Issued
2016
Decision
10 Oct 2016
Appeal Status
Not appealed

PAYE convictions upheld by the Court of Appeal – trial Judge found not to have acted with apparent bias

2016 case note – Dismissal of appeal - PAYE convictions – apparent bias – adverse rulings during course of trial.

Case
David Ian Henderson v The Queen [2016] NZCA 431
Legal terms
PAYE convictions ? apparent bias ? adverse rulings during course of trial

Summary

The Court of Appeal dismissed an appeal against conviction on seven counts of aiding and abetting a company to knowingly apply deemed PAYE deductions for purposes other than payment to the Inland Revenue Department (“IRD”). The sole appeal ground was whether the District Court Judge acted with apparent bias at trial, giving rise to an unfair trial. The Court found that a reasonable lay observer, watching the whole trial and reading the Judge’s minutes would not reasonably apprehend the Judge had become partial or predetermined the overall question of guilt.

Impact

This Judgment provides further authority for the test for apparent judicial bias as laid down by the Supreme Court in Saxmere Co Ltd v Wool Board Disestablishment Ltd [2009] NZSC 72 (“Saxmere”). It highlights the importance of viewing Judges’ comments in context of the proceeding as a whole when considering whether there is a risk of apparent bias.

Facts

The Appellant was the sole director of a company which did not pay PAYE on its employees’ wages to the IRD for the months of April-October 2010. After a Judge-alone trial before Judge MacAskill in the Christchurch District Court, the Appellant was convicted on seven counts of aiding and abetting the Company to knowingly apply deemed PAYE deductions for purposes other than payment to the IRD.

The Appellant appealed the conviction (but not sentence) to the Court of Appeal, initially listing a series of grounds which were abandoned once counsel was engaged. The sole ground ultimately pursued on appeal was that Judge MacAskill acted with apparent bias.

Decision

The Court of Appeal dismissed the appeal (judgment given by Kós P) finding that a reasonable observer, taken as having been present throughout the entire trial and having read the Judge’s minutes would not reasonably apprehend the Judge had become partial or had predetermined the overall question of guilt. The Court of Appeal acknowledged that some of the language the judge used was unfortunate and not to be encouraged, but that in the circumstances the comments were understandable and did not indicate that guilt had been predetermined.

The appeal and relevant law

The trial had been conducted in three main phases over the course of 10 months. Judge MacAskill adjourned the trial twice to enable the appellant to refocus on the merits of the prosecution case as it was clear that the appellant did not really engage with the substance of the prosecution case. The appellant was self-represented in the first and third phases, but represented by counsel in the second phase. Their Honours found that it had been a difficult trial and the Judge’s comments must be considered in this context.

The Court of Appeal applied the test as laid down by the Supreme Court in Saxmere whether a fair-minded lay observer might reasonably apprehend that the Judge might not bring an impartial mind to the resolution of the question the Judge is required to decide. Following Saxmere, the Court of Appeal in the present case found that the observer is not to be taken as legally trained but a person who is aware of the judicial oath and understands the Court process. The Court of Appeal further emphasised that an important trait attributed to the hypothetical lay observer is their ability to view matters in context.

With reference to Johnson v Johnson (2000) 201 CLR 488 and Muir v Commissioner of Inland Revenue [2007] 3 NZLR 495 (CA), the Court of Appeal noted that Judges may give forthright and robust indications of their tentative views. Such views are helpful to enable the parties to address the Judge with a view to persuading the Judge to a different view. Their Honours also observed that a trial Judge has a responsibility to ensure lay litigants do not spend time on irrelevant matters in a manner which is wasteful of the Court’s resources.

Pre-trial matters and trial phase one (November 2014)

The appellant had made a pre-trial application for a discharge under s 347 of the Crimes Act 1961. While not directly relevant to the appeal, their Honours observed that this was the start of a pattern of technical arguments raised in the appellant’s defence.

During the first phase of the trial, the defendant had chosen not to call any witnesses or cross-examine the witnesses called by the Crown. After the Crown had closed, the appellant applied for a s 347 discharge based on a technical argument based on the dates on the indictment. The Court of Appeal observed that “[the appellant] held a single egg in his hand and proceeded to place it in the Court’s basket.”

Judge MacAskill declined the s 347 application and adjourned the trial to provide the appellant another chance at cross-examining the witnesses. In his written reasons, Judge MacAskill commented that “the defendant had presumably concluded that there was no other reasonably arguable defence available to him, a conclusion which was not obviously wrong.” The appellant submitted that this remark, together with other comments by the Judge, gave rise to a perception of prejudgment.

The Court of Appeal found that the exchange did not show apparent bias but was a comment on the apparent lack of a defence at that point in the trial. The Judge’s adjournment for the sake of fairness to the appellant (which he was under no obligation to grant) would rather suggest that the Judge was open to consider other defences.

Trial phase two (May 2015)

The appellant complained that the Judge’s interactions with the prosecutor were inappropriate as an observer could, in the appellant’s submission, infer from the exchanges that the Judge was unduly helping the prosecutor to improve the Crown’s case and that the prosecutor and the Judge were collaborating to amend the indictment so as to find the appellant guilty.

The Court of Appeal found that a reasonable observer would have understood the Judge to be ascertaining the prosecution’s position on a particular point, which was not inappropriate. Even though one particular exchange, if viewed in isolation, might suggest to someone hearing only that legal discussion that the Judge had rather teamed up with the prosecutor, their Honours found that a reasonable, informed lay observer would not reach that view, given the whole context.

While many comments were expressed in robust language, especially during the Judge’s engagement with defence counsel (for example expressions such as “I am astonished” and “Don’t muck me around”) the Court of Appeal found that a reasonable observer would understand that the expressions were an understandable reflection of the Judge’s frustration in the face of a difficult and lengthy trial and that the Judge was taking a robust approach to managing the trial, rather than predetermining guilt. Other comments were found to be appropriate expressions of tentative views.

The Court of Appeal found that certain language was unfortunate, such as the Judge’s reference to events “proved” by the evidence, and the use of expressions “defence spin” and “tactic that crossed the line into illegitimacy”. Even though such language was not to be encouraged, in the Court of Appeal’s view the comments were understandable in the circumstances and did not indicate that guilt had been predetermined. Furthermore, the Judge’s willingness to adjourn for a second time for the sake of fairness to the appellant indicated his continued open-mindedness.

Further adjournment (June 2015) and trial phase three (September 2015)

When the trial did not resume as planned in June 2015 due to on-going issues, the Judge issued a minute in which he noted his provisional view of the Crown case. The appellant submitted that this was a further indication of predetermination. The Court of Appeal found that the comments in the minute were expressly tentative and in any event only responded to one technical aspect of the defence case. In their Honours’ view, the observer would have understood the ultimate question of guilt to still be open in the Judge’s mind. No issue was taken with any comments made in the third trial phase.

Tax Administration Act 1994