Two men connected to the New Zealand First party are back before the court as the Crown tries to have their not-guilty verdicts quashed.
The men, who continue to have name suppression, were tried and acquitted of deception in the High Court in Auckland last year.
The Serious Fraud Office accused them of “a fraudulent device, trick or stratagem” to control funds raised by the New Zealand First Foundation, a separate organisation to the party set up to hold on to raised funds.
The High Court was not convinced they had obtained by deception and without claim of right, the court agreed they believed they had a right to the funds. The court also agreed the funds were not party donations, as defined in the Electoral Act.
At the time, NZ First leader Winston Peters, who maintained the foundation and party were entirely separate and that he had no knowledge of the former’s activities, greeted that acquittal by saying the court found “no crime had been committed”.
He claimed the real guilty party had been the media who believed “liars” and had conducted a “trial by media”.
But the Crown’s lawyer John Dixon KC, revisited the arguments this week saying the High Court was wrong not to classify the money given to the foundation as party donations and that it was wrong to decide the men had a lawful right to the funds.
He said it was “simple” to call the funds party donations for a number of reasons.
“Everything we’ve discussed this morning is moot now, moving forward.”
– Brian Dickey
“The donors are intending to donate to the party, and believe that’s what they were doing. That’s all of their evidences to that effect.
“So when we see the references that people put into the bank statements … some of them talk about ‘good luck Winston’, or ‘election 17’, or ‘donation’. So they must have been understood in that sense. .. These are plainly made to the party.”
He said some people had structured their donations to sit under the then-$15,000 public disclosure threshold, which was another indication they believed they were making a party donation.
“It’s very clear they did think they were party donations. Some of them, to use the term non pejoratively, structured the donations, so there might be $15,000 from their company and $15,000 from a trust and $15,000 from themselves.
“We’re not commenting on the rights or wrongs of that, [but] that’s what they did.”
Dixon said the argument around claim of right came unstuck when looking at the lengths the men went to to keep the foundation funds hidden from the party secretary.
“If the money is party donations there is comprehensive evidence [the men] deploy the dishonour scheme, in order to deceive the party and the party secretary.
“So it’s an intentional act directed at deceiving the party. Why? Because they know the party has a better claim. It’s an intentional act … If they honestly believe these were not party donations, so the party was not entitled to the money, why are they seeking to deceive the party?”
Lawyer for one of the men, Brian Dickey, said under the Electoral Act a donation was only required to be passed on if it was made to a person or body involved in the administration of the affairs of the party, and that his client was not involved in this way.
“The SFO has erroneously formed a view that all donations to a party must be reported under [the Electoral Act]. They have ignored the definition.”
He said the Crown’s argument seemed to rest on the idea that donors had been deceived, but this was not the charge that had been tried in the High Court.
“The focus needs to be on whether these defendants have committed the offences that they are charged with, and that is unaffected by whether the law has changed.”
– John Dixon KC
“They’re not charged with deceiving donors – they were and that was dropped – it’s not open to the Crown to now argue that because of that deception, this definition can’t be right.
“If the Crown case comes down to the deceiving of donors, then run it that way, charge them with that. Because that seems to be the underlying anxiety for the Crown in this case.”
Lawyers for both the men said the appeal should not even be heard.
Dickey said everything that had so far been discussed was essentially moot.
“Point number one is, as to the definition of party donation, which no longer exists, it’s been superseded by the subsequent amendment to the Act, to bring in a more objective test around whether something is or was not a party donation.
“So everything we’ve discussed this morning is moot, now, moving forward.”
Following the court’s verdict, Parliament changed the law to close the “loophole” this case brought to light.
Lawyer for the other man, Tudor Clee, agreed.
“What is the legal interest in this? What is the public interest in this? The fact that the Parliament has recognised the fact that there was an error and corrected it would be submitting that there simply isn’t any interest in continuing this, and that the leave should not be granted in the first place.”
But Dixon disagreed.
“This is not moot, this is not redundant, the focus needs to be on whether these defendants have committed the offences that they are charged with, and that is unaffected by whether the law has changed.
“And in any event, the integrity of the electoral disclosure regime is important in and of itself.”
The Court reserved its decision.