IN THE COURT OF APPEAL OF NEW ZEALAND CA322/03

THE QUEEN

v

DONALD HUGH SIMCOCK

JUDGMENT OF THE COURT DELIVERED BY WILLIAM YOUNG J

Introduction
 

[1]     The appellant stood trial in the District Court at Auckland on five counts laid under s229A of the Crimes Act 1961 alleging the use of documents with intent to defraud.  He elected to be tried by a Judge alone.  The trial Judge (Judge Nicola Mathers) convicted the appellant of three counts (counts 1, 2 and 3 in the indictment) and acquitted him on the other two counts.  She subsequently sentenced him to community service.

[2]     The appellant appeals against conviction and the Solicitor-General seeks leave to appeal against sentence.

[3]     This judgment addresses only the challenge by the appellant to his convictions on counts 1, 2 and 3.

 
Background facts
 

The appellant
 

[4]     The appellant is, by training, a solicitor.  As well as a Bachelor of Laws degree from the University of Auckland, he has two postgraduate degrees in law, a Masters degree from Victoria University of Wellington and a doctorate from Harvard University.

[5]     He has worked for the Inland Revenue Department where he was head of the Legal Division.  Between 1981 and 1991 he was a partner in the national law firm, Bell Gully.

[6]     He left that firm in 1991 to pursue various business interests.
 

The business entities primarily relevant to the case
 

[7]     In the early 1990s the appellant was associated with New Zealand Enterprise Board Ltd (“NZEB”).  This company was set up to promote investment opportunities.  The share capital of NZEB was held through New Zealand Enterprise Nominees Ltd (“NZENL”) on behalf of Mr Simcock and others, including a Mr Stephen Reidy who was to die before the appellant’s trial.  Also involved in the affairs of NZEB was the late Mr Graham Perkins (also to die before the appellant’s trial) who was the company secretary but not, as we understand it, a shareholder.  The appellant was the executive chairman of NZEB.

[8]     A subsidiary of NZEB, New Zealand Trade and Investment Corporation Ltd (“NZTICL”), managed what were known as New Zealand Development Trusts.  One of these Trusts was the Flat Rock Forest Trust (“Flat Rock”).  This was a unit trust formed in 1989 to acquire pine forestry holdings.  A public offering of units in this trust was made by prospectus issued in March 1993.

[9]     The trustee of Flat Rock was AMP Perpetual Trustee Company NZ Ltd (“AMP”).  The AMP officer primarily involved in the administration of Flat Rock was Mr Michael Goodchild.

[10]     New Zealand Forests Ltd (“NZFL”) was a subsidiary of NZEB and was used to enter into agreement to acquire assets, title to which was later taken by Flat Rock.  There seems to have been some flexibility in the way in which NZFL operated in that it was not necessarily acting as nominee for Flat Rock when it entered into these agreements.

[11]     Mr Oliver Gilbert, a Wellington solicitor, acted for NZEB and NZTICL.  To a very limited extent and in respects which were really incidental to his primary role as solicitor for NZEB and NZTICL, Mr Gilbert also acted for Flat Rock.  AMP, as trustee of Flat Rock, usually obtained independent advice from Rudd Watts & Stone.  Mr Gilbert had been a partner in Bell Gully at the same time as the appellant and both had retired from that partnership in 1991.  He was clearly closely associated with the appellant and his law firm operated in the same premises as NZEB.
 

Counts 2 and 3
 

[12]     Counts 2 and 3 in the indictment were associated with very similar transactions relating to the acquisition of two forests.  These transactions pre-dated the events giving rise to count 1 and it is convenient therefore to refer to them first.

[13]     On or about 14 October 1992 NZFL entered into an agreement with Fortex Group Ltd (“Fortex”) to acquire from Fortex the shares in Cattle Services Ltd.  The price to be paid was $520,000.  The only asset of Cattle Services Ltd was a forest known as the Rocky River Forest.  The contract was conditional and was duly confirmed on 26 November 1992.  Settlement was required on 24 December 1992 but was deferred.

[14]     Beginning in late December 1992 the appellant began putting in place a replacement agreement pursuant to which another company, South Pacific Resources Commodity Traders Ltd (“SPRCTL”) became the purchaser.  This agreement, although eventually entered into in January 1993 was backdated to 14 October 1992 - that is the same date as the original agreement.

[15]     SPRCTL was a company associated with Mr R B Smith, who was acquainted with the appellant.  SPRCTL had substantial tax losses.

[16]     When SPRCTL entered into the replacement agreement with Fortex, it had a back-up agreement in place with Flat Rock pursuant to which Flat Rock agreed to purchase the Rocky River Forest from SPRCTL.  SPRCTL was to acquire the forest on the liquidation of Cattle Services Ltd.  The purchase price for the sale on to Flat Rock was $640,000 of which $520,000 was due on possession date (ie when SPRCTL was to settle with Fortex) and the balance of $120,000 was to be paid on 15 March 1992.

[17]     The relevant transactions were duly settled.  So SPRCTL settled with Fortex on 9 February 1993 and Flat Rock settled with SPRCTL on 20 May 1993.  The result was that Flat Rock acquired the Rocky River Forest at a total cost of $640,000 leaving a “gross profit” on the transaction for SPRCTL of $120,000.  The mechanics by which these settlements were effected is reasonably complex but are not material for present purposes.

[18]     Count 3 related to a very similar series of events.

[19]     By agreement of 21 December 1992, NZFL agreed to buy the entire shareholding in Matauri Mara Ltd.  The purchase price was $1,150,000.  The only asset of Matauri Mara Ltd was the Matauri Mara Forest.  This agreement was due for settlement one month after it became unconditional.  This was on 19 March 1993.  So settlement on 19 April 1993 was required.

[20]     SPRCTL was then interposed into the transaction.  It entered into a purchase agreement with the shareholders of Matauri Mara Ltd which was backdated to 21 December 1992 (ie the date of the original agreement), and agreed to sell the forest (which it was to acquire on the liquidation of Matauri Mara Ltd) on to Clearwood Holdings Ltd, a nominee for Flat Rock, for $1,240,000.

[21]     The various transactions were duly settled.  So Flat Rock acquired, via its nominee, Clearwood Holdings Ltd, the Matauri Mara Forest for a total cost of $1,240,000 and this left a “gross profit” of $90,000 for SPRCTL.  Again, the mechanics were reasonably complex but there is no need, for the purposes of this judgment, to review the details.  It is sufficient to note that settlement with SPRCTL (ie the payment to it of $90,000) occurred on 20 May 1993.

