The Queen v Heslehurst

[2009] NZCA 444

IN THE COURT OF APPEAL OF NEW ZEALAND

CA320/2009
[2009] NZCA 444

THE QUEEN

v

MAXWELL JOHN HESLEHURST

Hearing:20 August 2009

Court:Arnold, Panckhurst and Miller JJ

Counsel:M B Meyrick for Appellant

K A L Bicknell for Crown

Judgment:29 September 2009 at 10.30 am 

JUDGMENT OF THE COURT

A        The conviction on count three is quashed.

B        Otherwise the appeal is dismissed.

____________________________________________________________________

REASONS OF THE COURT

(Given by Panckhurst J)

Introduction

[1]       Following trial the appellant was found guilty of 38 fraud charges and three charges against the Companies Act 1993 (taking part in the management, or being the director, of a company without leave of the Court).  He was sentenced to imprisonment for a term of four years nine months.  This appeal is against conviction.

[2]       The appellant raises three grounds of appeal:

(a)that the verdicts of the jury in relation to counts two and three were unreasonable, in that the evidence in support of each charge was insufficient;

(b)that a breach of s 25(d) of the New Zealand Bill of Rights Act 1990 (NZBORA) occurred and gave rise to a miscarriage of justice; and

(c)that the trial Judge erred by not exercising his discretion to discharge the jury when a document containing a reference to the appellant’s previous convictions came to the attention of jurors.

The Crown case

[3]       The fraud counts were based upon obtaining by deception or causing loss by deception, save for one count of theft by a person in a special relationship.  Between February 2004 and September 2007 at various places in the North Island the appellant obtained advance payments on the faith of promises to deliver goods (mainly motor vehicles and television sets) to the complainants.  Repeatedly, the goods were not supplied.  The jury accepted the Crown’s contention that the appellant did not intend to honour his obligations at the time the contracts were entered into.

[4]       By contrast, counts two and three concerned advance payments made in anticipation of services to be provided by the appellant.  At the relevant time (April 2004) he was involved in the operation of a debt collection business.  The guilty verdicts were reached on the basis the jury accepted that at the time he received the advance payments the appellant had no intention to provide the services to which the payments related.

Was there sufficient evidence to support counts two and three?

[5]       Count two charged that on 14 April 2004 the appellant obtained a cheque for $1,640 by deception.  He was staying at the complainant’s motel.  She told him about a sum of $40,000 which she had lost after placing it with an investment company.  The appellant said he may be able to recover the money.  A cheque for $1,640 was given to the appellant by way of an advance payment for his services.

[6]       In the following months the complainant kept in touch with the appellant.  She was told that he had located a person involved in the management of the investment company, Jennifer McIntyre, in Christchurch.  The appellant reported that the $40,000 would be repaid, upon the sale of a property.  However, despite further approaches made to the appellant, nothing further eventuated.  No part of the debt was recovered.

[7]       In giving evidence the appellant said that the $1,640 advance payment was to enable him to locate those who operated the company, ascertain the extent of their assets and evaluate whether recovery was possible.  The appellant said he ascertained that Mr and Mrs McIntyre had property in Christchurch and also in Fiji, where they travelled regularly.  However these assets were “well and truly tied up” and as a result “there was nothing to chase”.

[8]       In order to refute the appellant’s explanation the Crown relied upon passenger movement records from the Customs Service, which showed that Jennifer McIntyre departed for Fiji in April 2003 and returned to New Zealand in April 2005.  The jury were invited to infer that the appellant lied in informing the complainant that he had made contact with Mrs McIntyre and that repayment of the debt was imminent.  The Judge directed the jury that propensity reasoning, based on the evidence of multiple occasions when the appellant obtained advance payments for goods which were not supplied, was impermissible.

[9]       Count three related to a further advance payment of $750 made by the same complainant on 19 April 2004 to enable the appellant to recover $39,000 for her son.  He was working in Singapore as a horse trainer.  Recovery of the money was to be sought from the son’s former accountant in New Zealand, who was said to have fraudulently failed to account for this amount.  The complainant arranged for the appellant to speak to her son in Singapore to obtain “the details of the debt”.  The son did not give evidence at trial.

