R v Wenzel

[2009] NZCA 130

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA31/2009
[2009] NZCA 130

THE QUEEN

v

SHANE CHARLES WENZEL

Hearing:18 March 2009

Court:O'Regan, Robertson and Arnold JJ

Counsel:J N Bioletti for Appellant

N Till QC, C J  Curran and A C Butler for Crown

Judgment:8 April 2009 at 12.30 pm

JUDGMENT OF THE COURT

LEAVE TO APPEAL IS GRANTED, BUT THE APPEAL IS DISMISSED.

____________________________________________________________________

REASONS OF THE COURT

(Given by Robertson J)

Introduction

[1]        The appellant, Mr Wenzel, and another  (“XYZ”) whose name has been suppressed, are awaiting trial on an indictment which has 36 counts:

·     Using a document dishonestly – 17 against Mr Wenzel only

·     Using a document to defraud – 2 against Mr Wenzel only

·     Obtaining by deception – 16 against both accused

·     Failing to produce documents – 1 against Mr Wenzel only.

[2]        At issue on this appeal is an order made on 9 January 2009 by District Court Judge Wade under s 361D of the Crimes Act 1961 that there should be a Judge alone trial.

[3]        That section, which came into force on 25 December 2008, enables the prosecution to apply for a Judge alone trial, an ability which hitherto had been available only to an accused.

[4]        As it is a new legislative provision, we have dealt contemporaneously with leave to appeal and the merits.  This is the first time s 361D has been considered by this Court.  Since the provision came into force, the High Court has considered one application under s 361D (R v F CRI 2007-092-18132 HC AK 20 February 2009) and one under its companion provision, s 361E, which provides for judge alone trials in cases of juror intimidation (R v Pritchard CRI 2008-020-002387 HC NAP 23 February 2009).In R v F, Rodney Hansen J noted the Law Commission’s assessment that s 361D would have particular application to cases involving fraud or complex evidence. 

[5]        In Pritchard, Dobson J observed that there is no guidance in the Crimes Act on how s 361E is intended to be balanced against s 24(e) of the New Zealand Bill of Rights Act 1990 (“NZBORA”), which provides that everyone charged with an offence the penalty for which is or includes three or more months’ imprisonment has the right to elect trial by jury.  The Judge noted that by virtue of s 4 of NZBORA, s 361E must prevail over s 24(e) of NZBORA if they conflict, but said:

[5]       Intuitively, however, the derogation from fundamental rights such as those in s 24 of the New Zealand Bill of Rights Act should only occur when the Court is well satisfied that such derogation is warranted.  In the context of New Zealand society and the balanced administration of the criminal law, it is to be hoped that justification for orders under this section will be rare. 

Background

[6]        Mr Wenzel and XYZ were arrested in October 2006.  A depositions hearing took place over eleven days during July and August 2007 and both men were committed for trial.

[7]        The Solicitor-General’s indictment was presented on 9 October 2007.

[8]        On 20 November 2008, at a pre-trial hearing, the Serious Fraud Office (“SFO”) as prosecutor informed the Court that it would be applying for a Judge alone trial under a new statutory provision (s 361D) which would come into force on 25 December 2008.  On 27 November 2008 the SFO filed an application for trial by Judge alone together with a supporting affidavit. 

[9]        Judge Wade, who has always had the carriage of the file, called for submissions from the parties by 24 December 2008 and allocated a hearing for the application on 9 January 2009.  The SFO filed further material in support of its application on 7 January 2009. 

[10]     At the conclusion of that hearing, he ordered trial by Judge alone and ruled that the trial would go ahead as scheduled on 9 February 2009.  He indicated that reasons would follow.  XYZ has been content throughout to abide the decision of the Court.

[11]     Mr Bioletti (for Mr Wenzel) immediately advised that there would be an appeal against the order.  This was lodged on 16 January.  There was a response by the SFO on 27 January 2009, basically arguing that leave to appeal should not be granted.

[12]     This Court, by Minute of 28 January 2009, advised there would be a hearing as to leave and the merits simultaneously.  At that stage reasons for judgment were not available and without them the appeal could not be advanced.  The Minute noted that if the prosecutor wished to hold its 9 February 2009 trial date, the parties could agree to there being a jury trial but, in the absence of consent, a postponement of the trial was inevitable as this Court needed to consider issues arising under the new legislative provision.

