JOHN ARCHIBALD BANKS Appellant. THE QUEEN Respondent
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1 IN THE COURT OF APPEAL OF NEW ZEALAND CA361/2016 [2017] NZCA 69 BETWEEN AND JOHN ARCHIBALD BANKS Appellant THE QUEEN Respondent Hearing: Court: Counsel: Judgment: 15 February 2017 (with an application on 14 March and submissions on that application on 14 and 17 March) Wild, Simon France and Duffy JJ D P H Jones QC for Appellant J R Billington QC and M J Lillico for Respondent 21 March 2017 at 3 pm JUDGMENT OF THE COURT A The appeal is dismissed. B The appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements. REASONS OF THE COURT (Given by Simon France J) BANKS v R [2017] NZCA 69 [21 March 2017]
2 Introduction [1] Mr Banks, formerly the Mayor of Auckland, was charged in relation to electoral returns he filed for his mayoralty campaign. It was alleged that he declared three payments to be anonymous when in fact he knew who the donor was. One of the donations was from SkyCity and two were from Megastuff Ltd (the Megastuff donations). The latter company is an entity associated with Mr Dotcom. [2] The charge was found proved in relation to the Megastuff donations, but Mr Banks successfully appealed on the basis of fresh evidence. The history of the matter is set out in several judgments. 1 Following his acquittal, Mr Banks applied under the Costs in Criminal Cases Act 1967 (the Act) to recover his trial costs. A key claim of the application was that the evidence of the main prosecution witnesses in relation to the Megastuff donations had been shown to be fabricated. It was also contended that deficiencies in the evidence of those witnesses could and should have been discovered earlier had proper inquiries been made. [3] Both these propositions were rejected by Wylie J. 2 The application was analysed in terms of the statutory criteria, and was dismissed. Mr Banks appeals on the basis that Wylie J erred in these two pivotal assessments. Counsel for Mr Banks, Mr Jones QC, accepts there is no other error of principle, and the appeal depends on this Court reaching different conclusions from those of Wylie J in relation to either of these matters. Relevant history [4] The Megastuff donations were made following discussions between Mr Dotcom and Mr Banks about donations. Prior to trial it seemed the main dispute would be about the content of those discussions, and whether Mr Banks had asked for the donations to be made anonymously. However, at trial the issue of when the discussions took place assumed importance, and then during the appeal process it became pivotal. 1 2 R v Banks [2014] NZHC 1244, [2014] 3 NZLR 256 [Trial judgment]; Banks v R [2014] NZCA 575 [Appeal judgment]; and Banks v R [2015] NZCA 182 [Recall judgment]. Banks v R [2016] NZHC 1596 [Costs judgment].
3 [5] The Crown case was built around the evidence of Mr Dotcom, which was in turn corroborated by his then wife and Mr Tempero (his then security adviser). Mr Dotcom s evidence was centred on a lunch at his residence on 9 June He said: (a) he offered $50,000, which was accepted; (b) Mr Dotcom instructed Mr Tempero to arrange a cheque but Mr Banks intervened and requested the cheque be split into two; (c) Mr Banks said this was so he would not have to declare the source; and (d) this had happened while they were at the lunch table. [6] Mr Banks made a statement to the police in which he denied knowing of the Megastuff donations. He accepted he had discussed donations at Mr Dotcom s residence with Mr Dotcom and had explained that anonymity could be achieved. He had also provided bank slips. He was not aware, however, that donations had ultimately been made. Mr Banks said the only conversation between the two occurred away from the table in a conservatory area of the house. Mr Banks gave some detail about the layout of the conservatory. [7] At trial, Mr Banks led evidence concerning his whereabouts and that of his wife (Mrs Banks) on 9 June. This evidence established that they could not have been at lunch at Mr Dotcom s place on that day. It was instead suggested the lunch occurred four days earlier, on 5 June. In her police statement Mrs Banks had said early June. It was not raised with the prosecution prior to trial that the 9 June date proffered by the Crown witnesses could be shown to be incorrect. [8] Wylie J found that the lunch occurred on 5 June, but otherwise accepted the evidence of the prosecution witnesses. 3 His Honour expressly rejected evidence from Mrs Banks that there were others at the lunch, particularly two American 3 Trial judgment, above n 1, at [106] and [121].
