R v Sullivan
[2014] NZHC 446
•12 March 2014
IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY
CRI 2011-076-1948 [2014] NZHC 446
THE QUEEN
v
EDWARD ORAL SULLIVAN, ROBERT ALEXANDER WHITE and LACHIE JOHN McLEOD
Hearing: 12 March 2014
Counsel: C Carruthers QC, N Flanagan and P Gardyne for Crown
P H B Hall QC, M Corlett and K H Cook for Mr Sullivan
R B Squire QC for Mr White
J H M Eaton QC for Mr McLeod
Judgment: 12 March 2014
(ORAL) JUDGMENT (NO. 4) 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, ChristchurchM Corlett, PO Box 4338, Shortland Street, Auckland
R v SULLIVAN and ORS [2014] NZHC 446 [12 March 2014]
Introduction
[1] Messrs Sullivan, White and McLeod are to be tried on various counts of fraud arising out of the collapse of South Canterbury Finance Ltd. The trial was due to start today.
[2] Yesterday, the Registrar referred to me a memorandum signed by senior counsel for each accused in which reference was made to a comment that occurred during the course of a conference in Auckland last Friday, 7 March 2014. I was chairing that conference. The speaker at the relevant time was Ms Julie Read, the Director and Chief Executive of the Serious Fraud Office. Counsel asked that I consider recusal, having regard to the decision of the Supreme Court in Saxmere
Company Ltd v Wool Board Disestablishment Company Ltd.1
Background
[3] On receipt of counsel’s memorandum, I prepared and issued a Minute in which I set out my recollection of events. I summarise the content of that Minute. The conference held in Auckland last Thursday and Friday (6 and 7 March) is an annual conference on insolvency law presented by INSOL New Zealand. It is generally attended by senior and intermediate practitioners in that field, from legal, accounting and banking backgrounds. I have chaired that conference since its inception in 2002, at a time just before my appointment to the Bench. I am asked to chair the conference because of my experience, both as a practising lawyer and a judicial officer, in dealing with corporate and insolvency law.
[4] One of the sessions was being presented by Ms Read. Her co-presenter was Ms Belinda Moffatt, of the Financial Markets Authority. The purpose of the session was to apprise delegates of the work being undertaken by the Serious Fraud Office and the Financial Markets Authority, and the policies each was employing in carrying out their respective functions.
[5] Before the conference I had not met Ms Read. In the break preceding her session, I introduced myself to her. My recollection is that I told her I did not want
1 Saxmere Company Ltd v Wool Board Disestablishment Company Ltd [2010] NZLR 34 (SC).
her to say anything about the South Canterbury Finance prosecutions as I was to be the trial Judge. I intended to convey clearly that nothing should be said about the merits of the case. Ms Read did not appear to know that I was to be the trial Judge, or may have forgotten. That was my perception.
[6] During the course of her presentation, Ms Read reached a slide that referred, without any comment as I recall, to the South Canterbury Finance prosecutions. At that stage a comment was made to the effect that “we are very fortunate to have Justice Heath as our trial Judge”. Those are the words that have been recalled by Ms Read in an affidavit that she swore today. My own recollection was that the word “lucky” was used, but there is no material difference in the use of those words in the context in which they were spoken. They can be regarded as synonymous.
[7] While I thought at the time that the remark was unfortunate, I decided not to say anything in response. I did not consider that anything had been said to cast doubt on my impartiality to try the present case and, for that reason, did not alert counsel to what had happened. The clear impression I formed was that the comment indicated no more than that Ms Read was pleased that a person with some experience in the area was presiding over the trial. I did not consider that any person in the audience could have thought that I was someone biased in the Serious Fraud Office’s favour. Had I thought that that was remotely possible, I would have raised the point with counsel.
