Huljich v R - [2025] NZCA 155
Date of Judgment
08 May 2025
Decision
Summary
Insider conduct - Conviction appeal dismissed - Crown's sentence appeal allowed in part - Appeal against refusal of interim name suppression dismissed.
The appellant was an executive of a publicly listed company called Pushpay Holdings Ltd. In April 2018, one of Pushpay's co-founders told the appellant he was thinking of leaving Pushpay and selling his nine per cent shareholding in the company. In May 2018, the appellant sent an email to the trustees of a trust, copied to its principal beneficiary, advising that the principal beneficiary wished to sell most of the trust's Pushpay shares. That trust then sold its shareholding in Pushpay for $[several tens of millions] (net total) before the co-founder announced his intention to leave and his shares were sold at a discount in a process called a bookbuild.
The appellant was convicted of one charge of insider conduct at a trial before Gault J and a jury. The Judge sentenced him to six months' community detention and a fine of $100,000. The Judge declined to grant the appellant name suppression pending final disposition of his conviction appeal. The appellant appealed his conviction on the basis that the jury's verdict was unreasonable or that a miscarriage of justice arose, and appealed the Judge's decision to decline name suppression pending final disposition of his conviction appeal. The Crown appealed the appellant's sentence on the ground that it was manifestly inadequate.
The conviction appeal is dismissed. The sentence appeal is allowed in part by setting aside the fine of $100,000 and replacing it with a fine of $200,000. The appeal against the refusal to grant name suppression pending final disposition of the conviction appeal is dismissed but interim name suppression is to continue for seven days from the date of this judgment.
Conviction appeal
Issue: Was the jury's verdict unreasonable on the basis that it was too uncertain that Mr Crowther (the departing co-founder) would leave and shell his shares by bookbuild?
No. The jury were entitled to make their own assessment of the likelihood that Mr Crowther would leave, and on the likelihood that in this event his shares would be sold by a bookbuild process, and to give any prospect of a private placement or a takeover no weight.
Issue: Was the jury's verdict unreasonable on the basis that the Crown's expert applied the wrong legal test for what would be a "material effect" on Pushpay's price?
No. The jury were correctly directed as to the legal test and were aware of the defence's concerns with the Crown's expert evidence. They were entitled to make their own assessment of the confusion that arose during cross-examination of the Crown's expert, which arose because of what the Judge viewed as cross purposes.
Issue: Was there a miscarriage of justice on the basis that the Judge erred by failing to give a proper direction on the legal test for "material information" and by failing to exclude the Crown's expert evidence?
No. At defence counsel's request, the Judge directed the jury on the legal meaning of "material information" prior to the Crown's expert giving evidence. During trial, defence counsel was content to wait until the end of the trial to wait for a further direction which was given.
Issue: Was there a miscarriage of justice on the basis that a late change in the Crown theory unfairly prejudiced the defence?
No. The best evidence that it did not do so is that trial counsel did not seek an adjournment on that basis. When the amended brief of the Crown's expert was signalled, it was anticipated and accepted by the Judge that there would be a break before he gave evidence. The defence also reserved its position in relation to the possible recall of two witnesses, but in the event did not pursue. The additional evidence that the appellant seeks to introduce on appeal to respond to what it says is a changed theory of the Crown's case is neither fresh nor cogent.
Issue: Was there a miscarriage of justice on the basis that the Crown adopted an aggressive and misconceived theory of case?
No. It was for the jury to decide what they made of the evidence as to the timing of the trust changes, the evidence from one of the trustees about why the principal beneficiary wanted to make the changes and their involvement in the decision to sell the shares, the benefit the appellant did in fact receive from the trust's sale of the shares and the manner in which the trust's sale was reported to the Pushpay board. The fact that the Judge formed the view for the purposes of sentencing that these aspects were not proven beyond reasonable doubt does not make the Crown's theory unfairly misconceived so as to give rise to a miscarriage of justice.
Sentence appeal
Issue: Was the Judge's starting point of 18 months' imprisonment too low?
Yes. Deterrence is to the fore when sentencing offenders for insider conduct. The Judge understated the culpability of the offending and the starting point should have been not less than two years' imprisonment.
Issue: Did the Judge err by considering personal factors when determining whether a community based sentence was appropriate?
No. Personal mitigating factors may be relevant to both the length of sentence and the nature of the sentence imposed.
Issue: Did the Judge err by imposing community detention rather than home detention?
No. Ordinarily a sentence of six months' community detention rather than eight months' home detention would not adequately serve deterrent aims, but it is not appropriate to interfere with the compassionate response the Judge felt compelled to take in the unique circumstances to which he referred.
Issue: Was the fine of $100,000, together with the compassionate community detention sentence, manifestly inadequate?
Yes. A higher fine, of $200,000, is necessary to provide some "sting", particularly in view of the compassionate approach the Judge took in imposing community detention rather than home detention.
Name suppression appeal
Issue: Should name suppression be continued until the final disposition of the appeal, including any possible conviction appeal to the Supreme Court?
No. The public interest in open justice must now take precedence. The case for continuing name suppression is premised on the basis that, if an application for leave to appeal is made, and if that appeal is successful, and if that results in an acquittal or a retrial order, then it is appropriate to grant continuing name suppression. If any such application for leave does ultimately lead to a retrial, it will be at a distant time from now and the trial Judge will take steps to manage the concerns that had led to the original decision to grant name suppression.
