Police v Henry - Judgment [1979] CKHC 4 (20 August 1979)

IN THE HIGH COURT OF THE COOK ISLANDS
RAROTONGA REGISTRY
714, 715

POLICE

v.

GEOFFREY ARAMA HENRY
CHARLES MAXWELL TURNER

Counsel: D.S. Morris for Police, with S.B.W. Grieve
L.W. Brown, Q.C., for defendants, with A. Deobhakta

Hearing: 16 August 1979
Judgment: 20 August 1979

JUDGMENT OF BEATTIE J

Mr. Brown applied under s.407(2) of the Crimes Act 1969 that the accused Geoffrey Arama Henry, Charles Maxwell Turner, and Apenera Pera Short should each be discharged on the main charge of conspiracy. Those accused, together with the Cook Islands Development Company Limited, Finbar Kenny, James Joseph Warnell Little, and Sir Albert Royle Henry, were jointly charged that between 5^th January 1978 and 30^th March 1978 at Rarotonga and elsewhere they did conspire by fraudulent means to defraud Her Majesty the Queen by participating in a scheme whereby money payable to Her Majesty the Queen was fraudulently used for private purposes, namely, to finance the charter of aircraft in breach of s.280 of the Crimes Act 1969. This charge involves the sum of $337,000 which was paid to Ansett Airlines of Australia for the charter of aircraft to fly Cook Islands Party supporters from New Zealand to Rarotonga to vote at an election.

The Cook Islands Development Company and Messrs Little and Kenny have pleaded guilty to the charge. They have already been sentenced. On 16^th August the accused Sir Albert Henry pleaded guilty to this charge and he is remanded for sentence today, 20^th August. On 16^th August the Crown prosecutor indicated that the Crown abandoned the allegation of conspiracy against Mr. Short: there was left remaining against him a charge laid under the Public Moneys Act 1969. As I indicated on 16^th August, in my opinion there was no satisfactory proof of knowledge on the part of Mr. Short that Sir Albert Henry did not intend to pay money into the appropriate bank account in the Cook Islands notwithstanding that Mr. Short, as a director of a company called "Cook Islands Government New Project Company Limited", was one of the two signatories to the cheque which was for a very large sum. A telex message dated 10^th March 1973 also served to raise a strong doubt in my mind as to the lack of any actual knowledge on the part of Mr. Short. I therefore discharged him.

Both Geoffrey Henry and Mr. Turner have pleaded guilty to a charge that they were parties to the commission of an offence against s.49 of the Public Moneys Act 1969 committed by Sir Albert Henry, namely, that he being a person holding public money, being monies received from the Cook Islands Philatelic Bureau, neglected to pay it to the account into which it was payable, namely, the public account at the National Bank of New Zealand Limited at Rarotonga. It was Mr. Brown’s strong submission that their acceptance of guilt in connection with this charge was a proper and total recognition of their part in this matter. The Crown was not able to accept this contention.

Before considering the factual matters advanced by counsel on each side of this matter I deem it necessary to state some general principles on the law of conspiracy so that the submissions may be considered against that background. As is usually the case, the law is succinctly stated in Halsbury’s Laws of England and I refer to the 4th edition, Vol. 11, paragraph 58:

"Conspiracy consists in the agreement of two or more persons to do an unlawful act, or to do a lawful act by unlawful means. It is an indictable offence at common law, the punishment for which is imprisonment or fine or both in the discretion of the court.

The essence of the offence of conspiracy is the fact of combination by agreement. The agreement may be express or implied, or in part express and in part implied. The conspiracy arises and the offence is committed as soon as the agreement is made; and the offence continues to be committed so long as the combination persists, that is until the conspiratorial agreement is terminated by completion of its performance or by abandonment or frustration or however it may be. The actus reus in a conspiracy is the agreement to execute the illegal conduct, not the execution of it. It is not enough that two or more persons pursued the same unlawful object at the same time or in the same place; it is necessary to show a meeting of minds, a consensus to effect an unlawful purpose. It is not, however, necessary that each conspirator should have been in communication with every other."

The mental element in conspiracy is referred to in paragraph 60 which reads:

"As conspiracy is a common law offence, mens rea is an essential ingredient. It consists in the intention of executing the illegal elements in the conduct contemplated by the agreement, in the knowledge of those facts which render the conduct illegal (Kamara v Director of Public Prosecutions (1974) AC 104 at 119, (1973) 2 All ER 1242 at 1251). Thus it must be shown that the defendant knew of all the circumstances which rendered the combination unlawful; and this is so even where the indictment alleges a conspiracy to commit an offence of strict liability.

