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The Queen v Slavich [2009] NZCA 188 (15 May 2009)

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The Queen v Slavich [2009] NZCA 188 (15 May 2009)

Last Updated: 20 May 2009


IN THE COURT OF APPEAL OF NEW ZEALAND

CA461/2007

[2009] NZCA 188

THE QUEEN

v

JOHN KENNETH SLAVICH

Hearing: 26 February 2009


Court: Chambers, Gendall and Allan JJ


Counsel: J Haigh QC and B H McCarthy for Appellant
P P Crayton for Crown


Judgment: 15 May 2009 at 2.30 pm


JUDGMENT OF THE COURT

The appeal is dismissed.


REASONS OF THE COURT


(Given by Chambers J)


Table of Contents

Para No
Two frauds [1]
Issues on the appeal [4]
Under the law prior to the Evidence Act 2006, was it impossible for
an accused to consent to the admission of unsworn evidence? [9]
Were any of the verdicts unreasonable having regard to the evidence? [28]
The overall Crown case [37]
The Booth transaction [44]
The Hannon transaction [50]
Mr Slavich’s complaints [56]
Result [77]

Two frauds

[1] In 2002, John Slavich was a chartered accountant practising in Hamilton. The Crown alleged that, between October and December that year, he had participated dishonestly in two transactions, which for convenience we shall call the “Booth” and “Hannon” transactions.
[2] On Mr Slavich’s application, the trial was heard before a judge sitting without a jury. Heath J, the trial judge, discharged Mr Slavich on three of the ten counts he faced, the Crown having elected not to call evidence to support those counts. On the remaining seven counts, the judge found Mr Slavich guilty on six. No verdict was required on the seventh, as it was an alternative charge. Subsequently the judge sentenced Mr Slavich to imprisonment, a sentence he has since served.
[3] Mr Slavich belatedly decided he wished to appeal. This court granted his application to extend time for appealing: [2008] NZCA 116.

Issues on the appeal

[4] The notice of appeal contained a number of grounds. In the end, however, Mr Haigh QC, for Mr Slavich, agreed the issues on appeal came down to two.
[5] The first concerned the admissibility of some Crown evidence. This was evidence from Carolyn Calder. (By the time of the High Court trial, Mrs Calder had got married and had taken her husband’s surname. At the time of the Hannon transaction, however, she was known as Carolyn Gibbs, and Heath J referred to her as Ms Gibbs throughout his judgment. We shall do the same.) For reasons we shall shortly explain, her evidence came in by consent, but unsworn. There is no doubt at all that Mr Slavich’s trial counsel, Mr McIvor, consented to the admission of Ms Gibbs’s evidence. Indeed, Mr Slavich was keen for the evidence to come in, as part of it, he thought, assisted his defence. But Mr Haigh now takes the point that, notwithstanding Mr Slavich’s consent, the evidence, being unsworn, was inadmissible. After discussion with the bench, Mr Haigh agreed that this first issue could be framed in these terms: under the law prior to the Evidence Act 2006, was it impossible for an accused to consent to the admission of unsworn evidence? We stress the words “under the law prior to the Evidence Act 2006” because this issue could not arise had the 2006 Act been in force at the date of this trial. Section 9(1) of the 2006 Act has made it crystal clear that unsworn testimony is now admissible, provided all parties consent. Section 9(1) reads:

In any proceeding, the Judge may, -

(a) with the written or oral agreement of all parties, admit evidence that is not otherwise admissible; and
(b) admit evidence offered in any form or way agreed by all parties.
[6] One sub-issue arises under the first issue. There is a dispute, advanced by Mr Haigh but lightly, as to the exact form of part of Ms Gibbs’s evidence. We need to clear that up.
[7] The second issue is whether any of the verdicts were unreasonable having regard to the evidence. In that regard, Mr Haigh was relying on s 385(1)(a) of the Crimes Act 1961. A sub-issue arising under this issue is what the standard of review should be on appeals from judge-alone trials where the appellate court has the advantage of seeing the fact-finder’s reasoning, an advantage we do not normally enjoy.
[8] For reasons we shall give, we find in the Crown’s favour on both these issues. This means we do not have to go on to determine issues which would have arisen had either of Mr Haigh’s arguments found favour, namely: was this an appropriate case for application of the proviso; if the appeal were allowed, should acquittals be entered or should there be an order for a new trial?

Under the law prior to the Evidence Act 2006, was it impossible for an accused to consent to the admission of unsworn evidence?

