Bid to remove South Canterbury Finance judge fails

EMMA BAILEY
Last updated 16:34 17/03/2014
South Canterbury Finance fraud case
MYTCHALL BRANSGROVE/Fairfax NZ

IN COURT: Arraigned in the dock at the start of the $1.58b South Canterbury Finance fraud case, from left, are Edward Sullivan, Robert White and Lachie McLeod.

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New Zealand's largest alleged fraud trial will continue, after defence counsel failed to have the judge removed.

Former South Canterbury Finance (SCF) chief executive Lachie McLeod and former directors Edward Sullivan and Robert White have pleaded not guilty to 18 individual and combined fraud charges laid by the Serious Fraud Office (SFO) in December 2011.

SCF collapsed in August 2010, with $1.58 billion of taxpayers' money paid to investors.

The three Queen's counsels acting for the three defendants had called for Justice Paul Heath to remove himself from the case.

Comments by SFO director Julie Read at a conference, where she said: "We are very fortunate to have Justice Heath as our trial judge", showed a perception of partiality and required the trial to be aborted. Justice Heath was chairing the conference, they said.

The trial began last Wednesday in the High Court in Timaru, with the Crown finishing its opening on Thursday.

The case resumed at 2.15pm today with the recusal application.

In rejecting the application Justice Heath said he had allowed time for full submissions to be made.

"I have heard from the counsel today," Justice Heath said.

"I'm not satisfied that the conditions for recusal have been made out. The trial will continue with full reasons to be released later."

Earlier, Bruce Squire, QC, acting for White, said the application was made on the perception of bias, not actual bias.

"The test is what a fair-minded objective lay observer would consider that there is a real possibility that a fair trial in this instance would not take place," Squire said.

"The perception of the public is part of the test. The question is not what your honour thinks but how it would be judged by an objective observer."

Philip Hall, QC, acting for Sullivan, said it was a matter of disqualification by association.

Colin Carruthers, QC, acting for the Crown, argued there was no basis for recusal, which would have resulted in the judge standing down from the trial.

"Finding existence of an association is not enough to disqualify a judge," Carruthers said.

"The application is utterly bereft of any substance."

A "senior silk" provided expert opinion on the matter.

Recusal could have led to the trial been delayed for years as a new judge would have needed to be found and a three to four-month trial scheduled. It has already taken two years and three months to get the matter to trial.

The first witness to be called is former SCF director Stuart Nattrass.

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