The Solicitor-General of New Zealand v Hutton HC Dunedin CIV 2004-412-000446

[2008] NZHC 2613

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV 2004-412-000446

BETWEEN  THE SOLICITOR-GENERAL OF NEW ZEALAND

Applicant

ANDHARVEY ANDREW HUTTON Respondent

Hearing:         (On papers) Judgment:  7 October 2008

COSTS JUDGMENT OF FOGARTY J

[1]      By judgment dated 31 May 2007 this Court dismissed an application for a restraining order over a helicopter owned by the Hutton Nolan Family Trust.   By judgment in the District Court on 15 January 2007 Judge J E Macdonald dismissed an application by the Crown for forfeiture of the helicopter.   There had been an interim restraining order prior to the decision of the District Court.  On 5 February the Solicitor-General made an application to the Court of Appeal for leave to appeal that decision.

[2] Pending consideration of that appeal the Solicitor-General then sought a restraining order under Part IV of the Proceeds of Crime Act 1991 from the High Court.

[3]      As the judgment of 31 May discusses an earlier decision of this Court in Solicitor-General v Sanders HC Tim M31/94 2 December 1994 Tipping J, declined to make a forfeiture order pending the determination of such an appeal.  There has

always been a gap in the statute known since then.

THE SOLICITOR-GENERAL OF NEW ZEALAND V HUTTON HC DUN CIV 2004-412-000446  7 October

2008

[4]      The Crown submissions call this gap “the loop hole” (which I note is a conclusion suggesting a deficiency in legislation not known to the legislature at the time  it  was  enacted)  was  “relatively  untested”.    I  do  not  agree.    In  fact,  the proposition should be put the other way round.

[5]      Nonetheless, because of the value of the helicopter of $800,000 its owners, the trustees of the Hutton Nolan Family Trust, engaged a solicitor who in turn engaged Queen’s Counsel, Mr Withnall, to argue the case against the application.

[6] The trustees now apply for costs relying on s 88 of the Proceeds of Crime Act

1991 which provides:

88     Costs

Where—

(a)      A person brings or appears in proceedings under this Act in order—

(i)     To prevent a forfeiture order or restraining order being made against property of the person; or

(ii)    To  have  property  of  the  person  excluded  from  a forfeiture order or restraining order; and

(b)    The person is successful in the proceedings; and

(c)     The Court is satisfied that the person was not involved in the commission of the offence in respect of which the order was sought or made,—

the Court may order the Crown to pay all the costs incurred by the person in connection with the proceedings or such part of those costs as the Court thinks fit.

[7]      Mr Withnall submits that the statutory policy underlying the section is to provide for compensation for property owners who are not involved in any wrongdoing for legal costs incurred by them in protecting their rights and interests. In such a situation the presumption is that such persons should receive a full indemnity for  such  costs  unless  there  are  reasons  why a  lesser  sum  should  be awarded.

[8]      He seeks solicitor’s costs of $2,496 together with counsel fee including GST

of $9,562.50, a total of $12,902.25.  Those fees are fair and reasonable.

[9]      The Crown concedes that half of this amount should be awarded but submits that making a greater payment would be effectively making a payment to the respondent, Harvey Andrew Hutton, who has been convicted of the offences in respect of which the order is sought, and his de facto partner.

[10]     Mr  Withnall  disputes  that.     He  points  out  that  there  are  no  vested beneficiaries to the trust.   In any event the practical consequences that the money paid under an order for a complete indemnity would simply go to reimbursing or paying, as the case may be, the legal costs.  There is no profit in this litigation to the respondent, Harvey Andrew Hutton, or his de facto partner.  There is no merit in the Crown’s point in that regard.

[11]     The application for costs succeeds.  The Crown will pay to the trustees of the

Hutton Nolan Family Trust the sum of $12,902.25.

Solicitors:

Raymond Donnelly & Co, Christchurch, for Applicant

Checketts McKay, Alexandra, for Respondent