Drollet v Police [2004] CKCA 10; CA No 10 of 2003 (13 December 2004)

IN THE COURT OF APPEAL OF THE COOK ISLANDS
HELD IN AUCKLAND

CA 10/03

BETWEEN

EDWARD VICTOR DROLLETT
Appellant

AND

THE POLICE
Respondent

Hearing date: 10 November 2004-12-07

Coram: Barker JA (Presiding)
Henry JA
Smellie JA

Counsel: Mr C Sweeney QC and Mr T Tapaitau for Appellant
Mr J Mullineux and Mr T Elikana for Respondent

Date of judgment: 13 December 2004

Solicitors: T Tapaitau, Rarotonga for Appellant

Crown Law Office, Rarotonga for Appellant

JUDGMENT OF THE COURT

[1] Following trial before a Judge alone, the appellant, Edward Victor Drollett, was found guilty on seven charges brought under s6 of the Secret Commissions Act 1994-95, and one charge of forgery under s287 of the Crimes Act 1989. He was sentenced to two years concurrent imprisonment on each of the charges under the Secret Commissions Act, and a cumulative term of three months' imprisonment on the charge of forgery. He now appeals conviction and sentence.

[2] For the appellant, Mr Sweeney QC advanced a number of grounds of appeal. Included in those were what could be described as challenges to jurisdiction. It is appropriate to consider those at the outset.

Constitution of the Court

[3] Mr Sweeney submitted that the Court, as constituted for this appeal, does not conform to Article 56 of the Constitution. It provides:

(1) There shall be a Court of Appeal of the Cook Islands, which shall be a superior Court of record;

(2) Subject to Articles 57 and 58 hereof, the Judges of the Court of Appeal shall be -

(a) A Judge of the Court of Appeal of New Zealand or a person who has held office as a Judge of that Court, or a Judge of the High Court of New Zealand, to be appointed by the Queen's Representative acting on the advice of the Executive Council tendered to him by the Prime Minister; and

(b) The Chief Justice and other Judges of the High Court; and

(c) Such other persons, possessing the qualifications prescribed by subclause

(3) of this Article, as may from time to time be appointed by the Queen's Representative acting on the advice of the Executive Council tendered to him by the Prime Minister.

(3) No person shall be qualified for appointment as a Judge of the Court of Appeal under paragraph (c) of subclause (2) of this Article, unless he is qualified under Article 49 hereof to be appointed as a Judge of the High Court;

(4) The Judge of the Court of Appeal of New Zealand, or, as the case may be, the person who has held office as a Judge of that Court or the Judge of the High Court of New Zealand who is a member of the Court of Appeal of the Cook Islands, shall be the President of the Court of Appeal of the Cook Islands, but in his absence the Chief Justice of the High Court, if present, shall preside, but if the Chief Justice is also absent, the Judge present who is highest in seniority shall preside;

(5) Judges of the Court of Appeal shall take seniority according to the respective dates of their first appointment as Judges, whether of the High Court or of the Court of Appeal or of any Court in any place outside the Cook Islands;

(6) An appointment under paragraph (c) of subclause (2) of this Article shall be for a period of time or for the trial or hearing of one or more particular causes or matters, as may be specified in the instrument of appointment.

[4] The submission was based on the premise that all three members constituting the present Court were appointed under Article 56(2)(a), whereas there could be only one such appointee. Accordingly, it was argued that the Judge appointed first in time (unspecified) was validly appointed to this Court but the appointment of the other two was invalid.

[5] The submission was made solely on the assumption that all three Judges qualified for appointment under Article 56(2)(a) and were in fact so appointed. No attempt to adduce evidence concerning the respective appointments was made to justify the submission. It must have been apparent to counsel that two of the members of the Court do not presently come within the purview of para (a), and it is equally self-obvious that all three members qualify for appointment under para (c). Also it is a matter of record that all three are not permanent appointees but appointed for a fixed period of time as required by Article 56(6), which governs appointment under para (c). Mr Sweeney's attempt to support his argument by reference to the provisions of Article 56(4) governing the presidency of the Court is misconceived. The Judge presiding in this Court is the Judge who is highest in seniority. The submission is without merit, and as presented it is difficult to see how it could have been made responsibly.

[6] Mr Sweeney also made the same challenge, again without any evidential foundation, to the validity of an earlier judgment of this Court delivered on 2 October 2003 in respect of the appellant's right to trial by jury. For the above reason, that challenge must also fail.

Court of Appeal sitting outside Cook Islands

[7] Rule 3(3) of the Court of Appeal rules provides:

(3) In the case of any appeal against conviction for any offence (whether or not the appeal is against the sentence also) or in the case of an appeal against the sentence imposed for any offence (whether or not the appeal is against the conviction also) or in the case of any other appeal which in the opinion of the Chief Justice it is expedient for the ends of justice and more convenient and in conformity with natural justice so to do, the Chief Justice may direct that the appeal be heard or determined by the Court in any place within or outside of the Cook Islands and in such case the appeal shall be heard and determined in the place where directed.