4 businessmen, and that there had been no discussion of donations at the lunch table as Mr Dotcom alleged. 4 [9] Mrs Banks was piqued by the rejection of her evidence about the lunch. By the time of the appeal Mrs Banks had tracked down the two American businessmen. They provided affidavits confirming they had been at the lunch and that donations were not discussed in their presence. When confronted with this evidence, Mr Dotcom accepted its accuracy. He believed, however, there had been a second lunch on 9 June at which the donations were discussed, and that the two cheques were written that day. [10] The appeal process took an unfortunate turn. When the appeal was first heard, this Court was not advised about Mr Dotcom s revised position. The Court accepted the cogency of the new evidence, and noted that the Crown had relied on the events at lunch to establish Mr Banks guilty knowledge. 5 The evidence was therefore important, and the appeal was allowed and a retrial ordered so that the evidence could be tested in context. [11] The information that Mr Dotcom accepted he was in error about 5 June was only disclosed after the appeal decision had been released. When that occurred, this Court was asked to revisit the matter, which it did. The Court noted that the High Court had rejected the possibility of the 9 June lunch date to which Mr Dotcom was now apparently returning. 6 The Court concluded that the Crown case, as presented in the High Court, was in sufficient disarray to make a retrial inappropriate. 7 A fact finder could not be satisfied beyond reasonable doubt. An acquittal was directed. Applicable law [12] The application for costs fell to be considered under s 5 of the Act. That section was summarised by this Court in Jones v Civil Aviation Authority: Trial judgment, above n 1, at [108]. Appeal judgment, above n 1, at [28]. Recall judgment, above n 1, at [34]. Recall judgment, above n 1, at [40]. Jones v Civil Aviation Authority [2009] NZCA 240.
5 [10] Section 5(1) provides that where any defendant is acquitted of an offence the Court may order that he be paid such sum as it thinks just and reasonable towards the costs of his defence. [11] Subsection (2) provides that without limiting or affecting the Court's discretion, in deciding whether to grant costs and the amount of any costs granted, the Court shall have regard to all relevant circumstances and in particular (where appropriate) to - (a) (b) (c) (d) (e) (f) (g) Whether the prosecution acted in good faith in bringing and continuing the proceedings; 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; Whether the prosecution took proper steps to investigate any matter coming into its hands which suggested that the defendant might not be guilty; Whether generally the investigation into the offence was conducted in a reasonable and proper manner; Whether the evidence as a whole would support a finding of guilt but the information was dismissed on a technical point; Whether the information 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; 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. [12] Subsection (3) provides there shall be no presumption for or against the granting of costs in any case. [13] Subsection (4) provides that no defendant shall be granted costs by reason only of the fact that he has been acquitted. [14] Subsection (5) provides that no defendant shall be refused costs by reason only of the fact that the proceedings were properly brought and continued. [13] The focus on appeal is subs (2)(f), which concerns whether the defendant has established that he or she is not guilty. The two key arguments advanced by Mr Jones pick up on the not guilty aspect of that provision by in effect claiming Mr Banks has established his innocence, and on the the defendant has established aspect of the provision by emphasising that the ultimately crucial evidence was a product of Mr Banks endeavour and not that of the Crown.
6 [14] In terms of appeals under the Act, Mr Jones cited this Court s decision in V (CA428/2012) v R: 9 [21] In R v Reid, the Supreme Court dealt with an appeal against an award of costs under the [Costs in Criminal Cases] Act. The Court confirmed that the decision to award or not award costs under the Act involves the exercise of a broad discretion and that what might generally be described as an error of principle by the judge must be established if the exercise of the discretion is to be challenged successfully on appeal. In describing the error required as it did the Court no doubt had in mind the discussion in Kacem v Bashir in relation to appeals against discretionary decisions. [22] As this Court noted in Delamere v Serious Fraud Office, the Supreme Court [in Reid] made it clear that the weight given to the statutory criteria does not engage matters of principle affecting the exercise of the discretion. The Supreme Court also identified the difficulty faced by an appellate court in attempting to capture the ephemeral but significant impressions which inform the assessments and discretions of the trial judge. [15] Given the relatively narrow focus of the appeal, it is not necessary to consider the authorities further. In the judgment under appeal, Wylie J distilled the principles from the authorities, 10 and it is not suggested his Honour erred in that assessment. Nor is it said the principles were wrongly applied to the case except in the way identified, namely that two underlying evaluations to which these principles were applied were incorrect. If Mr Banks fails on those challenges, there is no basis to disturb Wylie J s assessment. Decision Issue one has the subsequent evidence shown that the prosecution case was based on fabricated evidence? [16] There is no doubt that important aspects of the prosecution evidence concerning the Megastuff donations have been shown to be wrong. And we accept that when three witnesses make the same mistake, it is legitimate to inquire as to how that has come about. That said, we consider that Mr Banks has failed by some margin to establish that this Court on appeal should conclude that a conspiracy to pervert the course of justice by committing perjury is the correct explanation for the incorrect evidence V (CA428/2012) v R [2013] NZCA 211 (footnotes omitted). Costs judgment, above n 2, at [41].