[10]     The appellant gave evidence that inquiries were made in an endeavour to effect recovery from the accountant.  However, the accountant was bankrupt, had no “hidden assets” and nothing was recovered.

[11]     Dealing first with count three we accept that there is inadequate evidence to support the conviction.  There is no evidence as to the content of any discussions which may have occurred between the appellant and the complainant’s son in Singapore.  Although the appellant gave only sparse evidence as to the services he performed in an endeavour to recover the $39,000 debt, this does not afford a sufficient basis to infer that he had no honest intention to undertake the debt collection task at the time the upfront payment was made.  Suspicion abounds, but not proof to the criminal standard.  Accordingly, we quash the conviction on count 3.

[12]     In relation to count two there is a difference of opinion.  Two members of the Court consider that the evidence was sufficient to enable a jury to reasonably reach a conclusion of guilt to the required standard.  They are influenced by the evidence that the appellant told the complainant he had not only been in contact with Jennifer McIntyre, but that an arrangement for repayment of the $40,000 upon completion of the property sale was in place.  Given the evidence that Mrs McIntyre was in Fiji throughout 2004 the majority consider that not only did the appellant lie to the complainant, but that it was competent of the jury to infer he had no honest intention to collect the debt when the advance payment was received.

[13]     The third member of the Court does not agree with this analysis.  He considers that the appellant’s subsequent conduct does not clearly establish his intention at the time the up-front payment was received.  Absent direct evidence to establish that the appellant did not take steps to recover the debt, he considers that there is at least a reasonable doubt as to his intention.  He would quash this conviction as well.

Was there a breach of s 25(d)?

[14]     This argument, which was based on the failure of the police to interview the appellant before charging him, related to all the fraud counts laid under the Crimes Act, but not the three Companies Act counts.  Section 25 of NZBORA relevantly provides:

Minimum standards of criminal procedure 

Everyone who is charged with an offence has, in relation to the determination of the charge, the following minimum rights:

…

(d)The right not to be compelled to be a witness or to confess guilt:

….

[15]     The appellant’s offending occurred in different parts of the North Island.  In the end result the prosecution was co-ordinated by Detective Eckersley, a fraud investigator based in Hamilton.  He acted on a complaint received in Hamilton, but quickly identified that similar allegations against the appellant were under investigation throughout the North Island.  In due course, Detective Eckersley assumed responsibility to co-ordinate all the various complaints.  In addition, an investigation was underway by officers of the Companies Office at Auckland into allegations that the appellant was involved in company management or was acting as a director when prohibited.  These further counts were included in a composite indictment. 

[16]     Detective Eckersley’s involvement in the case began in June 2007.  The appellant was ultimately arrested in Wanganui on 2 October 2007.  The detective was not involved in the arrest.  Nor did he endeavour to subsequently interview the appellant concerning the multiple allegations he faced.  When questioned at the trial about his failure to interview the appellant the detective said that Mr Heslehurst was represented from the day of his arrest and could have offered an explanation through his lawyer, but did not do so. 

[17]     The officers conducting the Companies Act inquiry did seek to interview the appellant.  He declined to participate. 

[18]     At the conclusion of the Crown case Mr Meyrick argued that the appellant should be discharged pursuant to s 347, because the failure to interview him in relation to the fraud counts deprived him of the opportunity to explain matters and effectively meant that he could only offer an explanation by giving evidence, which in turn gave rise to a breach of s 25(d).  The trial Judge, Judge Singh, rejected this argument essentially on the basis that in the particular circumstances of the case the appellant’s rights had not been infringed.

[19]     Mr Meyrick sought to rely upon three judgments of the High Court in support of his contention that s 25(d) was infringed.  The first two decisions were Police v Kidwell [1989] 3 NZLR 594 (HC) and Reille v Police [1993] 1 NZLR 587 (HC). In the former Eichelbaum J overturned a conviction for theft. He did so because in the District Court the defendant contested the admissibility of a police interview, but no voir dire was held. Instead, the Judge heard evidence from both sides in relation to the admissibility of the interview and in relation to the charge itself, before ruling the interview inadmissible and finding the charge to be proved. Eichelbaum J held that had there been a voir dire, the appellant would subsequently have enjoyed an election as to whether or not to give evidence, and this could have affected the course of the hearing. The case, we think, is of no relevance to the present issue.