[9] Before discussing the law, we need to describe briefly how it came to pass that Ms Gibbs’s evidence came in unsworn. Ms Gibbs was to be the last Crown witness. She was in the final stage of a pregnancy. There were complications of such a magnitude that her medical advisor said that she could not safely travel to Hamilton to give evidence; indeed, she was not even to travel across Auckland to a facility with a video-link. Neither side wanted an adjournment until Ms Gibbs had given birth and was able to travel again.
[10] In the end, counsel agreed how to deal with the matter. Ms Gibbs’s evidence came in in two parts:
[11] Both parts require further explanation. We deal first with the brief of evidence. Ms Gibbs had given a deposition statement, which was, of course, supplied to Mr Slavich. Prior to the High Court hearing, however, that deposition statement was expanded. We shall call that document Ms Gibbs’s “brief of evidence” to distinguish it from her deposition statement. It is clear that that brief of evidence somehow or other found its way on to the High Court file; there is also no doubt that a copy of it was given to Mr Slavich.
[12] The teleconference call (which we shall shortly describe in more detail) took place on 20 September 2006. It is apparent from the transcript of that teleconference call that counsel discovered that Ms Gibbs, following her marriage, was now calling herself Mrs Calder. It is also apparent from that transcript that Mr Slavich’s trial counsel, Mr McIvor, had Ms Gibbs’s brief of evidence. Immediately after the teleconference call, Mr Douch, the Crown Solicitor at Hamilton, who was leading for the Crown on this prosecution, made one change to Ms Gibbs’s brief of evidence. That was to change the first paragraph of the brief, so that, instead of reading “My full name is Carolyn Anne GIBBS”, it read:

My full name is Carolyn Anne CALDER. My maiden name was Carolyn Anne Gibbs.

[13] Mr Douch then sent what we shall call the revised brief of evidence to Ms Gibbs for signature. The next day (21 September), Ms Gibbs signed the revised brief of evidence, which concluded with the following attestation:

This statement is true to the best of my knowledge and belief and I make this statement knowing that it might be admitted at a preliminary hearing, and that I could be prosecuted for making a statement that is known by me to be false and intended by me to mislead.

[14] Ms Gibbs returned the revised brief to Mr Douch. Mr Douch believes that he caused the original of the revised brief to be filed in the High Court. He thinks that because he now holds only a photocopy of the signed revised brief on his file. He annexed a copy of that photocopy to an affidavit.
[15] Unfortunately, no original of the revised brief appears on the court file. All the court file has is an unsigned copy of the original brief of evidence. In the end, we do not think it matters. It is quite clear that Ms Gibbs’s brief of evidence did come into evidence on 21 September: the court transcript expressly refers to the brief of evidence as having been “read” and forming part of the evidence. There is no difference between the brief of evidence and the revised brief of evidence save for the inconsequential amendment to paragraph 1. It is clear that Ms Gibbs did sign the revised brief, although unclear whether the original signed copy has been mislaid in the High Court or in Mr Douch’s office.
[16] We now turn to the second part of Ms Gibbs’s evidence, namely the transcript of the teleconference call. We need to describe how that transcript came into existence. Counsel suggested a procedure by which Ms Gibbs’s evidence (as contained in her brief) could be tested. On 20 September, the judge provisionally approved it. The agreed procedure was in brief this. The court set up a conference call with Ms Gibbs. Present in court were counsel, Mr Slavich, the registrar, and Heath J’s associate – but not Heath J himself. Counsel then had the opportunity to ask Ms Gibbs questions, as if she were present in court and they were conducting a supplementary examination-in-chief and cross-examination. The question and answer session was recorded and later transcribed by Heath J’s associate. The transcript was then given to counsel – but not, at that stage, to Heath J. Counsel then checked the transcript. It was only at that point that counsel agreed that Ms Gibbs’s brief of evidence and the transcript would both go into evidence. Following that agreement, counsel gave Heath J the transcript, and at that point, on 21 September, Ms Gibbs’s brief of evidence and the transcript became part of the evidence of the trial.
[17] It is important to emphasise certain features. First, everything occurred with Mr Slavich’s consent. Indeed, he was keen to have the transcript in evidence, as he considered some of Ms Gibbs’s answers to be supportive of the defence he was running. Secondly, none of Ms Gibbs’s evidence became evidence in the trial until the entire process was completed and both sides had consented. Thirdly, there is no suggestion that Mr Slavich’s trial counsel exceeded his authority or was in any way incompetent in suggesting or agreeing to the procedure followed. Fourthly, at no stage did anyone request Ms Gibbs to be sworn. Fifthly, both sides, in their final submissions, relied on parts of Ms Gibbs’s evidence.
[18] If ever there was a case, therefore, where it might be thought inappropriate for an accused to take the point on appeal that particular evidence was unsworn, this is it. But Mr Haigh submits that, notwithstanding the apparent lack of merit in the point, unsworn evidence is simply not evidence. It is his submission that, prior to the Evidence Act 2006, it was impossible for an accused to consent to the admission of unsworn evidence. In fairness to Mr Haigh, we should point out that this potential ground of appeal was apparently raised by the panel which heard the application to extend time for appealing.
[19] It is clear that this case must be decided under the common law. There was no relevant provision in any of the evidence statutes preceding the Evidence Act 2006. Mr Crayton, for the Crown, faintly suggested the evidence might have been admissible under s 369 of the Crimes Act 1961, which read:

Any accused person on his trial, or his counsel or solicitor, may admit any fact alleged against the accused so as to dispense with proof thereof.