[22]     The upshot of all of this was that SPRCTL received a total of $210,000 for its intermediary role in the two transactions.  Of this money, $200,000 (presumably representing the net profit derived by SPRCTL after payment of expenses associated with the transactions) was transferred to Craidenlie Holdings Ltd (“CHL”), another company associated with Mr Smith.  The transfer to CHL occurred on 20 May 1993.

[23]     On the same day (ie 20 May 1993) the appellant obtained a cheque (drawn in favour of one of his companies) for $150,000 from CHL.  He did this by dealing direct with Mr Smith’s secretary at a time when Mr Smith was overseas.  The appellant managed to obtain this money without prior contact with or approval from Mr Smith (at least according to Mr Smith’s evidence at trial).  Mr Smith, on his return to New Zealand, reacted placidly to being told about the $150,000 payment.  As between Mr Smith and appellant, the $150,000 payment was treated as referable to money which was owed to the appellant.  The basis upon which he was owed this $150,000 appears to be a little murky.  The explanation given at trial by both Mr Smith and the appellant was that it was referable in part to a transaction of a capital nature which had occurred some time earlier between Mr Smith and the appellant and in part to services rendered by the appellant to Mr Smith and associated companies, albeit that at no time did the appellant render to Mr Smith or to any of his companies an invoice for those services.  The appellant treated this payment as capital and did not return it as income to the Inland Revenue Department.

[24]     As indicated, the mechanics by which settlement of the various transactions occurred were complex.  For present purposes it is sufficient to note that the substantial effect of what happened was that Flat Rock acquired the Rocky River Forest and the Matauri Mara Forest for a total of $1,880,000 whereas the original contracts provided for purchase prices totalling $1,670,000.

[25]     From the point of view of Flat Rock, the other difference between the initial transactions entered into by NZFL and the later transactions between it and SPRCTL was that it acquired forestry assets direct rather than shares in forestry owning companies.  There were tax benefits for Flat Rock in this which probably mopped up, or largely mopped up, the immediate economic disadvantages associated with the mark-ups.

[26]      The Crown case was that at no stage did the appellant (or anyone else associated with NZTICL) advise AMP of:

1.     The chains of contracts;

2.     The mark-ups; and

3.     The $150,000 which was paid to the appellant.

[27]     In relation to these two counts the Crown alleged that the substituted agreements were the documents which the appellant had used in breach of s229A of the Crimes Act.

[28]     There are two other aspects of the evidence to which we should refer.

[29]     On 22 January 1993 AMP wrote to NZTICL seeking, inter alia, a certificate

“that, in relation to the purchase of the Rocky River forest, and on behalf of the directors of the manager, that South Pacific Resources Commodity Traders Limited is unrelated to the Manager, and the transaction was negotiated on an arms length basis for fair value.”

Mr Perkins (to whom the letter was addressed) gave a certificate in those terms.  It was true that SPRCTL was unrelated to NZTICL and that the transaction could be said to have been at “fair value”, but the certificate was false when it also confirmed that the “transaction was negotiated on an arms length basis”.

[30]     Documents associated with the original share purchase agreement involving Matauri Mara were located on the trustee’s file, and the Matauri Mara and Rocky River transactions were referred to in the March 1993 Flat Rock prospectus at total values which were less than the prices which were eventually paid.  At or about the date of settlement the difference between values and price in relation to the Matauri Mara transaction would appear to have been noticed by both the trust’s auditors (Deloittes) and by AMP.  On 21 May 1993 AMP wrote to NZTICL addressing a number of topics, one of which was the Matauri Mara variation in price:

“We also note that in the prospectus dated 24 March 1993 the price for Matauri Mara is stated to be a total of $919,505. The price appearing in the contract is approximately 35% higher.

We ask for your explanation for these matters.”

This letter would appear to have been faxed to NZTICL.  We say this because on the same day, that is 21 May 1993, AMP wrote again to NZTICL saying, inter alia:

“Thank you for your prompt response to our letter concerning Matauri Mara.
…

We note also your comments concerning the difference between the contract price, and the figures referred to on page 11 of the prospectus.  We suggest that the purchase price was a material fact, and ought to have been disclosed in the prospectus.”

What explanation was given to AMP is unclear, as Mr Goodchild was not able to remember and there is no written record of the explanation.  Also unclear is the explanation of the transaction presumably given by NZTICL to the auditors.  There is no evidence to suggest that the discrepancy between the values ascribed to the Rocky River Forest and the purchase price paid for SPRCTL was ever noticed by either Deloittes or AMP.  In any event, we were not taken to any evidence on this point.
 

Count 1
 

[31]     Count 1 related to a later transaction.

[32]     In the latter part of 1993 the appellant was under considerable financial pressure associated with his contractual commitments as to the purchase of shares in Phoenix Communications Ltd (“Phoenix”).  These contractual commitments were entered into in October 1993 and required him to pay $667,400 for shares in Phoenix.  Settlement was scheduled for 14 December 1993 and was then extended until 28 December.

[33]     On 22 December 1993 NZTICL entered into an agreement on behalf of Flat Rock to purchase a 25% stake in Manuka Holdings Ltd (“Manuka”).  Manuka was another forest owning company.  The vendor was NZENL.  The other shareholders in Manuka were Mr Adrian Burr, as to 50%, and interests associated with Messrs Hugh and Mark Riddiford as to 25%.

[34]     The 22 December 1993 agreement provided for a purchase price of $3m, of which $2.5m was to be paid in cash and the balance was to come in the form of units in Flat Rock.  Settlement was to occur on 28 December 1993.  This agreement was executed on behalf of NZTICL by Mr Perkins and on behalf of NZENL by the appellant.

[35]     It is not entirely clear to us just who the shareholders in NZENL were at this time.  They included the appellant and Mr Stephen Reidy.  It is obvious that the appellant anticipated that proceeds from the sale of the Manuka shares would flow quickly through to him and would be available to satisfy his personal obligations under the Phoenix agreement.

[36]     The Crown case at trial was that the 22 December 1993 agreement was simply a device on the part of the appellant to extract money from Flat Rock for the purpose of meeting his obligations under the Phoenix contract.  It certainly is an odd agreement because on the same day that it was executed, the appellant wrote to Mr Burr saying, inter alia:

“The trustee is prepared to consent to a sale at $3m [a reference to the NZENL stake in Manuka] … If it will not suit you and [the Riddifords] to acquire a 25% interest on the above terms a block of 10% would be available for $1.2m with payment on 28 December.

Apologies for time pressure. I would appreciate your response today if possible.”

[37]     On 23 December 1993 Mr Burr wrote to the appellant indicating that he intended to insist on rights of pre-emption set out in the articles of association of Manuka in relation to any sale to Flat Rock of the then NZENL stake in Manuka.

