Hitchinson v R Ca

JurisdictionNew Zealand
CourtCourt of Appeal
JudgeWinkelmann J
Judgment Date20 Aug 2010
Neutral Citation[2010] NZCA 388
Docket NumberCA749/2009

[2010] NZCA 388

IN THE COURT OF APPEAL OF NEW ZEALAND

Court:

Chambers, Winkelmann and Venning JJ

CA749/2009

BETWEEN
Peter Justin Hitchinson
Appellant
and
The Queen
Respondent
Counsel:

P J Davey for Appellant

M A Woolford for Respondent

Appeal against conviction for theft by a person in a special relationship under s220 Crimes Act 1961 — appellant was an investment manager and was convicted of misappropriating client funds — whether emails admitted as evidence were previous consistent statements and should have been excluded under s35 Evidence Act 2006 — whether the District Court erred in directing the jury that the appellant could not rely on a written acknowledgment of his use of the investment funds as ratification.

Held: The C's email was evidence that did not fall within the previous statements prohibition under s35 EA. The email was C's evidence, it was not a repetition of it. The email was sent at or near the start of the period when H had used the funds for his own purpose and formed of the events in issue.

H's assistant's email was sent after the misapplication of the funds and therefore had not formed part of the events in issue. The email between C and L had probative value because it was evidence that C had behaved in a manner consistent with his account of the terms on which he had paid money to H. C's communication to L gained probative value because it was a communication that pre-dated C's discovery of how H had dealt with this funds. The email was therefore admissible as evidence under s7 EA (fundamental principle that relevant evidence admissible).

Even if s35 EA had not applied, the email was admissible on the grounds that H had not replied to L's email in circumstances where he could have been expected to. Section 32 EA (fact-finder not to be invited to infer guilt from defendant's silence before trial) prohibited a drawing of inference of guilt on silence. Where s32 EA did not apply, the fact of silence and the question or statement to which the silence related were admissible pursuant to the general admissibility provisions of s7 EA. Pre-trial silence may be relevant evidence under s7 EA if the silence occurred in circumstances where the defendant could have been expected to have refuted the allegation and it had not occurred in circumstances where s32(1) EA applied. As the C's were entitled to have received an answer from H as to the treatment of their funds, s 32(1) EA had not been engaged.

R's email alleging misapplication of his funds was also admissible even though it was a previous consistent statement. What was important however, was that in a conversation after the email H had admitted that he had stolen the money. The email was a part of the chain of events that led to the signing of the acknowledgment of debt. Both could be taken as an admission by H. Admissions by defendants were admissible under s27(1) EA (defendants' statements offered by prosecution). Section 27(3) EA expressly states that s35 EA did not apply to evidence offered under s27(1) EA. The email became part of the defendant's statements and was therefore admissible.

The Judge had not erred in his directions to the jury that the agreement between C and H could not be relied upon as ratification. The ratification could not, as a matter of law, have provided ratification because the C's could not relieve H of criminal liability, even if they had intended to, whether or not the contract was enforceable, because the offence had been completed at the time of the misapplication of the funds. Also, there was nothing in the agreement that could have supported H's defence; there was nothing that was evidence of an intention to excuse H's misapplication of the funds.

JUDGMENT OF THE COURT
REASONS OF THE COURT

(Given by Winkelmann J)

1

The appellant, Mr Hitchinson, was found guilty by a jury of six counts of theft by a person in a special relationship, an offence pursuant to s 220 of the Crimes Act 1961. He was sentenced by Judge Joyce QC on 6 November 2009 to three years, four months imprisonment. Mr Hitchinson appeals against his conviction on counts 6 and 7 of the indictment which charged:

6 ….. Peter Justin Hitchinson, between 8 September and 13 November 2006 or thereabouts, at Whangarei or elsewhere in New Zealand, having control over property, namely US$195,448.69, on terms and in circumstances that he knew required him to deal with that property in accordance with the requirements of another person, namely Donald Currie, intentionally dealt with the property otherwise than in accordance with those requirements and thereby committed theft.

7 ….. Peter Justin Hitchinson, between 17 October and 23 November 2006 or thereabouts, at Whangarei or elsewhere in New Zealand, having control over property, namely US$65,000, on terms and in circumstances that he knew required him to deal with that property in accordance with the requirements of another person, namely Barry Reiher, intentionally dealt with the property otherwise than in accordance with those requirements and thereby committed theft.