[20]     In Reille (which was decided after NZBORA was enacted) Eichelbaum CJ upheld an assault conviction entered against a police constable.  On appeal the appellant contended that the District Court Judge erred in not holding a voir dire to determine whether s 38 of the Alcoholism and Drug Addiction Act 1966 applied.  This section provides protection against civil and criminal liability to persons who exercise powers under the Act in good faith (including in detaining persons who are so intoxicated as to be incapable of looking after themselves). 

[21]     The Chief Justice accepted that as a matter of principle the appellant was entitled to have the question of immunity determined as a preliminary matter at a voir dire.  But, in the event, the failure to facilitate this right had not made the “slightest difference”.  In particular, although the appellant may have been compelled to be a witness (in an endeavour to establish his entitlement to the statutory protection), the fact was that the protection was not available and the assault conviction was inevitable in light of the informant’s case.  Both the complainant and an acting sergeant had given clear evidence of an act of assault.  Accordingly, the Chief Justice concluded at 594: “[i]t was inevitable that the defence of immunity would fail and that he would be convicted” (at 594), in any event.  Again, this case is one concerned with the failure to conduct a voir dire and is of no help in relation to the present issue.

[22]     Ms Bicknell referred to R v K [1995] 2 NZLR 440 (HC), a decision of Hammond J. The decision concerned an application to transfer a trial from the District Court to the High Court, so that there could be a single trial in relation to alleged offences against two complainants. The intended indictment included charges of sexual violation by rape in relation to both complainants. One ground of opposition to the transfer was that, if granted, the appellant would be compelled at trial to give evidence in relation to the rape charges pertaining to the first complainant, because he had not been interviewed in relation to the question of consent or belief in consent with reference to her allegations. Although it is not expressly stated in the judgment, we infer that the interview pertaining to the second complainant did extend to the issues of consent and belief therein.

[23]     Hammond J held that neither in fact, nor in law, did the transfer infringe the accused’s right not to be compelled to be a witness.  When interviewed with reference to the first complainant’s allegations the accused denied that intercourse had occurred.  Hence, Hammond J found, there was no point in the interviewing officer broaching the issue of consent.  It followed that as a matter of fact there had been no failure to conduct an adequate interview, which placed the right guaranteed by s 25(d) at risk.

[24]     More importantly for present purposes Hammond J also concluded that as a matter of law a failure to interview did not entail a breach of the right.  At 445 he said:

It seems to me that if the Crown considers that it has sufficient evidence on which to prefer charges without in any way approaching the accused, then it must be entitled so to proceed.

The Judge then discussed what he termed the “common practice” that ordinarily accused were interviewed and the interview then relayed to the jury, albeit its contents were frequently exculpatory and therefore technically hearsay.  Returning to the s 25(d) argument at 447 the Judge added:

To suggest therefore that the police are bound to interview an accused, and moreover, I think it would follow on Mr Wilson’s argument, to put all the potential charges revealed by the statements that the police hold to an accused so that that statement goes into the trial, would I think, be a radical change in our law.  And, it would be one which would impose a severe investigatory burden on the police.

[25]     We are in general agreement with these observations.  Section 25 is directed to minimum standards of criminal procedure.  The right not to be compelled to be a witness (or to confess guilt) is a fundamental component of a fair trial.  But the contention that the failure to interview a suspect at all, or not to interview him comprehensively, infringes his fair trial rights is misplaced.  Thereby an accused is not compelled to give evidence.  To the contrary, he is under no such compulsion and the jury is told as much.  The argument confuses the rights which arise at the investigatory phase pursuant to ss 21-23, and the rights guaranteed pursuant to ss 24-27 which govern the post-charge phase.