[8] It was submitted that the rule is ultra vires its source, namely s102(2) of the Judicature Act 1980-81, which states:

(2) The High Commissioner may from time to time by Order in Executive Council made on the recommendation of at least two members of the Rules Committee prescribe rules for the purpose of facilitating the expeditious, inexpensive, and just despatch of the business of the High Court and of the Court of Appeal, or of otherwise assisting in the due administration of justice.

[9] It is common ground that the Chief Justice has given a direction which authorises the hearing of this appeal in New Zealand. The practice of the Court sitting in New Zealand is one of long-standing, occurring as it does in the context of the close and special relationship which exists between the two countries. In that context and recognising the ongoing membership of the Court of Appeal is in practical terms heavily dependent on the availability of New Zealand judges, it is not surprising that Mr Sweeney did not attempt to argue that the rule is outside the plain words of s102(2). Rather, the argument was twofold. First, it was said the rule is unconstitutional. We do not agree. The corollary of this argument is that it would not be possible, even by legislation, to authorise the Court to sit outside the Cook Islands - whether for the purpose of taking evidence or for any other steps in the conduct of a trial or an appeal. In our view, Article 47, which was relied upon, does not so dictate.

[10] Second, it was said because of the possible ramifications, including issues of sovereignty, s102(2) cannot have been intended to allow such a course. We think this argument is overstated. Sitting in New Zealand, the Court is applying Cook Islands law, not New Zealand law. It is not in any way encroaching on New Zealand sovereignty or purporting to exercise jurisdiction over New Zealand subjects, or attempting to impose sanctions or orders within New Zealand other than in accordance with established protocol. The further submission that the Court could only sit in New Zealand legislation expressly so permitted, was unsupported by authority of persuasive argument and that too we reject.

[11] We hold that Rule 3(3) is valid.

The trial Judge

[12] Mr Sweeney submitted that the trial Judge had not been validly appointed to the High Court and presumably the convictions therefore cannot stand. This submission is baseless. Article 49(3) of the Constitution is the relevant provision. It states:

(3) A person shall not be qualified for appointment as a Judge of the High Court under this Article, unless -

(a) He holds or has held office as a Judge of the High Court of New Zealand or of the Supreme Court of New Zealand or of the Court of Appeal of New Zealand or an equivalent office in any other part of the Commonwealth or in a designated country; or

(b) He has been in practice as a barrister in New Zealand or in any other part of the Commonwealth or in a designated country, or partly in New Zealand and partly is any other part of the Commonwealth or in a designated country, for a period of, or periods amounting in the aggregate to, not less than 7 years.

[13] Again, there was no responsible attempt to determine the factual basis of the Judge's appointment. For present purposes, it is sufficient to have regard only to the accepted fact that the Judge, prior to appointment, had been in practice in New Zealand as a barrister and solicitor for more than seven years. Mr Sweeney argued that under Article 49(3), an appointee had to be in practice as, what he termed, a barrister sole. Article 49(3) does not say that. Under the New Zealand Law Practitioners Act then in force, there was provision for a roll of barristers and a separate roll of solicitors. The Judge, it was accepted, was on both rolls. It is impossible to argue that he was not in practice as a barrister within the meaning of Article 49(3). When pressed, Mr Sweeney was unable to propound any reason why the Constitution would make the illogical distinction he sought to imply.

[14] There was a further challenge. It was submitted that, by implication, a Judge must have what was termed an antecedent right to reside in the Cook Islands. We are satisfied that implication cannot be drawn. In particular, we draw attention to Article 53(2) which expressly refers to the appointment of a Judge who does not reside in the Cook Islands.

[15] There is another difficulty facing the appellant on this point. Even assuming the appointment is invalid, the validity of the trial is unaffected. The "de facto" doctrine must apply to the present circumstances. See In Re Aldridge (1893) 15 NZLR 361 and Coppard v Customs & Excise Commissioners [2003] EWCA Civ 327; [2003] 3 All ER 351.

[16] We turn to the other grounds of appeal.

Right to trial by jury

[17] The appellant originally stood trial on all eight charges jointly with Edward Charles Friend. Both had elected trial by judge alone. The trial commenced on 30 June 2003 and on 1 July, when the Court resumed at 9 am, Mr Friend sought leave and changed his pleas to guilty on all charges. At 1.30 pm the same day, the appellant also pleaded guilty to the eight charges. On 3 July, having instructed different counsel, the appellant sought and was granted leave again to amend his pleas and to record those as being not guilty. On 22 July 2003, he sought a new trial, the right to elect trial by jury, and an order disqualifying Smith J from the trial. These orders were refused and the resulting appeal dismissed by the Court of Appeal in a judgment delivered on 2 October 2003.

[18] Mr Sweeney now seeks to re-argue the same issues on the basis that the orders in question were what he termed "interlocutory". We doubt these issues were interlocutory in nature, allowing a further appeal on precisely the same bases. Regardless of that, on due consideration we are satisfied, for the reasons given in it, the judgment of the Court of Appeal was correct. The orders in question were properly refused.

