Westpac New Zealand Limited v Anderson
[2019] NZHC 979
•7 May 2019
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2016-409-000373
[2019] NZHC 979
BETWEEN WESTPAC NEW ZEALAND LIMITED
Plaintiff
AND
PATRICIA KARENIA ANDERSON
Defendant
Hearing: 15 April 2019 Appearances:
B Stewart QC, J Goodall and R Smedley for Plaintiff
G M Brodie, S M Grieve and A N Riches for Defendant
Judgment:
7 May 2019
Reissued:
17 October 2019
JUDGMENT OF VENNING J
This judgment was delivered by me on 7 May 2019 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: Anthony Harper, Christchurch
Saunders & Co, Christchurch
Counsel: R B Stewart QC/J K Goodall, Auckland
G M Brodie/S M Grieve, Christchurch
Copy to: Defendant
WESTPAC NEW ZEALAND LIMITED v ANDERSON [2019] NZHC 979 [7 May 2019]
Introduction
[1] In the mid-2000s Patricia Anderson and her husband Ken Anderson were directors and shareholders in companies within the Lane Walker Rudkin Industries (LWRI) Group. The companies failed and were placed in receivership in April 2009.
[2] Following an investigation into the failure by the Serious Fraud Office Mr and Mrs Anderson were both prosecuted. Mr Anderson was convicted on several counts and sentenced to imprisonment for six years. [REDACTED].
[3] The receivers appointed to LWRI had, in the meantime, brought a civil proceeding against Mr and Mrs Anderson. Mrs Anderson settled that claim at a mediation on 7 February 2014.
[4] Westpac New Zealand Limited (Westpac) issued these proceedings on 18 May 2016. Westpac alleges deceit and conspiracy to defraud by Mrs Anderson in relation to the use of a Letter of Credit (LOC) facility by LWRI between 2005 and 2007.
[5] Mrs Anderson applied to have a preliminary question determined. There has been some debate between the parties as to the scope of the question to be determined. The preliminary question is:
Whether Westpac is precluded from pursuing its claims in these proceedings on the basis:
(a)the previous proceedings gave rise to an issue estoppel, or
(b)these proceedings are an abuse of process.
Background
[6] Until June 2006 Mrs Anderson was, together with her then husband Ken Anderson, a director of LWRI, a holding company which held shares of operational subsidiaries within the Lane Walker Rudkin Group. LWRI was a hundred per cent owned by Stirling Corporation Ltd (Stirling). Mr and Mrs Anderson were shareholders and directors of Stirling.
[7] Mr and Mrs Anderson were also directors of Florian Leather Goods Ltd (Florian) a company owned by Stirling and operated by Mrs Anderson. Florian imported, manufactured, wholesaled, and retailed leather goods, hosiery and underwear, sports apparel, jewellery, scarves and accessories.
[8] Mr and Mrs Anderson separated in May 2005. Following the completion of a relationship property agreement in June 2006 Mr Anderson became the sole shareholder in Stirling and Mrs Anderson became the sole shareholder in Florian.
[9] At all material times Westpac provided LWRI and LWR Properties Ltd with banking facilities. The facilities were supported by guarantees from Mr and Mrs Anderson. Following the settlement of relationship property issues Westpac released Mrs Anderson from her guarantees in July 2006.
The LOC facilities
[10] Florian had a trade finance facility with the Bank of New Zealand (BNZ). The facility was secured against the assets of Florian and was personally guaranteed by Mrs Anderson. Between 22 December 2005 and 14 September 2007 two LWRI subsidiaries – LWR Manufacturing Ltd and LWR Sports Ltd – applied for eight LOCs in favour of Florian to be issued by Westpac. In the case of each LOC, on receipt of an order from a LWRI subsidiary Florian issued an invoice addressed to the LWRI subsidiary which then applied for the LOC.
[11] When each LOC was issued, LWR Manufacturing Ltd on behalf of Florian presented to the BNZ documents called for under the LOC along with the Trade Finance Facility drawing request signed by Mr and Mrs Anderson. The bank accepted the LOC as security with recourse and advanced the face value thereof to Florian.