[20] This court, when determining the application to extend time for appeal, said this “was [plainly] not a s 369 situation, nor was it treated as such by the [High] Court”: at [60]. We agree.
[21] So what was the common law? There is no doubt that originally the common law required all evidence to be sworn. But there is equally no doubt that, in civil cases, that requirement has not been insisted upon in New Zealand for decades. Unsworn evidence has frequently come in by consent. If the common law permits unsworn evidence by consent in civil cases, it is a little difficult to see why it would erect a barrier in criminal cases. There is no unfairness to the accused from the course, as no one is suggesting this relaxation of the old rule could occur in circumstances where the accused does not consent. And, indeed, it is our experience as trial judges that unsworn evidence has not infrequently come in in criminal cases. Deposition statements are frequently read by consent. Of course, they will have been sworn in the lower court, but nonetheless the witness has not been resworn for the purposes of the trial itself. In addition, however, it has not been uncommon for unsworn witness statements, obtained by the police after the preliminary hearing, to be tendered by consent. The fact that so many trial judges have permitted this course suggests the common law in New Zealand has moved on this topic so that, prior to the Evidence Act 2006, it could be said that unsworn testimony, which would have been admissible if sworn, can come in as evidence in both civil and criminal trials, provided such admission is with the consent of all parties.
[22] We see it as very significant that the Law Commission did not regard the section of its model Bill (now s 9 of the Evidence Act 2006) as changing the law: it saw s 9(1)(a) as merely a codification. The Law Commission said of this section (Evidence (NZLC R55, vol 2 1999) at [C62]):

Section 9(1)(a) codifies the convenient practice in both civil and criminal proceedings which allows a judge, with the consent of all parties, to admit evidence that may otherwise not be admissible. For example, in the course of presenting their cases, parties sometimes introduce, without objection from the other side, evidence that is not strictly relevant to determining the proceeding. In the end, it saves time not [sic] to allow this sort of harmless evidence, rather than disrupt its flow by constant rulings on admissibility. Section 9(1)(b) allows a judge to admit evidence in any form (for example, in the form of an affidavit or a written brief) or in any way (for example, in any alternative way permissible under s 105) agreed between the parties.

[23] Mr Haigh, in support of his argument that it was impossible for an accused to consent to the admission of unsworn testimony, relied on two authorities. The first was this court’s decision on the application to extend time for appeal. But this decision was by no means definitive. This court said at [62]:

We do not have to decide this point. And counsel were not in a position to assist us with argument at the hearing. In the circumstances, this panel merely notes the point. It will be entirely a matter for counsel as to what if anything is to be made of this factor as an appeal point, if and when the appeal proceeds.

[24] The only case this court referred to in the earlier decision was R v Sharman [1998] 1 Cr App R 406 (CA). Mr Haigh relied on this as his second authority. In Sharman, a young girl gave recent complaint evidence in a rape case. Part of her evidence was given by pre-recorded videotape. At the date that videotape was recorded, she was 13. By the time of trial, she was 14. At trial, after the videotape had been shown to the jury she gave further evidence-in-chief and was then cross-examined and re-examined. At no stage was she required to take an oath or to affirm. Mr Sharman was convicted. He then appealed against conviction on the ground that the unsworn oral evidence of a 14 year old witness should not have been admitted.
[25] Under English law as it then was, there was no need for a 13 year old witness to swear or affirm; thus, the videotape rightly came into evidence. But a 14 year old, as the witness was by the time of trial, was required to swear or affirm. By oversight, that did not take place: at 409. The consequence of this, the Court of Appeal held, was that the witness’s viva voce evidence was inadmissible. Mr Sharman’s conviction was quashed, as the court was concerned that the witness’s viva voce evidence (or, correctly, non-evidence) might well have affected the jury’s conclusion: at 410. The decision has since been reversed so far as the United Kingdom is concerned by the Youth Justice and Criminal Evidence Act 1999, s 56(5). It would no longer be possible for an appellate court to allow an appeal on the grounds of unsworn testimony in the circumstances that arose in Sharman.
[26] In our view, Sharman can be distinguished. Mr Sharman did not consent to the witness giving her evidence unsworn. Rather, there was a trial irregularity and the evidence came in unsworn “by oversight”. In our view, the case is not authority for Mr Haigh’s proposition.
[27] We accordingly answer the first issue in this way: it was not impossible for Mr Slavich to consent to the admission of unsworn evidence. What is more, for the reasons given at [17] above, we do not consider any prejudice arose from the judge’s acceptance of a procedure counsel had jointly agreed.

Were any of the verdicts unreasonable having regard to the evidence?