[13]     A Minute of Judge Wade dated 30 January 2009 records that Mr Wenzel was by then opposed to the trial proceeding with a jury without the appeal being heard.  That stance is difficult to understand.  However, eventually all parties agreed that there had to be an adjournment pending the appeal.  The trial was rescheduled for Monday 17 August 2009.  Reasons for judgment were delivered on 4 February 2009.

The grounds of appeal

[14]     The submissions on behalf of Mr Wenzel were somewhat diffuse, but  involved challenges rooted in questions of:

·     Jurisdiction;

·     Unfairness;

·     The effect of NZBORA; and

·     A wrongful exercise of discretion.

The legislation

[15]     Section 4 of the Crimes Amendment Act (No 2) 2008 inserted the new ss 361D and 361E into the Crimes Act 1961 and, as relevant, provides:

4         New sections 361D and 361E inserted

(1)       The following sections are inserted after section 361C:

361DJudge may order trial without jury in certain cases that are likely to be long and complex

(1)      This section applies only to a person (the accused person) who is committed for trial for an offence that is not—

(a)an offence for which the maximum penalty is imprisonment for life or imprisonment for 14 years or more; or

(b)an offence of attempting or conspiring to commit, or of being a party to the commission of, or of being an accessory after the fact to, an offence referred to in paragraph (a).

(2)      The Judge may, on a written application for the purpose made by the prosecutor to the Judge and served on the accused person before the accused person is given in charge to the jury, order that the accused person be tried for the offence before the Judge without a jury.

(3)      However, the Judge may make an order under subsection (2) only if the prosecution and the accused person have been given an opportunity to be heard in relation to the application, and following such hearing, the Judge is satisfied—

(a)that all reasonable procedural orders (if any), and all other reasonable arrangements (if any), to facilitate the shortening of the trial, have been made, but the duration of the trial still seems likely to exceed 20 days; and

(b)that, in the circumstances of the case, the accused person's right to trial by jury is outweighed by the likelihood that potential jurors will not be able to perform their duties effectively.

(4)      In considering, for the purposes of subsection (3)(b), the circumstances of the case, the Judge must take into account the following matters:

(a)the number and nature of the offences with which the accused person is charged:

(b)      the nature of the issues likely to be involved:

(c)       the volume of evidence likely to be presented:

(d)the imposition on potential jurors of sitting for the likely duration of the trial:

(e)       any other matters the Judge considers relevant.

(5)      If the accused person is one of 2 or more persons to be tried together, all of them must be tried before a Judge with a jury unless an order under subsection (2) for all of them to be tried by a Judge without a jury is applied for and made.

(6)This section does not limit section 361B or 361C or 361E.

…

(6)This section applies in respect of an accused person only if –

(a)the accused person is committed for trial on or after the date on which this section comes into force; or

(b)the accused person is committed for trial before the date on which this section comes into force and the trial has not commenced before that date.

[16]     These new provisions came into force on 25 December 2008, six months from the date that s 4 of the Crimes Amendment Act (No 2) 2008 received Royal Assent (s 2).

Jurisdiction

[17]     Mr Bioletti argues that, as s 361D of the Crimes Act was not in force until 25 December 2008, the application filed on 27 November 2008 and the supporting documentation filed prior to the new provisions coming into force were, in law, nullities.

[18]     This is an unsustainable argument.  Mr Wenzel and the co-accused have been awaiting trial for over two years.  There was a ten-week time slot available between the provision coming into force and the trial date in February 2009.  Putting to one side the date on which the SFO’s application was filed, clearly there was jurisdiction to make the order. 

[19]     Mr Wenzel and XYZ have been committed for trial for offences for which the maximum penalty was seven years.  There were no charges involving a maximum penalty of life imprisonment of 14 years or longer, which would have precluded the application of the section.

[20]     Written application for trial by Judge alone was made by the prosecutor and served on each of the accused (as required by s 361D(2)).  The accused had been committed for trial before the date on which the new section came into force, but the new trial had not commenced (s 4(6)(b) Crimes Amendment Act (No 2) 2008).  The parties were given an opportunity to be heard in relation to the application (as required by s 361D(3)).  The section was in force at the time that Judge Wade made his order.  In other words, all the statutory requirements for its being engaged existed.

