R v N
[2022] NZHC 2115
•24 August 2022
ORDER PROHIBITING PUBLICATION OF NAMES, ADDRESSES OR IDENTIFYING PARTICULARS OF DEFENDANT AND EMPLOYER UNTIL FURTHER ORDER OF THE COURT
NOTE: ORDER SUPPRESSING DETAILS OF THE REDACTED PORTIONS OF THIS JUDGMENT
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CRI-2019-044-72
[2022] NZHC 2115
THE QUEEN v
N
Hearing: 19 August 2022 Counsel:
S S McMullan and H F Brown for Crown
A F Pilditch QC and B Z C Shen for Defendant M Heard for the employer
Judgment:
24 August 2022
JUDGMENT OF BREWERJ
This judgment was delivered by me on 24 August 2022 at 12 noon
Registrar/Deputy Registrar
Solicitors/Counsel:
Meredith Connell (Auckland) for Crown Fletcher Pilditch QC (Auckland) for Defendant Lee Salmon Long (Auckland) for the employer
R v N [2022] NZHC 2115 [24 August 2022]
Introduction
[1] On 18 August 2022, a jury found N guilty on 45 of the 49 charges of dishonesty set out in the Charge List.
[2] N has had interim name suppression since he was charged. He now seeks name suppression to continue until his sentencing. He argues that if he were to receive a community-based sentence then he would be eligible to apply for permanent name suppression.
[3] Four related land development companies connected to N seek permanent suppression of their names in connection with any record of this proceeding.1 I will refer to the applicants collectively as “[the employer]”
[4] N is employed by [the employer] as its Land Development Manager. He is currently overseeing five land development projects.
[5] [The employer] submits that N is, in effect, the personification of their land development business and if their names were to be published in connection with N’s fraud [the employer] would likely experience serious and adverse consequences. Therefore, [the employer] also seeks permanent name suppression for N on the basis that if his name were published then this would inevitably lead to the identification of [the employer].
[6]This judgment decides the applications by N and by [the employer].
The law
[7]The law is well understood.
[8] Section 200 of the Criminal Procedure Act 2011 (the Act) provides, relevantly, that a court may make an order forbidding publication of the name, address, or occupation of a person convicted of an offence. But the court may do so only if it is
1 [Redacted]
satisfied that publication would be likely to cause extreme hardship to the person convicted; or lead to the identification of another person whose name is suppressed.
[9] Section 202 of the Act provides, relevantly, that a court may make an order forbidding publication of the name, address, or occupation of any person who is connected with a person who has been convicted of an offence. The court may make such an order only if it is satisfied that publication would be likely to cause undue hardship to the connected person.
[10] The decision whether to suppress a name requires a two-stage analysis. The court must, first, be satisfied that the applicable consequence would be likely to follow if no order were made. If the court is satisfied that the threshold ground is established, the court must then determine whether in the exercise of its discretion it should grant the application to forbid publication.
N’s application
[11] The case against N arose from his employment by [redacted] as Administration Manager during the period 2001 to 2012. The period covered by the charges was 20 January 2006 to 31 December 2013.
[12] In brief, the Crown case was that N used his position to take money from the [redacted] accounts as and when he chose. The total sums involved were alleged to be in excess of $1m.2 N was a minority shareholder of [redacted] and, from 2008, a director.
[13] N was also convicted of falsifying accounting documents with intent to obtain a pecuniary advantage by deception.
2 Many of the charges were representative charges, some involving hundreds of transactions. Because N intermingled his finances with those of [redacted] legitimately as well as illegitimately, I will have to decide the final quantum of fraud to the criminal standard of proof. I have not yet done that. The overall quantum might well be substantially reduced, but it will still be in the hundreds of thousands of dollars.
[14] When non-payment of funds to the Commissioner of Inland Revenue led to an inquiry into his accounts, N removed and disposed of all of the relevant base financial records. A conviction was entered on the corresponding charge.
[15] Finally, N concealed [redacted] electronic accounting records and was convicted in relation to that.