[28] The law under s 385(1)(a) of the Crimes Act has now been definitively settled by the Supreme Court’s decision in R v Owen [2008] 2 NZLR 37. In that case, the Supreme Court endorsed, at [13], the following aspects of what this court had held in R v Munro [2008] 1 NZLR 87:
[29] The Supreme Court went on to say, at [14]-[15], that a verdict will be unreasonable “where it is a verdict that, having regard to all the evidence, no jury could reasonably have reached to the standard of beyond reasonable doubt”.
[30] Munro and Owen were, of course, both concerned with trials where findings of fact and verdicts had been made by juries, not judges sitting alone. Does this make a difference? The first point to note in this regard is that the statutory test is identical: the appeal is still founded on s 385(1)(a). That is to say, the appellant must satisfy the appellate court that the verdict of the fact-finder should be set aside “on the ground that it is unreasonable”. Normally, of course, where facts have been found by a jury, the appellate court has no way of critiquing the jury’s reasoning process, as it is undisclosed. But judges sitting alone give reasons. Are those reasons to be ignored so far as this ground of appeal is concerned? Obviously, the judge’s reasoning could be considered on the other grounds of appeal provided by s 385(1). For instance, if the judge’s reasoning disclosed that he or she had misdirected himself or herself as to the law, the reasons could be analysed in that regard, just as a judge’s summing-up to the jury can be analysed. Where, however, the sole ground of appeal hinges on the reasonableness of the fact-finding, should a defendant who has had a judge-alone trial be in a better position than he or she would have been in had the facts been found by a jury?
[31] That is not an easy question. At first blush, one might answer: of course, the appellate court should look at the factual reasoning. It’s there; how could one sensibly ignore it? But the matter is not that simple. That is because this court has held that judges sitting alone are not expected to produce a fully reasoned judgment. The definitive judgment continues to be R v Connell [1985] 2 NZLR 233, where this court said at 237:

Further, what the Judge sitting alone delivers is intended to be a verdict. It need not be supported by elaborate reasons. To require the Judge to set out in writing all the matters that he has taken into account and to deal with every factual argument would be to prolong and complicate the criminal process to a degree which Parliament cannot have contemplated. There are cases where a point or argument is of such importance that a Judge’s failure to deal expressly with it in his reasons will lead this Court to hold that there has been a miscarriage of justice. A demonstrably faulty chain of reasoning may be put in the same category. But it is important that the decision to convict or acquit should be made without much delay. Careful consideration is an elementary need, but not long exposition.

[32] In R v Eide [2005] 2 NZLR 504, this court arguably widened the trial judge’s obligation so far as giving reasons for verdicts was concerned: at [19]-[22]. Heath J obviously took that judgment to heart – he referred to Eide at [9] – as he delivered what can only be described as a fully reasoned judgment. Should the fact, however, this particular judge was so conscientious result in a de facto widening of appellate review, simply because it is possible to critique the factual analysis on a line by line basis?
[33] We do not have a definitive answer to any of these questions; it may be something the permanent court needs to consider at some stage. Probably the answer is that the appellant does get the advantage of a “fuller” appeal if his or her trial has been before a judge alone who has delivered full reasons: see, for example, R v Biniaris [2000] 1 SCR 381 (SCC). In that decision, the Supreme Court of Canada held that the Yebes test (Canada’s equivalent of our Owen test), while “expressed in terms of a verdict reached by a jury”, is “equally applicable to the judgment of a judge sitting at trial without a jury”: at [37]. The court went on to say:

The review for unreasonableness on appeal is different, however, and somewhat easier when the judgment under attack is that of a single judge, at least when reasons for judgment of some substance are provided.

[34] After discussing some relevant authorities, the Supreme Court concluded at [37]:

These examples demonstrate that in trials by judge alone, the court of appeal often can and should identify the defects in the analysis that led the trier of fact to an unreasonable conclusion. The court of appeal will therefore be justified to intervene and set aside a verdict as unreasonable when the reasons of the trial judge reveal that he or she was not alive to an applicable legal principle, or entered a verdict inconsistent with the factual conclusions reached. These discernible defects are themselves sometimes akin to a separate error of law, and therefore easily sustain the conclusion that the unreasonable verdict which rests upon them also raises a question of law.

[35] We had no proper argument on this matter. For present purposes, we adopt the Biniaris approach, which must be the most favourable approach an appellant could expect. Applying that, we are satisfied that Mr Slavich has failed to show – by a wide margin – that the verdicts were unreasonable.
[36] We set out our answer to Mr Slavich’s appeal under this head in four parts:

The overall Crown case

[37] On the Crown case, the central figure with respect to both transactions was a fraudster whose real name was Les Orchard. He was a good friend of another fraudster, Miles McKelvy. According to Mr Orchard, it was Mr McKelvy who first instructed him in the modus operandi adopted by Mr Orchard in the Booth and Hannon transactions. Mr Orchard was the key Crown witness at Mr Slavich’s trial. By the time of that trial, he had already been dealt with on a large number of fraud charges, including charges relating to the Booth and Hannon transactions.
[38] The essential nature of the frauds was this. Mr Orchard or Mr McKelvy would find someone who owned unencumbered property which could be used as security for a loan from a second- or third-tier financier. Mr Orchard would then pretend to be that landowner and would approach the financier through an intermediary, offering “his” land as security. Once the loan was approved, Mr Orchard would instruct a solicitor with whom he had never previously dealt. He would then pretend to be the landowner who had just secured the loan. He would attend on the solicitor and fraudulently sign the security documents. Instructions would then be given to the solicitor as to the disbursal of the funds. The idea was that, by the time the loan had to be repaid, no one would be able to find or identify Mr Orchard.
[39] According to Mr Orchard, “a third party” put him on to the possibility of Justin Booth as a potential persona. Mr Booth owned a property at Morrinsville Road, Hamilton. Later, it was, according to Mr Orchard, Mr McKelvy who identified Richard Hannon as a second victim. Mr Hannon was a wealthy farmer who Mr McKelvy said had been at school with him.
[40] Once Messrs Orchard and McKelvy had settled on using Mr Booth’s persona as the vehicle for the first fraud, they had to decide on a lender to approach. Mr Orchard said he had a list of financiers he used. On this occasion, Basecorp Finance Limited was chosen. It is unclear on the evidence as to when that choice was made. The contact person at Basecorp was Craig Rolls. Mr Orchard’s difficulty was that he “couldn’t front with Craig”. That was because he had previously had dealings with Mr Rolls, who would know that he was not Justin Booth. As well, their previous relationship had apparently turned sour owing to what Mr Orchard described as “a misunderstanding”. Mr McKelvy had previously dealt with Mr Slavich. It seems it was Mr McKelvy who suggested to Mr Orchard that Mr Slavich should be asked to present the funding proposal to Mr Rolls. As it happens, Mr Orchard had also previously met Mr Slavich – that was the previous year with respect to a transaction Mr Orchard described as “the Heta loan”.
[41] It was the Crown case that a meeting was then arranged at Burger King in Chartwell Square, Hamilton. Mr Orchard, Mr McKelvy, and Mr Slavich were present. It was the Crown case that, at that meeting, Mr Slavich agreed to front the loan application on behalf of “Mr Booth”. Mr Slavich knew well that this was not the real Mr Booth, although, as it happens, Mr Slavich did not know Mr Orchard’s real name. Mr Orchard had been using the alias Paul Adams when he and Mr Slavich had met the previous year.
[42] It was the Crown case that, about a week after the Booth transaction, a similar arrangement was entered into with respect to the Hannon transaction. Once again Mr Slavich fronted, claiming to be Mr Hannon’s accountant, to a different financier, this time Legend International Mortgage Brokers ’98 Limited. Mr Orchard masqueraded as Mr Hannon when instructing a different firm of solicitors to act for him on this loan.
[43] After the loans were arranged and disbursed, Messrs Orchard and Slavich shared the proceeds between them.

The Booth transaction

[44] Mr Orchard’s proposal was that they should try to obtain a loan of some $75,000 from Basecorp. They would offer as security Mr Booth’s unencumbered Hamilton property. For reasons already given, Mr Orchard could not approach Mr Rolls, pretending to be Mr Booth. So Mr Slavich prepared a funding proposal and went in to see Mr Rolls. Mr Slavich told him that Mr Booth wanted to borrow $75,000 for “a short term investment” in a fishing boat venture. Mr Slavich said that Mr Booth wanted to assist a friend, Paul Cameron, with the new project. Mr Slavich offered as security a first mortgage over Mr Booth’s residential property. The real Mr Booth knew nothing of the intended transaction and did not authorise Mr Slavich to make the proposal on his behalf.
[45] Basecorp accepted and processed the application for finance, instructing a solicitor, Umarji Mohammed, to act on the transaction. Mr Mohammed had been suggested by Mr Orchard, who took his name from a list of lawyers he had. Mr Orchard had never previously met Mr Mohammed. A man representing himself to be Mr Booth attended at the solicitor’s office. That man was, of course, Mr Orchard, who accepted in evidence that he had impersonated Mr Booth without his authority. Mr Orchard signed the mortgage and the loan agreement in Mr Booth’s name. He deceived Mr Mohammed as to his true identity by use of a false passport.
[46] On the afternoon of 29 October, Mr Mohammed received a facsimile from Mr Slavich’s accountancy firm, providing instructions for disbursement of the Basecorp funds. Of the $75,000 borrowed, $30,000 went to a company with which Mr Slavich was associated and $44,000 eventually found its way to Mr Orchard.
[47] Mr Slavich did not give evidence. But he had given a statement to the police. In that statement, he maintained he too had been duped by Mr Orchard, a man whom he knew, he said, as Mr Adams. He said that Mr Adams (Orchard) had introduced him to Mr Booth. Since it was common ground that this man was not the real Mr Booth, it followed that, on Mr Slavich’s account, there were two impersonators: Mr Orchard pretending to be Mr Adams, and some unknown man pretending to be Mr Booth. Mr Slavich insisted that, when he gave instructions to Mr Mohammed, he believed he was acting on the instructions of the Mr Booth to whom he had been introduced. Mr Slavich initially denied preparing the authority to disburse funds on which Mr Mohammed had relied. On being told that the disbursement authority was sent by facsimile from his firm’s office to Mr Mohammed, Mr Slavich accepted that he would have undertaken that task. He provided no explanation as to how $30,000 ended up in his own company’s account. Nor did he explain why Mr Cameron was not the recipient of the funds.
[48] The judge accepted Mr Orchard’s evidence, which he found corroborated by other evidence. He rejected Mr Slavich’s explanation to the police as “implausible”: at [110]. He found that Mr Slavich had no credible explanation as to why Mr Booth would want to mortgage an unencumbered property to provide money to an entity associated with Mr Slavich and to a man associated with Mr Orchard.
[49] The judge found Mr Slavich guilty of both fraud charges relating to the Booth transaction.

