Bublitz v R
| Jurisdiction | New Zealand |
| Judge | Kós P,Winkelmann,Williams JJ |
| Judgment Date | 22 August 2019 |
| Neutral Citation | [2019] NZCA 379 |
| Court | Court of Appeal |
| Docket Number | CA138/2018 |
| Date | 22 August 2019 |
[2019] NZCA 379
Kós P, Winkelmann and Williams JJ
CA138/2018
CA168/2018
IN THE COURT OF APPEAL OF NEW ZEALAND
I TE KŌTI PĪRA O AOTEAROA
Civil Procedure — appeals against cost orders made under s364 Criminal Procedure Act 2011 and Costs in Criminal Cases — charged with offences under the Crimes Act 1967 and Companies Act 1993 — trial aborted because of late disclosure by the Crown
R S Reed QC and H M Z Ford for Appellant
Bublitz D H O'Leary and R J Beca for Appellant
Morrison B J Horsley and R K Thomson for Respondent
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A Mr Bublitz's appeal is dismissed.
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B Mr Morrison's appeal is dismissed.
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C There is no order made as to costs.
Mr Bublitz and Mr Morrison were charged, initially, with multiple criminal counts under ss 220 and 242 of the Crimes Act 1961 and s 377 of the Companies Act 1993, arising from the collapse of two finance companies, Viaduct Capital Ltd and Mutual Finance Ltd. After nine months, their trial was aborted by Woolford J because of what the Judge described as “extensive” and “unprecedented” late disclosure by the Crown. 1
Mr Bublitz and Mr Morrison sought costs. The Judge awarded Mr Morrison $75,000 under s 5 of the Costs in Criminal Cases Act 1967 and made an award of $50,000 under s 364 of the Criminal Procedure Act 2011 to be split five ways between Mr Bublitz, Mr Morrison, two other defendants and the Crown. 2
Mr Bublitz appeals the quantum of the CPA award. Mr Morrison appeals the quantum of the CCCA award.
The charges arose from the 2010 collapse of two companies controlled by Mr Bublitz, Viaduct Capital Ltd and Mutual Finance Ltd. Following extensive investigations by the Financial Markets Authority, 3 in 2014 Mr Bublitz and Mr Morrison were charged with the offences noted at [1], along with four other men. 4
The two companies had the benefit of Crown guarantees under the Crown Retail Deposit Guarantee Scheme. The Crown case was that the defendants, led by Mr Bublitz, entered into a series of transactions that breached limitations on related party transactions in the companies' trust deeds and the Crown guarantees. The Crown also alleged the defendants misled potential investors and the Crown by failing to
The defendants pleaded not guilty. Their trial commenced in the High Court at Auckland before Woolford J on 8 August 2016. The trial significantly exceeded the allocated three months. Mr Bublitz funded his defence privately until the start of the fifth month of the trial, at which point he was approved for legal aid. Mr Morrison retained private counsel until October 2015, whereupon he represented himself with the assistance from May 2016 of counsel appointed by the Court. During the Crown case, a number of charges were either withdrawn or dismissed, reducing the charges to 15 in all against the appellants.
On 23 March 2017, after the Crown case had closed but before the conclusion of Mr Bublitz's defence, the Crown disclosed to the defence a list of documents from the files of Deloitte, investigative agents for the FMA. These documents had been reviewed by Crown counsel between September and October 2016 and were not disclosed on the grounds that they were irrelevant or able to be withheld. The late disclosure of this list was an admitted breach of ss 13(2)(b) and (5) of the Criminal Disclosure Act 2008. 5 Woolford J aborted the trial on 10 May 2017 on the basis that the prosecution's non-compliance with the Criminal Disclosure Act gave rise to a reasonable danger of a miscarriage of justice, compounded by a prosecution of “unnecessary length and complexity”. 6
The Crown chose not to proceed against Mr Morrison again. The remaining charges against him were dismissed. Subsequently Mr Bublitz was retried and convicted on four charges of theft by a person in a special relationship and two charges of making a false statement as a promoter of securities. 7 Toogood J sentenced Mr Bublitz to three years and two months' imprisonment on these charges. 8 Mr Bublitz's appeal to this Court against conviction and sentence was recently allowed
Following the aborted trial, but before the conclusion of the retrial, Mr Bublitz and Mr Morrison applied to the High Court for costs. Mr Bublitz sought costs of $1,284,493.57. Of that, $200,000 was sought under the CCCA and $1,084,493.57 under the CPA. 10 Mr Morrison applied for costs totalling $212,992.90 under the CCCA and CPA but did not specify how much was sought under each Act. 11
Section 364 of the CPA provides:
364 Costs orders
(1) In this section,—
costs order means an order under subsection (2)
procedural failure means a failure, or refusal, to comply with a requirement imposed by or under this Act or any rules of court or regulations made under it, or the Criminal Disclosure Act 2008 or any regulations made under that Act
prosecution—
(a) means any proceedings commenced by the filing of a charging document; but
(b) does not include an appeal.
