R v Sullivan - [2013] NZHC 454

IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY

CRI 2011-076-1948 [2013] NZHC 454

THE QUEEN

v

EDWARD ORAL SULLIVAN ROBERT ALEXANDER WHITE LACHIE JOHN MCLEOD
TERRENCE WILLIAM HUTTON AND GRAEME ROBERT BROWN

Hearing: 8 March 2013 (at Christchurch) Counsel: N F Flanagan and P Gardyne for Crown
P H B Hall and K H Cook for Mr Sullivan
R B Squire QC for Mr White
Appearances on behalf of Messrs McLeod, Hutton and Brown excused

Judgment: 11 March 2013

JUDGMENT OF HEATH J

This judgment was delivered by me on 11 March 2013 at 2.45pm pursuant to Rule 11.5 of the
High Court Rules

Solicitors:

Registrar/Deputy Registrar

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 350, Wellington
P H B Hall, PO Box 3750, Christchurch
R B Squire QC, PO Box 10157, Wellington
J H M Eaton, PO Box 13868, Armagh, Christchurch
R Raymond PO Box 9344, Tower Junction, Christchurch

R V SULLIVAN HC TIM CRI 2011-076-1948 [11 March 2013]

The application

[1] On 31 October 2012, Messrs Sullivan, White, McLeod, Hutton and Brown were each committed for trial in the District Court at Timaru on charges arising out of the collapse of South Canterbury Finance Ltd (South Canterbury). The charges allege that the accused acted dishonestly, primarily in relation to the issue of prospectuses, between November 2004 and February 2010. South Canterbury was placed in receivership by the trustee for first ranking secured debenture holders on
31 August 2010. At the time of receivership, the deficiency to that class of creditors was approximately $1.58 billion.

[2] The Crown applies under s 28J of the District Courts Act 19471 to transfer the proceeding for trial in the High Court. The application is opposed by Messrs Sullivan and White. Messrs McLeod, Hutton and Brown each abide the decision of the Court.

The Crown case

[3] At material times, Mr Sullivan and Mr White were directors of South Canterbury Finance Ltd (South Canterbury). The remaining accused were its Chief Executive Officer (Mr McLeod), company accountant (Mr Hutton) and Chief Financial Officer (Mr Brown). While not all accused have been charged with each offence, the charges involve alleged false statements by promoters (x5), theft by a person in a special relationship (x3), obtaining property by deception (x2) and false accounting (x2).

[4] The most serious allegations are made against the two directors, Mr Sullivan and Mr White. At the risk of over-simplifying them, the Crown assert that each was a party to the making of deliberately false statements in prospectuses issued to members of the public, to induce them to subscribe to securities offered by the company. The first prospectus in relation to which that allegation is made was on
issue between 19 November 2004 and 28 October 2005. The last (in respect of

1…

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 Sullivan

Details

AGLC: R v Sullivan [2013] NZHC 454
Case: [2013] NZHC 454
Decision Date: 11 March 2013

CaseChat Overview and Summary

The case of R v Sullivan involved multiple accused individuals who were charged with various offences arising from the collapse of South Canterbury Finance Ltd. The primary charges against the accused included allegations of dishonesty, false statements in prospectuses, theft by a person in a special relationship, obtaining property by deception, and false accounting. The Crown applied to transfer the proceeding from the District Court to the High Court, which was opposed by two of the accused, Messrs Sullivan and White. The primary legal issue was whether the interests of justice required the trial to be transferred to the High Court.

The court considered several factors in determining whether to transfer the proceeding, including the gravity of the offence charged, the complexity of the issues likely to arise, the desirability of prompt disposal of trials, and the general interests of justice. The court found that the gravity of the alleged offending was extremely serious, as it involved allegations of deliberate false statements made by company directors to induce public investment, resulting in a significant financial loss. The complexity of the trial, involving detailed review of transactions, accounting treatment, and legal concepts, was also a factor in favour of transfer. The desirability of prompt disposal of the trial was another significant factor, as the District Court was unlikely to accommodate the trial before the second half of the following year, while the High Court could set a firm trial date. Lastly, the public interest in the trial was substantial due to the nature and seriousness of the charges.

Based on these factors, the court concluded that the trial should be transferred to the High Court. The court made an order transferring the trial to the Timaru Registry of the High Court and assigned itself as the trial judge. The trial was scheduled to commence on 10 February 2014, unless a change of venue order was made. The court thanked counsel for their assistance in the matter.

Orders