[26]     That said, we do not deprecate the general value of police interviews.  In many cases it may be imprudent to proceed to charge someone without first extending to them an opportunity for explanation.  Not the least this will be an important consideration where a prosecution fails and it is demonstrated that an interview would have brought forth an explanation, or exposed avenues of inquiry, which would have placed a different complexion upon matters.  Where this occurs a failure to interview, or to interview adequately, may be very relevant to the discretion whether to award costs in favour of the accused.  But these considerations do not arise in the present case.

Did the trial Judge err in not discharging the jury?

[27]     This question arose on the seventh day of the trial.  The jury had been provided with various written materials.  In error, three letters (exhibits 76, 77 and 78) which were sent to the accused and two other persons on 12 July 2006 were included in the jury book.  The letters were from the Ministry of Economic Development and warned the recipients that they were prohibited from being involved in management or from acting as a director of a company for a five year period.  In the case of the appellant exhibit 78 stated:

You are aware of the extent of your criminal convictions, which includes two dishonesty convictions under the Crimes Act 1961 on 25 October 2002 and 23 November 2002, respectively.

On the afternoon of day seven the three offending exhibits were removed from the jury book.  An inquiry followed as to whether jurors had seen the offending exhibits.

[28]     The following day Judge Singh delivered an oral judgment in which he rejected defence counsel’s application to abort the trial.  The ruling included this:

[6]     After conference with Counsel, and with Counsel’s consent, I invited the entire jury to come into Court and inquired of each one of them individually as to whether they had seen the exhibits that have since been removed, and whether they had read it and know the contents of those three exhibits 76, 77 and 78.

[7]     Jurors JF, DR, JH, the foreperson, and GH stated that they had flicked through the exhibit documents but they did not read the exhibits other than those referred to during the course of the trial.  None of the three exhibits have been referred to in the trial.  Therefore they had not read the exhibits that are in issue.  Only one juror, CN, stated that she had read Exhibits 76, 77 and 78.  As a result of that initial inquiry the jury retired and after further conference with Counsel I invited the juror, CN, to come into Court.

[8]     During each one of these conferences with the jury the accused and all Counsel have been present.  CN, a very diligent juror, read the contents of Exhibits 76, 77 and 78 and was aware that the accused had previous convictions, and in particular she referred to his previous convictions as reason for his disqualification from being a director or a manager of a company.

[9]     When I inquired whether she had discussed it with others, she stated that she could not be sure but she did not think so.  In particular she stated that none of the remaining jurors had said that they had read the documents 76 to 78.  As far as she was aware she did not think she had told other jurors about the accused’s previous convictions.

[10]   From the time she stated that she was aware of Exhibits 76 to 78 I had kept her separate and apart from the rest of the jurors.  I thanked her for her duties and indicated to her that after further conference with Counsel I would be discharging her, because she was aware of the accused’s previous convictions, and that those documents were not meant to be on the file for the jury.  I clearly advised her that it was no fault of hers that she had read those documents and that it was through inadvertence that those documents had been placed on the file.

[11]   After CN retired I spoke to Counsel again.  Mr Meyrick confirmed that his application to have the trial declared a mistrial stands.  Out of abundance of caution I record that the remaining 11 jurors, I spoke to each one of them individually and again collectively confirmed as follows:

(i)Seven had not flicked through or seen the documents 76 to 78, four had flicked through the documents in the exhibit book but none of them had read any of the three exhibits 76 to 78.

(ii)Each one of the 11 jurors confirmed that CN did not discuss the documents with the remaining jurors.

(iii)All 11 jurors confirmed that they were not aware of what is in the documents 76 to 78.

[12]   In addition to knowing that none of the 11 jurors are aware of what is in documents 76 to 78, I note as follows.  The evidence before the jury is that the accused is disqualified from being a director of a company and is excluded from the management of a company.  Defence accepts that the accused is disqualified from being a director and excluded from the management of a company.  Implicit in that, of course, is that the accused must have done something that disqualified him from being a director and from being excluded from the management of a company. 

(In the ruling the jurors were referred to by name, whereas we had substituted initials).

The Judge then expressed himself satisfied that the 11 remaining jurors were unaware of the contents of exhibits 76 – 78 and that they were not in any way compromised.  The trial continued with 11 jurors.