[38]     AMP would appear not to have been told, at least initially, that an agreement had been entered into on 22 December 1993 because, on 24 December 1993, Mr Goodchild wrote to the appellant referring to the Manuka transaction as one of “two proposed acquisitions”.     The letter went on:

“We are conscious of the obligation of both the Manager and Trustee where one party to a transaction has associations with the Manager. Therefore we request your confirmation that neither the vendor of the Manuka Holdings Limited shares nor [the other property] is a related party (defined in the Trust Deed by reference to Section 2(5) of the Companies Act 1955). As a matter of record we would also be obliged for your confirmation that in considering the agreements you were at all times representing the interests of the unit holders.”

[39]     This letter was responded to not by the appellant (to whom it was directed) but rather by Mr Perkins.  This was in a letter also of 24 December 1993 and in this letter Mr Perkins advised:

“We confirm that this Company is not a related Company with respect to either of the … Vendors.”

[40]     We regard the correspondence referred to in the two preceding paragraphs as strange.  In the first place it appears to us (and this was confirmed to us from the bar) that NZENL and NZTICL were related parties.  On that basis, the confirmation provided by Mr Perkins was false.  On the other hand, it is likely enough that AMP knew, at least in general terms, of the association between NZENL and NZTICL and for this reason might be thought to have appreciated that they were in fact related parties.  The accuracy of this letter and the reasons why it was accepted, apparently, at face value by AMP were not explored in any detail at trial or in the course of argument before us.

[41]     On 29 December 1993 the appellant requisitioned a cheque for $230,000 from AMP on the basis that this was required as a deposit on the purchase of the Manuka shares.  The requisition for the cheque was also approved by fax by Mr Perkins, although Mr Perkins did not himself sign the requisition form.  Accordingly a cheque was issued by AMP and was applied immediately by the appellant to meeting part of his financial requirements in relation to the Phoenix transaction.

[42]     The appellant, however, was still short of what was required to complete his obligations in relation to the Phoenix transaction. So he entered into an agreement with Mr Burr which produced for him a further $500,000. This agreement is recorded in a letter of 30 December 1993 from Mr Burr to the appellant.  The letter is in these terms:

“Dear Don

I confirm my agreement to purchase your 100 shares held in Trust by New Zealand Enterprise Nominees Limited in [Manuka] for $500,000, for settlement today 30 December 1993.  I further confirm that in the event that I unconditionally agree to sell the balance of my holding to the Flat Rock Trust prior to the 1st of March 1994 I will extend to you an option to purchase the same 100 shares for $550,000 to be exercised and settled on the 31st day of March 1994.

If you find these terms acceptable would you sign the acceptance at the foot of this page and return to me by 2.00pm and I will arrange for the funds to be deposited in the account nominated by you yesterday by close of business today.”

The shares which were the subject of this letter formed part of the parcel of shares which were subject to the “sale” to Flat Rock in respect of which the deposit of $230,000 had been paid.

[43]     As the letter from Mr Burr indicated, by the end of December 1993 the proposal that Flat Rock acquire the 25% stake in Manuka held by NZENL had been superseded by proposals that Flat Rock take a larger stake in the company.  Indeed, in February 1994, there was an agreement entered into pursuant to which Flat Rock was to acquire a 100% interest in Manuka.  This new agreement required a deposit of $100,000 payable by 23 February 1994.  AMP understood that this would be paid using the original $230,000 “deposit”.  But as this money had been spent, the deposit was not able to be paid and this agreement was cancelled.  The appellant eventually, in September 1994, caused Flat Rock to be reimbursed in the sum of $230,000.
 

Subsequent events
 

[44]     The forestry ventures in which the appellant was involved eventually collapsed in 1997.

[45]     The charges which the appellant faced resulted from a lengthy investigation by the Serious Fraud Office.

The approach of the trial Judge
 

[46]     In her judgment the Judge addressed the elements of the offence which had to be established and focused particularly on the requirement to prove an “intent to defraud”.  This is what she said:

[11]     As a Judge sitting alone I must direct myself to the elements that must be proved beyond reasonable doubt. Both the Crown and the Defence have relied upon R v Firth (1997) 15 CRNZ 406 and R v Williams [1985] 1 NZLR 294, and I accept that the principles enunciated in those cases must be applied.  Also in R v Speakman (1989) 5 CRNZ 250, the Court of Appeal held that “intent to defraud” in s229(b) had the same meaning as fraudulently in s222 and s224.

[12]     Mr Billington QC has put to me, in my view correctly, that “two broad elements must be proved beyond reasonable doubt” being:

1. The documents used in each Count were used to derive a pecuniary advantage to which the person who received that advantage was not entitled.
    
2. The accused has dishonestly breached a legal duty.  That is it must be shown he acted deliberately and with knowledge he was acting in breach of his legal obligations.

A further decision of assistance is the decision of Dr Cadenhead DCJ in R v Mathieson Auckland District Court 22 June 1999, where the Learned Judge has stressed that: “not every deliberate and knowing breach of duty will constitute dishonesty.  The duty breached must have some relevance to the basic concept of dishonesty.”  As to “pecuniary advantage” I have directed my mind to the appropriate passage in R v Firth and the underlying concept of “dishonest intent”.

[47]     She then turned to identify the legal obligations to which the appellant was subject. She summarised her conclusions as to his obligations in this way:

[46]     In my view there are fiduciary duties imposed upon the manager, and in the circumstances of this case, the accused, not to profit, to avoid conflicts and to act honestly with full disclosure, and not to act to the detriment, if any, of the Trust. I say this notwithstanding para 7.03 which I consider to be an empowering provision but not an exclusion of all other responsibilities.

[48]     In relation to counts 2 and 3 she made the following relevant findings:

[54] …I am satisfied and find as a fact that Mr Simcock did not properly disclose to Mr Goodchild the circumstances relating to the introduction of South Pacific into the loop of the Rocky River [and] Matauri Mara … transactions.

[61]     …I find that South Pacific was introduced to create a benefit for Mr Simcock and others. I find that he intended to interpose South Pacific as a means of obtaining a profit and a means of getting back from Mr Smith the money he was owed.

So she was able to conclude:

[62]     … I am satisfied beyond reasonable doubt that Mr Simcock did use the documents alleged in counts 2 and 3 with intent to defraud to obtain a pecuniary advantage being the profit in the Rocky River and Matauri Mara transaction for himself (or others).  I am also satisfied beyond reasonable doubt that he dishonestly breached the legal duty I have already found and that he was not entitled to the advantage he obtained for himself or others.