[12] Florian then advanced the corresponding sum of money to LWRI or a subsidiary of LWRI. The money was then used by the subsidiaries in the ordinary course of their business, which business included purchasing finished goods in the form of clothing from within New Zealand and from overseas.
[13] In each case Westpac paid the face value of the LOC to the BNZ on the due date for payment having simultaneously drawn that sum from the LWRI’s subsidiaries bank accounts.
[14] Westpac alleges that Mrs Anderson acted dishonestly in relation to the LOCs. Despite the invoices it had issued, Florian did not sell any stock to the LWRI subsidiaries. The invoices were for fictitious stock and were created to enable the funds to be drawn down.
The SFO prosecution
[15] The SFO laid [REDACTED] counts of fraud under s 228(b) of the Crimes Act 1961 against Mrs Anderson in relation to the use of the LOC facility.
[16] Each count alleged that Mrs Anderson, together with Ken Anderson, with intent to obtain a pecuniary advantage dishonestly and without claim of right used or attempted to use one or more documents supplied to BNZ and Westpac for the purpose of obtaining funds from Westpac under the LWRI documentary credit facility.
[17] The trial took place over four days during which Crown witnesses gave their evidence-in-chief and were cross-examined. During the afternoon of the fourth day and while David Sugden, the employed accountant for LWR Manufacturing Ltd was being cross-examined, the trial was adjourned to allow the prosecution and defence to engage in discussions.
[18] When the parties returned to Court the following day, counsel for Mrs Anderson, Mr Davis, advised the Judge that the parties had come to a sensible resolution of the matters before the Court. [REDACTED].
[19] The Crown offered no further evidence on the remaining seven counts. Mrs Anderson was discharged under s 347 of the Crimes Act 1961 in relation to them. [REDACTED].
Westpac’s case
[20] Westpac relies on the fraud and dishonesty causes of action to extend the usual six-year limitation period for discoverability. Westpac says that it could not reasonably have discovered the fraudulent use of the LOC facility until May 2010 when Mr Sugden was interviewed by the receivers’ staff.
Mrs Anderson’s submissions
[21] Mrs Anderson argues that the issue of whether she was guilty of fraud or dishonesty in relation to the LOCs has already been determined by the District Court. She says that the matters Westpac will be required to prove to make out its civil claim are the same as the prosecution was required to prove in the criminal case. She was discharged in relation to seven counts. The discharges are deemed to be acquittals. While Ms Grieve accepted there will usually be no issue estoppel where the civil proceeding follows a criminal prosecution because of the different standards of proof, the position is different where the allegations relate to fraud or dishonesty.
[22] In the alternative, Mrs Anderson submitted that if an issue estoppel did not apply, the Westpac proceedings were an abuse of process.
[23] Ms Grieve acknowledged certain difficulties with the issue estoppel argument but submitted that it did not matter how the matter was categorised. She referred to the following passage from the decision of Somers J in Gregoriadis v Commissioner of Inland Revenue:1
I am satisfied it would not be right to permit the Commissioner to seek to establish in proceedings in the High Court that the appellant wilfully made false returns of income when another Court has already finally determined that issue against him. Whether that be described as issue estoppel or the application of public policy in respect of an abuse of process may not be important. The aim in each case is finality of litigation and fair use of curial procedures.
[24] Ms Grieve also referred to the case of New Zealand Social Credit Political League Inc v O’Brien.2 In that case the Court of Appeal noted that the inherent
1 Gregoriadis v Commissioner of Inland Revenue [1986] 1 NZLR 110 (CA) at 118.
2 New Zealand Social Credit Political League Inc v O’Brien [1984] 1 NZLR 84 (CA).
jurisdiction to strike out a statement of claim as an abuse of process is one which the Court may come under a duty to exercise.3 She noted that this was the third time Mrs Anderson had been required to respond to allegations of fraud arising from the use of the LOCs.