7 [17] Wylie J had the advantage of not only the new affidavit evidence from the American businessmen, but of being able to assess the impact of that evidence on the original evidence that he heard and saw. He was by far in the best position to assess the merits of this argument, and he rejected it. We see no basis on which we should differ. [18] The evidence of the American businessmen provided further detail about the purpose of their visit and what was discussed at the lunch. When confronted with that evidence, Mr Dotcom recognised it was correct, and that his recollection of the lunch table discussions was mistaken. He acknowledged that immediately. However, he adheres to the proposition that the unusual structure of the cheques (two $25,000 cheques for a $50,000 donation that Mr Dotcom says he did not want to keep anonymous) was a direct consequence of Mr Banks asking for the money to be paid that way. [19] Mr Jones submits Mr Dotcom s adherence to his core allegation is not credible. The evidence at trial established that the lunch could not have happened on 9 June, and further established all the possible occasions on which there could have been discussions between Mr Dotcom and Mr Banks. The conversation could only have happened on 5 June. [20] All this may be so, but it still does not establish the witnesses were deliberately telling untruths. What Mr Banks seeks here is something concerning which an appellate court will necessarily be wary. The proposition is that this Court should make a finding for the first time on what is a third appeal hearing in the matter that there is no explanation for incorrect testimony other than perjury, in circumstances where the witness has not had an opportunity to confront under oath the contrary evidence relied upon, and where the Judge who heard the original evidence, and was aware of this new evidence, declined to do so. Implicitly the submission asks this Court to hold that the core allegation made by Mr Dotcom, rather than the detail surrounding it, is wrong, and that Mr Banks is innocent. This Court, when entering the acquittal, did not go that far and there is no basis for us to
8 do so. We repeat, as Wylie J did, 11 it is clear some evidence is incorrect, and there is cause to ask how the error came about. Beyond that one cannot go. It follows that we reject what is in reality the central plank of the appeal. Issue two should the Crown have tested its evidence more thoroughly? [21] Mr Jones submits the flaws in the evidence about the Megastuff donations were there to be seen. Like Wylie J, 12 we consider this is unsustainable. This Court on the earlier appeals expressly concluded the evidence of the American businessmen was not fresh. 13 It could have been called at the first trial with reasonable endeavour. The reason it was not called was that it was not seen by anyone to be important. The proposition now advanced that the Crown should have pursued it prior to trial is one that can only be advanced with hindsight. [22] But for this missing evidence, the prosecution case on the Megastuff donations was considered sufficiently credible to result in a conviction. That being so, it is difficult to advance the proposition that the prosecution needed to do more when the missing evidence that ultimately undermined the case was more in the control of the defendants than the prosecution. The defence knew who was at lunch. The defence knew that the 9 June date was incorrect but kept silent on it. Mrs Banks was able to locate the American businessmen speedily enough following verdict. [23] At this point it would be speculative to try to assess what actions may have been taken had the Crown been advised prior to trial that the lunch could not have occurred on 9 June. The change in date, on its own, may not have been seen as significant. Alternatively it may be, as we understood Mr Jones to contend, that it should have raised issues about the quality of the evidence concerning when the cheques were written and sent. This, in turn, would raise issues about Mr Dotcom s evidence. But if that is so, it was a defence choice not to start that hare running. We make the same observation about the identity of the two American businessmen. There was no particular reason prior to trial for the Crown to identify them, and the capacity to do so was with the defence Costs judgment, above n 2, at [104]. Costs judgment, above n 2, at [89] [92]. Appeal judgment, above n 1, at [27]; and Recall judgment, above n 1, at [27].
9 [24] There is no aspect of Wylie J s careful reasoning on this second issue that has been shown to be flawed. He was familiar with the case and how it unfolded, was aware as the decision-maker as to what had struck him as important, and was best placed to assess the merit of this argument. Conclusion [25] The short answer to this appeal is that nothing has been raised that leads us to conclude the careful and thorough judgment of Wylie J was wrong. The appeal runs into the appellate difficulties noted in the passage from V (CA 428/2012) v R that we cited earlier. 14 This appeal has essentially proffered the same arguments as were made to Wylie J and rejected. 15 There is in reality no error of principle alleged, just disputed evaluations. For the full reasons given in Wylie J s judgment, and which need not be repeated here in detail, we see no reason to disagree with those evaluations. [26] The appeal is accordingly dismissed. Mr Jones submits that whatever the outcome, costs should lie where they fall. Counsel for the respondent, Mr Billington QC, did not have instructions on the matter. We consider that the appeal lacks merit. The appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements. 16 It is of course open to the respondent not to pursue costs if it chooses. Addendum [27] On 14 March 2017, after this judgment had been drafted, the Court received an application by Mr Dotcom seeking leave to intervene in this appeal. The application was based on media reporting of the hearing on 15 February 2017, referring to claims made about Mr Dotcom s evidence. We received written submissions from the parties but have not considered it necessary further to consider the application. First, the substance of this judgment means that the concerns V (CA428/2012) v R, above n 9. See Costs judgment, above n 2, at [43]. The appeal is brought under s 271 of the Criminal Procedure Act 2011, which is located in pt 6 of that Act. Section 8 of the Costs in Criminal Cases Act 1967 makes it plain that appeals under pt 6 may be subject to an award of costs.
10 underlying Mr Dotcom s application have not come to fruition. Secondly, the application comes too late for this Court to entertain, not least because Wild J will not be sitting again. Accordingly, we formally dismiss Mr Dotcom s application. Solicitors: Parlane Law, Auckland for Appellant Crown Law Office, Wellington for Respondent
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