party disclosure is also indicated in respect of Mr Franklin, who did not give evidence, but was alleged by the Crown to have been a front for Mr Bublitz in respect of NKE Trust Ltd, another company at issue in this trial. A recently disclosed document records a conversation between the FMA and Mr Franklin in which Mr Franklin is recorded as saying he had boxes of documents and would review them and focus on the important documents until the FMA advised otherwise. The possibility of further disclosure applications is not only an indicator of potential delay should the trial go
ahead, but also of the breadth of the impact the documents could realistically have had on the trial.
[91] In addition to rulings on applications for particular disclosure, I have no doubt the defence would make applications to recall a number of witnesses. The Crown submitted that it would not be necessary to recall any witnesses as all issues were live during the trial and the defence did take every opportunity to cross- examine witnesses on those issues. I am, however, of the view that it will be inevitable that some witnesses would need to be recalled as a matter of fairness to the defence. One of them would be Mr Weir, who has already given evidence twice. Application may also be made to recall the defence expert on accounting standards, Mr Hucklesby, to comment on the draft Viaduct report recently disclosed. It is therefore difficult to see when the trial would be back in the position it was when it came to a standstill on 27 March 2017, but it would be some months. It was not possible for counsel to provide the Court with any realistic estimate of an end date for the trial. After witnesses had been recalled and Mr Bublitz had closed his case, the three other defendants would then have had the opportunity to give or call evidence on their behalf.
[92] This has to be seen in the context of the first application to dismiss the proceedings as an abuse of process because of delays, which I heard last year. The major complaint at that time by the defence was that the breadth and complexity of the Crown’s case had led to a trial that was cumbersome and oppressive and which had prejudiced the defendants’ fair trial rights as well as causing undue delay.
[93] The original Crown charge notice contained 49 charges. Mr Bublitz faced all
49 charges, Mr McKay faced 41 charges, Mr Blackwood faced 28 charges and Mr Morrison faced seven charges. Therefore 125 verdicts would have been required on the original charge notice.
[94] At the time I heard the application we had completed week 16 of the trial and the Court had sat for more than 70 working days almost continuously. I formed the view that it was entirely possible, on the present progress of the trial, that the evidence would not be completed until May or June next year. I commented that this
was unnecessarily burdensome on all concerned. At the time I considered a number of alternatives to a stay of proceedings, including severance and a direction that the Crown and defence experts meet, discuss and prepare a joint statement identifying points of agreement and contention, but for a number of reasons they were not practicable. I then asked Crown counsel to identify the charges which represented the gravamen of the allegations against the defendants. The Crown identified
19 charges and 32 verdicts. At the time I took the view that dismissal of the other charges for reasons of case management was perfectly proper and, accordingly, I dismissed a number of the charges. I took this step on the basis that otherwise the burden on the defendants, counsel, the Court and all others involved would become intolerable and that scarce public resources would be wasted. In that regard I agreed
completely with the sentiments of the English Court of Appeal in the case R v Jisl:49
The starting point is simple. Justice must be done. The defendant is entitled to a fair trial: and, which is sometimes overlooked, the prosecution is equally entitled to a reasonable opportunity to present the evidence against the defendant. It is not however a concomitant of the entitlement to a fair trial that either or both sides are further entitled to take as much time as they like, or for that matter, as long as counsel and solicitors or the defendants themselves think appropriate. Resources are limited. The funding for courts and judges, for prosecuting and the vast majority of the defence lawyers is dependent upon public money, for which there are many competing demands. Time itself is a resource. Every day unnecessarily used, while the trial meanders sluggishly to its eventual conclusion, represents another day’s stressful waiting for the remaining witnesses and the jurors in that particular trial, and no less important, continuing and increasing tension and worry for another defendant or defendants, some of whom are remanded in custody, and the witnesses in trials which are waiting their turn to be listed. It follows that the sensible use of time requires judicial management and control.
[95] Having commented that it would be unnecessarily burdensome if the evidence was not completed until May or June next year, I note that the trial has now reached that point without any end in sight. It cannot continue to “meander sluggishly” to its eventual conclusion. It is my view that even the most complicated trial should not exceed six months, except in the most exceptional circumstances, otherwise it is difficult for defendants and their counsel to retain and assess the evidence which they have heard. Likewise, if the trial is being conducted with a jury and the jury cannot retain and assess the evidence which they have heard, then the
trial is not fair for either the prosecution or the defence.