A person is not to be convicted of conspiracy unless it is shown that he intended to carry the agreement into effect; but, if he did so intend, it is immaterial that nothing was done in pursuance of it. Where the agreement is to do an unlawful act it must be shown that the parties knew of the circumstances which rendered the act unlawful."

That at the time the agreement is reached it must be proved there was an actual intention to defraud appears from the judgment of the Court of Appeal, Criminal Division, in R v Sinclair and Others (1968) 3 All ER 241. At 246 James J., who read the judgment of the Court, when analysing the words "fraud" or "fraudulent", said:

"To cheat and defraud is to act with deliberate dishonesty to the prejudice of another person’s proprietary right."

Again, in Scott v Commissioner of Police for the Metropolis [1974] UKHL 4; (1974) 3 All ER 1032 (I do not have the official report but it is [1974] UKHL 4; (1975) A.C. 819), Viscount Dilhorne at 10-33 said: "‘fraudulently’ means ‘dishonestly’". I also bear in mind the distinction between agreement and negotiation or intention. Because negotiation may well fall short of a conspiracy (see R v Mills (1962) 47 Cr App R 49) reservations of a sufficiently substantial nature may have the effect of negativing conspiracy.

For his part, Mr. Morris mentioned the passage from the most recent edition of Archbold’s Criminal Pleading, Evidence and Practice paragraph 1399 which, where relevant, reads:

"The acts and declarations of any conspirator in furtherance of the common design are admissible in evidence against any other conspirator and this principle applies when the charge is one of a crime committed in pursuance of a conspiracy.... The following statement of the principles appears in Phillips’ Treatise on Evidence (1820) 4^th ed., pp 96-100: ‘It is an established rule that where several persons are proved to have combined together for the same illegal purpose, any act done by one of the party, in pursuance of the original concerted plan and with reference to the common object, is in the contemplation of law... the act of the whole party; and therefore the proof of such act will be evidence against any of the others who were engaged in the same general conspiracy, without regard to the question whether the prisoner is proved to have been concerned in that particular transaction .... The same rule, subject to the same limitations must apply to the declarations of conspirators.... Any declarations made by one of the party, in pursuance of the common object of the conspiracy, are evidence against the rest of the party, who are as much responsible for all that has been said or done by their associates in carrying into effect the concerted plan, as if it had been pronounced by their own voice or executed by their own hand .... What one of the party may have said, not in furtherance of the plot, but as a mere relation of some part transaction or as to the share which some of the others have had in the execution of the common design, cannot it is conceived, be admitted in evidence to affect other persons....’"

In brief, therefore, intention is all important and I have to ask myself, does the evidence produced by the Crown demonstrate in the case of these two accused a dishonest criminal intention? If there is no evidence of a conspiracy upon which a conviction could properly be entered then I should exercise my discretion and discharge the accused.

Although Mr. Brown, as is usual, was required to present his argument first, I find it more convenient to look at the Crown submission that there is a prima facie case against both accused that can be extracted from the extradition proceedings in connection with the accused Finbar Kenny, together with supplementary briefs of evidence which have been made available for my perusal. Having regard to the particular rules of evidence relating to conspiracy trials as referred to in the extract from Archbold, it is immediately apparent that a large number of documents seized from Mr. Little’s house are inadmissible against the present applicants being ex post facto the time of the alleged agreement to conspire. The Crown prosecutor accepted that the Crown is required to prove three elements to inculpate either or both of these accused. First, that each conspired, that is, agreed or combined with one or more of the several others named in the conspiracy charge. Secondly, the Crown must prove that the conspiracy was one to defraud the Crown, that is, a dishonest criminal intention. Thirdly, that the dishonest means was the charter of the aircraft for private purposes with the intention that costs would be met from Government funds.