Discussion
[25] Mrs Anderson’s argument that Westpac is estopped from pursuing these proceedings relies on the principle of res judicata. Res judicata applies where a final judicial decision has been pronounced by a New Zealand Court on a matter the subject of the litigation. Any party or privy to the litigation is estopped, in subsequent litigation, from disputing or questioning the merits of the decision on the subject matter as against any other party or privy.4 The justifications for the rule are well known. As Lord Blackburn stated in Lockyer v Ferryman:5
The object of the rule of res judicata is always put upon two grounds – the one public policy, that it is in the interest of the State that there should be an end of litigation, and the other, the hardship on the individual, that he should be vexed twice for the same cause.
[26] There are different types of res judicata. Mrs Anderson’s argument is based on issue estoppel. She argues that the essential matters in issue in Westpac’s claim have been finally determined by her acquittal before the District Court.
[27]To establish an issue estoppel the following factors are required:6
·a final judgment;
·between the same parties and/or their privies;
·litigating in the same capacity;
·on the same pleaded issue;
3 At 89.
4 Shiels v Blakely [1986] 2 NZLR 262 (CA) at 266.
5 Lockyer v Ferryman (1877) 2 App Cas 519 at 530.
6 See for example Victoria Street Apartments Ltd (in liq) v Sharma HC Auckland CIV-2009-404- 8377, 14 October 2011 at [15].
[28] The discharges in relation to the seven counts are deemed acquittals. They are final decisions of the District Court. However, the starting point as to the effect of a criminal prosecution in terms of estoppel is as stated by the Court of Appeal in Daniels v Thompson:7
It has never been the law that a criminal prosecution will bar civil proceedings based on the same facts which gave rise to the prosecution.
[29] Ms Grieve sought to overcome the difficulty posed by that statement by reliance on the case of Gregoriadis.8 Mr Gregoriadis had been prosecuted for filing false tax returns and was initially convicted. His conviction was set aside on appeal because the Judge ruled the conviction had been based on inadmissible secondary evidence as to bank and other financial records fundamental to the preparation of the Commissioner’s (CIR’s) accretion assessment.
[30] The Commissioner also assessed Mr Gregoriadis as being liable for penal tax for filing false returns. The returns in issue were the same returns the subject of the criminal proceedings. Mr Gregoriadis successfully argued the CIR was estopped from claiming the civil penal tax due to his acquittal in the criminal proceedings. The Court of Appeal found that the CIR’s attempt to introduce evidence designed to establish that the returns were false challenged the finding that had been made against him in the prosecution proceedings. There was no reason why estoppel per rem judicatum should not be available. The critical factor was whether the tax returns were false. That had been finally decided in the criminal prosecution against the CIR.
[31] Ms Grieve submitted that the substance of the allegations against Mrs Anderson in both the SFO prosecution and in Westpac’s claim were the same, as in the Gregoriadis case. The issue is not whether the documents relied on to obtain the funds through the LOC facility were false but whether Mrs Anderson knew that the use of the LOC facility in this way and therefore the use of the documents was dishonest. The evidence and witnesses Westpac will rely on to prove its case will effectively be the same. There will be a significant overlap in the number of witnesses and their documents. While the standard of proof might be different in civil
7 Daniels v Thompson [1998] 3 NZLR 22 (CA) at 33.
8 Gregoriadis v Commissioner of Inland Revenue [1986] 1 NZLR 110 (CA).
proceedings, where the standard is grounded on fraud the standard is “flexibly applied” and may approximate the standard of proof required in criminal cases.9 In Gregoriadis the Court considered that the standard of proof in the civil proceedings would be “sufficiently proximate to the criminal persuasion” to render the technical differences not material.
[32] The argument, at least in relation to reliance on the approximation of the standards of proof may not have the same force given the clear statements in Z v Dental Complaints Assessment Committee that there are only two standards of proof in New Zealand.10 There is no intermediate standard of proof between criminal and civil proceedings.11 It is however, unnecessary to consider that issue in any detail, as the Gregoriadis case on which Mrs Anderson’s case primarily relies can be distinguished on two fundamental grounds.
