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R v Harris

R v Harris

Case [2023] NZHC 2635 21 September 2023

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI-2019-004-11829

[2023] NZHC 2635

THE KING

v

PETER ALAN HARRIS CARDEN JAMES MULHOLLAND

Hearing:
17-18 April; 20-21 April; 24 April; 26-28 April; 1-2 May; 4-5

May; 8-9 May; 12 May; 15-17 May; 22 May; 24-26 May; 29-30
May; 2 June; 6 June 2023

Appearances:

B Dickey, D Luo and K Parkash for the Crown

R Reed KC, D Salmon KC, J Cundy and T Hu for Mr Harris
D Jones KC, C Morris, S Cameron and B Shen for Mr Mulholland

Judgment:

21 September 2023

Verdicts:

21 September 2023

JUDGMENT OF ROBINSON J

[Reasons for Verdicts]

Solicitors: MC, Auckland; LeeSalmonLong, Auckland; Cook Morris Quinn, Auckland

Counsel:R Reed KC, Auckland; D Salmon KC, Auckland; D Jones KC, Auckland; B Dickey, Auckland; T Hu, Auckland; J Cundy, Auckland

R v HARRIS [2023] NZHC 2635 [21 September 2023]

BACKGROUND AND INTRODUCTORY MATTERS [1]

Introduction [1]

Background [1]

The charges [5]

The Samoa Transactions charges (charges 6-8) [7]
The RBNZ Directions charges (charges 1 – 5) [8]

Verdicts [9]

Relevant rules of law and practice [11]

Judge alone trial [11]

Presumption of innocence, burden and standard of proof [20]

Separate trials [23]

Prejudice and sympathy [24]

Circumstantial evidence and inferences [25]

Question Trail [26]

Regulatory framework [27]

Insurance (Prudential Supervision) Act 2010 [29]

Purposes and principles of IPSA [33]

Licensing [36]

Investigation [39]

Recovery plan [42]

Directions [43]

Appointed Actuary [47]

Solvency Standards [49]

Insurance solvency [51]

CBLI’s business (from Robert Cole’s Formal Witness Statement) [59]

THE SAMOA TRANSACTION | CHARGES 6 - 8 [63]

Introduction [63]

Summary of charges [66]

Relevant chronology [71]

Negotiations with Alpha [71]

The transaction [98]

Documentation [98]

The payments [105]

(Alleged) concealment [110]

Events post liquidation [145]

CHARGE 6 | OBTAINING BENEFIT BY DECEPTION (FRAUDULENT STRATAGEM)  [152]
The charge  [152]
Legal principles  [155]

Question 1: Am I sure that between 9 May 2014 and 22 October 2014 Mr Harris, directly or indirectly, obtained a pecuniary advantage, benefit, or valuable consideration (benefit); namely the €12.5m paid to and for the benefit of Alpha Insurance A/S (Alpha) on or about 15 October 2014 from or through the National Bank of Samoa (NBoS)? [160] Question 2: Am I sure that Mr Harris engaged in a fraudulent stratagem as described and particularised in charge 6 of the Crown Charge Notice and set out above (stratagem)? [161]

The documents [166]
Discussion [169]

Question 3: Am I sure that Mr Harris used the stratagem with intent to deceive the RBNZ or the FMA? [178]

Question 4: Am I sure that the stratagem was a material cause of the defendant obtaining the benefit?  [180]
Question 5: Am I sure that when Mr Harris engaged in the stratagem, he did not believe that it was lawful to do so?  [181] CHARGE 7: OBTAINING BENEFIT BY DECEPTION (OMISSION OF MATERIAL PARTICULAR)  [183]
Introduction  [183]

Elements of the charge [185]

Question 1: Was the deposit of €12.5m at NBoS…

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 Harris

Details

AGLC: R v Harris [2023] NZHC 2635
Case: [2023] NZHC 2635
Decision Date: 21 September 2023

CaseChat Overview and Summary

The case of R v Harris involved charges against Peter Alan Harris and Carden James Mulholland, both of whom were directors and officers of CBL Insurance Limited (CBLI), a publicly listed insurance company in New Zealand. Harris faced eight charges under the Crimes Act 1961, while Mulholland faced three charges, two of which were as a party to Harris' principal offending. The charges stemmed from their involvement in the affairs of CBLI and other companies within the CBL Group. The case was heard over several sessions from April to May 2023, with the verdicts delivered on 21 September 2023. The charges were divided into two groups: those related to statutory directions issued by the Reserve Bank of New Zealand (RBNZ) between July 2017 and February 2018, and those related to a €12.5 million deposit made by CBLI with the National Bank of Samoa (NBoS) on 15 October 2014.

The court found Harris not guilty on all charges, and Mulholland not guilty on all charges he faced. The reasoning for these verdicts involved a detailed examination of the legal framework under the Insurance (Prudential Supervision) Act 2010 (IPSA), the nature of the RBNZ's regulatory powers, and the specific circumstances of each charge. Key issues included the validity of the RBNZ directions as "requirements" under the Crimes Act 1961, the mens rea required for charges of theft in a special relationship, and the sufficiency of the Crown's evidence to prove each element of the charges beyond reasonable doubt. The court also considered the broader implications of the case for New Zealand's commercial and insurance sectors.

Orders