R v Sullivan

[2014] NZHC 1496

IN THE HIGH COURT OF NEW ZEALAND TIMARU REGISTRY

CRI 2011-076-1948 [2014] NZHC 1496

THE QUEEN

v

EDWARD ORAL SULLIVAN ROBERT ALEXANDER WHITE and 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 April 2014
1, 2, 5, 6, 7, 8, 9, 13, 14, 15, 22, 26, 27, 28, 29, 30 May 2014
3, 4, 5, 10, 11, 12, 17, 18, 19, 20, 24, 25, 26, 27 and 30 June
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
R Raymond for Mr G R Brown (witness)

Judgment:

30 June 2014

(ORAL) JUDGMENT (NO. 15) 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

Cameron & Co, PO Box 1985, 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 A Corlett, PO Box 4338, Shortland Street, Auckland R Raymond, PO Box 9344, Christchurch

R v SULLIVAN [2014] NZHC 1496 [30 June 2014]

[1]      Having been called on behalf of Mr Sullivan, evidence is currently being given by Mr Brown, the former Chief Financial Officer of South Canterbury Finance Ltd.   He gave evidence in chief that the Kelt transaction was initiated at his suggestion; that he discussed it with the company’s accountant, Mr Hutton, before it went to the board; that there was an agreement in principle to proceeding with the transaction at a meeting of the board on 16 June 2009; and that Mr McLeod, the Chief Executive Officer, knew nothing more about the transaction than what he learned at the board meeting.

[2]      The Crown’s position is somewhat different.   Mr Carruthers QC, in cross- examining Mr Brown, put to him a statement which he had given voluntarily on 23

August 2011 to officers at the Serious Fraud Office.   In that statement, Mr Brown had suggested that Mr McLeod was responsible for the transaction.   The Crown’s position  is  that  it  was  not  approved  prior  to  30  June  2009  and  that  it  was implemented in order to get around a single lending ratio contained in the debenture Trust Deed in a manner that was not lawful.

[3]      In re-examination, Mr Corlett sought leave under s 35 (2) Evidence Act 2006, to admit a second statement made to Serious Fraud Office investigators on 13 July

2013.  Section 35(2) provides:

35  Previous consistent statements rule

...

(2)    A previous statement of a witness that is consistent with the witness's evidence  is  admissible  to  the  extent  that  the  statement  is  necessary  to respond to a challenge to the witness's veracity or accuracy, based on a previous inconsistent statement of the witness or on a claim of recent invention on the part of the witness.

....

[4]      In  the  second  statement,  Mr Brown  explained  the  Kelt  transaction  in  a manner consistent with what he has said in Court.  Mr Corlett submits that, given the Crown’s  challenge to  his  veracity or accuracy of recollection  in  relation  to  the initiation and implementation of the Kelt transaction, s 35(2) is engaged, and the prior consistent statement should come into evidence.  Mr Carruthers has also made it clear that an issue of recent invention also arises.

[5]      I have discussed with counsel the purpose for which such evidence might be used.  I have done so having regard to the observations made by the Supreme Court in Hart v R.1    The Crown is content to allow those parts of the first and second interviews that deal solely with the Kelt transaction to come into evidence, provided the use of the second interview goes no further than to support a submission that the evidence given by Mr Brown in Court should be accepted as correct being consistent with what he told the Serious Fraud Office at an interview at which he was more prepared than for the first.

[6]      After discussing the issue with Mr Eaton QC, who acts for Mr McLeod, Mr Corlett has indicated there is no opposition to that course of action and that neither  his  client,  Mr Sullivan,  nor  other  accused  will  seek  to  use  the  second interview transcript, in relation to the Kelt transaction, for any other purposes.

[7]      On that basis, the transcripts of the two interviews, insofar as they relate only to the Kelt transaction, may be produced.

P R Heath J

1      Hart v R [2011] 1 NZLR 1 (SC).