49 R v Jisl [2004] EWCA Crim 696 at [114].
[96] Delays are especially burdensome on the self-represented, such as Mr Morrison in the present trial. I agree with Mr Morrison when he submitted that although length is not necessarily synonymous with complexity, here it plainly is. There are lots of different strands to this case, numerous different transactions and sharply conflicting views as to the purpose, effect, and consequences of them. Extensive expert evidence has been called, by both sides. And, of course, some expert evidence has been briefed, prepared for, relied upon, and then not called. I accept Mr Morrison’s submission that with his health issues and living conditions it has been particularly difficult for him to recall evidence that was given months ago in order to bring all the strands of his defence together.
[97] The needless complexity brought about by unnecessary delay means that this trial differs from the trial at issue in Kellard v R, the UK Court of Appeal case discussed above at [53]. There, the Court held that while the range and weight of evidence was large, the summary and presentation of the evidence was “such that the jury must have readily understood it and, notwithstanding its length, there was no
danger of it being confused”.50 The Court held that the correct approach was to ask
whether the case revealed any feature which “tends to establish that any of those taking part in the trial were by reason of its length unable to discharge their function”. The fact alone that the trial had run for 252 days was not sufficient to make the trial unfair where the evidence was readily understandable and the issue for the jury was ultimately a simple one.
[98] By contrast, this trial has not featured a straightforward presentation of evidence and a clear issue to be decided. The changes to evidence called and the numerous adjournments necessary in this trial have made it increasingly complex and difficult to understand. This is not just a result of the length of the trial, but of unnecessary length and complexity brought about by disruptions and changes in approach. It will be further exacerbated by the current disclosure problems. Additional adjournments, followed by recall of witnesses and disjointed revisiting of evidence will provide further obstacles in the trial. By that stage the trial will have been beset by a range of errors and anomalies contrary to good practice for a fair
trial. The cumulative unfairness arising from the delay and complexity is in part
50 Kellard v R, above n 34, at 150.
brought about by unexpectedness; had the trial lasted this long but proceeded in a linear and predictable fashion the impact would not have been the same. But there must be a point at which a trial becomes sufficiently long and convoluted to give rise to a risk of a miscarriage of justice.
Impact on right to present effective defence
[99] The Crown submits that the scale of the problem of late disclosure has been exaggerated. It submits that alongside the Category 1–12 documents identified as being at issue from the Deloitte list, there were 6,730 duplicate copies of other documents and 3,202 documents which had already been disclosed. It also submits that each of the documents recently disclosed could not have had an impact on the outcome of the trial. While there are undoubtedly a large number of duplicates and documents which have already been disclosed, I am advised by defence counsel that to date they have received 5,506 documents by way of recent disclosure, with more to come. The scale of late disclosure is therefore, in my view, reasonably extensive.
[100] Defence counsel have also advised the Court that in the six weeks since the trial came to a standstill, they have reviewed only about a quarter of the documents recently disclosed. Counsel has not had time to consider the documents listed as withheld in the FMA list. Time has been required to review each document as to its possible relevance, its relationships with other documents and where the issue in the document was dealt with in the already extensive notes of evidence. That process would continue for some weeks.
[101] As noted, part of the defence case is that there has been an element of selectiveness and predetermination in the evidence compiled and conclusions reached by Deloitte. The investigative process is therefore highly relevant. This includes Mr Jordan’s role, discussions between Deloitte staff and witnesses, the drafting and amendment of briefs of evidence and reports provided by Deloitte to the FMA. There were also over 1.5 million documents on the Viaduct and Mutual server and Mr Weir acknowledged that there undoubtedly were many relevant documents he had not seen or reviewed. He said he had to rely on particular word searches to identify documents for production at trial.