[49]     In respect of count 1, the Judge expressed her conclusions in this way:

[77]     …I am satisfied beyond reasonable doubt that he did arrange for a deposit to be paid which was not required.  I find that he did this deliberately with the intention to defraud by using the requisition to obtain for himself a pecuniary advantage for which he was not entitled and dishonestly breached a legal duty.

She reached this conclusion having rejected the appellant’s explanations given at trial.  In the course of this section of her judgment she did make one mistake.  She noted that the “supposed deposit was never in fact paid to Manuka”.  The supposed “deposit” was of course not required to be paid to Manuka but, if payable, would have been paid to NZENL.  We are not completely sure as to who could be regarded as beneficially interested in NZENL at the end of December 1993.  It is clear, however, that the appellant was not the only person with a significant beneficial interest in that company at that time.  What is also clear is that the “deposit” was not paid to NZENL or for the benefit of all its shareholders but rather directly for the benefit of the appellant.  So the underlying point which the Judge made was sound, albeit that she misidentified the vendor.

Overview of appeal
 

[50]     We propose to deal with the appeal by reference first to counts 2 and 3 and then count 1.
 

Counts 2 and 3
 

Overview of the appellant’s argument
 

[51]     Mr Billington QC claimed that the Judge had wrongly concluded that the appellant had an intent to defraud. This argument was presented discursively with the result that the flaws which he alleged in the Judge’s reasoning were not identified with great precision or conciseness.

[52]     The principal elements in his argument seem to us to be as follows:

1. The Judge wrongly analysed the trust deed and Act in identifying the appellant’s civil legal obligations.

2. The Judge’s finding of fact as to non-disclosure was wrong.

3. The Judge’s finding of fact as to absence of honest belief was wrong.

4. In any event it was not open to the Judge to conclude that the appellant had acted fraudulently.

[53]     It is convenient to deal with counts 2 and 3 by reference to headings corresponding broadly to these arguments.
 

The appellant’s legal obligations
 

[54]     The relevant provisions of the Unit Trusts Act 1960 are as follows:

3     Unit trust to have manager and trustee

(2)     Subject to the provisions of this Act, the company that is the manager of any unit trust—

(c) Shall have the same liability for its acts and omissions in the exercise of its powers and functions as manager of the unit trust as it would if it exercised those powers and functions as a trustee.

…

12 Implied provisions in trust deed

(1)     The following provisions shall be implied in every trust deed relating to a unit trust, notwithstanding anything to the contrary in the deed:

(a)     That the manager of the unit trust shall use its best endeavours to ensure that the unit trust is carried on in a proper and efficient manner:

…

(c)     That the trustee of the unit trust shall not act on any direction of the manager to acquire any property for the unit trust or dispose of any property of the unit trust if, in the trustee's opinion conveyed in writing to the manager, the proposed acquisition or disposal is manifestly not in the interests of the unit holders; and the trustee shall not be liable to the unit holders or to the manager for so refusing to act on any direction of the manager:

…

24     Trust deed not to exempt trustee or manager from liability

(1)     The trustee of a unit trust and the manager thereof shall each have the same duty to observe care and diligence in the performance of its duties as any other trustee, and shall each be entitled to the same indemnities and relief as any other trustee.

(2)     Any provision in a trust deed governing a unit trust or in any other instrument shall be void so far as it would have the effect of—

(a)     Exempting the trustee or manager or any director or officer of the trustee or manager from liability for breach of trust where it or he fails to show the degree of care and diligence required of it or him in that capacity, having regard to the provisions of the trust deed and the powers, authorities, or discretions conferred thereby:

(b)     Indemnifying the trustee or manager or any such director or officer from any such liability.

…

26     Restriction on personal benefits by directors or officers

(1)     Every person who is a director or officer of a company that is the manager of a unit trust, or of a trustee corporation or company or bank that is the trustee of a unit trust, shall be a trustee for the benefit of the unit holders of any personal profit or benefit which he gains by availing himself of his position, whether by buying or selling or joining in buying or selling investments or securities or otherwise:

Provided that nothing in this subsection shall affect the right of any such director or officer to receive and retain remuneration from the trustee corporation or company or bank of which he is a director or officer.

(2)     Any such personal profit shall be transferred to the trustee of the unit trust, and may be recovered by that trustee from the person who gained it.

[55]     The trust deed dealt with investments in this way:

7.01     Subject to clauses 7.02 and 7.03, the Manager shall have absolute and uncontrolled discretion as to the investment of any sums of Cash forming part of the Trust Fund and as to the purchase sale transfer exchange or alteration of any Investments from time to time and the Manager alone shall be entitled from time to time cause to be effected any transactions which it may consider to be in the interests of Unit Holders and the Trustee shall from time to time to the extent of the Cash in its hands effect and pay for such investments or purchases sales transfers exchange or alterations of Investments as may be directed in writing by the Manager and shall do all things necessary on its part to give effect to any such direction.

7.02     The Trust fund shall be invested only in Authorised Investments.

7.03     Notwithstanding clauses 7.01, 7.04, or 7.07, the Trustee shall not act on the direction of the Manager to acquire or dispose of any Investment if in the opinion of the Trustee conveyed in writing to the Manager the proposed acquisition or disposal is manifestly not in the interests of the Unit Holders.  The Trustee shall not be liable to the Unit Holders or the Manager for so refusing to act on any direction.

7.04     Subject to Section 24 of the Unit Trusts Act 1960 the Manager shall subject to the consent of the Trustee and to clause 7.03, be at liberty to cause moneys of the Trust Fund to be invested in shares or other securities issued by, or lent to, the Manager, the Trustee or any Related Company of either and to cause Investments of the Trust Fund to be purchased from or sold to, or other transactions (including transactions of agency or brokerage) to be entered into on behalf of the Trust Fund with, the Manager in any capacity other than that of manager of the Trust Fund, any Related Company of the Manager, or the Trustee or any Related Company of the Trustee and neither the Manager nor the Trustee nor any Related Company of either shall be liable to account to the Trust Fund for any profit arising from any such transaction.

[56]     The position as to the appellant’s legal obligations seems to us to be straightforward:

1. NZTICL as manager owed fiduciary duties to Flat Rock comparable to those of a trustee.  This is clear from ss3(2)(c) and 24 of the Act.  Even without those provisions, it would have owed such duties given its dominant role, vis-à-vis the trust, as its manager.  It was an agent of the trust and plainly owed generally applicable fiduciary duties.
    
2. Accordingly, it was not open to NZTICL to put its own interests (and in this we include the interests of its shareholders and directors) ahead of the interests of the trust.  For it to introduce a transaction to the trust for the purpose - or a purpose - of generating a secret profit for the appellant was a plain breach of its fiduciary obligations.
    