Defence counsel - conflict of interest

[19] Following the entry of the pleas of guilty during the course of the trial, the appellant instructed Mr George and Mr Samuel as counsel. In that capacity, Mr George argued the implication to reinstate the not guilty pleas and the resulting appeal concerning the mode of trial. Mr George and Mr Samuel then conducted the defence for the duration of the trial following its resumption.

[20] It is now contended that Mr George was in a conflict of interest situation which has resulted in a mis-trial and a miscarriage of justice. The submission is based on correspondence which evidences that in his then capacity as Attorney-General -for the Cook Islands, Mr George visited New Zealand in the company of the Commissioner of Police and another police officer and made an appeal for assistance that resulted in the New Zealand Serious Fraud Office being called in to help in the investigation. In addition, it appears that on 17 September 2002, Mr George, in that same capacity, had requested prosecution assistance in respect of the charges which had by then been made against the appellant and Mr Friend. The Serious Fraud Office provided both investigatory and prosecution assistance. It was this earlier involvement in the prosecution process which is now called into question. No suggestion is made that the conduct of the defence was other than robust and competent. The appellant was, of course, aware that Mr George had held the office of Attorney-General. Neither is any suggestion made that had the appellant known of the facts now relied upon, he would have had misgivings over his representation. Mr Sweeney made it clear that knowledge on the part of the appellant was not relevant to his submission which was that Mr George had an unacceptable ministerial and political interest in the outcome, namely the success of the prosecution. It was said that Mr George's sole interest at trial was not, as it should have been, to represent the interests of the appellant.

[21] Although we have a measure of concern over Mr George's involvement at all, we do not see that at the time when he was exercising his function as Attorney-General in making what was no more than a government-to government request for assistance, it constituted or objectively would be seen to constitute an interest in securing a conviction. An acquittal would not, in our view, be seen as demonstrating that the request for assistance had been either unreasonable or wrong. We take the view that disclosure of this level of involvement should have been made, but as we have said that is not the issue identified by the appellant. The issue is whether, in the absence of any identifiable prejudice, the involvement in this limited way of itself necessarily disqualified Mr George, and in the eyes of the ordinary fair-minded citizen in the position of the appellant has resulted in a reasonable suspicion that there has been an unfair trial or that there has been a miscarriage of justice. We are not so persuaded.

Involvement of the Serious Fraud Office

[22] As we have recorded above, the New Zealand Serious Fraud Office (SFO) became involved in the investigation leading to the charges now in question. At trial, leading counsel for the prosecution (Mr Mullineux) was an employee of the SFO. A wide-ranging attack was made in respect of this involvement, including initially a challenge to Mr Mullineux's right of audience in the Cook Islands. That was abandoned when it became clear that counsel had been duly admitted - information which was readily available from Court records.

[23] In common with other grounds of appeal, the appellant's submissions raise a plethora of matters, some of which are based on factual assertions which have never been traversed in evidence and others which are difficult to place in focus as proper points on appeal. We have attempted to discern those matters which require consideration by the Court. On analysis, the thrust of the submissions appears to have two bases

[24] First, the SFO unlawfully caused the institution of the prosecution without Crown Law approval. There has been no attempt to establish the relevant facts other than to place before the Court some correspondence between the SFO and the Crown Law Office. That apart, the prosecution was undoubtedly commenced in proper form by the Cook Islands Police. No authority was cited for the propositions of law concerning the need for provision of advice from or control by Crown Law Office or any other body.

[25] Second, a contention that it was unlawful for the SFO to assist the Cook Islands Police either in investigating or in prosecution whether by way of advice or by appearance of counsel at trial. Having re-read the submissions in detail, we are satisfied the contention is unsound. There is no evidence that the SFO did other than provide investigative assistance (including the services of an officer who was sworn in as an officer of the Cook Islands Police) and a trial prosecutor who had been duly admitted. The SFO was not purporting to exercise its statutory powers in the Cook Islands. The claim of usurpation of Cook Islands sovereignty and a breach by the SFO of its own statutory duties is unfounded.

[26] This ground of appeal is not substantiated.

Summary of relevant facts

[27] The appellant was a director of Drollett and Associates Limited which carried out management and accounting services in particular for some government departments. From 25 November 1999 the appellant was appointed Acting Chief of staff for the Officers of the Prime Minister (OPM). On 14 June 2000 the appointment was made permanent and evidenced by a contract of service. Mr Friend had previously been employed by the Government Audit Office as an accountant, although he held no formal accounting qualifications. In January 2000, the appellant and Mr Friend entered into negotiations relating to Mr Friend's intended employment by, or possibly partnership in, Drollett and Associates. The terms of an agreement are recorded in letters of 26 January and 1 February 2000 and include a provision that all professional fees will be shared between the two on a 50:50 basis. The relationship is stated as being one of employment of Mr Friend by Drollett and Associates. On 18 February a further letter reiterated the terms of employment and records that services rendered by Mr Friend are to be invoiced by a new company to be established by him. The company referred to was formed under the name of Associate Consultants Limited (ACL).