[33] First, there is no identity of parties. In Gregoriadis, the prosecuting authority and the claimant were the same, the Commissioner of Inland Revenue.
[34] Ms Grieve submitted in her written submissions that, while the parties here are different, they were effectively privies in that Westpac could be said to be claiming through the prosecuting authority. Ms Grieve submitted that, while the Crown brought the prosecution on behalf of the public in the wider interest of administering justice and preventing criminal behaviour it also represented the interests of Westpac as the organisation directly affected by the alleged offending. Westpac had sought (but not been granted) reparation at sentencing. Westpac was the victim and its interests were represented by both the SFO and the Crown in bringing the prosecution. Westpac’s interests in the prosecution were entirely aligned with the Crown’s and did not extend beyond those which the Crown represented. Ms Grieve submitted that in those circumstances there was a sufficient community or mutuality of interest between Westpac and the Crown in bringing the prosecution, as referred to and applied in Shiels v Blakely, for them to be considered privies in interest.12
9 Maxwell v CIR [1962] NZLR 683 at 703.
10 Z v Dental Complaints Assessment Committee [2009] 1 NZLR 1, [2008] NZSC 55 at [26].
11 At [102].
12 Shiels v Blakely [1986] 2 NZLR 262 (CA) at 268.
[35] Westpac was not the complainant in the criminal proceedings. Even if it had been, there would still be a lack of privity between it and the Crown represented by the SFO in the District Court prosecution. Westpac had no derivative interest in the prosecution. Unlike in Shiels, where the plaintiff who was estopped from bringing a new proceeding was a member of the union that had brought the original proceeding, and whose interests in pursuing the proceedings were identical, the required mutuality of interest between Westpac and the Crown is not present.13 The purposes of a criminal prosecution and a civil action are quite different. In bringing a prosecution the Crown represents the public interest. Westpac’s interest is entirely private. Westpac does not have the required degree of identity with the Crown.
[36] Nor is it relevant that Westpac sought a reparation order. No reparation was ordered. But even if a reparation order had been made in its favour it would not have prevented Westpac from pursuing civil proceedings for damages to make up the shortfall between the amount recovered by way of reparation and its loss.14
[37] The Gregoriadis decision can also be distinguished on the basis that the civil proceedings were effectively penal in nature. The CIR sought penalty tax assessments. Such proceedings are of a quite different nature to the compensatory nature of the relief sought by Westpac in the current proceedings.
[38] Again, in the circumstances, it is strictly unnecessary to deal with the issue of whether the discharges were a final determination of the issue for the purposes of the issue estoppel point. There can be no issue estoppel arising from the criminal proceedings. There was no final judgment between the same parties or their privies.
The receivers’ proceedings
[39] For the above reasons and an additional one, there can be no issue estoppel arising from the receivers’ proceedings. The receivers issued the proceedings in the name of the company, LWRI. LWRI was not the privy of Westpac. Further, there was
13 At 269.
14 Sentencing Act 2002, s 38(2).
no final judgment. The proceedings were settled at mediation. Issue estoppel does not arise.
Abuse of process
[40] That leaves the abuse of process point. During her oral submissions Ms Grieve conceded there were issues for Mrs Anderson with the issue estoppel argument. She placed more emphasis on the abuse of process argument.