I deal first with the accused Geoffrey Arama Henry. Mr. Morris relied on the cumulative effect of several pieces of evidence to establish a prima facie case. In preparation for this judgment I have re-read the whole case and checked again the references to the exhibits on which counsel rely. This accused at all material times was a member of the Cabinet, and Minister of Finance. It is clear that he was aware of memoranda from Dr Joseph Williams who was at one time Minister of Health and Education but who resigned his position as a Cabinet Minister on 18^th January 1978. This memoranda formulated by Dr Williams included a "Plan of Action" for the forthcoming election and "Suggestions for E-Day". In this latter paper the flying-in of voters to vote was documented and elaborated on in some detail, and was a carefully made study to ensure that Dr Williams’ then Party be maintained in power. In his affidavit Dr Williams referred to his knowledge of approaches to the accused Kenny for financial assistance for the plan. He states he believed the loan that was sought was to be a loan to the Cook Islands Party and that the amount involved was within the capability of the Cook Islands Party supporters to raise. I shall refer to this gentleman’s affidavit in more detail when I turn to Mr. Brown’s submissions. Subsequent to the discussions about the plan, Geoffrey Henry travelled to Honolulu in January 1978 to a Hapex Conference. He took with him a letter from Sir Albert Henry to Mr. Kenny: that letter has not been located but two replies dated 23^rd January 1978, which letters I have perused, entitle me to draw the inference that Mr. Kenny’s assistance was being sought at the forthcoming election. Mr. Morris submitted that a mass of evidence clearly indicates that this accused had some knowledge of the contents of the letter he took to Mr. Kenny, and counsel carefully took me through various exhibits seized from this accused which in my opinion amply justify Mr. Morris’ submission that discussions took place, enquiries were being made with airlines over chartering planes, and that the formation of some new companies was contemplated. Then there is further documentary evidence that while away Geoffrey Henry kept in close touch with Sir Albert Henry. I have also perused the affidavits of Messrs Walsh and Kane and Mr.s Heather. I find no reference to source of funds in any of this set of evidence; but it is clear that this accused brought back a letter from Kenny which promised aid. Reference was also made to the fact that this accused became a director of the Cook Islands Government New Project Company Limited which seems to have been formed other than in accordance with valid Government procedures, and the contention is made that Geoffrey Henry, as Minister of Finance, should have been aware of the illegal situation. I will come to a telex message which would appear to throw some light on this man’s role as a director of that company. Undoubtedly he signed bank authorities for this new company to operate and signed a cheque for $335,000. However, the defence has urged that a plea of guilty under the Public Moneys Act meets his involvement to this extent.

It is accepted by Mr. Brown that Mr. Henry went to Honolulu primarily for the Hapex Conference but also as an emissary of the Cook Islands Party seeking financial assistance from Mr. Kenny if that political party decided planes were needed to fly in voters. The evidence of Dr. Williams, who is no longer a member of that party, as I understand it, has a direct bearing on this submission. I set out paragraph 7 of his affidavit of 24^th February 1979:

"7. THAT following the adjournment of the Legislative Assembly on Friday, 6^th January, 1978, more meetings were held in the Cabinet Room to prepare for the General Election. The matter of flying in of voters was discussed with the premier, Sir Albert Henry, in his office and at his home. At about this time the possibility of seeking financial assistance from Mr. Finbar Kenny was considered. I recall that arrangements were made for the Minister of Finance, Geoffrey Henry, to attend the Hapex Conference in Honolulu and to seek financial assistance from Mr. Finbar Kenny. It was my clear understanding at that time that the purpose of Geoffrey Henry’s trip to Honolulu was to ask Mr. Kenny for financial assistance to pay for the charter of aircraft to fly in voters. This matter had been discussed informally in the Cabinet Room and in the Premier’s office. I do not however, recall which Ministers were present in the Cabinet Room or the Premier’s office at those particular discussions."

But more importantly, I reproduce paragraph 11 of the same affidavit:

"11. THAT with regard to Mr. Geoffrey Henry’s visit to the Hapex Conference in Honolulu and meeting Mr. Finbar Kenny, I believed that the loan he sought was to be a loan to the Cook Islands Party. I had actually worked some figures based on the facts set out in paper ‘E’, and had estimated that on the basis of a charter cost of $30,000.00 per DC10 that it would cost $60,000.00 for Rarotonga alone and $90,000.00 all islands to fly in sufficient voters to win the election. I believed that such figures were within the capability of the Cook Islands Party supporters to raise."

I consider those passages entitle Mr. Brown to ask me draw the reasonable inference that Geoffrey Henry shared the same belief as Dr. Williams that the transaction sought was to be a loan repayable by the Cook Islands Party. There is further evidence which bears on the question of the accused’s intentions. It comes from a supplementary statement from Mr. Little taken from him after he had pleaded guilty and been sentenced, and thus when he was available as a witness for the Crown. Mr. Little also attended that Hapex Conference. He confirmed that he overheard the accused Geoffrey Henry state that he was wanting to make arrangements to charter aircraft for the Cook Islands Government. He said he was not a party to any discussions which may have taken place between Geoffrey Henry and Mr. Kenny involving the charter of aircraft. Mr. Little said he could recall speaking to Geoffrey Henry a short time prior to the elections: he said he told him that the monies being advanced for the fly-in voters flights were public monies, but Geoffrey Henry had replied that Sir Albert Henry had told him otherwise and that he accepted Sir Albert’s word.