[28] On 31 March 2000, at the instigation of the appellant, ACL wrote to the appellant in his capacity as Chief of Staff, OPM, accepting appointment as accountant for the office for the financial year ending 30 June 2000, at a monthly fee of $3,000 plus VAT. The letter was countersigned by the appellant.

[29] On 18 April 2000, again at the appellant's instigation, ACL wrote to the appellant in his official capacity confirming interest in providing accounting services for completing the office's financial statements for the year ended 30 June 1999 for a fee of $13,000 plus VAT. On the same day, in his official capacity, the appellant wrote accepting the offer on behalf of the OPM.

[30] On 28 August 2000, ACL again wrote to the appellant as Chief of Staff accepting appointment as accountant for the period 1 August 2000 to 30 June 2001. This time for a monthly fee of $2,000 plus VAT.

[31] ACL duly carried out accounting services for the OPM, for which invoices were issued and paid for services rendered under the above arrangements. The banking records show that on seven occasions, following receipt of funds by ACL from the OPM, there was a corresponding payment to Drollett and Associates, accounting for 50% of the fees received from the OPM. These seven payments to Drollet and Associates formed the basis of the charges under the Secret Commissions Act.

[32] About July 2000 concern over possible financial irregularities in the OPM surfaced and later in the year specific allegations were being made that the appellant had been paying his own company for accounting services rendered to the department. The appellant denied the allegations. Concern was expressed by the Public Service Commissioner at the level of fees charged by ACL and the fact that its services had not been acquired transparently by a tender process.

[33] On 8 May 2002 the audit report was completed concluding that the appellant and Mr Friend had together artificially inflated accounting fees and shared the proceeds between them. The report was referred to the police. Between 15 May and 21 May 2002 a computer letter was generated by both the appellant and Mr Friend. A hard copy of it was located by the police. It was dated 29 February 2000 and recites an agreement for the take over by Mr Friend of Drollett and Associate's client base for a goodwill figure of $25,000. Both the appellant and Mr Friend signed the letter. The appellant also had a hard copy of the letter but it was never located as he had destroyed it, requesting Mr Friend to do the same with his copy. The letter, which was never put to actual use by either of the signatories to it, formed the basis of the charge of forgery.

Duplicity of informations

[34] The seven informations under s6 of the Secret Commissions Act 1994-95 forming the basis of the convictions on those charges are in common form, differing only in respect of the date of the alleged offending and the intent of the payment received. Count 1 states:

"EDWARD VICTOR DROLLETT on or about the 6^th day of April 2000 at Rarotonga as an agent of the Crown corruptly accepted a consideration, namely payment of Two Thousand Two Hundred and Fifty Dollars ($2,250.00) from Edward Charles FRIEND as an inducement to and/or reward for showing or having shown favour to the said Edward Charles FRIEND in relation to the affairs of the Crown, namely the entering into of a Government Contract whereby Associate Consultants Limited (ACL) was to provide accounting services to the office of the Prime Minister (OPM) for the year ending 30^th June 1999 for a fee of Thirteen Thousand Dollars ($13,000.00) plus expenses, and a further Government Contract whereby ACL was to provide accounting services to the OPM for the year ending 30^th June 2001 for a fee of two Thousand Dollars ($2,000.00) per month plus expenses."

[35] Mr Sweeney submitted that these charges were bad for duplicity in that the concepts of inducement and reward are mutually incompatible. It was argued that the information must identify which of those two alternatives was being alleged.

[36] The flaw in the submission is that the section does not envisage two distinct and separate offences which are mutually exclusive. A payment may bear the characteristics of a reward as being consideration for a past favour and also be made in anticipation of a future favour. That is precisely the way in which the Crown case was presented here. It was put on the basis that under an arrangement between the appellant and Mr Friend, the appellant would obtain contracts of service between Mr Friend through his company, Associate Consultants Limited, and the Prime Minister's Office. In return, the appellant would receive 50% of any fees received through those contracts. In that situation it could well be that an individual payment received as a consequence of the arrangement was both an inducement and a reward. In each case (other than count 1) the payment followed the provision of services by Associate Consultants Limited under the first named contract, and preceded the second named contract.

[37] Depending on a personal analysis, it was open to the trial Judge to find in respect of a particular payment either that it was a reward by relating it back to a then existing contract, or both a reward and an inducement to be favoured with an anticipated future contract. This was an ongoing arrangement under which the parties anticipated that from time to time service contracts would be entered into. There is nothing inconsistent with each payment having the characteristic of a reward and an inducement. There is no suggestion that the defence was in any way embarrassed or prejudiced by the form of the information. Neither could there be any suggestion that for record purposes there is doubt as to what offence was found to have been dealt with at trial. A plea of autrefois acquit or autrefois convict in respect of a possible future prosecution could not be in jeopardy.

[38] As regards count 1, as the payment preceded either named contract, it would seem that this was an inducement rather than a reward, at least in so far as those contracts are concerned. That analysis, however, does not vitiate the information - it was not duplicitous. Duplicity is something which is divorced from a particular factual situation, and is to be determined by taking an objective view of the charge to see whether a particular offence has been properly identified.