[8] It is true that there are some differences in detail as to what was said when one compares the terms of my Minute with the affidavit of Ms Read. However, both accounts are consistent with what was contained in an email forwarded by a partner in a Wellington firm of solicitors to Mr Squire QC, Mr White’s counsel, shortly after the discussion took place. The text of the email that was sent to Mr Squire read that Ms Read had ‘just stated in a conference presentation I am attending that “we are very fortunate to have Justice Heath as our trial Judge’ for the SFC trial”. There is no discrepancy in material terms among any of those descriptions.
[9] Today counsel for the accused have asked for an adjournment to consider whether additional evidence should be put before the Court, before I make a
determination on whether I should recuse myself from presiding over the trial. In that context, I am conscious that I am trying the case without a jury and that the issue is one of perception. It is important that not only is justice done but that it is manifestly seen to be done by an impartial Judge.
Analysis
[10] The test to be applied is stated clearly by the Supreme Court in Saxmere.2
There is a two-stage inquiry.3 The first is to identify what it is said would lead the Judge to decide a case other than on its legal and factual merits. The second is an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on the merits.
[11] It is important that Judges should not too readily disqualify themselves from hearing and determining cases. Public confidence in the judicial system is not necessarily enhanced if Judges are seen to shrink from making difficult decisions when there is demonstrably no injustice involved.
[12] The question is whether a fair-minded lay observer might reasonably apprehend a possibility of bias on the part of the Judge.4 In making that assessment the fair minded lay observer is presumed to be intelligent and to view matters objectively. He or she is neither unduly sensitive nor suspicious, or complacent about what might influence a Judge’s decision. While taken to be a non-lawyer, the fair minded lay observer is regarded as someone reasonably informed about the workings of our judicial system, the nature of the issues in the particular case and the facts pertaining to the situation which is said to give rise to an appearance or apprehension of bias.5
[13] I was assigned to manage and to try the present prosecutions, at that stage with or without a jury (that point remaining to be determined) by Winkelmann J,
around the time the Crown made an application to transfer the proceeding to the
2 Saxmere Company Ltd v Wool Board Disestablishment Company Ltd [2010] NZLR 34 (SC). I shall be referring to the principal judgment, delivered by Blanchard J The other members of the Supreme Court expressed views consistent with his.
3 Ibid, at para [4].
4 Ibid, at para [3].
5 Ibid, at para [5].
High Court. That assignment was made in her capacity as Chief High Court Judge. I have been managing the case since the transfer to the High Court. I have heard defended applications to transfer the proceeding to this Court, whether the trial should be heard by Judge-alone or before a jury and whether one of the accused should be discharged. I have also dealt with a series of issues relating to disclosure and admissibility of documents. During the year that has passed, no suggestion has been made of any appearance of bias on my part.
[14] On the information I currently have, I must ask what has changed? The only change is the nature of the comment made by Ms Read during the conference.6
Whatever her reasons may have been for expressing that view I do not currently see on the evidence any link between it and whether I will perform my judicial function impartially.
[15] In my view, on the current information, there is no basis for a belief by a lay objective bystander, with the characteristics identified by the Supreme Court in Saxmere, for believing that I will not carry out my judicial function in this trial in accordance with the judicial oath I took on my appointment to the Bench in 2002; namely, “to do right to all manner of people after the laws and usages of New
Zealand without fear or favour, affection or ill will”.7
[16] On the information currently available I decline to recuse myself. I am, however, satisfied that the accused should have the opportunity of having this issue revisited should any material evidence that I have not considered to date become available for consideration.
[17] In the meantime, I propose to proceed with the trial by having the accused arraigned and by hearing the Crown opening. If, at the end of the Crown opening, counsel for the accused indicate that they wish to pursue this issue further, I will timetable the filing of a formal application and affidavits in support, responding material from the Crown and fix a date next week for the application to be heard
before evidence begins.
6 See para [6] above.
7 Oaths and Declarations Act 1957, s 18.
[18] In my view, there is no prejudice to the accused in following that path. The Crown will simply have an opportunity to put its case in opening and nothing will be required of the accused meantime.
Result
[19] I rule that we will proceed in that manner.
P R Heath J
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