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R v Whale

R v Whale

Case [2013] NZHC 731 12 April 2013

Theft by Person in Special Relationship

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A SUPPRESSION ORDER EXISTS IN RESPECT OF THE PUBLICATION OF THE NAME AND ANY IDENTIFYING PARTICULARS OF THE ACCUSED REFERRED TO IN THESE VERDICTS AS "A".

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2011-004-018433 [2013] NZHC 731

THE QUEEN

v

ROBERT BARRY WHALE PAUL WILLIAM CROPP A

Hearing: 18-22, 25-28 February, 1, 4-8, 11-15, 21, 25 and 26 March 2013

Counsel: B H Dickey and M Thomas for Crown
P Davison QC and R Woods for R B Whale
J R Billington QC and D Pannett for P W Cropp
M D Lloyd for A Judgment: 12 April 2013

VERDICTS OF LANG J

This judgment was delivered by me on 12 April 2013 at 4.30 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………

R V ROBERT BARRY WHALE HC AK CRI-2011-004-018433 [12 April 2013]

PART ONE: BACKGROUND AND INTRODUCTORY MATTERS [5]

The personnel involved in the governance, management and operation of the companies

[16]

The loan approval process [28] The regulatory framework within which the companies operated [35] Dominion’s Trust Deed [37] North South’s Trust Deed [42]

Fundamental principles
Onus and standard of proof

[48]

Separate trials [52]
Other matters [55]

Elements of the offence
a) Control
b)The obligation to deal with the property in accordance with the requirements of another person

c) Knowledge of the obligation
d)Intentionally dealing with the property otherwise than in accordance with the obligation

[56] [59] [61]

[63] [64]

The allegations in greater detail [66]
Principals and parties [71]

PART TWO: THE ALLEGATIONS BASED ON INTENTIONAL FAILURE TO OBAIN TRUSTEE’S PRIOR WRITTEN CONSENT TO RELATED PARTY TRANSACTIONS
Background to Counts 1, 2 and 3 – the Norfolk Manor project

[74]

Count 1 – the loan to Norfolk Manor [79]
Issues [84]

Did Mr Whale control the investors’ funds that Dominion used to make the advance to Norfolk Manor?
Did Mr Whale know between August 2004 and July 2007 of the restriction that the Trust Deed imposed on Dominion in respect of related party lending?
Did Mr Whale intend to assist Dominion to breach the restriction on related party lending?

[85] [90] [104]

Verdict [109] Count 2 – The loan by Dominion to WAFD [110] Background [111]

1. Mr Whale
Issues

Who controlled the investors’ funds that Dominion used to make the loan to
WAFD?
Did Mr Whale assist Dominion to breach the prohibition on related party lending?
Did Mr Whale know of the prohibition on related party lending as at 31 March
2008?

[123]

[124] [127] [129]

Verdict [150]

1. Mr Cropp
Issues

Did Mr Cropp know of the prohibition on related party lending in Dominion’s
Trust Deed?

[151] [153]

Did Mr Cropp intentionally cause Dominion to breach the prohibition on related party lending?

[169]

Verdict [207] Culpability [208] Count 3 – the WAFD SSA [224] Preliminary issues [231]

Was the payment underlying Count 3 a related party transaction for the
purposes of North South’s Trust Deed?
Did the Trust Deed nevertheless exclude the payment from being a…

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 Whale

Details

AGLC: R v Whale [2013] NZHC 731
Case: [2013] NZHC 731
Decision Date: 12 April 2013

CaseChat Overview and Summary

This case involved criminal charges against three individuals, Mr Whale, Mr Cropp, and Mr A, for their involvement in the failure of two finance companies, Dominion Finance Group Ltd and North South Finance Ltd. The Crown alleged that the accused intentionally caused or assisted the companies to make unauthorised loans to related parties using investors' funds, and to breach their obligations to conduct their business in a prudent and businesslike manner. The Crown did not allege that the accused acted dishonestly or stood to gain personally from any of the transactions. The Crown contended that the accused committed the crime of theft by a person in a special relationship under section 220 of the Crimes Act 1961.

The court examined the evidence and legal issues, including the burden of proof, the concept of control over property, and the obligation to deal with property in accordance with the requirements of another person. The court concluded that the Crown had not proved its case beyond reasonable doubt for all but one of the accused in relation to certain charges. The court found Mr Whale not guilty on all counts, and Mr A not guilty on all counts. The court found Mr Cropp guilty on Counts 2, 3, 4, and 5.

The court held that the obligation to carry on business in a prudent and businesslike manner did not amount to a "requirement" for the purposes of section 220 of the Crimes Act 1961. The court held that liability under section 220 would only arise where the accused was subject to an obligation to use or apply identified property in a particular way. The court held that the obligation imposed by Clause 5.3(a) of North South's Trust Deed was insufficient to give rise to a requirement for the purposes of section 220.

The final orders of the court were that Mr Whale was found not guilty on all counts, Mr Cropp was found guilty on Counts 2, 3, 4, and 5, and Mr A was found not guilty on all counts.

Orders