2

In respect of count 6, the grounds of appeal are that:

  • (a) the Judge erred in allowing two emails to be admitted as evidence which were, on Mr Hitchinson's case, evidence of previous consistent statements by Mr Currie and therefore inadmissible by reason of the prohibition contained in s 35 of the Evidence Act 2006 (the Act) against the admission of previous statements of a witness consistent with the witness's evidence, and

  • (b) the Judge was wrong to direct the jury that Mr Hitchinson could not rely on a subsequent written acknowledgment by Mr Currie of Mr Hitchinson's use of the funds as a ratification of that use and hence as a defence to the charge.

3

In relation to count 7, the appellant argues that the Judge erred in admitting evidence of an email from the complainant which the appellant says was inadmissible, again by reason of the s 35 prohibition.

4

A fourth ground of appeal contained in the notice of appeal, concerning the Judge's failure to discharge the jury, was abandoned at the hearing.

Appeal in relation to count 6
Factual background
5

Mr Hitchinson, through his company, FHXT Fund Managers Ltd (FHXT FM), offered to invest funds for clients in online foreign currency trading. Investors' funds were deposited with a foreign exchange trading platform. Each investor was allocated a client account showing their funds. FXHT FM took commission from the trading and any profit in excess of an agreed amount, with all other profits accruing to the client's account.

6

From June 2005 to September 2006, the online foreign currency trading platform used by FXHT FM was Foreign Exchange Clearing House Ltd, also known as “Forex Swiss”. Client funds were traded online through the Forex Swiss platform by Mr Hitchinson and an associate of his. Clients who invested with FXHT FM entered into a written client agreement which provided:

2.3 The client hereby mandates FXHT Fund Managers Ltd to operate a managed account on behalf of the client.

2.4 FXHT Fund Managers Ltd will not handle or transfer funds or financial instruments on behalf of the client.

2.5 All monies received (including profits) will accrue to the account of the client and will be held by Forex Swiss [or FX Active] in the Client's own trading account.

7

In early 2006 Mr Currie invested three sums, NZ$30,000, NZ$680,000 and again NZ$30,000 with FXHT FM, although subsequently withdrawing US$154,000 in May 2006.

8

In late August and September 2006 the Curries were travelling in Australia. There was a chain of emails around this time in which the Curries sought clarification from Mr Hitchinson as to the state of their investment and requested a simplified statement to assist them in understanding it. In his deposition statement and at trial Mr Currie said that in September 2006 Mr Hitchinson phoned him and told him that FXHT FM was changing trading platforms as Mr Hitchinson was not happy with the current platform's performance. Mr Hitchinson said that he thought that the current platform was making mistakes so they were opening another platform which would give the Curries a better return. He told the Curries that their funds would be transferred to their bank account and that they would then have to put them into another account for investment through the new platform.

9

Subsequently, on the evening of 7 September 2006, the Curries received a phone call from Westpac Bank, Sydney telling them that US$195,448.69 had been deposited into their account. They went to the bank first thing the following morning and transferred the money as they had been instructed by Mr Hitchinson.

The Curries' email
10

On 11 September 2006 Mr and Mrs Currie sent Mr Hitchinson an email. Evidence produced at trial established that the email had been received on Mr Hitchinson's computer. The subject line of the email is ‘Transfer Done’, and the text of the email reads as follows:

Hello Justin,

We had a foreign woman ring us from Sydney Westpac Bank about 6.30 Thursday evening to let us know about the large sum of U.S. dollars (195,448.69) that was deposited into our account and wanted our signatures and verification of our identities and what we were going to do with the money. We told her it was our investment and our fund manager was changing the investment platform. In order to get the signatures a.s.a.p. we went to Cairns Bank first thing Friday morning. They faxed through all our relevant details and we asked them to confirm the transaction by ringing us. They did this within the hour but did not deduct the $50 nor the $1000 which we requested and in order to change things at that stage it would delay things until Monday so we said to let it go through as is. This means we are still short and would like an extra $2,500 transferred into our account this week. This should make it worthwhile doing the transaction,...

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