Hearing:
3 – 5, 10 – 14, 17 – 21, 24 – 28 and 31 March

1 – 4, 7, 8 and 14 – 16 April 2014

Counsel:

NR Williams, KC-M Chang and AJH Senior for Crown
JG Robertson, DG Young and J McNamara for Defendant

Date:

16 May 2014

REASONS FOR VERDICT OF FAIRE J

Solicitors: Meredith Connell, Auckland
Hauraki Gulf Law, Auckland

R v Hamilton [2014] NZHC 1024 [16 May 2014]

Table of Contents

Introduction ..............................................................................................................[1] The counts .................................................................................................................[4] The position of the company-offenders ................................................................ [11] Discharge of defendant in respect of counts 17 and 18 .......................................[16] Amendment to count 19.........................................................................................[17] Judge alone trial .....................................................................................................[18]

The background facts ........................................................................................... [27] The defendant ..............................................................................................[42] Purchase of Belgrave....................................................................................[45] The loans to Schofield interests ...................................................................[93] The documents involved in the disclosure charges ......................................[94] Belgrave’s position at receivership ..............................................................[97] Distributions by receivers ..........................................................................[106]

Elements of the theft charges ............................................................................ [110] Elements in respect of principal theft offences .......................................... [114] Conviction certificates ............................................................................... [115] Secondary party elements in respect of theft charges ................................ [116] (a) Actus reus element………………………………………. [117] (b) Mens rea element………………………………………… [118] (i) Knowledge .................................. …………………………[119]

Intention .............................................................................. [122]

The elements of the disclosure charges ............................................………… [128] Elements in respect of principal offence under s 242 ................................[131] Secondary party elements in respect of s 242 ……………………………[133] Common intention requirement …………… …………………… …………[133] Was false statement carried out as part of the common design………................ [136] (a) Defendant’s knowledge…………………………………………… [137]

Elements in respect of principal offence under s 377(2) [138] Rules of law and practice.....................................................................................[143] Key facts and findings..........................................................................................[149]
Count 1 – The guarantee by Belgrave of the loan of $3,175,000......................[149]

Verdict ........................................................................................................[161]

Count 2 – The guarantee by Belgrave of the loan of $5,000,000 to IEL,
Belgrave’s shareholder.........................................................................................[162]

Verdict ........................................................................................................[168]

Count 3 – The guarantee to MFS Pacific Ltd ....................................................[169] Verdict ........................................................................................................[176]

The balance of the theft counts – Counts 4 to 16 and 19 ..................................[177] Is Mr Schofield a related party to Belgrave? .............................................[178] Actual assistance ........................................................................................[189] Knowledge .................................................................................................[193] Intention .....................................................................................................[201] Verdict ........................................................................................................[204]

The disclosure charges .........................................................................................[205] Verdict ........................................................................................................[222]

Conclusion.............................................................................................................[223]

Introduction

[1] This case arises from independent investigations undertaken by the Serious Fraud Office and the Financial Markets Authority into the affairs of Belgrave Finance Ltd (Belgrave).

[2] Belgrave was placed into receivership on 28 May 2008. At that time it owed

1,268 individual investors $20,481,616. The debenture investors have received distributions representing 9.8 cents per dollar invested. Belgrave’s failure had serious consequences for those investors.

[3] The defendant was at the material times a solicitor. He took instructions from a Mr Schofield relating to the acquisition of all the shares in Belgrave. Those instructions later included Messrs Buckley and Smith. Further instructions were taken in relation to borrowing by Belgrave and then in relation to lending. The charges that I now consider arise from the defendant’s involvement with these matters. They include steps taken…

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 Hamilton

Details

AGLC: R v Hamilton [2014] NZHC 1024
Case: [2014] NZHC 1024
Decision Date: 16 May 2014

CaseChat Overview and Summary

The defendant, Hugh Edward Staples Hamilton, a solicitor, was charged with multiple counts of theft by a person in a special relationship, false statements by a promoter, and making false statements to a trustee, arising from his involvement in the affairs of Belgrave Finance Ltd, a finance company that was placed into receivership. The trial, presided over by Faire J, considered the defendant's role in the acquisition of Belgrave, the raising of funds, and the lending activities that allegedly breached the company's trust deed. The court had to determine whether the defendant had the requisite knowledge and intention to be found guilty as a secondary party to the alleged offences. Faire J found the defendant not guilty on counts 1 to 3, which related to guarantees made by Belgrave, as the Crown failed to prove beyond reasonable doubt that the defendant knew these guarantees breached the trust deed. However, the defendant was found guilty on counts 4 to 16 and 19, which involved loans made by Belgrave to entities associated with Mr. Schofield, a related party. The court concluded that the defendant had the necessary knowledge of the related party provisions in the trust deed and was wilfully blind to the fact that the loans were in breach of those provisions. Regarding the disclosure charges, the court found the defendant not guilty on counts 20 to 41, which involved the preparation of prospectuses and statements that concealed Mr. Schofield's involvement in Belgrave. The court held that there was insufficient evidence to establish a common intention between the defendant and the principal offenders to prosecute an unlawful purpose.

Orders