R v Sullivan

[2014] NZHC 1023

IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY

CRI 2011-076-1948 [2014] NZHC 1023

THE QUEEN

v

EDWARD ORAL SULLIVAN ROBERT ALEXANDER WHITE LACHIE JOHN McLEOD

Hearing:

12, 13, 17, 18, 19, 21, 24, 25, 26, 27, 31 March 2014

1, 2, 3, 4, 7, 8, 9, 14, 15, 16, 28, 29, 30 Apri 2014
1, 2, 5, 6, 7, 8, 9, 13, 14, 15 May 2014

Counsel:

C R Carruthers QC, N F Flanagan, P W Gardyne and
E Rutherford for Crown
P H B Hall QC, M A Corlett and K H Cook for Mr Sullivan
R B Squire QC for Mr White
J H M Eaton QC for Mr McLeod

Judgment:

15 May 2014

(ORAL) JUDGMENT (NO. 9) OF HEATH J

Solicitors:

Serious Fraud Office, PO Box 7124, Wellesley Street, Auckland
Meredith Connell, PO Box 2213, Auckland
Gresson Dorman & Co, PO Box 244, Timaru
Rhodes & Co, PO Box 13444, Armagh, Christchurch
Duncan Cotterill, PO Box 5, Christchurch
Counsel:
C Carruthers QC, PO Box 305, Wellington 6140
P H B Hall QC, PO Box 3750, Christchurch
R B Squire QC, PO Box 10157, Wellington
J H M Eaton QC, PO Box 13868, Armagh, Christchurch

M Corlett, PO Box 4338, Shortland Street, Auckland

R v SULLIVAN [2014] NZHC 1023 [15 May 2014]

[1]      I am currently presiding over a Judge-alone trial in respect of charges brought against Messrs Sullivan, White and McLeod arising out of the collapse of South Canterbury Finance Ltd (South Canterbury). The trial began on 12 March 2014.

[2]      Yesterday, on 14 May 2014, evidence was being given by Mr Pearson.  He was the person responsible for the audit of South Canterbury.  He is currently under cross-examination.

[3]      During  the  course  of  cross-examination  it  emerged  that  he  had  been interviewed by someone from the Financial Markets Authority (FMA).  A transcript of that interview had not been disclosed to defence counsel.   It was disclosed late yesterday afternoon before the Court rose.

[4]      It had also become clear earlier that Mr Loader, a director of Ernst Young who was responsible for conducting a peer review of one of the audits, had been interviewed by FMA and that, at the time that information came to hand, had not been disclosed.  Mr Loader is not a prosecution witness.

[5]      Inquiries were made overnight, at my request, about any further transcripts of interviews or documents that might be relevant to the trial that were conducted by FMA.  As a result of correspondence among counsel overnight and discussions this morning, Mr Corlett, on behalf of all accused, raised some disclosure questions with me.

[6]      I was told, initially, that a number of people, some of whom have been witnesses in the trial, may have been interviewed by FMA without disclosure of any transcript.  Mr Carruthers QC, for the Crown, informs me that FMA advises that the witness in respect of whom protection has been claimed represents the only witness interviewed whose transcript has not yet been disclosed.

[7]      There is a question of jurisdiction in relation to the disclosure obligation. The initial prosecuting authority was the Serious Fraud Office (SFO).  It is apparent from evidence  given  by  one  of  the  witnesses  involved  in  the  South  Canterbury investigation at SFO that there was a degree of collaboration between SFO and FMA

in  respect  of some,  at  least,  of the  investigation.   The  question  is  whether the “prosecutor” for the purposes of the Criminal Disclosure Act 2008 encompasses both SFO and FMA, or only SFO.1  That issue will require resolution in due course.

[8]      If  jurisdiction  did  not  exist,  it  would  be  necessary  for  any  disclosure application to be made on a non-party basis under the Act.2   There is no reason why an application against the Crown, as “prosecutor”, and FMA as a non-party might not be made in the alternative.  Only if it were necessary to decline jurisdiction on the disclosure from prosecutor ground would it be necessary to pursue the non-party application.

[9]      This morning it became clear that it was necessary to identify witnesses relevant to the charges before the Court who had been interviewed by FMA to ascertain whether any claims of confidentiality were made by FMA in respect of disclosure of any of the transcripts of interview; to identify any additional documents held by FMA which have not been disclosed to date, but are relevant to any of the charges before the Court; to identify what transcripts or other documents could be disclosed without objection; and the provision of a list of documents to which some claim of confidentiality or the like could be made in opposition.

[10]     After  the  Court  adjourned  this  morning  to  enable  those  issues  to  be addressed, Mr Carruthers presented to defence counsel and me a memorandum entitled “Crown Position on Disclosure”.  FMA has advised Mr Carruthers that it has an interview with a witness which is subject to protections under a provision of the Financial Markets Act 2011 and s 64 of the Evidence Act 2006.  It is possible that the prior statute might be a reference to the Protected Disclosure Act 2000 but that is presently unclear.  FMA will not disclose the transcript of that interview to SFO.

[11]     This is an issue that will require an application by defence and argument to take place at a time when FMA can also be heard independently.  Mr Carruthers has provided a list containing the categories of documents held by FMA in relation to the

South Canterbury investigation and has also proffered the Crown view in relation to

1      Criminal Disclosure Act 2008, s 6(1), definition of “prosecutor”.

2      Ibid, ss 24–29.

relevance.  He has advanced the point that disclosure of documents not held by the SFO is not required.  Among other things, it is said that is because this is not a joint prosecution.

[12]     To  facilitate  resolution  of  the  disclosure  issues,  I  make  the  following directions:

(a)      Any application by counsel for the accused for additional disclosure from the prosecutor under s 30 of the Criminal Disclosure Act 2008, together with any alternative application for a non-party disclosure hearing against FMA, shall be filed and served by 10am on Monday

19 May 2014.  I will deal with the latter on the papers.  A summons can issue once an order has been made on  the non-party hearing application.

(b)I abridge the time for service of the non-party application, for the purposes of s 26 of the Criminal Disclosure Act, to 11am on 19 May

2014.  I authorise service on FMA by email to Mr Paul O’Neil.

(c)       Notices of opposition shall be filed and served by 5pm on 20 May

2014.

(d)Submissions in support of the applications and in opposition shall be filed and served contemporaneously by 3pm on Wednesday 21 May

2014.

(e)       The applications will be heard at 10am on Thursday 22 May 2014.

[13]     Necessarily, those directions interrupt significantly the evidence to be called. Mr Pearson remains under cross-examination.  It is unreasonable to expect counsel for the accused to complete cross-examination before they have considered all relevant documentation disclosed to date, or to be disclosed.  If, however, counsel consider that the cross-examination can be completed earlier, leave is reserved for

them  to  apply to  have  the cross-examination  recommence at  a time  next  week suitable to all.

[14]     The evidence to be given by Mr Graham, the forensic accountant to be called by the Crown, which was to have commenced on 19 May 2014 will now be deferred pending  resolution  of  the  disclosure  issues,  and  any  time  required  to  consider

documents.

P R Heath J