(2) A court may order the defendant, the defendant's lawyer, or the prosecutor to pay a sum in respect of any procedural failure by that person in the course of a prosecution if the court is satisfied that the failure is significant and there is no reasonable excuse for that failure.
(3) The sum must be no more than is just and reasonable in the light of the costs incurred by the court, victims, witnesses, and any other person.
(4) A costs order may be made on the court's own motion, or on application by the defendant, the defendant's lawyer, or the prosecutor.
(5) Before making a costs order, the court must give the person against whom it is to be made a reasonable opportunity to be heard.
(6) A costs order may be made even if the defendant has not yet been convicted, or is eventually discharged, or the charge is dismissed.
(7) The court may make more than 1 costs order against the same person in the course of the same prosecution.
(8) The court may order that some or all of the amount ordered to be paid under a costs order be paid to any person connected with the prosecution.
(9) Subsections (2) to (8) do not limit or affect the Costs in Criminal Cases Act 1967.
Section 5 of the CCCA provides:
5 Costs of successful defendant
(1) Where any defendant is acquitted of an offence or where the charge is dismissed or withdrawn, whether upon the merits or otherwise, the court may, subject to any regulations made under this Act, order that he be paid such sum as it thinks just and reasonable towards the costs of his defence.
(2) Without limiting or affecting the court's discretion under subsection (1), it is hereby declared that the court, in deciding whether to grant costs and the amount of any costs granted, shall have regard to all relevant circumstances and in particular (where appropriate) to—
(a) whether the prosecution acted in good faith in bringing and continuing the proceedings:
(b) whether at the commencement of the proceedings the prosecution had sufficient evidence to support the conviction of the defendant in the absence of contrary evidence:
(c) whether the prosecution took proper steps to investigate any matter coming into its hands which suggested that the defendant might not be guilty:
(d) whether generally the investigation into the offence was conducted in a reasonable and proper manner:
(e) whether the evidence as a whole would support a finding of guilt but the charge was dismissed on a technical point:
(f) whether the charge was dismissed because the defendant established (either by the evidence of witnesses called by him or by the cross-examination of witnesses for the prosecution or otherwise) that he was not guilty:
(g) whether the behaviour of the defendant in relation to the acts or omissions on which the charge was based and to the investigation and proceedings was such that a sum should be paid towards the costs of his defence.
(3) There shall be no presumption for or against the granting of costs in any case.
(4) No defendant shall be granted costs under this section by reason only of the fact that he has been acquitted or that any charge has been dismissed or withdrawn.
(5) No defendant shall be refused costs under this section by reason only of the fact that the proceedings were properly brought and continued.
The Judge considered that costs under the CCCA were available only to Mr Morrison. The “unique circumstances” of the case meant it was inappropriate to hear Mr Bublitz's application while significant charges remained outstanding against him. 12 The analysis of the dismissed charges would depend on the outcome of the retrial. 13 All charges against Mr Morrison having been dismissed, there was no barrier to determining his CCCA application. 14
In determining whether Mr Morrison should be awarded costs under s 5 of the CCCA, the Judge considered the factors under s 5(2), 15 as well as various other issues unique to the trial, including the breadth and complexity of the Crown charge notice, a Crown application to admit hundreds of documents under the co-conspirator's rule, the unavailability of a Crown expert, the admitted breach by the Crown of the Criminal Disclosure Act and the length of the trial. 16 In light of these...
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