[39] As a matter of construction, s6 does not create two separate offences. There is one offence, namely the corrupt receipt of some form of consideration, whether it be by way of reward or inducement of both. Importantly, in each information the alleged offence consists of a single identified instance. Uncertainty and unfairness, the mischief behind the rule, does not arise here.

[40] This ground of appeal cannot succeed.

Admissibility of evidence

[41] At trial, the prosecution adduced documentary evidence in the form of bank records from the ANZ Bank relating to the accounts of Associate Consultants Limited and Drollett & Associates Limited. The purpose of these was to trace the receipt of moneys by ACL from the Prime Minister's Office and the corresponding transfer of money from ACL to the appellant. Immediately prior to the commencement of the trial, objection was taken to the admissibility of the records. The basis of the objection was that they were obtained by Mr Allsworth, Director of Audit for the Office of Public Expenditure Review Committee, without lawful authority. The argument was that there was no statutory authority enabling the officer to require access to the records. The Crown's response was that while it did not accept the absence of statutory authority argument, the records were, in any event, handed over by the Bank voluntarily following advice from its own solicitors. It was also contended that, in the circumstances, there was a duty to the public to hand over the records which overrode the duty of confidentiality. Finally, it was said that even if the records had been obtained unlawfully, they were still admissible at law.

[42] In his ruling, the trial Judge observed that a banker's duty of confidentiality is not absolute, that the records were made available on legal advice, and concluded that even accepting that they had been obtained unlawfully, he would exercise his discretion to admit them in evidence.

[43] In the course of his argument before the trial Judge, then counsel for the appellant had also submitted that the search warrants which were subsequently obtained in respect of the same bank records were tainted by the illegality of the original receipt of the records.

[44] In this Court, Mr Sweeney made the serious allegation that Mr Allsworth had used a fraudulent subterfuge to induce the Bank to break the law and thereby obtain the documents. When Mr Allsworth gave evidence at trial, no such allegation was put to him. The only evidence relied upon in this Court is contained in correspondence between Mr Allsworth and the ANZ Bank and written advice to the Bank from its own solicitors.

[45] Having considered the correspondence and the criticisms levelled at Mr Allsworth, we are satisfied the allegation is unsubstantiated. Moreover, we are not persuaded that even if statutory powers had not been lawfully exercised in relation to the obtaining of the documents, the trial Judge has demonstrably erred in exercising his discretion to admit this evidence.

[46] Mr Sweeney next submitted that the search warrants which were later obtained in respect of the Bank records were defective. It appears that these were sought as a precautionary step because they related to the same records obtained by Mr Allsworth. The challenges now made in this respect were not made at trial.

[47] Having considered carefully the various matters, we find it unnecessary to review them in detail. On proper consideration, they are of insufficient substance or materiality to give any cause for concern.

[48] In respect of the challenge to the admissibility of information obtained from the appellant's computer which had been seized under a different warrant, it was argued that it was unlawful for the Police to copy the computer's hard drive. The removal of it from the Cook Islands to New Zealand for examination was said to have been unlawful. We are unable to agree. There is no express prohibition against removing seized material from the Cook Islands and none should be implied. In other jurisdictions, it is not an uncommon procedure. The evidence shows that at all relevant times the material was in the possession of a person who had been sworn in as an officer of the Cook Islands Police.

[49] For completeness, we refer to s61 of the Judicature Act 1980-81 which provides:

61. Appeals not to be allowed for improper admission or rejection of evidence - No judgment of the High Court shall, on appeal to the Court of Appeal, be set aside on the ground of the improper admission or rejection of evidence, unless the Court of Appeal is of opinion that a substantial miscarriage of justice has taken place.

[50] No miscarriage of justice resulting from the admission of the material in question, namely the bank records and the computer analyses, has been demonstrated.

Prime Minister's evidence

[51] The defence called the Prime Minister to give evidence, a purpose of that apparently being to establish that he was aware of the arrangement between the appellant and Mr Friend, under which the appellant would be receiving a portion of the fees charged for the accounting services rendered by Mr Friend. The Prime Minister's evidence-in-chief was somewhat equivocal on that issue. Under cross-examination he was asked directly whether he knew there was to be a 50:50 split of fees which had been received from the OPM. Before putting the question, Mr Mullineux requested the Judge to caution the witness on the basis that if he was aware, he may be a party to an offence under the Secret Commissions Act. The Judge then said:

Dr Maoate, the question which has been put to you is a question which you need not reply to. Because if you were to reply that you knew all along that these payments were being made by Friend to Drollett, then, as stated by the Prosecutor, you would be committing an offence under the Secret Commissions Act. If the answer to the question is yes, and you refused to answer the question, it has no reflection on your bearing whatsoever, even if the answer is no, you may still refuse to answer the question. No person is required to answer a question which may result in their being convicted. So the question which has been put to you was, did you know at the time of these transactions that Mr Drollett was receiving payments from Mr Friend, purportedly in the figure of 50% of the fees that the Office of the Prime Minister was paying to Mr Friend.