Name suppression should, however, be continued for seven days to allow the appellant to notify family members or significant business interests.
The appellant was an executive of a publicly listed company called Pushpay Holdings Ltd. In April 2018, one of Pushpay's co-founders told the appellant he was thinking of leaving Pushpay and selling his nine per cent shareholding in the company. In May 2018, the appellant sent an email to the trustees of a trust, copied to its principal beneficiary, advising that the principal beneficiary wished to sell most of the trust's Pushpay shares. That trust then sold its shareholding in Pushpay for $[several tens of millions] (net total) before the co-founder announced his intention to leave and his shares were sold at a discount in a process called a bookbuild.
The appellant was convicted of one charge of insider conduct at a trial before Gault J and a jury. The Judge sentenced him to six months' community detention and a fine of $100,000. The Judge declined to grant the appellant name suppression pending final disposition of his conviction appeal. The appellant appealed his conviction on the basis that the jury's verdict was unreasonable or that a miscarriage of justice arose, and appealed the Judge's decision to decline name suppression pending final disposition of his conviction appeal. The Crown appealed the appellant's sentence on the ground that it was manifestly inadequate.
The conviction appeal is dismissed. The sentence appeal is allowed in part by setting aside the fine of $100,000 and replacing it with a fine of $200,000. The appeal against the refusal to grant name suppression pending final disposition of the conviction appeal is dismissed but interim name suppression is to continue for seven days from the date of this judgment.
Conviction appeal
Issue: Was the jury's verdict unreasonable on the basis that it was too uncertain that Mr Crowther (the departing co-founder) would leave and shell his shares by bookbuild?
No. The jury were entitled to make their own assessment of the likelihood that Mr Crowther would leave, and on the likelihood that in this event his shares would be sold by a bookbuild process, and to give any prospect of a private placement or a takeover no weight.
Issue: Was the jury's verdict unreasonable on the basis that the Crown's expert applied the wrong legal test for what would be a "material effect" on Pushpay's price?
No. The jury were correctly directed as to the legal test and were aware of the defence's concerns with the Crown's expert evidence. They were entitled to make their own assessment of the confusion that arose during cross-examination of the Crown's expert, which arose because of what the Judge viewed as cross purposes.
Issue: Was there a miscarriage of justice on the basis that the Judge erred by failing to give a proper direction on the legal test for "material information" and by failing to exclude the Crown's expert evidence?
No. At defence counsel's request, the Judge directed the jury on the legal meaning of "material information" prior to the Crown's expert giving evidence. During trial, defence counsel was content to wait until the end of the trial to wait for a further direction which was given.
Issue: Was there a miscarriage of justice on the basis that a late change in the Crown theory unfairly prejudiced the defence?
No. The best evidence that it did not do so is that trial counsel did not seek an adjournment on that basis. When the amended brief of the Crown's expert was signalled, it was anticipated and accepted by the Judge that there would be a break before he gave evidence. The defence also reserved its position in relation to the possible recall of two witnesses, but in the event did not pursue. The additional evidence that the appellant seeks to introduce on appeal to respond to what it says is a changed theory of the Crown's case is neither fresh nor cogent.
Issue: Was there a miscarriage of justice on the basis that the Crown adopted an aggressive and misconceived theory of case?
No. It was for the jury to decide what they made of the evidence as to the timing of the trust changes, the evidence from one of the trustees about why the principal beneficiary wanted to make the changes and their involvement in the decision to sell the shares, the benefit the appellant did in fact receive from the trust's sale of the shares and the manner in which the trust's sale was reported to the Pushpay board. The fact that the Judge formed the view for the purposes of sentencing that these aspects were not proven beyond reasonable doubt does not make the Crown's theory unfairly misconceived so as to give rise to a miscarriage of justice.
Sentence appeal
Issue: Was the Judge's starting point of 18 months' imprisonment too low?
Yes. Deterrence is to the fore when sentencing offenders for insider conduct. The Judge understated the culpability of the offending and the starting point should have been not less than two years' imprisonment.
Issue: Did the Judge err by considering personal factors when determining whether a community based sentence was appropriate?
No. Personal mitigating factors may be relevant to both the length of sentence and the nature of the sentence imposed.
Issue: Did the Judge err by imposing community detention rather than home detention?
No. Ordinarily a sentence of six months' community detention rather than eight months' home detention would not adequately serve deterrent aims, but it is not appropriate to interfere with the compassionate response the Judge felt compelled to take in the unique circumstances to which he referred.
Issue: Was the fine of $100,000, together with the compassionate community detention sentence, manifestly inadequate?
Yes. A higher fine, of $200,000, is necessary to provide some "sting", particularly in view of the compassionate approach the Judge took in imposing community detention rather than home detention.
Name suppression appeal
Issue: Should name suppression be continued until the final disposition of the appeal, including any possible conviction appeal to the Supreme Court?
No. The public interest in open justice must now take precedence. The case for continuing name suppression is premised on the basis that, if an application for leave to appeal is made, and if that appeal is successful, and if that results in an acquittal or a retrial order, then it is appropriate to grant continuing name suppression. If any such application for leave does ultimately lead to a retrial, it will be at a distant time from now and the trial Judge will take steps to manage the concerns that had led to the original decision to grant name suppression.
Name suppression should, however, be continued for seven days to allow the appellant to notify family members or significant business interests.