[16] N’s case is that if he were to be sentenced to a community-based sentence then he would be eligible for permanent name suppression because publication of his name would make it impossible for him to continue in his current employment and would prejudice his chances of future employment. This, he submits, would be extreme hardship.
[17] For the purposes of this decision, I will take the approach most favourable to N and assume that his sentence will be one which is less than imprisonment.3
[18] I accept that publication of N’s name would cause him hardship. There is almost always hardship when a convicted person’s identity is published. But a likelihood of a very high level of hardship to a defendant needs to be identified before the threshold of “extreme hardship” can be established. It must be significantly greater than the lesser “undue” threshold of hardship required elsewhere in the Act.
[19]The Court of Appeal observed in Robertson v Police:4
As regards the level of hardship required by the phrase “extreme hardship”, we consider it clear beyond argument that it connotes a very high level of hardship. The word “hardship” on its own means “severe suffering or privation”. The addition of the qualifier “undue” in s 200(2)(c) indicates that something more than hardship simple is required, while the word “extreme” in s 200(2)(d) indicates something more again.
[20] It is often the case that defendants convicted of serious criminal offending lose their livelihood or employment as a result. N has been convicted of offences of serious dishonesty occurring over a period of years and while he was in a position of trust.
3 I have indicated to N previously that a community-based sentence is unlikely, but I have kept open the possibility at the behest of Mr Pilditch QC.
4 Robertson v Police [2015] NZCA 7 at [48] (footnotes omitted).
Loss of livelihood or employment is an ordinary associated consequence of such offending. More would be required to meet the statutory threshold of extreme hardship:5
They [the threshold terms] require that the court compare the consequences of publication in the instant case with those that normally attend prosecution. Distress, embarrassment and adverse personal and financial consequences usually attend criminal proceedings, and something out of the ordinary is needed if the applicant is to get across the threshold.
[21] There are no other factors put forward as combining with the prospect of loss of employment to meet the threshold of extreme hardship.
[22] I am advised by Mr McMullan for the Crown that the victims of N’s offending oppose permanent name suppression.
[23] Mr Nichols, a reporter for the NZ Herald newspaper, also opposes permanent name suppression. He stressed the principle of open justice.
[24] In my view, N has not established that he would suffer extreme hardship if his name is not permanently suppressed, even on the assumption that he receives a community-based sentence. That is sufficient to dispose of his application.
[25] I record that if I had concluded that N did cross the threshold of extreme hardship, I would not exercise my discretion to order permanent name suppression in this case.
[26] N’s position would have to be balanced against the principle of open justice. As the Supreme Court emphasised in Erceg v Erceg,6 the principle of open justice is one of constitutional importance and “fundamental to the common law system of civil and criminal justice”.
[27]The Court of Appeal has said:7
5 D (CA443/2015) v Police [2015] NZCA 541, (2015) 27 CRNZ 614 at [11] (footnotes omitted).
6 Erceg v Erceg [2016] NZSC 135, [2017] 1 NZLR 310 at [2].
7 R v Liddell [1995] 1 NZLR 538, (1994) 12 CRNZ 458 at 466.
… the starting point must always be the importance in a democracy of freedom of speech, open judicial proceedings, and the right of the media to report the latter fairly and accurately as ‘surrogates of the public’.
[28] This is not a rote catechism of legal principle. The Court of Appeal has consistently emphasised the importance of the open justice principle. The community is entitled to know the identity of a person convicted of serious offending and the community should be deprived of that entitlement only in exceptional cases.
[29] I am satisfied beyond reasonable doubt that N used an accounting system which he set up to systematically defraud the other shareholders and directors of [redacted]. People who have future business dealings with N should not have concealed from them this criminal history. Indeed, in accordance with the principle of open justice, they are entitled to know of it.
[The employer’s] application
[30] [The employer’s] application is supported by two affidavits. The first is by [the employer’s] solicitor, [redacted]. I expressed criticisms of [the solicitor’s] affidavit in the course of the argument by Mr Heard, counsel for [the employer].