[41] A leading case in relation to abuse of process is the case of Hunter v Chief Constable of the West Midlands Police.15 Mr Hunter had been convicted of murder as one of Birmingham bombers. During his murder trial he had challenged the admissibility of an oral statement he had made to the police. He alleged his statement had been made under duress because of violence and threats of violence by the police. After a voir dire during the criminal trial the judge rejected Mr Hunter’s evidence and ruled the statement admissible. The conviction was upheld on appeal. Subsequently Mr Hunter sought to pursue civil proceedings against the police force alleging he had been assaulted while in police custody for questioning. The House of Lords unanimously upheld the decision to dismiss his civil proceeding as an abuse of process. Their Lordships described the proceedings as constituting “the mounting of a collateral attack upon a final decision … made by another court of competent jurisdiction…”.16 To allow the proceedings to continue would bring the administration of justice into disrepute among right-thinking people.17
[42] Ms Grieve submitted that following Hunter the Courts of New Zealand have been less prescriptive about which of the two, abuse of process or issue estoppel, should apply to uphold the principles at play which are:
(a)the public interest in the finality of litigation;
(b)the protection of individuals from repeated suits of the same cause; and
15 Hunter v Chief Constable of the West Midlands Police [1982] AC 529, [1981] 3 All ER 727.
16 At 541.
17 At 536.
(c)the integrity of the justice system – to ensure there are no collateral attacks on judicial determinations and to ensure that crimes are determined by the criminal process.
[43] The Court of Appeal discussed the relevant principles that arose where civil proceedings followed a criminal process in the case of Daniels v Thompson.18 The issue was whether the Court should permit claims for exemplary damages for allegedly criminal conduct where that matter had been determined by a criminal court. The Court declined to permit the claims for exemplary damages. If there had been a conviction, the defendant would already have been punished and should not be punished again by an award of exemplary damages against him.19 Where the defendant had been acquitted it would be undesirable to allow what was substantially the same issue to be relitigated for the sole purpose of extracting a punishment for the action.20
[44] More recently the issue of abuse of process was considered by the Supreme Court in Z v Dental Complaints Assessment Committee.21 Z had been acquitted on charges of indecently assaulting three patients, two of whom had been sedated before the alleged assault. The three patients together with another, who had not been a complainant in the criminal trial, then referred the matter to the Dental Council. Z was prosecuted by the disciplinary body. Elias CJ, citing Lord Bingham in the House of Lords decision of Johnson v Gore Wood & Co (a firm),22 noted that what constitutes abuse of process in this context requires a “broad, merits-based judgment in context”.23
[45] The majority held there was no abuse of process in respect of all but one of the charges because the scope of the disciplinary matters was wider than that of the criminal proceeding.
[46] Two points arise for consideration from the reasoning in the cases of Hunter v Chief Constable of the West Midlands Police, Daniels v Thompson and Z v Dental
18 Daniels v Thompson [1988] 3 NZLR 22 (CA).
19 At 47-48.
20 At 51.
21 Dental Complaints Assessment Committee [2009] 1 NZLR 1, [2008] NZSC 55.
22 Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1 at 31.
23 At [2].
Complaints Assessment Committee. First, whether substantially the same issue that was before the District Court is raised by Westpac’s proceedings and secondly, the relevance of the fact Westpac’s claim is for compensation rather than exemplary damages.
[47] The Crown was required to prove the following elements beyond reasonable doubt in its prosecution:24
(a)Mrs Anderson used a document;
(b)that she did so dishonestly without a belief there was consent to or authority for using the document in that way; and
(c)she did so without claim of right; and
(d)she did so with intent to obtain a pecuniary advantage or valuable consideration.
[48] In Amaltal Group Ltd v Maruha Corp the Court of Appeal confirmed the tort of deceit involves:25
(a)a false representation as to a past or existing fact;
(b)known to be untrue or without belief in its truth or being reckless as to its truth;
(c)with an intention that the claimant should act on the representation; and
(d)action by the claimant in reliance on the representation which leads to loss.
[49] Ms Grieve submitted that the core issue in both proceedings was the same. It was not whether the documents relied on to obtain the funds through the LOC were
24 Crimes Act 1961, s 228.
25 Amaltal Group Ltd v Maruha Corp [2007] 1 NZLR 608 (CA) at [46]–[50].
false, but whether Mrs Anderson knew that the use of the LOC in this way and therefore the use of the documents was dishonest. She argued that the unsuccessful criminal prosecution brought against Mrs Anderson traversed all the available evidence about the use of the LOC facility and was unsuccessful in establishing the key ingredient of dishonesty on her part.