That is the question, as I say, it's up to you to answer if you wish. You are not bound to answer.

[52] It was submitted the way in which the caution was administered was unfair and constituted a miscarriage of justice. The first complaint is that the instruction was wrong in law because if the Prime Minister was aware, there could be no offence. For the reasons we will refer to shortly when discussing the overall adequacy of the evidence, we do not think that result follows. The Prime Minister was potentially at risk and in all the circumstances a caution was appropriate.

[53] It was also submitted that the Judge should not have told the Prime Minister he could refuse to answer the question, even if the answer to it was in the negative. Technically that is correct. The framing of the direction is open to criticism - the right to refuse to answer a question is based on an averment that the witness believes that the answer may incriminate the witness and that is the substance of the warning which should be given. In some circumstances (not the present) it may also be desirable to afford the witness the opportunity of seeking legal advice. In the context of this trial and having considered the evidence-in-chief and the cross-examination of the Prime Minister, we are not persuaded that any miscarriage of justice has occurred.

Adequacy of evidence

[54] Although there were a number of witnesses, there was no material dispute that the factual background was as set out in the summary set out in paragraphs [27] to [33] above. Evidence included that given by Mr Friend for the prosecution following his pleas of guilty, and also by the appellant.

[55] In respect of the Secret Commission charges, it was submitted that the Crown case failed because it had not established that the only rational explanation for the payments was that they were secret commissions. We note at the outset that s6 does not use the word "secret". It provides that it is an offence if an agent of the Crown:

Corruptly accepts or obtains or agrees or offers to accept or attempt to obtain or solicits from any other person for himself or for any other person, any gift or other consideration as an inducement or reward for doing or forbearing to do, or for having done or forborne to do, any act in relation to the principal's affairs or business (whether such act is within the scope of the Agent's authority or the course of his employment as agent or not), or for showing or having shown favour or disfavour to any person in relation to the principal's affairs or business.

[56] Mr Sweeney correctly submitted that s6 only attaches to a payment which has the character of a reward or inducement. He argued that there was a lawful commercial arrangement between the appellant and Mr Friend under which the appellant was to receive fifty percent of gross fees received by Mr Friend who was taking over an existing business with an established client base. Mr Friend had no funds to make any capital contribution nor to pay anything by way of goodwill. The arrangement was, it was submitted, an economical alternative to a more conventional payment of goodwill.

[57] The defence case throughout was that although receipt of the money was immoral and inconsistent with the appellant's duties as Chief Officer, it was only pursuant to this agreement with Mr Friend which covered all fees received by him, not only those in respect of the OPM. The fallacy in this approach is that the fact that the payments were made in accordance with the business agreement does not preclude them from also having appropriate s6 characteristics. At trial it was argued that in reality the accounting services were provided by Drollett and Associates through its employee, Mr Friend, thus negating the element of favouring another person. This, however, as the Judge recognised, ignores the intervention of ACL which was awarded the contracts of service and which received the benefit of the resulting fees. It was ACL, which was favoured with the contracts.

[58] The real inquiry is whether it was established beyond reasonable doubt that a particular payment was received either as a reward or as an inducement in return for providing ACL with the accounting contracts. The evidence that these payments were is strong, to the point of being overwhelming. It is common ground that the appellant initiated the contracts and secured them for ACL knowing a necessary consequence would be a payment to him of the share of the fee - a payment which he would not otherwise receive. The offence lies in favouring ACL with the contracts for personal reward.

[59] We have earlier referred to the fact that there were three contracts of service procured by the appellant. The first in time was 30 March 2000 although, for some reason this contract does not feature in any of the informations. We note that in count 1 payment to the appellant was made on 6 April 2000, which is after the first contract but before the second contract of 18 April. There was a suggestion that because it was omitted from the charges it had to be regarded as part of an innocent arrangement outside the ambit of s6. We do not accept that, although obviously this contract could not be treated as a favour giving rise to any of the payments in the absence of amendment of the informations, which was refused at trial. The existence of this contract does not somehow put the other contracts into some kind of innocent framework. The only possible significance arising from its absence from the informations would be to contend that some of the payments were received in respect of that contract alone as distinct from the contracts of 18 April and 28 August. Although raised as a matter of interest by the Court in the course of the hearing of the appeal, nothing was made of this point by counsel for the appellant and we think rightly so. From the outset, the OPM was contemplated as a client for which Mr Friend, with the appellant's help, would undertake future accounting services. Put shortly, the Crown case was that the appellant would procure contracts for ACL and in return, over a certain period of time, would receive payment based on 50% of the fees engendered.