[21]     As to the filing of the application, all that occurred was the simple expedient of having it filed early.  This allowed everyone involved to consider their positions and assisted in having the application adjudicated upon within the short timeframe available.  Early warning in respect of the application was to everyone’s advantage.  There was nothing unlawful in what occurred. 

[22]     As it transpired, because of an exercise of appeal rights, the best laid plans of mice and men did not come to fruition and the trial slot had to be vacated.  There was, however, jurisdiction when Judge Wade made the order on 9 January 2009.  The submission that commencing the process early was a nullity is without merit.

[23]     Although not referred to by counsel, we have considered New Zealand Employers Federation v National Union of Public Employees [2002] 2 NZLR 54, where this Court considered the scope of s 11 of the Interpretation Act 1999. Section 11 provides for the exercise of powers conferred by enactment before the enactment enters into force in certain circumstances. The NZEF case involved the registration of a union under the Employment Relations Act 2000 before the Act was in force.  The Court considered whether the registration had been “necessary or desirable to bring, or in connection with bringing” the enactment into operation in terms of s 11(2).  Holding that s 11 did not authorise registration of a union before the Act came into force because registration involved the substantive provisions of the Act, Richardson P for the majority said that s 11 applied to steps required to facilitate procedural, not substantive, changeover from the old to the new legislation. 

[24]     The Court in NZEF was divided, with Keith and Blanchard JJ dissenting.  They considered that s 11 (unlike its predecessor, s 12 of the Acts Interpretation Act 1908) distinguishes between the coming into force of legislation and the bringing of it into operation. Keith J said that:

[68]     The change, consistently with the reading given to the old provision and its equivalents, clarifies the purpose of helping give fuller substantive effect to the legislation by enabling the making of necessary or desirable provision which is effective right from the time the legislation comes into force… The provision is not to be read narrowly.

[25]     Even on the majority view in the NZEF case, nothing unlawful occurred in this case.  The s 361D application was procedural, and its grant by Judge Wade was administrative, directed to the efficient disposal of an inevitable issue.  The order cannot, in that sense, be said to fall into the “substantive” zone envisaged by the NZEF majority.  The new section was in effect before the trial commenced and Judge Wade’s order was a procedural means of expediting what could otherwise have arisen in a foreshortened timeframe during the vacation. 

Unfairness

[26]     Mr Bioletti submits that as a deposition hearing is part of the continuum of criminal procedure for any indictable information, it is fundamentally unfair to permit a change in the system to occur in the course of a particular trial. 

[27]     That is, however, precisely what the words of the statute provide for (s 4(6)(b) Crimes Amendment Act (No 2) 2008).  It is not for a court, in the absence of ambiguity or uncertainty, to intrude its view as to a policy matter which has been clearly articulated by Parliament.

[28]     Mr Bioletti’s concern in this regard also needs to be viewed in light of what did happen at the deposition hearing.  In his reasons for decision, Judge Wade described it thus:

[11] … Mr Wenzel, at the depositions hearing, refused to consent to any brief of evidence at all being the subject of “hand-up”.  Partly as a result, the depositions hearing ran for a total of 11 days, during which it was only possible for 11 of the 41 prosecution witnesses to give evidence.  I had before me affidavit evidence from Mr Danby, a Serious Fraud Office investigator, that even purely formal evidence (such as that by bank officers merely producing documentary exhibits) could not be agreed. …

[29]     An accused can behave like this if they wish, but there is no obligation at a depositions hearing to call all evidence which may be led at trial.  The purpose of depositions is to determine whether there is a prima facie case.  What is required is evidence adequate to establish a prima facie case, and there is no infringement of a defendant’s legal right just because some, rather than all, of the available evidence is sufficient for the purpose.

[30]     There was no unfairness.

NZBORA

[31]     Mr Bioletti made an impassioned plea about the consequences of taking away an accused person’s right to trial by jury.  He made particular reference to statements of the importance of the right as recognised in other jurisdictions (R v Sherratt [1991] 1 SCR 509 (Supreme Court of Canada) and S v Coetzee (1997) 3 SA 527 (Constitutional Court of South Africa)).  A similar philosophy permeates the jurisprudence in our country.

