By Anna Longdill
Appeal from High Court pre-trial judgments on legality of SFO’s exercise of search warrant and compulsory notice powers – Serious Fraud Office Act 1990, ss 4, 7, 9, 10, 12, 18, 22 – New Zealand Bill of Rights Act 1990, s 21 – approach to assessing legality of SFO’s exercise of powers – balance between effective law enforcement and protection of individual liberties – specificity requirements for compulsory notices and search warrants
R v Pikia [2024] NZCA 408
Roger Pikia was the chairman of the Te Arawa River Iwi Trust (TARIT), which was established to receive a $29 million Treaty of Waitangi settlement fund and to coordinate the co-management of the Waikato River by the three Te Arawa River Iwi. He was also the chairman of TARIT Holdings Ltd (THL), the investment vehicle for TARIT.
Rangatira of Te Arawa asked police for a forensic inquiry into TARIT, expressing concern that trust funds had been fraudulently used by Pikia. The police immediately referred the complaint to the Serious Fraud Office (SFO) on 1 April 2016.
The director opened an inquiry under part 1 of the Serious Fraud Office Act 1990 on 2 May 2016. On 18 July 2016, the director opened an investigation under part 2 of the Act to investigate four discrete matters. This was later expanded to include a further three discrete matters.
From July 2016 to October 2020, the SFO served at least 203 notices under s 9 of the Act to compel information. The notices were all headed “Investigation into the affairs of [Mr] Pikia” but no other information about the nature or scope of the investigation was provided.
The notices required the production of a very broad range of documents, across a lengthy time frame. For example, major trading banks were required to produce all bank and credit card statements for the seven-year period preceding the notices. The SFO also compelled all domestic or international travel information over a period of at least five years for Pikia and others (who were not the subject of the investigation).
In June 2017, the SFO obtained six search warrants which authorised entry and search of Pikia’s two residential addresses, two motor vehicles, TARIT’s offices and a Customs-controlled area at Auckland airport. The warrants did not identify any specific offence – simply referring to any offence involving serious or complex fraud with TARIT and THL involving Pikia.
As a result of its notices and warrants, the SFO obtained more than one million documents.
Pikia was subsequently charged with serious fraud offending and attempting to pervert the course of justice. He challenged the legality of the SFO’s s 9 notices and search warrants.
Pikia had partial success with respect to some of the notices in the High Court but sought leave to appeal the judge’s conclusions in respect of the other notices and warrants. The Court of Appeal granted leave to appeal.
Applicable principles: Serious Fraud Office Act 1990, ss 4, 7, 9, 10, 12, 18, 22 – New Zealand Bill of Rights Act 1990, s 21 – did the notices and warrants taken together amount to an unlawful warrant? (no, it would be unprincipled to determine the legality of the SFO’s exercise of its powers by assessing the cumulative breadth of the overall search taking account of all notices and warrants) – do s 9 notices need to be specific? (yes, notices must be targeted to the offence/s under investigation and as specific as the circumstances reasonably permit) – can s 9 notices be used to carry out general surveillance to determine how individuals were responding to the SFO’s investigation? (no) – can s 9 notices be used to obtain all available banking information, relevant or not? (no, s 9 does not provide a general licence to carry out a wholesale audit of the entirety of the available business and personal financial transactions of the person under investigation and anyone else without regard to the particular fraud the director believes has been committed) – can s 9 notices be used to require electronic devices – eg, laptops or cell phones? (no, they do not fall within the definition of “document”) – can s 9 notices be used to require passcodes to devices? (yes) – were the search warrants as specific as possible in the circumstances? (no, they were overbroad and unlawful, amounting to general warrants)
Held: The appeal is allowed. The SFO’s approach involved significant overreach.
The drafting technique to craft the warrants and many of the notices was the antithesis of the correct approach, which requires the provision of as much specificity as is reasonably possible in the circumstances and targeting only information relevant to the frauds under investigation. Given the defined and limited parameters of the frauds properly under investigation, the number and breadth of the notices and warrants was unnecessary, unreasonable, and oppressive.
The court remitted the matter back to the High Court to consider admissibility issues. A total of 148 notices and warrants (set out in the seven-page schedule to the judgment) were unlawful.
Note: The SFO sought the Solicitor-General’s consent to seek leave to appeal the decision to the Supreme Court. This was declined. As a result of the Court of Appeal’s decision, the Crown decided not to proceed further with the prosecution, and the High Court dismissed the charges against Pikia on 29 November 2024:
https://sfo.govt.nz/media-cases/media-releases/sfo-response-to-court-of-appeal-decision
0 Comments