4 October 2006

Election expenses - prosecution under the Electoral Act

> Scoop: National asks cops to explain on pledge card probe > NZHerald: Police dragged into election spending row > NoRightTurn: Cause for complaint > KiwiBlog: Brash complains to Police over Electoral Act investigation I've previously written a bit about the legitimacy of the spending on the pledge cards, concluding that it might be credible spending under the Leaders' Fund and may not need to be repaid (retrospective legislation on this point might not be objectionable). However, I take a different view on the question of whether it should have been recorded as an electoral expense under the Electoral Act and whether, consequentially, Labour exceeded the cap. I'm concerned about the robustness of the Police's analysis of the charges and evidence when they decided not to prosecute (I won't detail the concerns here - others have addressed this elsewhere). There is some speculation that the real reason was the time for a prosecution expired (or a prosecution could never have been bought in time after the election). It's the question of the timing of a prosecution that I want to address. Section 226 of the Electoral Act sets a 6 month time limit for any prosecution:
s226. Time limit for prosecutions A prosecution against any person for a corrupt practice or an illegal practice shall be commenced within 6 months after the offence was committed: Provided that where the person charged has been reported by the High Court in its report on the trial of an election petition to have been proved guilty of the offence, a prosecution shall be commenced within 6 months after the offence was committed or within 3 months after the date of the report, whichever period is the later to expire.
There's some question mark about when any offence was committed, assuming there was one. A lot of people have adopted the 6 months from the election date or the date of the electoral return. However, I suspect it's at an earlier point in time. The offence in section s214B(3) is as follows:
(3) Every person who directly or indirectly pays or knowingly aids or abets any person in paying for or on account of any election expenses any sum in excess of the maximum amount prescribed by this section is, (a) If the act is done with knowledge that the payment is in excess of the maximum amount prescribed by this section, guilty of a corrupt practice; and (b) In any other case, guilty of an illegal practice unless the person proves that he or she took all reasonable steps to ensure that the election expenses did not exceed the maximum amount prescribed by this section.
The critical elements are "pays" and "in excess of the maximum amount". This means, I think, the time of any offence was when Labour paid the first invoice that took them over any limit (assuming the pledge cards are attributable spending under the Electoral Act - there's seems to be no doubt that if it was, they were over the limit). As an aside, there is some dissonance between the reference in the offence section to "pays" when the definition of election expenses refers to "incurs". Now, factually, I have no idea when this took place - it may have been rather early in the election process. Alternatively, it might have been months after, particularly if an actual payment approach is adopted. (Actually, I was once involved in litigation which raised the issue of whether a cause of action arose when expenses were "incurred" or "paid": see Watercare Services Ltd v Affco New Zealand Ltd.) I suspect therefore that any prosecution was always going to face limitation problems. The question has been raised about whether retrospective legislation could be used to amend the limitation provision to allow a prosecution. However, if a desire to allow a prosecution is to be pursued, I'm not convinced it is necessary. There is a possible solution within the Electoral Act itself, albeit somewhat of a "hail mary". Section 266 of the Electoral Act empowers the Governor-General extend the time for doing anything which could not have been done in the time required:
s266. Validation of irregularities Where anything is omitted to be done or cannot be done at the time required by or under this Act, or is done before or after that time, or is otherwise irregularly done in matter of form, or sufficient provision is not made by or under this Act, the Governor-General may, by Order in Council gazetted, at any time before or after the time within which the thing is required to be done, extend that time, or validate anything so done before or after the time required or so irregularly done in matter of form, or make other provision for the case as he or she thinks fit: Provided that this section shall not apply with respect to the presentation of an election petition or to the giving of security for costs in relation to an election petition.
Now, it's not straight-forward for a number of reasons: - Although, on its face, the section is wide enough to cover this scenario, it's clearly not the purpose of the section (and could be "read down" according). - It would need to be established that a prosecution within the time limit was never a possibility; I'm not sure that was the case. - Applying the section might have retrospective effect, which is problematic in the criminal context. On the other hand, it's only the limitation period not the substantive criminal offence (the Court of Appeal in R v Hibberd [2001] 2 NZLR 211 seemed less concerned with retrospectivity in limitation provisions: "Any failure to provide in the reforms for what would amount to an amnesty is not ... the equivalent of the retrospective imposition of a penalty.") and conceptually a prosecution now would not violate the offender's decision-making functions - merely remove an amnesty. - Limitation periods generally arise because of a desire for a fair trial and, in this context, the legal certainty related to the election. In this case, neither is really an issue: the provisions already recognise an extended limitation period if the offence is reported in an electoral petition (which is not a possibility for party spending). - Realistically, the prospect of the Governor-General gazetting an Order in Council is remote because these are gazetted on advice of the Executive Council, ie the government. Anyways, food for thought!


Graeme Edgeler said...

Kiwiblog had a thread about this after Mike Williams had spoken publically (before the police decision not to prosecute) that time he - Mike - thought had almost expired.

I expounded at length on my interpretation there - http://www.kiwiblog.co.nz/2006/03/labour_may_escape_prosecution.html

A 'Masked M' came along with a case - Rees v Munday [1974] 3 All ER 506 - in support of my opinion that time had not expired.

I hadn't considered the possibility that it was only the first invoice paid that took the total sum spent over the maximum amount prescribed that would constitute an offence, but disagree that this would be the case. The offence occurs when someone "pays ... any sum in excess". An invoice is paid in excess of the prescribed amount whether it is just in excess, or whether the amount was exceeded some time previously. I'd argue that the offence is committed on payment and that each payment over the prescribed amount is a separate offence.

Six months after the last invoice was paid would be my pick for the time by which a prosecution would need to be launched. As a matter of fact I suspect that time would almost certainly be some time (at least weeks) after the election.

[s 214BA(2) gives some hint]

We know that the pledgecards themselves (which I'd suggest were "indirectly" paid by the Labour Party) were not paid for until over a month after the election.

I certainly hadn't considered the effect of s 266, but consider it inappropriate (although not double jeopardy) to be used to extend the time for prosecution so late (I'm open to an application to extend time before time has expired).

I'd also disagree with your assertion that "It would need to be established that a prosecution within the time limit was never a possibility". I would suggest that as a matter of statutory interpretation "cannot be done at the time required" does not relate to the phrase "is omitted to be done" - the two are distict .

This is a case of an ommission to do something (lay an information); only on an application to extend the time before it expired would it be necessary to establish impossibility within the time allowed. Naturally, I'm less certain of this than I am of my interpretation of the time when the offence is committed.

As an aside, I'd suggest that at the time the police were still considering whether to lay charges under the electoral act against Heather Simpson or the EB for having improperly authorised election material, and against National, it's ad agency or any broadcaster for breaches of the broadcasting act the time had expired (my reasoning on that is also in the kiwiblog thread).

Anonymous said...

The pledge card invoices were not paid till Jan 06 because Parliamentary Services believed they were illegal and only paid them when forced to by Heather Simpson. So the 6 months carried on until at least June/July this year. If National had been on to it, they could have begun a private prosecution up until then.

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Lord Justice Lawton in Maxwell v Department of Trade and Industry [1974] 2 All ER 122 said:

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This course examines the elephantine concept of fairness in the law, along with other contemporary legal issues.

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