Spleen-venting and acrimony marked an application in the High Court in Timaru where former SCF chief executive Lachie McLeod’s lawyer, Jonathan Eaton QC, commented that the Serious Fraud Office faced serious pressure to “come through with the goods” in their prosecution of McLeod and co-accused lawyer Edward Sullivan and accountant Bob White.
Justice Paul Heath said that the SFO’s “trumpeting” of the case as being the country’s biggest white collar crime was “unforgivable”. He also heavily criticised the Office for never having interviewed former Treasury Secretary John Whitehead regarding SCF’s application to enter the Crown Retail Deposit Guarantee scheme.
He commented that it was “absolutely astounding” that Whitehead had not been interviewed.
Stuff.co.nz report that the defendants, charged with submitting an application containing false information for SCF to enter the scheme that cost an estimated $1.58 billion of the $1.7 billion the SFO alleged was involved in fraudulent SCF deals.
McLeod, Sullivan and White were all acquitted of the charge.
Appearing for the Crown, Colin Carruthers, QC, said the Crown argued the men committed an offence when they submitted the application.
Carruthers maintained Crown decisions to prosecute McLeod were reasonable.
Eaton said His Honour needed to look at verdicts acquitting McLeod and ask “shouldn’t he get something back?”
Eaton said McLeod had “put his life on hold” for three years to defend the misuse of a document charge and charges of theft in a special relationship by breaching trust deeds and false accounting.
The Costs in Criminal Cases Act 1987 regulates a maximum compensation scale of $226 for each half day a defence lawyer spends in court. However, Carruthers said the going Crown rate was $199 an hour before GST, and the commercial rates Eaton produced were higher than that. McLeod was also seeking disbursements for expert document analysis.
The Act allows a court to order costs above that scale “if it is satisfied that, having regard to the special difficulty, complexity, or importance of the case, the payment of greater costs is desirable”.
His Honour said McLeod’s case was “clearly beyond scale”. When considering the compensation application, he would have to decide how much of McLeod’s costs to award based on the evidence for each of the charges he had faced.
They ranged from a false accounting charge where the “reasonable possibility” of McLeod’s involvement could not be ruled out to a charge focused on a transaction related to Dairy Holdings Limited, where His Honour said he had produced “effectively a finding of innocence”.
Eaton said emails the Crown claimed showed McLeod trying to circumvent SCF’s trust deed actually showed him structuring a loan so it obeyed the deed. Eaton claimed a Crown assumption that a “culture of concealment” existed in SCF drove the prosecution to seize upon any documents as evidence of wrongdoing.
The saga over the SCF fraud continues to stir some degree of controversy and a decision on the application from Lachie McLeod will be made shortly, with further observations, no doubt, from Justice Heath.
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