3. As a matter of strict law it might be debatable whether the appellant, as an individual, owed direct fiduciary duties to Flat Rock.  But this is of no moment because, to the extent to which NZTICL breached its fiduciary obligations at his insistence, he was necessarily a party to its breach and thus similarly responsible.  This is, of course, consistent with s26 of the Act.
    
4. It is true that clause 7.04 appears to permit related party transactions in certain circumstances.  However, ss24 and 26 would appear to have robbed this clause of all or most of its apparent effect.

[57]     There is perhaps scope for doubt as to some associated legal issues.  For instance, it might be open to doubt whether disclosure to and consent from AMP as the trustee, as opposed to the unit holders, would have been sufficient to absolve NZTICL from what would otherwise be liability for breach of fiduciary duty in instances not covered by clause 7.04 of the trust deed.  Given that this is a criminal case, we are prepared to accept that disclosure to AMP by NZTICL of transactions requiring disclosure would suffice.

[58]     Mr Billington argued that the only relevant obligations on AMP and NZTICL were to satisfy themselves that proposed investments in the two forests were authorised and not in the category of being “manifestly not in the interests of the unit holders”, a reference to clause 7.03 of the trust deed.  He also placed much reliance on the fact that s26 applies only where an officer has produced a profit by “availing himself of his position” - which he treated as a limitation on what might otherwise be the position.

[59]     Mr Billington’s argument proceeded on the basis that, under the trust deed, the obligations of AMP as trustee were comparatively limited and he sought to ratchet down the obligations of NZTICL as manager to those of AMP as trustee.  But the roles of manager and trustee were very different.  NZTICL, as manager, had primary responsibility for the operations of Flat Rock.  We see it as being too clear for credible argument to the contrary that the appellant breached legal obligations (albeit perhaps as a party to NZTICL’s behaviour) if he structured the Rocky River Forest and Matauri Mara Forest transactions so as to facilitate a secret payment/benefit for himself.
 

The findings of fact as to non-disclosure
 

[60]     Mr Billington challenged the Judge’s findings on non-disclosure.

[61]     In part Mr Billington relied on the Judge’s findings on count 4 (which related to a transaction broadly similar to the Rocky River and Matauri Mara transactions).  The Judge acquitted the appellant on that count because she was not satisfied that there had been a dishonest intent.  The Judge also acquitted the appellant on count 5 which was similar to counts 2 and 3 only in that it involved an allegation that the appellant had used his position vis-à-vis Flat Rock for personal advantage.  Again the Judge had doubts as to dishonest intent.  Mr Billington sought to build the Judge’s doubts in relation to counts 4 and 5 into affirmative findings that the count 4 and 5 transactions were legitimate.  We do not see that as appropriate.  But, in any event, it cannot be credibly suggested that there was any relevant inconsistency between the findings of the Judge on counts 2 and 3 (on which she convicted the appellant) and counts 4 and 5 (on which she acquitted the appellant).  There was evidence in relation to counts 4 and 5 which was of assistance to the appellant in terms of his bona fides.  If this case had been tried by a jury which had returned the same verdicts as the Judge, a challenge to the guilty verdicts based on inconsistency would plainly have failed.

[62]     Interestingly, when the appellant gave evidence he did not contend that he had made full disclosure to AMP, although he did maintain that Mr Goodchild must have been aware of the inter-positioning of SPRCTL into the transactions and that this was, broadly, for tax purposes.  The appellant endeavoured to justify his non-disclosure on the basis that if he had told AMP the detail of what was going on this might have led to later difficulties with the Inland Revenue Department if the transactions were challenged as being ineffective under s99 of the Income Tax Act 1976 – the then general anti-avoidance provision.

[63]     In saying all of this we accept that the chains of contracts associated with the Rocky River Forest and Matauri Mara Forest transactions were not kept fully secret from all other people associated with Flat Rock.  For instance, the solicitor, Mr Gilbert, who acted for NZTICL, SPRCTL and, to a limited extent, for AMP as trustee, in relation to the transactions, was aware of the chain of contracts.  We have already referred to the material which was found on the AMP file relating to the first Matauri Mara transaction and the variation between what was disclosed in the prospectus as to this transaction and what eventuated.  It is apparent that some sort of explanation was given for this variation to AMP and likely as well that an explanation was given to the auditors.  Given that there was also a variation between the values listed for the Rocky River Forest in the prospectus and the price paid to SPRCTL it is not inconceivable that there were similar discussions with AMP in relation to this transaction although Mr Goodchild thought this was “highly unlikely”.  Mr Goodchild was unable to give an explanation as to why he had written to NZTICL seeking confirmation that no related parties were involved in this transaction (see para [38]) but conceivably he had some snippet of information which prompted this letter.

[64]     Such limited disclosure as may have been made, and such limited explanations as may have been offered to the auditors and the trustee, were not enough to absolve NZTICL and the appellant of liability for breach of fiduciary duty.  We say this because there is not the slightest suggestion anywhere in the evidence (including the evidence which originated from the appellant) that there was ever any disclosure of the most relevant aspect of these transactions, namely the payment of $150,000 which the appellant received.

[65]     Where a fiduciary relies on disclosure to avoid what would otherwise be liability for breach of fiduciary duty, it is elementary that full disclosure is required and that partial and incomplete disclosure and explanations are not sufficient.  So the Judge’s finding that there was not proper disclosure was well open to her.
 

The findings of fact as to absence of honest belief
 

[66]     The Judge’s finding on this point is closely associated with her finding that SPRCTL was inserted in the transactions to produce the opportunity for the appellant to extract a payment from Mr Smith and his companies.  The Judge would appear to have accepted that there was a liability from Mr Smith to the appellant.  She did not treat the payment to the appellant as being his share of the profit associated with the tax scheme or a fee payable by Mr Smith associated with the tax scheme.  Rather, the benefit which she attributed to the appellant consisted of the creation of an opportunity to obtain payment of $150,000 to which he was entitled but which might he might not otherwise have been able to obtain, at least at that time.  On her findings of fact, this was undoubtedly a benefit for the appellant, albeit one which might not be particularly easy to value.

[67]     The Judge’s conclusions as to the reason for the insertion of SPRCTL into the transactions and as to the absence of honest belief on the part of the appellant in the legitimacy of his actions were expressed in conclusory terms – indeed in terms which are rather too conclusory for our liking.  This makes it necessary for us to refer to the background material which may have supported those findings.