[32]     Mr Bioletti responsibly accepted that there was no obvious ambiguity in the language of s 361D which would enable the Court, under s 6 of the NZBORA, to interpret the section consistently with s 24(e).  Counsel still submitted that the approach of the Supreme Court in Hansen v R [2007] NZSC 7 probably required a ss 5 and 6 assessment.

[33]     A Hansen assessment under ss 4, 5 and 6 of NZBORA will be a rather non-productive exercise where there is a clear and unambiguous legislative direction.  But, as is required by Hansen, we briefly consider whether s 361D is justified in terms of s 5 of NZBORA. 

[34]     Section 5 requires that the rights in NZBORA may be subject only to such limits as may be demonstrably justified in a free and democratic society.  The template for this “demonstrable justification” was articulated by the Canadian Supreme Court in R v Oakes [1986] 1 SCR 103.

[35]     We consider that the limit placed by ss 361D and E on the right to trial by jury can be justified.  Normally in a s 5 case, the Crown will provide material to the Court to establish that the relevant limitation on the right is “demonstrably justified”.  In the present case, however, s 361D was enacted after the Law Commission had carried out a research project into juries, and it and s 361E were among the changes that the Commission recommended: see New Zealand Law Commission Juries in Criminal Trials (NZLC R69 2001, ch 3).  For the reasons given by the Commission, we consider that the limit placed by those sections on the right to trial by jury can be justified.  The scope of s 361D is by its terms confined in application and requires a judicial assessment of the circumstances that the prosecution contends bring the case within the section.  Section 361D is directed at promoting fair trial outcomes, which could be compromised if a jury were presented with highly complex evidence that it could not reasonably be expected to understand so as to be able to assess and evaluate.

[36]     We are satisfied that s 361D is justified in terms of s 5 and we do not see how there could sensibly be any interpretation under s 6 of the words used by Parliament which would lessen the impact of the balancing exercise. 

[37]     At the hearing before us, it emerged that the crux of the appellant’s case was that, as under s 24(e) of NZBORA trial by jury is an absolute right in cases where the penalty is imprisonment of three months or more, the availability to the right has an increasing intensity according to the length of the effective sentence likely to be imposed upon conviction.  That is, the longer the probable effective term of imprisonment, the more important the right to trial by jury.  We consider this thesis below.

The exercise of discretion

[38]     The factual circumstances giving rise to the charges were encapsulated by Judge Wade as follows:

[7]       The offences involve alleged complex mortgage frauds, with multiple transactions and layers within transactions, spread over some 18 separate properties, with what has been described as a sophisticated modus operandi relating to the alleged offending.  It is the prosecution case that, in many instances, properties were being purchased by entities controlled by Mr Wenzel and then sold by that entity to another person who worked for Mr Wenzel, or was otherwise closely associated with him.  These purchasers were then asked by Mr Wenzel to sign documents and enter agreements, including loan applications, which they knew little about and, in many cases, where loans were arranged there were same day payments of borrowed funds back to the original vendor.  The volume of evidence is likely to be large, with some 41 prosecution witnesses.  Six of those witnesses’ briefs of evidence exceed 20 pages and two of them exceed 50 pages.  The 41 prosecution witnesses are made up of eight borrowers or purchasers, four real estate agents, six employees of businesses run by Mr Wenzel, five mortgage brokers, 11 lenders’ representatives, a Police document examiner, three lawyers, one legal executive and two Serious Fraud Office investigators.

[39]     Mr Bioletti did not engage in detail with the particular issues which are required to be taken into account by the Judge under s 361D(3) and (4). 

[40]     However, he submitted:

[14]     An actual prison sentence of seven years was a likely consequence of conviction, this is an insurmountable and overwhelming factor against the removal of the right to jury trial in this case.  This factor is like Jabba the Hutt sitting on the end of the seesaw.  Something extraordinary would be required to justify the removal of the right to jury trial in a case involving this heavy potential loss of liberty and this case is not extraordinary.