[50] In his submissions on the facts, Mr Brodie emphasised the nature of the LOCs. The whole process involving the LOCs was document based not goods based. He submitted it was irrelevant to the banks whether goods were supplied by Florian or not. He noted the invoices generated by Florian referred in very general terms to goods. No attempt had been made to clarify what those goods were or to seek further information.
[51] With respect to that submission, it rather overlooks the significant point that the banks involved in the transactions relied on the documents. The banks relied on the invoices which on their face stated that Florian was to supply goods to the LWRI subsidiaries when that was not the case.
[52] There was a significant degree of overlap between the elements of the offence in the criminal proceedings and the elements of the torts Westpac relies on in its civil proceedings. Mrs Anderson clearly used a document. She did so to use the facility to obtain finance from the banks. But the principal argument for Mrs Anderson in defence of the criminal prosecution was the claim of right defence. In his opening address Mr Davis split the charges into two groups, counts 1–4 and 5–8. For counts 1–4 he told the judge the defence was, monies were advanced, and goods were bought. For counts 5–8 he submitted that Mrs Anderson had been effectively removed from the business and simply signed what was put in front of her. Again, she signed off believing that goods would be bought. In both cases the argument was that Mrs Anderson believed she was entitled to act in the way she did.
[53] The claim of right defence was available if Mrs Anderson believed, at the time of her act, she had a proprietary or possessory right in the property in relation to which the offence was alleged to have been committed.26 Her belief need not have been
26 Crimes Act 1961, s 2(1) claim of right.
reasonable, but it had to be genuine.27 It could be based on ignorance or mistake of fact.28
[54] Mrs Anderson places some reliance on the comments of the District Court Judge in sentencing and the evidence of Mr Davis regarding the Crown’s decision not to continue its case against Mrs Anderson.29
[55] The Judge observed that Mrs Anderson was aware of how the facility had been operated, but she then went on to suggest “[y]ou were not aware as to perhaps the illegality in relation to how both your husband, your son had organised that facility, but also how Mr Sugden was operating [it]”.30 Those general and tentative suggestions in the sentencing notes fall well short of any reasoned decision by the District Court determining Mrs Anderson’s guilt or innocence.
[56] Mr Davis’ evidence was that while he was cross-examining Mr Sugden the Crown prosecutor, Mr Stanaway, approached him to seek a resolution of the proceeding. Mr Davis also said that the Judge expressed the view on the evidence as presented that the prosecution could not succeed. However, Mr Davis accepted that he did not have transcripts available when he prepared his affidavit. He also accepted that, while he believed the Judge had formed a view that Mr Sugden was not coming up to the mark and made a comment to that effect which was a catalyst for the discussion with the Crown, the comment was not recorded anywhere in the notes of evidence.
[57] Given that goods were ultimately sourced by the LWRI entities using the funding obtained through the LOCs, it is understandable why the Crown could have reached the conclusion it might not have been able to disprove Mrs Anderson believed she was able to act in the way she did. But all of that is of limited assistance to Mrs Anderson in the civil proceedings. The claim of right defence is not a defence available to Westpac’s civil claim.
27 Jardine v R [2016] NZCA 371 at [34].
28 Crimes Act 1961, s 2(1) claim of right.
29 R v Anderson DC Christchurch CRI-2011-009-7510, 25 November 2013.
30 At [2].
[58] The House of Lords decision of Derry v Peek establishes that, for the purposes of the tort of deceit, the focus is on the representation made by the defendant. 31 The focus in Westpac’s case against Mrs Anderson will be on whether Mrs Anderson had an honest belief in the truth of the representation, not whether she believed she was entitled to use the facility that way. Applying the ruling from Derry, Westpac will have to establish that Mrs Anderson knowingly made a false representation, or made the representation without belief in its truth, or recklessly (being careless whether it was true or false).32
[59] Westpac also relies, in the alternative, on an unlawful means conspiracy. That is based on an agreement between Mrs Anderson, her husband and son, to obtain money from Westpac, knowing it would not be used for the purchase of stock. The unlawful means was the false representations in the Florian invoices. Again, the colour of right defence is no defence to such a claim.