[102] Much of the argument in the application to abort the trial revolved around the impact of particular documents which had recently been disclosed. While arguably none of them by themselves can be said to make a difference to the outcome of the trial, it is my view that the cumulative effect of them may have made a difference. Concessions or further concessions could have been made by the Deloitte witnesses, Mr Weir and Ms Hodgkins. The evidence of witnesses of fact may also have been affected. In evidence at trial, Mr Grant, the receiver of a number of companies connected with Mr Bublitz, said that “The FMA were seeking me to be more bullish with regards to a couple of points than I felt comfortable with”. The Crown recognised that in those circumstances it should disclose all the correspondence between the FMA and Mr Grant. It did so on 6 April 2017, after the trial had come to a standstill. In a subsequent ruling, dated 20 April 2017, in relation to other witnesses, I found that apart from the initial interview of a witness and their final brief of evidence, any further statements made by the witness to the FMA were properly disclosable under the Criminal Disclosure Act. This would include handwritten comments on draft briefs of evidence prepared by the FMA or separate comments which may have been made by the witness or recorded by the FMA as having been made by the witness. My ruling arose because in the particular circumstances of this case, although briefs of evidence were drafted from the notes of interview of a witness, in many cases extensive new material was inserted or numerous questions asked in draft briefs of evidence upon which witnesses were asked to comment or to answer.
[103] This also has to be seen in the context of the second application to dismiss the charges which I heard in February this year. The major complaint at the time by the defence was that the Crown’s decision to substitute the evidence of Ms Hodgkins for Mr Jordan was prejudicial as counsel would not be able to cross-examine Mr Jordan on matters not able to be put to Ms Hodgkins. Counsel submitted they would have cross-examined other Crown witnesses differently had Ms Hodgkins been called from the outset.
[104] At the time I heard the application the Crown case had not concluded. Because of the perceived unfairness of the Crown not calling Mr Jordan, I allowed applications to recall a number of Crown witnesses. I also noted that matters then
thought to be relevant could still be put to Ms Hodgkins and even the FMA investigator, Mr Andrew Scheepers, when they gave evidence as part of the Crown case. Further, I formed the view that to the extent that Ms Hodgkins’ evidence differed from that of Mr Jordan, the defence expert, Mr Hucklesby, should have been able to readily modify his evidence to respond.
[105] The trial has, however, now reached another stage altogether. The Crown has closed its case and Mr Bublitz has called three witnesses, all of whom have given evidence on his behalf and been cross-examined by Crown counsel. Counsel for Mr Bublitz has, however, not closed his case because of the unresolved disclosure issues. The timing of the late disclosure is a very important factor in assessing the merits of the application to abort the trial. If the Deloitte and FMA lists had been disclosed to defence within the first three months of trial, ie, shortly after Mr Weir had raised the issue of the availability of further documents in cross-examination and while he was still giving evidence, then any prejudice could have been cured by an adjournment at that time.
[106] I am of the view, however, that a lengthy adjournment now would have a prejudicial impact on the defendants’ right to present an effective defence. The case cannot be rerun. Although the issues raised in the late disclosure were live in the trial, the defence is entitled to prepare and present its case with full knowledge of all relevant documentation that both helps and hinders its case. Strategic decisions as to priority and narrative are important in a judge-alone trial as much as a jury trial. Similarly, cross-examination of witnesses for the second or third time is of necessity disjointed and likely to be less effective. Witnesses who are recalled would need to be taken through their earlier evidence in some detail before being asked if that evidence would differ in light of the documents recently disclosed. There is no doubt that cross-examination would have been more direct and robust if the defence had the documents recently disclosed, such as the draft Viaduct report. More concessions could well have been made by Crown witnesses. They are less likely now. It is my view that the Crown breaches of the Criminal Disclosure Act have restricted the choices open to the defence in respect of the presentation their case, both in manner and extent.
Conclusion
[107] It was regrettable to have granted the application to abort the trial, but I am of the view that there was a real possibility of unfairness to the defendants if the trial was to proceed. The breaches of the Criminal Disclosure Act have given rise to a reasonable danger or apprehension of a miscarriage of justice in the circumstances.
[108] Accordingly, I declared a mistrial and remanded the defendants to a further callover at 9.00 am on Wednesday, 5 July 2017. I excused personal attendance by the defendants at callover if they are represented by counsel.
[109] The Crown is to advise the defendants prior to that date whether or not it intends to proceed further against the defendants and, if so, file an amended charge
list on which it intends to proceed.
Woolford J
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