[60] It was also submitted that the evidence established, or at least left as a possibility, that the Prime Minister was aware of the existence of the arrangement under which the appellant would receive some benefit from the services to be rendered to the OPM through Mr Friend. As mentioned in paragraph [51] above, the evidence as to the Prime Minister's knowledge is not entirely clear but in our view it matters not whether he was aware of what was happening. The OPM is a government department subject to audit and it is the affairs of that department, not those of the Prime Minister personally, which feature in the informations. What must be considered is whether the elements which go to make up the offence have been established to the required standard. Knowledge by the Prime Minister that the appellant was receiving a part of the fees billed by ACL does not, in the circumstances, impact on any of those. That being so, whether or not the Prime Minister was properly warned regarding self incrimination cannot affect the validity of the convictions.

[61] On the charge of forgery, the only issue concerned the element of intent that the letter be acted upon as genuine. That it was a false document is clear. It told a lie about itself, namely that it was compiled on 29 February 2000. That date was material because it recorded that at that time the parties had agreed that the arrangement was that the appellant was to be paid goodwill in the sum of $25,000, thus providing a possible innocent explanation for the payments he received which in early May 2002 were under investigation. An intent to use in the future "should the need arise" is a sufficient intent under s 287.

[62] The appellant also made false entries in his diaries, apparently designed to support the existence of the agreement referred to in the letter dated 29 February 2000. The inference that the letter was constructed with the intention at the time that it should be acted on as genuine in respect of the date was undoubtedly open on the evidence. The evidence of Mr Friend alone would be sufficient to support the inference. The fact that the appellant destroyed his copy of it without ever having attempted to use it and requested Mr Friend to do likewise, does not negate the inference. The explanation that it was compiled to record for the benefit of the parties alone, an agreement made by them in February 2000 was not credible and could properly be rejected by the trial Judge.

Decision of the Judge

[63] The decision was delivered on the day following the conclusion of the trial. It is relatively brief. The requirements for a decision in a Judge alone criminal trial are set out in R v Connell [1985] NZCA 34; [1985] 2 NZLR 233 and discussed by the New Zealand Court of Appeal in R v Eide (CA77/04, Judgment 8 September 2004). By and large, the requirements were met in the present case although we observe that where there has been a lengthy break in the trial, as occurred here, care needs to be taken to ensure the real issues have been adequately addressed.

[64] Two aspects of the decision require mention. In respect of the s6 charges, Mr Sweeney submitted that there was an inadequate consideration of the critical aspect of the defence case, namely that the payments were related to the commercial arrangement and not part of any clandestine conduct involving bribery. As to that, the Judge did advert to the arrangements between the appellant and Mr Friend, the exchange of letters between them, and the fifty/fifty split. He also referred to the three contracts and to Mr Friend's evidence that he had no doubts that his offers which were made to the appellant as Chief Officer to undertake the accounting work for the OPM would be successful. We think the thrust of the defence case was sufficiently covered and in particular we are not left with a concern that the defence was not appreciated or addressed by the Judge.

[65] As to the charge of forgery, the Judge said that the intent that the letter be acted upon as genuine was evidenced by the police evidence that upon initially locating it, they contemplated dropping their enquiries. Counsel rightly criticised that reasoning. We do not, however, read that passage as indicating the Judge finding that the appellant in fact intended the Police to find the letter. Rather, it was confirmation that the pre-dating of the letter was capable of misleading, as was intended when it was made. Coupled with the Judge's reference to the false diary entries, and the lack of any reference to goodwill in the negotiations between the appellant and Mr Friend, we are satisfied that the Judge did turn his mind to the necessary elements of the offence and has sufficiently based his conclusion in his decision.

[66] Although not a matter advanced by counsel, we note that there was no express reference in the decision, as there should have been, to the need for care in considering the evidence of Mr Friend, an acknowledged accomplice. However, it is clear that his testimony, in the limited area where it was under challenge, had minimal if any effect on the outcome.

Sentence

[67] The circumstances of the offending resulting in the appellant being convicted on the seven charges laid pursuant to s6 of the Secret Commissions Act and the single joint charge of forgery under s287 of the Crimes Act are fully set out in the earlier paragraphs of the judgment dealing with conviction and need not be repeated here.

[68] The circumstances under which Mr Friend (who was jointly charged with forgery and separately charged on the seven counts under the Secret Commissions Act) pleaded guilty are also set out in the conviction appeal portion of this judgment. Briefly, however, the circumstances were that at the end of the Crown case, having taken fresh advice, Mr Friend pleaded guilty to all charges.

[69] At the end of the trial, both the appellant and Mr Friend were remanded for sentence. The sentencing Judge was not the Judge who presided at the trial, but he received very full submissions from both counsel and in addition had a fact summary prepared by the prosecution but agreed, after some limited amendment, as accurate by counsel for the appellant.

[70] Mr Friend, in those circumstances, was dealt with under s113 of the Criminal Procedure Act, the consequence being that no penalty was imposed and he was ordered to appear for sentence if called upon at a later stage. Williams J apparently took that view on the basis that Mr Friend's involvement in the Secret Commissions Act offending was less than that of the appellant: he was a younger man led astray, and had pleaded guilty. The prosecution emphasised his plea of guilty, his willingness to give evidence for the Crown after his plea was changed, and indeed the prosecutor suggested that an order under s113 of the Criminal Procedure Act might be appropriate.

