THE SOLICITOR-GENERAL OF NEW ZEALAND V STURGEON HC NEL CIV 2003 442 84

THE SOLICITOR-GENERAL OF NEW ZEALAND V STURGEON HC NEL CIV 2003 442 84 14 September 2006IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY CIV 2003 442 84IN THE MATTER OF an application pursuant to the Proceeds of Crime Act 1991 BETWEEN THE SOLICITOR-GENERAL OF NEW ZEALAND Applicant AND GRAHAM DONALD STURGEON Respondent Hearing: 13 September 2006 Counsel: R G Marshall for the Applicant to Oppose T Bamford for the Respondent in Support Judgment: 14 September 2006JUDGMENT OF WILD J: FURTHER VARIATION OF RESTRAINING ORDER[1] By amended application dated 11 September the respondent, Mr Sturgeon, applies for a further variation of a restraining order pursuant to s44(2)(a) Proceeds of Crime Act 1991 over his farm property. He seeks an order further varying the restraining order to authorise advance of up to $35,000, secured against the property, to meet the legal costs of appeals against conviction and sentence, and the costs of a now discontinued appeal from MacKenzie J's judgment of 14 June, initially varying the restraining order. [2] The Solicitor's opposition is restricted to one item: Mr Sturgeon seeks 35 hours of preparation time by senior counsel for his conviction and sentence appeals. The Solicitor says it should be limited to 20 hours. At the hourly rate of $297 current since 1 July 2006, the 15 hours difference is $4,455. In money terms not alarge amount, but Mr Marshall emphasised that it is the principle that the Solicitor is concerned about. [3] The original restraining order was made by Young J on 31 March 2003, at a time when Mr Sturgeon was facing drugs, firearms and money laundering charges which the Crown alleged he had committed on his farm property in the Orinoco Valley, which runs off the Motueka River Valley. The restraining order has, by consent, been extended several times since and remains in force. [4] At the end of a trial in the District Court at Nelson in July 2005 the jury found Mr Sturgeon guilty of three counts of cultivating cannabis, two counts of selling cannabis, one count of being in possession of cannabis for supply, two counts of possession of an offensive weapon and four counts of money laundering. He was found not guilty of a further count of money laundering. On 1 September 2005 Mr Sturgeon was sentenced to 5 years imprisonment. [5] The Crown's application for forfeiture of Mr Sturgeon's farm property has yet to be heard. It is agreed that it should await the outcome of Mr Sturgeon's appeals against conviction and sentence. [6] Mr Bamford emphasises that the Crown has never suggested that Mr Sturgeon acquired his farm property with the proceeds of crime. The Crown case has never been more than that Mr Sturgeon used his farm to commit the alleged offences. [7] In his 14 June 2005 judgment, MacKenzie J varied the restraining order by authorising use of Mr Sturgeon's farm as security for an additional advance of up to $105,000 to fund the costs of Mr Sturgeon defending the charges against him. MacKenzie J applied the principles set out in the decision of a Full High Court inSolicitor-General v Panzer [2001] 1 NZLR 224. Mr Marshall points to the following observation by MacKenzie J in that judgment: [10] It does not appear to me, from the nature of the charges, that the matter is particularly complex. [8] Mr Sturgeon's appeals against conviction and sentence are scheduled to be heard on 11 October. Trial counsel, Mr Donald Stevens QC, has been retained. The challenged 35 hours is Mr Stevens' preparation for the hearing of the appeals. [9] Mr Bamford indicated that only two of the existing three grounds of appeal against conviction are likely to be pursued. Both will allege that the trial Judge misdirected the jury. The first ground relates to the Judge's directions to the jury about Mr Sturgeon's defence to the firearms charges. Mr Sturgeon had in his home two loaded firearms, one in his bedroom, the other in the hot water cupboard. The Crown case was that he had these firearms in connection with his cannabis cultivation and dealing activities. Mr Sturgeon's defence was that he had the firearms to defend himself against a mentally unstable neighbour who he believed was endangering him. Mr Bamford submitted that development of this ground of appeal will involve detailed reference to and analysis of the evidence. [10] The second ground of appeal against conviction relates to the Judge's directions about evidence given by a Mr Ferguson, a witness called for the defence. Mr Ferguson essentially took the "rap" for the drug cultivation and dealing offences which the Crown had levelled against Mr Sturgeon. Mr Sturgeon's evidence was that he had grown a small amount of cannabis for his own use, but was not the person who had cultivated the large cannabis crops located on his farm. The nub of Mr Ferguson's evidence was that he had cultivated that cannabis. Mr Bamford indicated that the submission on appeal may be that