[68]     The substitute agreements were backdated to the dates of the original agreements.  This was addressed (albeit extremely inadequately) by Mr Gilbert, the solicitor, in his evidence and this on a basis which did not directly implicate the appellant.  But the Judge did not necessarily have to accept Mr Gilbert’s evidence and the backdating of the agreements did form part of the circumstantial material which was available for her consideration.  It is difficult to see why Mr Gilbert would have wished to backdate agreements for sale and purchase unless he intended that people who later came to look at the agreements were to be misled as to the dates upon which those agreements were entered into.  The most logical reason for doing this would be to facilitate concealment of the earlier contracts.  We note in passing that the prospectus issued in March 1993 did not refer to the earlier contracts and, in the case of the Matauri Mara Forest, incorrectly asserted that the relevant agreement had been entered into prior to 31 December 1992.

[69]     Mr Perkins’ certificate to the effect that the Rocky Road transaction had been negotiated at arms length (para [29] above) was false.

[70]     The documentary evidence and the oral evidence, when considered as a whole, makes it clear that the insertion of SPRCTL into the transactions was at the insistence of the appellant and that he dictated what happened, including the prices at which the relevant transactions were to occur.  So, if the Judge took the view that Mr Gilbert and Mr Perkins had acted dishonestly (and it would have been open for her to do this), it would also have been open to her to attribute their dishonest actions to the appellant on the basis that they would not have been acting independently of the appellant.

[71]     Although reasoning along the lines set out in paras [68]-[70] above would have been available to the Judge, this is not really the way in which she approached the case.  As we read her judgment, the key consideration which led her to conclude that the appellant acted dishonestly was her conclusion that the restructuring of the two acquisitions was influenced by the appellant’s intention to create for himself an opportunity to obtain payment of $150,000.  It is safest and fairest to the appellant to test the safety of his convictions by reference to that conclusion.  The considerations referred to in paras [68]-[70] may, however, be relevant to another facet of the arguments advanced by Mr Billington which is addressed later in this judgment, see para [85] below.

[72]     The way in which the transactions were structured was, to say the least, unusual.  There was no logical correlation as to the extent of the “profit” allowed to SPRCTL on the Rocky River Forest transaction as compared to the profit generated for SPRCTL on the Matauri Mara transaction.  Further, the transactions left, at least initially (ie before the payment out of $150,000 on the direction of the appellant), all or most of the benefit of the utilisation of the tax losses with SPRCTL.

[73]     The circumstances associated with the payment out of $150,000 are consistent with pre-planning.  The final settlement of the transactions between Flat Rock and SPRCTL occurred on 20 May 1993 when it received payments totalling $210,000.  On the same day $200,000 was transferred to CHL.  Also on the same day the $150,000 payment for the benefit of the appellant’s company was made.  This happened at a time when Mr Smith was overseas and was brought about by a direction from the appellant to Mr Smith’s secretary.  All of this is highly consistent with the extraction of the $150,000 payment having been a significant reason (at least in the mind of the appellant) for the insertion of SPRCTL into the transactions.

[74]     Interestingly, the appellant did not in his evidence claim explicitly that the arrangements as to the extraction of the $150,000 were made at a time subsequent to the introduction of SPRCTL into the transactions although he did indicate that he initially had it in mind to take a “fee” for NZEB from the surplus generated by the insertion of SPRCTL into the transactions.  The details of this proposal were not explored in evidence.  What is significant is that the appellant did not deny in evidence an intention to take a benefit (either for himself or NZEB) at the time when the replacement agreements were entered into.

[75]     Given that the replacement agreements (which were the documents upon which counts 2 and 3 focused) were used at the least up until the time when the transactions were settled (ie on 20 May 1993) and the fact that the $150,000 payment was extracted for the benefit of the appellant’s company on the same day, the inference that the appellant used the documents so as to provide himself with an opportunity to obtain this payment was practically inevitable.  We are, however, conscious that the dates specified in counts 2 and 3 refer to “use” which occurred on or about the dates when the replacement agreements were entered into rather than when settlement occurred.  It may be that the there was some ellipsis in the Judge’s approach to this aspect of the case in that the Judge may have focused on intention at the time of settlement without recognising that the counts, as drafted, might be thought to be primarily referable to the entering into of the replacement agreements.  So we have thought it right to assess the convictions on the basis that it is possible that the appellant initially (ie when the replacement agreements were entered) intended that there should be an opportunity to take a benefit for NZEB (which is essentially what he claimed in evidence) but that there was subsequently a change in plan.  Since the taking of a “fee” by NZEB would have been as objectionable as the benefit eventually obtained by the appellant in the form of the $150,000 payment, such a factual analysis would be of no assistance to the appellant.

[76]     We accept that the Judge’s finding that the appellant had acted in breach of fiduciary obligation did not, in itself, necessarily carry with it the conclusion that he did so knowingly and dishonestly.  On the other hand, the appellant, as a solicitor, might fairly be expected to know the law.  Where there has been a breach of fiduciary duty resulting in a substantial payment being received by a solicitor, an inference that the solicitor acted mala fide is likely to be drawn.

[77]     Such an inference was clearly available here.  On the footing that SPRCTL was inserted in the transactions to produce the opportunity for the appellant to obtain a benefit, the conclusion that the appellant’s non-disclosure was dishonest followed naturally.  The appellant must have recognised that if he had disclosed his intention to obtain such a benefit, it was highly likely that AMP would not have approved the transaction.

[78]     As indicated, we think it would have been better if the Judge had given more detailed reasons for the key conclusions which she reached on this aspect of the case.  The brevity of her reasons has necessitated a reconstructive process which is not desirable in the context of a criminal appeal.  This consideration, however, must be assessed in light of the evidence in the case including of course the evidence of the appellant.  In light of that evidence it is perfectly clear that the key transactions were structured so as to provide an opportunity for the appellant to derive benefits.  Given acknowledged non-disclosure of this aspect of the transactions, the inference of dishonesty was overwhelming.  So, despite the limited and perhaps elliptical nature of the Judge’s reasons, there has not been a miscarriage of justice for the purposes of 385(c) of the Crimes Act 1961.
 

The conclusion of the Judge that the appellant had acted fraudulently
 

[79]     In his argument Mr Billington referred to R v Adams (1994) 12 CRNZ 379 and the way in which the Privy Council in that case distinguished the earlier judgment of the House of Lords in R v Governor of Pentonville Prison Ex Parte Tarling (1978) 70 Cr App R 77.

[80]     Tarling was decided by a 3-2 majority. The majority distinguished between breach of fiduciary duty and fraud. For instance, Lord Wilberforce said, at page 110:

Breach of fiduciary duty, exorbitant profit making, secrecy, failure to comply with the law of company accounts (I state these as assumptions) are one thing.  Theft and fraud are others.