Another piece of evidence which I find of some real significance was the copy of a telex message amongst documents seized by the police from Mr. Little. The message was sent on 10th March 1978, that is, well after the Honolulu meeting. It was a confidential document between Mr. Little and his employer, Mr. Kenny, with the code name "Garage" which was a pseudonym for flying-in voters. I reproduce that telex:

"Garage:

Have you received my letter 3 March stop Proposal has to be implemented by next Friday and large capital injection required by that date. Max Turner in N.Z. presently completing all preliminaries. Chairman announced formation of companies and their propose (‘purpose’ - my interpretation) but little else. Chairman has not kept other directors fully informed and leading them to believe capital will not be loan but outright presentation. Capital and setting up costs are only being paid on written request from chairman as discussed."

Certain things can be said about the contents of this message. First so far as the accused is concerned it is not a self-serving document, being a confidential missive between employee and employer. Secondly, at face value it reads that the chairman has not kept the other directors fully informed and leads them to believe the capital will not be loaned but will be an outright presentation. Well, the other directors were this accused and Mr. Short.

Having given this rather careful consideration I am not satisfied that the Crown can establish a prima facie case of mens rea. In other words, it has not shown an "intention of executing the illegal elements in the conduct contemplated by the agreement, in the knowledge of those facts which render the conduct illegal" nor indeed has it been shown to my satisfaction that the defendant "knew of all the circumstances which rendered the combination unlawful". Having a good idea is not, of course, the same test as full knowledge of the circumstances which render the action unlawful. I dismiss the conspiracy charge against Geoffrey Henry and discharge him in that respect.

I now turn to the accused Charles Maxwell Turner. Mr. Morris made it clear that it has never been the contention of the prosecution that this accused was implicated at the beginning of this affair when discussions were held prior to the end of January 1978 but it is claimed that he joined in with the conspiracy having the necessary knowledge of the object of it before the exercise was completed. Mr. Turner's personal diary does demonstrate that he was retained to advise Sir Albert Henry (then Premier) over the formation of the company to fly supporters to the Cook Islands. I have looked at several extracts in the diary. In my opinion by themselves the diary entries do not indicate the dishonest intention, which is an essential ingredient of this offence. It is next said that he is involved in the crime because he was present with Sir Albert Henry when that person dictated a memorandum known as "Rambling Thoughts". I have examined that document, a record of which was seized from Mr. Little. It is preceded by a synopsis of discussions about forming and registering these separate companies, the arranging of bank accounts, shareholders, directors, etc. I observe that in connection with the formation of the Cook Islands Government New Project Company the record states that the shareholding is to be 99% by the Cook Islands Government Properties Corporation. The record continues that the bank account that will be handling the money from this company will be opened with the Commercial Bank of Australia in New Zealand where the first account will be opened with $500. The dictation continues that an amount of money will be paid to Sir Albert Henry who will deposit this money into the bank account. There is no reference to the source nor any suggestion that this will be public monies.

It is further said that in considering a prima facie case against him the fact that Mr. Turner travelled to Auckland alone on 8^th March 1978 and opened a bank account for the New Project Company, sending back bank authorities for signature, and returning later with Sir Albert to complete the banking, is indicative of dishonest intention. But that submission in my view must be measured against the fact that the telex I have already referred to in this judgment was dated 10th March 1978 and on its face it would appear Sir Albert was not letting either Geoffrey Henry or Mr. Turner know the exact position. On 14^th March Mr. Turner took counsel's opinion in Auckland whether the Public Money's Act 1969 would apply to monies held by the Cook Islands Government New Project Company Limited. He received an opinion dated 16^th march that such monies would be public monies as the company was an agency of the Cook Islands Government. Furthermore, in an interview with Superintendent Khan the accused Turner said he had told Sir Albert Henry of the conclusion reached in the legal opinion and that the company was regarded as a Government company. He stated to the superintendent that Sir Albert Henry had told him that the money for the charter flights was coming from Finbar Kenny through Kenny's external account. In the supplementary brief of evidence from Mr. Little it is stated that Mr. Little spoke to Mr. Turner prior to his leaving for New Zealand in early March. Mr. Little said he told this accused that no matter what he had heard, the money for the fly-in voters was an advance against Government funds. He stated that Mr. Turner replied he had heard so many stories about where the money had come from he did not know what to believe. I, of course, have to look at this evidence on the basis it is a statement by an accomplice, and warn myself of the danger of acting on that type of uncorroborated evidence.

All in all, applying the legal tests, I am not satisfied that it has been demonstrated to me in a prima facie way that Mr. Turner had the mental element necessary to establish conspiracy against him. As the trial judge, therefore, I do not find the circumstances alleged against this man are sufficient to establish a criminal dishonest intention, and he is therefore discharged on that count.

I will now hear counsel's submissions as to sentence for Sir Albert Henry, Geoffrey Henry, and Charles Turner.

BEATTIE J