The Hannon transaction

[50] The Hannon transaction occurred just a week or so after the Booth transaction. This time, on the Crown case, Mr Orchard was impersonating Mr Hannon, an elderly and wealthy farmer. On the Crown case, Mr Orchard, calling himself Mr Hannon, approached Ms Gibbs of Legend, seeking to borrow $400,000. Mr Hannon (Orchard) told Ms Gibbs that Mr Slavich was Mr Hannon’s accountant. He gave Ms Gibbs Mr Slavich’s contact details. Ms Gibbs then contacted Mr Slavich, who provided her with what purported to be Mr Hannon’s financial information.
[51] On the faith of that information, Ms Gibbs arranged for a loan to be obtained from Yidam LLC, an American company. Yidam agreed to lend Mr Hannon $400,000.
[52] Mr Hannon (Orchard) then contacted Bruce Dell Law, a firm of solicitors in Auckland, asking them to act for him on the transaction. On 12 November Mr Hannon went into Mr Dell’s office, where he met (for the first time) Diana Jenkin, a solicitor employed by Bruce Dell Law. Mr Hannon (Orchard) presented a (false) driver licence to her to establish that he was Mr Hannon. Mr Hannon (Orchard) then executed mortgages over the real Mr Hannon’s property. After that was done, Ms Jenkin reported to the lender’s solicitors. Later that day, a sum of $385,750 was paid into the trust account of Bruce Dell Law, being the net proceeds of the loan.
[53] Ms Jenkin sought instructions on disbursement of the funds. Mr Hannon (Orchard) told her to contact his accountant, Mr Slavich. Ms Jenkin telephoned Mr Slavich. After the telephone discussions, Ms Jenkin received a document authorising the disbursement of funds. Of the total amount, $49,000 was to go to “T & M Smith (T/A Albacora Fiji)”. Mr Smith was a friend and client of Mr Slavich’s. According to Mr Orchard at trial, this was a payment to Mr Slavich for “doing the work” ie his role in the fraud. The balance found its way to Mr Orchard or for his benefit.
[54] Mr Slavich’s account was that Mr Adams (Orchard) had asked him to act for Mr Hannon, a man he had never met. He said he agreed to do so and that he believed the transaction was genuine.
[55] Heath J had little difficulty in finding these fraud charges proved. He concluded that Mr Slavich was a party to Mr Orchard’s fraud and that Mr Slavich had prepared the fraudulent authority to disburse funds. The judge also found that, after Mr Orchard was arrested on 24 November, Mr Slavich set about creating a false document to cover up his role in the fraud. Mr Slavich had said that, on 15 November, Mr Adams (Orchard) had asked him to prepare a deed under which Mr Hannon was to lend $50,000 to T & M Smith, trustees of the Albacora Trust, to enable them to operate two vessels, Albacora and Dolphin Free. In consideration for that loan, Mr Hannon was to have an option to buy into a Fiji tourist resort being investigated by Mr Smith. In fact, a computer expert called by the Crown established to the judge’s satisfaction that this deed had not been created in Mr Slavich’s computer system until 25 November, the day after Mr Orchard’s arrest and at a time when he was in custody. The judge found that Mr Slavich had drawn this document without colour of lawful authority, contrary to s 272 of the Crimes Act.

Mr Slavich’s complaints

[56] We found it difficult to pin down exactly what Mr Slavich’s complaints about the judge’s reasoning were. This was partly because Mr Haigh’s oral submissions departed significantly from the written submissions filed in advance of the hearing.
[57] To a large extent, the complaints stemmed from the judge’s acceptance of Ms Gibbs’s evidence, evidence which Mr Haigh submitted was inadmissible for the reasons advanced under the first issue. We have rejected that complaint.
[58] The principal complaint appears to be that the judge was not justified in finding that Mr Slavich had met Mr Orchard (pretending to be Mr Adams) prior to the commencement of the Booth transaction. It is true that this was a key part of Heath J’s reasoning. Count 1 of the indictment charged that Mr Slavich, on or about 28 October 2002, with intent to defraud, used a document capable of being used to obtain a benefit, namely a funding proposal summary addressed to Basecorp, for the purpose of obtaining for himself or for any other person a benefit. The judge dealt with the elements of that offence (s 229A(b) of the Crimes Act) and concluded at [101]:

On count 1 the only issue is whether the Crown has excluded the reasonable possibility that Mr Slavich dealt with a person whom he honestly believed to be Mr Booth. If that reasonable possibility has not been excluded, Mr Slavich must be acquitted on count 1.