the trial Judge was required to give something akin to the so-called "tripartite direction" mandated by the Court of Appeal for a Judge directing a jury as to how they should proceed if they find defence evidence untruthful. [11] Mr Bamford conceded the sentence appeal was not complicated. I gathered that he agreed with Mr Marshall's analysis: if the drugs convictions are quashed, then a new trial will be ordered and any fresh sentencing will be consequent upon the outcome of that new trial. If the firearms convictions are quashed, then a consequent adjustment to sentence will be required. As I understand it, the Judge treated the firearms convictions as a factor aggravating culpability in relation to the drugs offences when sentencing Mr Sturgeon. That would be a conventional approach.[12] Mr Marshall obviously did not contend for the standard 10 hours preparation for an appeal provided for in the Crown Solicitor's Regulations. He supported his submission that 20 hours preparation was the appropriate allowance by referring to two judgments of this Court. The first was Solicitor-General v Allison HC AK M1705-IM00 30 August 2002. At [26] Paterson J said: [26] In considering the hours which the Court is prepared to approve, I am not finding that Mr Reece did not provide the time which he claims he did. Time expended is not the test. It is the reasonable time which should have been expended which is the basis. If a counsel spends far greater time at the request of a demanding client, then that client is only entitled to have his reasonable expenses met from the restrained property. (Mr Marshall's emphasis) [13] The second is Solicitor-General v Darwish HC AK CIV 2004 404 1603 28 July 2005 in which Allan J fixed 20 hours preparation as appropriate for the defence of a Crown appeal against a judgment of Winkelmann J striking out several counts from an indictment and ordering severance of other counts. Allan J's judgment included these passages: [23] Mr Neil referred to Solicitor General v de Bruin HC AK CIV 2002 404 3302, 22 July 2005, in which Venning J, having declined at the invitation of counsel to depart from the decision in Solicitor General v Panzer, approved a total of 50 hours preparation for a significant criminal trial, estimated to last some four weeks. He submitted that an allowance of 100 hours for an appeal would be completely out of line with the entitlement of Crown solicitors and the approach of the Court generally. [24] An allowance for 100 hours preparation would be plainly excessive. I must bear in mind the aims and objectives of the Proceeds of Crime Act. I am prepared to allow 20 hours preparation. That is about three days work. Having regard to the fact that Mr Gibson was counsel before Winkelmann J and is therefore steeped in the case, anything more than 20 hours would in all the circumstances be excessive. [14] I consider the Crown position is the correct one. Neither of the two grounds of appeal against conviction seem to me to be very complex. The sentence appeal is conceded to be an uncomplicated one. 20 hours preparation by senior counsel, who was trial counsel and is a very experienced criminal advocate, I consider is adequate.I note he is supported by junior counsel from Mr Bamford's office (the allowance of 15 hours for her is not contested). The Peter principle holds that work tends to expand into the time available. Conversely, limited time tends to focus even the most able mind on the issues. [15] I have not overlooked a further and more general point made by Mr Bamford. He emphasises that, even if the $35,000 further variation is granted, there will remain a very large difference between the then total indebtedness secured over Mr Sturgeon's farm (it will be approximately $200,000) and the current value of the farm ($852,000 at March 2005). If Mr Sturgeon's farm property is ordered forfeit to the Crown, that large difference will all accrue to public funds. [16] While I did not understand Mr Marshall to take any issue with the remainder of the variation orders sought, I should mention one of them. The Solicitor's nominee company which has agreed to advance the $35,000 has made it a condition of that advance that it retain an additional $10,000 as a fund to meet any default in interest payments. My understanding is that, in the event that the property is ordered forfeit to the Crown and sold, and that there has been no default in interest up to the time of sale, then that $10,000 will accrue to public funds. I agree with Mr Bamford that that somewhat unusual $10,000 item can properly be brought within s42(2)(d) of the Proceeds of Crime Act. I consider it could also be brought within s42(2)(e). [17] In the result, the orders sought in the amended application are granted, save that preparation time for senior counsel for the appeals is limited to 20 hours at $297 per hour, plus GST.Solicitors: Crown Solicitor, Nelson for the Applicant to Oppose Bamford Law, Nelson for the Respondent in Support