[29]     The trial occupied a further nine days.  The Judge did not refer to the jury book mishap in the course of his summing-up.  No complaint is made as to its content.  It included a standard direction as to the requirement that the jury reach verdicts solely on the basis of the evidence, including the exhibits.

[30]     At least in emphasis Mr Meyrick’s submission on appeal was different to the argument he advanced before the trial Judge.  At that time the emphasis was upon whether jurors had actual knowledge of the three exhibits.  This consideration was treated as essentially determinative of the outcome of the mistrial application.

[31]     Before us, however, counsel submitted that even if the remaining jurors were not aware of the content of the offending exhibits there remained an unacceptable risk of prejudice.  The written argument included this:

… it was impossible for the jurors not to have been alerted to the fact that some inadmissible but very damaging documents were inadvertently included in the exhibit folder.  The jurors must have realised those documents were so damaging in content that knowledge of them saw the automatic discharge of the juror who was aware of that content.  That in itself must have been highly prejudicial.

Mr Meyrick urged us to the view that, regardless that the trial Judge’s questions to the jurors were “carefully worded”, the very process to which they were each exposed was such as to highlight that the appellant had been involved in some serious impropriety and required that a mistrial be ordered.

[32]     We note that the Companies Act counts were so framed as to include reference to the need for the appellant to obtain leave of the Court before he took part in the management or acted as a director of a company within five years after his prohibition.  In summing-up Judge Singh told the jury that the prohibition was “common ground”, since the accused accepted this fact.  His directions were then focused upon the concepts of management and acting as a director.

[33]     The test to be applied is settled.  In R v McLean [2001] 3 NZLR 794 (CA) Richardson P said at [14]:

… [T]he trial Judge has a discretion to discharge the jury.  Whether it will be proper to do so depends on the facts of the particular case.  If the jury is not discharged, whether to give a direction and, if so, what direction in relation to the objectionable passage in the evidence, similarly depends on the facts of the particular case.  If the trial proceeds and the accused is convicted the ultimate question on appeal is whether a substantial miscarriage of justice occurred.

[34]     Ms Bicknell submitted that the trial Judge exercised his discretion in a careful and appropriate manner.  Due inquiry was made of the jurors, with the result that the one juror who had knowledge of the previous convictions was discharged.  Counsel submitted that thereafter no real possibility of prejudice to the accused remained.

[35]     We are satisfied that the process followed and the conclusion reached at trial do not give rise to the possibility of a miscarriage.  We accept the submission that the trial Judge carefully explored which jurors had knowledge of the contents of the relevant exhibits.  The jurors were effectively polled in relation to this aspect, and the single juror who had read and absorbed the offending information was questioned, in isolation, in order to ensure that she had not passed on her knowledge to others.

[36]     It follows that the real question is as Mr Meyrick put it, whether the process was such as to inevitably invite speculation to the point where the only safe course was to discharge the jury as a whole. 

[37]     We think not.  In the first place, of necessity the jury had to be told that the Companies Act counts required proof of a prohibition.  There was no escape from this.  Secondly, the issue was considerably defused by the manner in which the Judge dealt with it in summing-up.  The fact of a prohibition was mentioned and then the jury’s attention was directed to the real issues which they had to confront and determine. 

[38]     Finally and most importantly, we note the delay between the emergence of this problem and the deliberative phase of the trial.  Several days had elapsed between the two.  By the time the jury commenced its deliberations it had heard evidence which occupies over 600 pages from a large number of witnesses, followed by closing arguments and a careful summing-up.  Against this background we consider that the discipline of the trial process is not to be underestimated.  It is a process designed to focus the attention of jurors upon the real issues in the case.  It is a process designed to remove the potential for the jury to be distracted by matters which are not evidence, or by emotional prejudicial considerations.

Conclusion

[39]     Save for the quashing of the conviction on count three, the appeal against conviction is dismissed.  Plainly this could have no impact on the sentence which was imposed in relation to the multiple offences.

Solicitors:
Berman & Burton, Auckland for Appellant
Crown Law Office, Wellington