[59] As we understand Mr Haigh, he does not dispute that that was the key issue. And, in our view, there was ample evidence to support the judge’s conclusion that Mr Slavich was party to a fraud under which he was to fulfil the role as front man to Mr Rolls while Mr Orchard (Adams) was to front to Mr Mohammed as Mr Booth. The judge, in reaching his conclusion on this key issue, was careful not to take Mr Orchard’s evidence at face value. Early on in the judgment, Heath J described his approach to Mr Orchard’s evidence in this way:

[23] The pleas of guilty Mr Orchard entered demonstrate that he has no difficulty in telling the most outrageous lies in order to deceive people into parting with their money. However, he has some perverse pride in the way in which he carries out his elaborate frauds and is prepared openly to discuss them. The nature of his personality, in that regard, suggests that much of his evidence about the way in which the frauds were perpetrated might be truthful.

[24] Nevertheless, I take a cautious approach to evaluation of Mr Orchard’s testimony. I am not prepared to act on Mr Orchard’s evidence unless it is confirmed in a material respect by contemporaneous documentary evidence, by another witness whose evidence I accept or is consistent with the general body of circumstantial evidence.

[60] On this key issue, the judge was faced with Mr Orchard’s testimony on the one hand and Mr Slavich’s out of court explanation on the other. The judge accepted Mr Orchard’s testimony and rejected Mr Slavich’s explanation as “implausible” for seven reasons, which he carefully listed at [110]. Mr Haigh in his submissions made no attempt to challenge those reasons.
[61] Rather, Mr Haigh concentrated on one aspect of the judge’s reasoning, namely that Mr Slavich “had already met Orchard calling himself Adams”. There was, Mr Haigh submitted, “no corroborating evidence of this allegation”. There did not need to be. Mr Orchard had given evidence that he had first had dealings with Mr Slavich the previous year with respect to “the Heta transaction”. On that occasion, he (Mr Orchard) had been using the name Paul Adams. Mr McIvor had not challenged Mr Orchard’s evidence in that respect when cross-examining him. So the judge was fully entitled to conclude that the two men had previously met.
[62] Once one accepts there was evidence that the two men took forward the Booth transaction together, each playing a vital role in the fraud, then the inference that the two men decided to use the same modus operandi a week later to perpetrate the Hannon fraud is irresistible. Mr Slavich’s innocent explanation of his role in the two transactions was rightly described by the judge as implausible. This case does not come even close to establishing that this court should interfere with the verdicts under s 385(1)(a).
[63] We may add that, even if Mr Slavich had not met Mr Orchard before the Burger King meeting, it would not have affected our conclusion that he nonetheless must have known that Mr Orchard was planning to assume the persona of Justin Booth. No other explanation is plausible. Why after the Burger King meeting did he never have contact with Mr Booth again? Why were all instructions taken from Mr Orchard (Adams)? Why did he take instructions as to disbursement of the loan from Mr Orchard (Adams)? Why did he not query why no money was going either to Mr Booth or to Mr Cameron? Why did $30,000 end up in his company’s bank account? Why did he not send a bill to Mr Booth for his services? The only rational inference to be drawn from the evidence is that Messrs McKelvy, Orchard and Slavich agreed at the Burger King meeting that they would perpetrate a fraud. It may well be that Mr McKelvy had decided from past dealings with Mr Slavich that he would be of a mind to assist.
[64] Mr Haigh raised two other matters, where he said the judge had gone wrong. The first related to when Mr Orchard, posing as Mr Hannon, had signed a Privacy Act waiver form Ms Gibbs required before processing the loan application Mr Slavich had made to Legend. The judge found “as a fact” that the document in question had been “signed in Hamilton by Mr Orchard before 10.54 am on 6 November 2002”: at [152]. Mr Haigh submitted this finding was in error and that Mr Orchard had not in fact signed the document until later in the day. Mr Crayton, for the Crown, accepted the judge was wrong and that Mr Orchard had not signed until that afternoon. But, he asked, does it matter? We agree with Mr Crayton. This was a trivial error, which in no way undermined the point the judge was making at this part of his reasoning. The speed with which Mr Slavich got everything ready for Ms Gibbs following her request of him that morning is supportive of Mr Orchard’s evidence that he signed the waiver document, as Mr Hannon, that day in Mr Slavich’s office.
[65] Mr Haigh’s other point related to the deed relating to the Albacora trust: see at [55] above. Mr Haigh acknowledged that the Crown had called an expert, Desmond Bennett, who had testified that the Albacora deed, although supposedly dated 15 November, had not been created until 25 November. But, Mr Haigh submitted, the judge had effectively ignored the evidence of Terry Smith, a friend and client of Mr Slavich’s, who was a trustee of the Albacora trust. Mr Smith gave evidence for the defence. He said he had signed the Albacora deed. The judge had referred to Mr Smith’s evidence on this topic at [178] of the judgment:

Mr Smith gave evidence that he usually drove from Auckland Airport to Tauranga and that the Deed had been signed by himself, his wife and Mr Slavich at the residence of a friend in Tauranga at his home address. The friend witnessed signatures and added his residential address. Notwithstanding the fact that Mr Smith said it was not unusual for Mr Slavich to be waiting for him at home in Tauranga when he arrived back from overseas, there is no evidence to establish Mr Slavich’s whereabouts that day. I take the view that it is improbable that any document was executed in Tauranga on 15 November 2002 by both Mr Smith and Mr Slavich.

