R v Sansom - [2018] NZHC 1988

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI-2017-004-004038

[2018] NZHC 1988

THE QUEEN

v

HAMISH MARK SANSOM

Hearing: 23 May 2018

Appearances:

Nick Williams and Margot Gatland for the Crown David Jones QC and Hannah Drury for the Defendant

Judgment:

7 August 2018

JUDGMENT OF MOORE J

This judgment was delivered by me on 7 August 2018 at 11:00 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

R v SANSOM [2018] NZHC 1988 [7 August 2018]

Introduction

[1] The defendant, Hamish Marc Sansom, faces one charge of insider trading under ss 241 and 244 of the Financial Markets Conduct Act 2013 (“the FMCA”). The Crown alleges that Mr Sansom, on advice from a former colleague, Jeffrey Honey, used internal company information in deciding to sell 15,000 shares for a total of
$51,150.

[2] Following a trial in March this year the jury was unable to reach a verdict. A re-trial has been set down for two weeks beginning 10 September 2018.

[3] Originally, Mr Sansom was charged with Mr Honey. Mr Honey pleaded guilty to one charge of insider trading on 11 April 2017, and has been sentenced to six months’ home detention. The Crown has now made an application under s 49 of the Evidence Act 2006 (“the Act”) to admit evidence of Mr Honey’s conviction. The application is opposed.

[4] At Mr Sansom’s first trial the Crown did not seek to admit Mr Honey’s conviction. It now says Mr Honey’s certificate of conviction will conclusively prove he committed the offence and that two essential elements of Mr Sansom’s charge, namely that the information was material information and not generally available to the market, will thus be proved.

Factual background

[5] The alleged offending centres around Eroad Ltd (“Eroad”), which operates a transport technology business in New Zealand, Australia and the United States. It was listed on the NZX through an initial public offering (“IPO”) on 15 August 2014.

[6] From September 2013 to April 2015 Mr Sansom worked as the company’s Product and Portfolio Manager, reporting directly to the CEO. During his employment he accumulated a substantial shareholding in Eroad.

[7] Mr Honey was employed on 13 October 2014, having been recruited by Mr Sansom. He reported directly to Mr Sansom.

[8] The Crown alleges that on 22 September 2015 Mr Honey sent Mr Sansom a photograph by MMS of the internal and confidential Eroad Dashboard showing its financial performance in the United States market. The message was accompanied by a text message which read: “US sales not doing to [sic] we’ll [sic], time to sell up? Confidential obviously”. Mr Sansom, who by that time was no longer working at Eroad, replied two minutes later saying, “You’re a bad boy … but thanks!” A minute later, he texted saying “Was going to sell down significantly anyway”.

[9] Two days later, Mr Sansom sold 15,000 shares. Four days later, Eroad released a…

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 Sansom

Details

AGLC: R v Sansom [2018] NZHC 1988
Case: [2018] NZHC 1988
Decision Date: 7 August 2018

CaseChat Overview and Summary

In the case of R v Sansom, the defendant Hamish Mark Sansom faces a charge of insider trading under sections 241 and 244 of the Financial Markets Conduct Act 2013. The Crown alleges that Mr Sansom sold 15,000 shares for a total of $51,150, based on insider information provided by a former colleague, Jeffrey Honey. The initial trial resulted in a hung jury, necessitating a retrial. Mr Honey had previously pleaded guilty to insider trading and was sentenced to six months’ home detention. The Crown seeks to introduce Mr Honey’s conviction as evidence under section 49 of the Evidence Act 2006, which permits the admission of prior convictions to prove the fact of conviction and that the accused committed the offence. However, this application is opposed by Mr Sansom’s defence.

The key legal issues the court had to decide were the relevance of Mr Honey’s conviction, what elements of the charge are conclusively proven by this conviction, and whether admitting this evidence would unfairly prejudice Mr Sansom’s right to a fair trial. The court found that while Mr Honey’s conviction is relevant and admissible, it does not conclusively prove that the information Mr Sansom received was material and not generally available to the market, which are central issues in the defence’s case. The conviction could only be seen as conclusive proof of the elements of Mr Honey’s offence, not those of Mr Sansom’s. Furthermore, the court held that the probative value of Mr Honey’s conviction outweighs any prejudicial effect on Mr Sansom’s trial.

In conclusion, the court ruled that Mr Honey’s conviction certificate is admissible as conclusive proof of Mr Honey’s conviction but cannot be used as proof that the information Mr Sansom received was material and not generally available to the market. This decision ensures that the fairness of Mr Sansom’s trial is maintained while allowing the Crown to present relevant evidence.

Orders