And, a little later on in his speech, he added, at page 111:

The highest, in my opinion, that the evidence can be put is that the participants made a secret profit at the expense probably of HPBHK (but Mr Tarling was not a director of HPBHK), possibly and indirectly of HPBIL and that they kept it secret: it would not otherwise be a secret profit.  This by itself is no criminal offence whatever other epithet may be appropriate.

In the same case Lord Keith of Kinkel referred to the allegation that Tarling and his alleged co-conspirators were in breach of their fiduciary duty to disclose share dealings and, at pages 137-38, went on:

.. but that does not in itself constitute a crime under the law of England.  The evidence, while clearly showing that Mr Tarling and those of his co-directors who were party to the dealings missed a number of suitable opportunities for disclosing these dealings, does not indicate that positive steps were taken to conceal them.

There is, in addition, no direct evidence that Mr Tarling and the other alleged conspirators held the intention, in connection with anything they did or omitted to do, of inducing the shareholders to omit to require an accounting nor indeed that the shareholders might otherwise have been reasonably expected to require one.  I do not consider there to be room for the view that either of these matters could properly be inferred beyond reasonable doubt from the evidence of what was actually done or omitted to be done by the alleged conspirators.

…

Whatever views may be held about the propriety of the conduct of Mr Tarling and his associates in connection with the Spydar affair, will not accord with the proper administration of criminal law that he should be committed for trial merely on the ground that his conduct appeared on the face of it to have been deplorable and dishonest in a broad and general sense.

(Emphasis added)

[81]     There were powerful dissenting speeches delivered by Viscount Dilhorne and Lord Edmund-Davies in which they concluded that there was evidence of dishonesty.  Further, Tarling has been the subject of not uncritical comment by Sir John Smith, “Theft, Conspiracy and Jurisdiction: Tarling’s Case” [1979] Crim LR 220.  As well, the English Court of Appeal in Sociedade Nacional de Combustiveis de Angola UEE v Lundqvist [1991] 2 QB 310 at 335 noted that Tarling might need reconsideration in light of the House of Lords decision in R v Cooke [1986] AC 909.

[82]     In Adams, the Privy Council addressed the observations of Lord Wilberforce in Tarling set out above in para [80] in this way, at page 389:

Lord Wilberforce’s observations in Tarling were made in the context of charges of conspiracy to defraud.  The Divisional Court had already held that the evidence on these charges fell far short of setting up a prima facie case of dishonesty… .

…

Neither Lord Wilberforce nor Lord Keith of Kinkel went further than to say that non-disclosure per se amounting to breach of fiduciary duty did not amount to a crime.  They were not dealing with a situation where there was a positive finding of dishonest concealment on the part of the defendants.

(Emphasis added)

[83]     We accept that it is possible to find passages in some of the speeches delivered in Tarling which provide some assistance to the appellant’s case.  An example is the passage from the speech of Lord Edmund-Davies which we have emphasised.  But when the speeches in Tarling are read as a whole, and when that case is applied consistently with the approach taken in Adams, it is clear that there is no general principle of law which precludes a finding of fraud against a fiduciary who makes a secret profit in conscious disregard of fiduciary obligations.

[84]     In his argument for the appellant, Mr Billington focused on the reference in the Adams judgment to the phrase “dishonest concealment” (see para [82] above).  He sought to argue that where a fraud case focused on breach of fiduciary obligation, the Crown could only succeed if there had been additional “dishonest concealment” as was found in Adams.  To put this in more concrete terms, he suggested that the appellant could not properly have been found guilty here without a finding by the Judge that he had taken dishonest steps to conceal his breach of fiduciary duty, ie by forging documents or telling lies.

[85]     We see the use of the phrase “dishonest concealment” in the Adams judgment as referable to the facts of that case (where there were indeed findings of dishonest concealment) rather than as identifying a particular element which must be established wherever fraud involving breach of fiduciary obligation is alleged.  Mr Billington’s argument is, in part, circular because a dishonest failure to disclose by a fiduciary who knows that disclosure is required before a benefit can legitimately be retained might be regarded as dishonest concealment.  In addition, it may well have been open to the Judge to have made a finding of dishonest concealment by reference to the considerations referred to in paras [68]-[70] above.  In any event, the key issue is dishonesty.  Dishonesty in this class of case may obviously consist of, or be evidenced by, “dishonest concealment” of the sort involved in Adams.  But there seems to us to be no principled basis to confine the concept of dishonesty to cases where there has been “dishonest concealment”.  A fiduciary who, in conscious disregard of fiduciary obligations, deliberately brings about and takes an illegitimate benefit can be said, we think, to have acted fraudulently.

[86]     Mr Billington also complained that the Judge’s finding of fraud did not allow for what he regarded as an absence of prejudice to the economic interests of Flat Rock.  It is fair to say that the evidence as a whole suggested that Flat Rock was no worse off under the substituted agreements than it would have been had it adopted the original agreements.  But the risk of economic prejudice was nonetheless there.  It may well be that if the transactions had not been influenced in their final form by the appellant’s self-interest, a more favourable outcome for Flat Rock may have resulted.  In any event, however, the appellant obtained a benefit (albeit not entirely easy to quantify) for himself which was required to be accounted for to Flat Rock.  We see this as providing a sufficient economic basis for the conclusion that the appellant’s dishonesty was appropriately regarded as fraudulent as the essence of the crimes alleged was not fraudulently causing loss but fraudulently obtaining a benefit.

[87]     It follows that we are satisfied that the Judge was entirely entitled to take the law from R v Firth [1998] 1 NZLR 513, R v Williams [1985] 1 NZLR 294 and R v Speakman (1989) 5 CRNZ 250.  Indeed, we think that Mr Billington put the matter accurately in the submission which he made to the Judge and which she recorded in para [12] of her judgment (which we have set out in para [46] above).
 

Count 1
 

[88]     Neither in his voluntary interview with a Serious Fraud Office investigator nor in his evidence in chief at trial did the appellant give a detailed explanation for his actions in obtaining the cheque for $230,000.  His full explanation for all of this did not, in fact, emerge until he was cross-examined.

[89]     In cross-examination the appellant claimed that after the agreement of 22 December 1993 was entered into, it was agreed between him (for NZENL) and Mr Perkins (for Flat Rock) that a deposit should be paid.  Associated with this explanation was the contention that Mr Perkins (now acting for NZENL) also agreed that the “deposit” would not be paid to NZENL (the vendor of the shares) but would rather be given to the appellant to satisfy his obligations in relation to the Phoenix transaction.

[90]     The whole transaction is profoundly unsatisfactory.