[15]     At the end of the day, it is a case of alleged false pretences, in the old parlance, as to whether deposits said to be paid were not paid and income said to be earned was not earned.  At the end of a trial, distilled to its essence with the humbug stripped away, the trial Judge having determined questions of law which is what invariably occurs, this case would be fairly straight forward for a jury to determine.

[41]     He subsequently referred to “the greater the potential loss of liberty, the higher the level of constitutional protection required” and noted:

[17] … the greater need for public validation of verdicts through the jury system and public participation in the criminal justice system, the greater need for protection against arbitrary state power, the greater need for the unconstrained and constitutional right of a jury to bring in a verdict, the greater need for the impartiality of the fact determiner, the public endorsement of decisions, the democratic right of people to serve as jurors, the larger number of people on a jury, and the requirement of practical unanimity.

[42]     In conclusion he submitted:

[18]     The greater the potential loss of liberty the more important these things are and the fact that the particular case may be highly suited for practical administrative purposes to a judge alone trial cannot outweigh the paramountcy of the right to jury trial where lengthy prison terms are at stake.

[43]     Mr Till QC rejected this approach and undertook an orthodox analysis of the issues required to be considered under the statutory test.  He referred to the number of counts and the technical nature of many of them.  As to the issues likely to be involved, he argued that this is a case of “complex mortgage fraud with multiple transactions and layers within transactions spread over 18 properties with a sophisticated modus operandi to the offending”.

[44]     Counsel noted that, at the time Judge Wade undertook this assessment, he had already heard a s 347 application in respect of XYZ and had access to the notes of evidence from the very lengthy depositions hearing so was in a good position to evaluate the balance required.

[45]     Turning to the issues specifically required to be taken into account under s 361D(4), the respondent’s submissions noted:

The briefs of six of the prosecution witnesses exceed 20 pages and two exceed 50 pages.  The 41 prosecution witnesses are made up of the following:

·     7 borrowers/purchasers

·     4 real estate agents

·     6 employees of business run by Mr Wenzel

·     5 mortgage brokers

·     11 lender representatives

·     1 police document examiner

·     3 lawyers and 1 legal executive

·     2 SFO officers

[46]     Counsel underlined the fact that, at the depositions hearing, all witnesses were required to give oral evidence.  The trial is set down for ten weeks. 

[47]     Judge Wade referred to language problems for prospective jurors in the Manukau District Court.  We are told that this issue was not raised by either counsel and it is not a matter of relevance in the evaluative exercise we have undertaken.

[48]     The respondent submits that the size, scope and complexity of the case demonstrates a likelihood that potential jurors would not be able to perform their duties effectively.  This undermines both the private and public value of a jury right, and makes this case a proper candidate for a judge-alone trial under s 361D.

[49]     Judge Wade concluded:

[31] … I am satisfied that the Serious Fraud Office is entirely correct when they submit that it is difficult to envisage a trial more suited to the exercise of my statutory discretion than a complex alleged fraud trial such as this.

[50]     We agree. 

[51]     There is nothing which suggests that the Judge exercised his discretion on a wrong principle, took into account irrelevant considerations or failed to weigh the statutory requirement or other matters relevant to the exercise of that discretion.  We are not persuaded that the language issue was seriously influential.

[52]     We reject the sliding scale approach advocated.  It adds nothing to, nor detracts anything from, our conclusion at [35], above, that s 361D is an unambiguous and justified derogation from s 24(e).  That being the case, s 361D must be read in its terms.  There is no provision in that section for the application of a higher stringency standard if the penalty is likely to be great.  The evaluative criteria for the Judge do not go beyond those provided for in the section.

[53]     The right to trial by jury affirmed in NZBORA is an absolute.  Its application and availability arise from the potential for more than three months’ imprisonment.  However, Parliament has decided that in some classes of case, that right is to be balanced against other identified factors.  The probable effective sentence is not one of those, and we find no basis for introducing that additional mandatory consideration by judicial fiat.

[54]     The case has all the hallmarks identified by Parliament as being sufficient to outweigh the advantages which are otherwise obtained by trial by jury.

[55]     Leave to appeal is granted, but the appeal is dismissed.

Solicitors:
Crown Law Office, Wellington
Serious Fraud Office, Auckland