[60] Next, unlike the case of Z v Dental Complaints Assessment Committee, the discharges under s 347 of the Crimes Act 1961 were based on a practical plea bargain made during the trial. While the discharges are deemed acquittals, they are not the same as a finding of not guilty following trial.33
[61] While there will be a significant overlap in terms of the evidence to be covered, for the above reasons I do not consider the same determinative issue arises in Westpac’s proceedings as arose in the criminal proceedings.
[62] At this point it is convenient to review the action brought by receivers against Mr and Mrs Anderson as directors. The claim pursued by the receivers as agents of and in the name of LWRI raised four causes of action:
(a)money had and received in relation to the sum of $743,081;
(b)knowing receipt in relation to the sum of $743,081;
31 Derry v Peek (1889) 14 App Cas 337.
32 At 356.
33 R v Grime [1985] 2 NZLR 265 (CA) at 269.
(c)money had and received in relation to the sum of $200,530; and
(d)knowing receipt in relation to the sum of $200,530.
[63] While part of the pleading involved allegations that Mr and Mrs Anderson managed the business of the plaintiff recklessly and fraudulently, including obtaining several sums from Westpac in relation to four of the impugned transactions, the causes of action were directed at recovering money received into personal bank accounts from the account of Lane Walker Rudkin. As noted, the receivers’ proceedings were resolved by mediation. The scope of the receivers’ proceeding was quite different to the claim pursued by Westpac.
[64] The second and perhaps more determinative point is that, unlike the case of Daniels v Thompson, Westpac’s claim is for compensatory, not exemplary damages, and unlike Z v Dental Complaints Assessment Committee it is a civil as opposed to a disciplinary process.
[65] The starting point is that a criminal prosecution will not bar civil proceedings based on the same facts.34 In Daniels v Thompson the Court recorded that the position in relation to compensatory damages was very different to the claims before it which were for exemplary damages. The Court made the point that, unlike other civil proceedings which aim to compensate the victim of a wrong, (an aim which is entirely independent and separate from the criminal law aim to punish the offender), exemplary damages fulfil broadly the same punitive purpose as criminal sanctions.35 It was for that reason the claims were an abuse of process.
[66] While in Gregoriadis v Commissioner of Inland Revenue the Court suggested that it did not matter whether the matter was approached as an issue estoppel or abuse of process in that case again the relief sought was not compensatory. The relief pursued was penalty assessments of tax.
34 Daniels v Thompson [1998] 3 NZLR 22 (CA) at 33.
35 At 51.
[67] Unlike Hunter v Chief Constable of the West Midlands Police, Westpac’s proceedings cannot be characterised as an abuse of process, as Westpac’s clear motives for bringing the proceeding are not to collaterally attack the District Court granting of the s 347 application. There can be no abuse of process where an important element of Westpac’s claim has not been determined against it in the previous criminal proceedings. Indeed, on one view of it, the element of Mrs Anderson’s knowledge of the falsity of the invoices (at least in relation to counts 1–4) might have been determined as a concession against her interest. All that goes to show is that an acquittal in these circumstances (let alone a discharge) is not an acquittal on each element of the offending.
[68] In the circumstances of this case, and applying the broad-based approach suggested in Johnson v Gore Wood & Co (a firm), it cannot be said that Westpac is abusing the process of the Court to pursue its civil claim against Mrs Anderson.36 The purpose of Westpac’s claim is fundamentally different to the purposes served by the criminal proceeding.
Result
[69] The preliminary question is answered as follows. The previous proceedings do not give rise to an issue estoppel. Westpac’s proceedings are not an abuse of process.
Costs
[70] Westpac is entitled to costs. Costs to scale 2 band B would be appropriate. I certify for second counsel.
Venning J
36 Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1 at 31.
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