[91]     It was quite wrong for the agreement of 22 December 1993 to be entered into by NZTICL (on behalf of the Trust) with NZENL.  NZENL and NZTICL were related parties and this transaction should only have been entered into, if entered into at all, with the consent of AMP under clause 7.04 of the trust deed.  Such consent had not been obtained by 22 December 1993.  In any event, any profit on the transaction was subject to s26 of the Unit Trusts Act.

[92]     The agreement did not make provision for payment of a deposit presumably because it was hoped by the appellant that the entire transaction would be settled in time to provide the funds he needed to meet his liabilities in relation to the Phoenix transaction.

[93]     That the 22 December 1993 agreement was for the appellant’s purposes rather than anyone else’s was made perfectly clear by his contemporaneous actions in offering, on behalf of NZENL, that company’s 25% stake in Manuka to the other shareholders (ie the other shareholders in Manuka) or, in default, a 10% stake in the company (see para [36] above).  This rather suggests that the appellant did not regard the agreement of 22 December 1993 as a firm commitment.

[94]     If there are disquieting aspects to the 22 December 1993 agreement, the position as to the events of 29 December 1993 is far worse.

[95]     The most plausible interpretation of these events is that the appellant simply obtained a cheque for $230,000 by the false representation that a deposit was required.  If that interpretation of events is correct then the appellant was plainly fraudulent.  This is essentially the basis upon which the Judge convicted the appellant.

[96]     As indicated, the defence, as it emerged, was that Mr Perkins (acting for Flat Rock) and the appellant (acting for NZENL) agreed that a deposit should be payable and that this “agreement” resulted in the requisitioning of the cheque and that Mr Perkins (now acting for NZENL) agreed to advance the money to the appellant.  Given that this explanation was not advanced by the appellant until he was cross-examined at trial despite a number of earlier opportunities to explain what had happened and the absence of any underpinning documentation, it is not surprising that the Judge rejected this account of events.  We are, however, uncomfortable with the brevity of her reasons.  In those circumstances we have thought it right to examine the defence advanced at trial in a little more detail.

[97]     As we have already indicated, NZTICL had no right to enter into an agreement with NZENL in a way which bypassed AMP.  Any profit accruing to the appellant as a result of this transaction was subject to s26 of the Unit Trusts Act.  The same reasoning is applicable to the alleged “agreement” to pay a “deposit”.

[98]     Leaving aside altogether what might be said by the appellant to be technicalities associated with the operation of the Unit Trusts Act and the trust deed and the associated absence of any entitlement for Mr Perkins to contract on behalf of Flat Rock, any “agreement” to pay a “deposit” would have been grossly and obviously improper.  By 29 December 1993, it was perfectly apparent that the agreement of 22 December 1993 could not be settled in accordance with its terms; this given Mr Burr’s insistence on his rights of pre-emption.  In that context, the only possible beneficiary of an “agreement” to pay a “deposit” would have been the appellant.  Flat Rock obtained no benefit from the payment of the “deposit”.  Indeed the appellant’s subsequent actions involving Mr Burr make it clear that he did not see the 22 December 1993 agreement as ever likely to be settled.

[99]     Against that background, there could be no reality to the suggested “agreement” to pay a “deposit”.  To put it another way, it is implausibly far-fetched to suggest that Mr Perkins and the appellant sat down and formally negotiated an agreement under which Flat Rock was to pay NZENL a deposit.  At most there was may have been an arrangement between the appellant and Mr Perkins to use the terminology of “deposit” to extract a substantial payment from AMP.  Since there could not have been a bona fide agreement to pay a deposit, the conclusion that the $230,000 was obtained by a false representation to the effect that a deposit was required was really inevitable.

[100]     As is apparent from what we have said, Mr Billington argued that Mr Perkins could be treated as acting for Flat Rock when he approved the payment of the “deposit” and then for NZENL when he approved the payment of this deposit direct to the appellant.  So he said that Mr Perkins acted throughout with full knowledge.  He sought to argue that “the cheque was obtained in the normal course of business” and he pointed to other transactions in which deposits not originally stipulated for were paid.  He also referred to what we regard as the surprisingly mild reaction of Mr Goodchild and AMP when Mr Goodchild realised what had happened in the early part of 1994.

[101]     If it is the case (and this seems highly likely) that Mr Perkins understood what was going on, then his conduct was as improper as that of the appellant.  Both were parties to a gross breach of duty by NZTICL of its obligations to Flat Rock.  In that context, we do not see how Mr Perkins’ participation in these events can be regarded as absolving the appellant from liability.  Nor do we regard after-the-event reactions by AMP as material.

[102]     Mr Billington made several other minor criticisms of the Judge’s conclusions in relation to this part of the case but we see them as being of no moment.  This was a clear fraud and the Judge was entitled to return a verdict of guilty.

[103]     We should note one other point made by Mr Billington.  The cheque requisition form which was the focus of this charge was signed by the appellant.  From the other evidence as a whole, it appears that the usual practice was for cheque requisition forms prepared by NZTICL addressed to AMP to be signed by two officers.  Given the time of the year, Mr Perkins did not sign the cheque requisition form but rather sent a fax to AMP confirming his consent to the issuing of the cheque.  In that context Mr Billington sought to argue that the cheque requisition form, signed as it was by only one officer, was not a document capable of being used to obtain a pecuniary advantage.

[104]     This point would appear not to have been advanced at trial, at least with any precision.  We say this because the Judge did not address this issue in her judgment.  Had this point been taken, the evidence associated with administrative practices carried out in relation to the requisitioning of cheques may have been more detailed.  Alternatively, the Crown may have amended the indictment to focus either on the fax by Mr Perkins to AMP (which was plainly sent on the instructions of the appellant) or alternatively on the cheque itself.

[105]     On the basis of the material before the Judge, however, it was open to inference that the cheque requisition form played a part in the processes associated with the issuing of the cheque.  It appears that neither the cheque requisition form nor the fax signed by Mr Perkins would, individually, have been sufficient to result in the issuing of a cheque by AMP.  But the cheque requisition form, in conjunction with the fax, was sufficient, as events showed.  In those circumstances we think it was open to the Judge to conclude as she did (implicitly anyway), that the requisition form was a document capable of being used to obtain a pecuniary advantage for the purposes of s229A.

[106]     Had we not been satisfied that that was so, we would, in any event, have amended this count.
 

Disposition
   

[107]     Accordingly, the appeal against conviction by the appellant is dismissed.

 
The Solicitor-General’s appeal
 

[108]     The application for leave to appeal against sentence is to be re-listed for argument.

 
Solicitors:
Gilbert Swan, Wellington for Appellant
Crown Law Office, Wellington
 

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