[31] [The solicitor] is not impartial. He has acted as the solicitor for [the employer] since 17 June 2013. His affidavit has some useful factual background but [redacted] gives opinions, which he says to be based on his experience, which are quite extreme. [The solicitor] does not qualify himself as an expert and there is no reference to the Code of Conduct set out in Schedule 4 to the High Court Rules 2016.8 I place no weight on the opinions expressed by [the solicitor].
[32] The other affidavit filed in support of [the employer’s] application is that of [redacted]. [Redacted] is Managing Director of [the employer]. His affidavit is one to which I will give weight.
[33] [Redacted] deposes that N has been responsible for maintaining key relationships with people important to, in particular, the very large land development
8 See r 9.43.
project being undertaken by [the employer] known as [redacted]. Accordingly, [redacted] opposes publication of any connection to N’s criminal proceeding.
[34] According to [redacted], [the employer] was introduced to N in mid-2017 when he was a real estate agent. Subsequently, he was employed by [the employer] as a Senior Manager to coordinate its land development projects in close conjunction with the relevant Executive Directors. N has given what [redacted] considers to be exemplary service.
[35] I pause to note that prior to the criminal proceedings there was a civil proceeding in this Court in which N was sued for damages arising from the actions which were later the concern of his criminal trial.9 Judgment was entered against him at the civil standard of proof.
[36] [Reacted] says that before N was employed by [the employer] he provided [the employer] with a copy of the judgment. [The employer] was also aware that complaints had been made, arising from that litigation, against N’s employment as a real estate agent. [Redacted] deposes:
21[N] openly talked about his background in the civil matter and dispute. He lamented the fact that he had represented himself and he was disappointed in himself for falling short on the professional, standards required within the company.
22He made it quite clear that he did not believe he had ever intentionally been dishonest and that he simply believed he was operating in a business environment with co shareholders and effectively co directors who would support him.
23[N] made it clear that he had not been charged with any offending and that the civil liability had been settled in full.
[37] [Redacted] adds that N said that it was always possible he would be charged with criminal offending, but N did not believe he would be charged given that the allegations against him arose in 2012 and that was five years previous. [Redacted] said that N thought it unlikely that the police would decide to prosecute him unless they were “pushed”.
9 [Redacted].
[38][Redacted] goes on to describe [the employer’s] land development:
26As mentioned, our group undertakes project management and governance of a high profile land development in [redacted]. [Redacted]. Over $200m has been invested in the project to date.
27An extensive development team as well as external consultants (planners, surveyors, architects etc) have been busy completing the necessary technical reports together to enable the appropriate Council consents to be obtained. External contractors are now embarking on civil earthworks and construction on site, requiring hundreds of workers onsite at any one time.
28All of our developments are high profile in that due to the perceived housing crisis in Auckland and elsewhere and the very tight resources of local government throughout the country, very great focus is brought on the rate of development, the quality of development, environmental and cultural concerns and the financial planning required bringing substantial resources into a development at the right time.
29Given the complexity of such developments we need Managers who can keep track of numerous “moving parts” but can also maintain good professional relationships with all relevant stakeholders involved such as the Council, iwi, contractors and end customers. N is one such person.
[39] Much of [redacted] concerns are focused on the likely effect on [the employer] if [the employer] is linked publicly with N during the course of his trial. That did not occur because of the continuation during trial of the interim suppression order relating to N’s identity and the further order I made suppressing publication of the names of [the employer] pending further order of the Court.
[40] Now that N has been convicted the submission, through Mr Heard, is that the concerns of damage to reputation and linking consequences to the success of the land developments remain. In terms of the mitigation of any damage caused by publication, [redacted] deposes:
41 Lastly, I firmly believe that even if [N] were to resign, should his position become untenable due to negative publicity, then [the employer] would still suffer severe reputational damage (which in turn would likely translate into economic damage).