[71] The appellant, on the other hand, was sentenced to two years' imprisonment on the seven charges under the Secret Commissions Act and three months' imprisonment on the forgery charge, to be served cumulatively on the two year sentence.

[72] The notice of appeal in respect of sentence contained the following:

• The learned judge sentencing made findings of fact unsupported by the evidence and which the defence had had no opportunity to test;

• The learned judge sentencing imposed sentence by reference to factual matters upon which the defence had had no opportunity to make submission;

• The learned judge sentencing failed to have proper regard for the considered views of the Prime Minister and other senior figures in the Cook Islands, instead imposing his own views as a New Zealander;

• The learned judge sentencing failed to pay proper regard to the customs and perceptions of Cook Islanders;

• The learned judge sentencing imposed sentence without having had the benefits of the notes of evidence of trial and was therefore unable to make relevant findings of fact.

[73] It was submitted that the sentencing was flawed because the sentencing Judge was not the trial Judge; did not have the notes of evidence; made findings of fact; expressed conclusions based upon literature of the United Nations and he treated the Secret Commissions Act offending as "directed to Government corruption." In the circumstances of this case there is no real substance in these complaints.

[74] The Crown, on the other hand, submitted that the summary of facts had been agreed to and was full and informative; that the element of deterrence in the Judge's sentencing was appropriate; and that sentences of two years and three months respectively, although firm, were nonetheless compassionate and should not be disturbed.

[75] Taken in isolation, the sentencing Judge's approach to the appellant's offending is not open to significant criticism. The Judge was well informed on the facts and entitled to take the view that a firm line was required in respect of the kind of offending exposed in the case. Likewise, he was entitled to reject the submissions of defence counsel which echoed a number of testimonials that had been provided to the effect that the offence was not as serious as theft or dishonesty. The Judge also was entitled to take into account the fact that the maximum penalty prescribed by the Secret Commissions Act was ten years.

[76] In respect of the seven charges under that Act, the Judge adopted a starting point of three years but taking into account the strong mitigating factors, he reduced that by one-third to two years. The strong mitigating factors were that the appellant, at the age of 50, had otherwise led an exemplary domestic and public life and had served his nation and community commendably and energetically. The Judge nonetheless saw it as his duty to impose a sentence of imprisonment which would send a clear message to others who might be tempted to offend in a similar way.

[77] The forgery charge was not dealt with in the same degree of detail. The Judge did not stipulate his starting point nor discuss any reduction on account of mitigating circumstances. He simply imposed a sentence of three months. Had it been dealt with in the same way as the Secret Commission charges, then on a starting point of three months a reduction to two months would have been appropriate.

[78] The Judge also concluded that the three month sentence on forgery should be served cumulatively on the two year sentence for the Secret Commission charges. That decision is understandable in view of the fact that the forgery charge arose from offending some two years after the Secret Commission charges.

[79] The principal difficulty with the sentencing, however, is the marked differences between the way Mr Friend was dealt with and the penalties imposed upon the appellant. It is true, of course, that Mr Friend was a younger man, less experienced, and pleaded guilty partway through the trial, but he had worked in the Audit Department of the Government and clearly knew exactly what was happening. He went along willingly with the benefits that flowed to him from the arrangement made between the appellant's company and his own. Also, it was Mr Friend who first suggested the goodwill letter. Taking those matters into account, the disparity is, in our judgment, unjustifiable.

[80] The principle of disparity is one which has evolved gradually. Initially it was sufficient for a Court to take the view that there was a significant disparity and that in order to do justice between co-offenders, there should be a logical relationship between the two penalties. Subsequently, however, in some jurisdictions the law has evolved to the point where it was considered that only if an impartial observer would consider that the disparity was both gross and unjustified should there be a reduction in the higher sentence.

[81] In this case we are satisfied that the impartial observer would take the view that something had done wrong when the appellant was sentenced to two years and three month's imprisonment, a relatively severe sentence in all the circumstances, while his co-offender in all matters escaped the imposition of any penalty at all.

[82] In the circumstances, the appropriate course is to reduce the starting point for the Secret Commission offences from three to two years. We then allow the one third discounts for mitigating factors, resulting in concurrent penalty on those charges of sixteen months.

[83] Looking at the three months' cumulative penalty for forgery, our view of the circumstances is that Mr Friend was equally culpable with the appellant. It was Mr Friend who first suggested the goodwill letter. And when the appellant elected to destroy his letter and not to advance it as any kind of excuse and requested Mr Friend to do likewise, Friend failed to do so. In those circumstances, we consider that the three months should again be reduced by one-third to two months. Also, given the equality of offending between the two, rather than making that penalty cumulative, we would make it concurrent.

Conclusion

[84] The appeal against conviction is dismissed. The appeal against sentence is allowed. The sentences of imprisonment imposed are quashed and replaced by a term of imprisonment of 16 months on each of the Secret Commissions Act charges and two months on the forgery charge, all to be concurrent.

BARKER JA
SMELLIE JA
HENRY JA