[66] Mr Haigh complained that the judge had given no reason for rejecting Mr Smith’s evidence, which established, Mr Haigh submitted, that the deed had been made on 15 November and was a genuine document. In light of that, Mr Haigh submitted the judge’s finding with respect to count 10 was unreasonable.
[67] We disagree. The judge was fully entitled not to accept Mr Smith’s evidence. We have carefully read Mr Smith’s evidence and find it far from satisfactory. It was vague and contradictory. One possible reason for that is that Mr Smith was attempting to assist his friend with false evidence. Another possibility is that Mr Smith’s memory was badly affected by a stroke he had suffered two months before the trial. The judge made no finding as to which of those explanations was the more likely. In those circumstances, it would be wrong for us to speculate. But there can be no doubt about the unsatisfactory nature of the evidence.
[68] Having read the evidence, we are by no means sure that Mr Smith was saying he had executed the Albacora deed on 15 November in Tauranga, immediately after returning from overseas. In his examination-in-chief, he had put his arrival back in New Zealand as being 12 November and had said the agreement was signed about three days later. He said nothing about where it was signed or who had been present.
[69] Under cross-examination, he had no idea as to how long after he had returned to New Zealand he had signed the Albacora deed. It was also established in cross-examination that Mr Smith’s return to New Zealand was not 12 November, but was in fact 15 November. This meant that, if Mr Smith’s earlier evidence was right, namely that he had signed the deed some days after returning, the deed could not have been signed by him on 15 November.
[70] The judge’s finding, as expressed in [178], is not consistent with what Mr Smith said in either examination-in-chief or cross-examination. It appears to be based on the following questions the judge asked of Mr Smith:

See, the 15th of November, the date of that exhibit 45 [the Albacora deed] is the same day you arrived back in New Zealand. Do you have any recollection of signing it that day? ... No. With respect, Your Honour, I do, do a lot of travelling with respect to the vessels and I just, they become one dressed like another.

Okay? ... Unless there’s something special, which there wasn’t.

Do you tend to drive back from Auckland Airport to Tauranga? ... Yes.

Or fly? ... I tend to drive.

Yes? ... In those days I always drove.

Would it be unusual to have Mr Slavich waiting for you at home when you arrived? ... No, that wouldn’t be unusual.

[Emphasis added.]

[71] We regard that evidence as extremely shaky, especially when viewed against what Mr Smith had said in examination-in-chief and cross-examination. The judge in the circumstances was fully justified in regarding it as improbable that Mr Smith had signed the Albacora deed on 15 November. There was no evidence from Mr Slavich that he had been in Tauranga that day. Mr Smith’s answers to the judge provided no reason to doubt the expert evidence of Mr Bennett.
[72] Further, Mr Bennett’s evidence was, in crucial respects, supported by the defence expert, Michael Pook. While it is clear that an earlier draft of the Albacora deed was in existence prior to 25 November, we know for a fact that Mr Slavich altered that draft on 25 November and saved it for the first time under the name “Hannon”. We know that it was the amended document which Mr and Mrs Smith signed. So it just cannot be right that they signed the document on 15 November. The only rational explanation is that, immediately after Mr Orchard’s arrest, Mr Slavich took a draft and altered it, in an attempt to provide a paper trail, which, he hoped, would distance himself from the fraud of which he had been a part.
[73] It was, in any event, a very clumsy attempt. First, the deed purported to provide that Mr Hannon was lending the Smiths $50,000, which was to be repaid from the proceeds of a fish catch. The deed had a number of complicated provisions, including what was to happen if the catch proved insufficient to repay the purported loan. At no stage in his interview with the police did Mr Slavich refer to having discussed these complicated terms with Mr Hannon or getting his approval to them.
[74] Further, there is no evidence that Mr Slavich ever attempted to get Mr Hannon’s signature on the deed. When asked about that, he replied that his signature was not necessary. But, of course it was. The deed was the only record of the terms upon which Mr Hannon had purportedly lent $50,000 to the Smiths. Presumably Mr Slavich’s intention was to get Mr Orchard (Adams) to sign this deed as Mr Hannon at some point, but was unable to achieve that, either because he was unable to contact him owing to his arrest or because Mr Orchard (Adams) refused to sign it.
[75] We are satisfied beyond any doubt that the document was a sham and that the Crown established count 10 beyond reasonable doubt.
[76] Our analysis of the evidence and the judge’s reasoning goes far beyond what would normally be required on a s 385(1)(a) analysis following a judge-alone trial. We do not consider the judge’s reasoning has been undermined at all by the challenges made to it. He did make one minor error, but it was immaterial. Mr Slavich has not shown the verdicts were unreasonable.

Result

[77] We consider neither ground of appeal has been established. We are satisfied there has been no miscarriage of justice. We dismiss the appeal.

Solicitors:
Stace Hammond, Hamilton, for Appellant
Crown Law Office, Wellington

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