[41] In his oral submissions to me, Mr Heard raised a further ground based on an affidavit N swore in the District Court on 24 April 2019 in support of his application for an extension of the interim order then in place suppressing his name. Mr Heard’s
submission was that people associated with N in the ownership of [redacted] have sought to actively call negative attention to subsequent employers of N and [his wife]. He submits that similar negative attention could be given to [the employer].
[42] As a matter of principle, Mr Heard submits, the good intentions of [the employer] in giving N a chance at redemption should not rebound against [the employer].
[43] Mr Heard submits further that the civil action against N is not suppressed and any person interested in N’s history can have access to it. Therefore, N has no real chance of hiding from his past if permanent name suppression is granted.
[44] I accept that the threshold of undue hardship has been crossed. [The employer] is not a large organisation. [The employer] employs about 90 people and N has had a prominent role in negotiating with contracting parties and regulatory authorities relevant to its land development business. Any employer who has a senior manager convicted of fraud in a context divorced from its business is likely to incur some hardship as a result of the negative association. [The employer] is not associated in any way with the dishonesty for which N has been convicted. But because of his prominent role in [the employer’s] relatively small organisation, negative association is likely to be higher than usual. The threshold of undue hardship for third parties unrelated to the offending of the defendant is not a particularly high one. It has been crossed in this case.
[45] I now have to consider the exercise of my discretion. I accept that if I suppress the names of [the employer] then I would also have to suppress N’s identity because the publication of N’s name in connection with his offending would certainly cause the commercial and regulatory parties with which [the employer] associates to identify [the employer].
[46] As I have said, the principle of open justice is a fundamental one. It is not to be easily put aside because of the likelihood that the economic interests of connected third parties will be adversely affected if a defendant is named in connection with their offending.
[47]I make the following points:
(a)[The employer] has had interim name suppression, as has N.
(b)N has now been convicted and the principle of open justice is highly engaged.
(c)[The employer] knew of N’s background when he was employed and knew there was a possibility he would be charged with offending in relation to [redacted]. [The employer] took the risk to its business of employing N.
(d)I do not accept that [the employer] could not mitigate the risks it identifies. [The employer] is not in any way associated with N’s offending, the vast bulk of which occurred before any of [the employer companies] were even incorporated. Advice of that to those with whom it has commercial dealings should be largely efficacious. Commerce, at the level engaged in by [the employer], is not generally carried on by the irrational.
[48] One of the factors going to the need for open justice is protection of the community. N’s dishonest offending was prolonged and in breach of the trust and confidence reposed in him. It is true that he is reported to have been an exemplary employee of [the employer] since 2017. His offending, however, took place in a very different employment context. Despite Mr Heard’s submission in relation to the availability of access to the civil proceeding, I consider that it would be wrong to deprive future employers or business associates of N of knowledge of his criminal offending.
[49] Mr McMullan advises that N’s victims do not oppose name suppression of [the employer] so long as N’s name is not suppressed.
[50] In summary, in assessing the balance between open justice and suppression, I do not find that the balance favours suppression, let alone “clearly favours” suppression.10
Decisions
[51]N’s application for permanent name suppression is dismissed.
[52][The employer’s] application for permanent name suppression is dismissed.
Appeals
[53] Mr Heard’s written submissions, reinforced orally, are explicit that an adverse decision will be appealed.11 Mr Pilditch has no instructions but expects to have a position which will not be opposed to that of [the employer].
[54] Accordingly, pursuant to s 286 of the Act, I make an interim order continuing the interim suppression orders now in force until –
(a)the expiry of 20 working days after the date of this decision; or
(b)if a notice of appeal is filed within this period, the appeal is finally determined.
Brewer J
D (CA443/2015) v Police [2015] NZCA 541, (2015) 27 CRNZ 614 at [12]; Lewis v Wilson &
Horton Ltd [2000] 3 NZLR 546, (2000) 18 CRNZ 55 (CA) at [43]; Parker v R [2020] NZCA 502,
(2020) 29 CRNZ 536 at [8].
11 Which is somewhat dispiriting since it means that no reasons I give will be regarded as persuasive.
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