Clogged courts delay finance firm trials

Photo / Herald on Sunday

Trials stemming from finance company collapses are being delayed for up to two years and the high volume of methamphetamine cases clogging the courts is partly to blame.

The Ministry of Economic Development says there is an 18-month to two-year delay from a defendant's first appearance in financial cases until the trial begins.

Litigation specialist Andrew Horne said the High Court at Auckland was already scheduling short one-week trials for the end of 2011.

Horne said this delay was partly due to the time it took lawyers to prepare complex cases and collect large amounts of evidence but this was not helped by the court's limited capacity and lack of resources to hear long and complicated trials.

Auckland criminal lawyer Barry Hart said drug cases were putting additional pressure on already stressed resources both at High Court and District Court level.

"There are many many methamphetamine cases. These are complex cases with volumes of evidence. This adds to the delay. Courts are struggling for early trial dates.

"The methamphetamine cases are causing problems, and not just for the financial cases but for all cases that are taking time to get through the system. The issue is the allocation of court resources."

Minter Ellison Rudd Watts partner Lloyd Kavanagh said that "justice delayed is justice denied" for the plaintiff/prosecutor and defendants.

"Unfortunately, while there is a strong focus on reforming the laws that apply to financial services, unless cases can be heard and decided promptly the impact on behaviour in the market is less than it should be."

Last week the Capital + Merchant committal hearing was adjourned until the beginning of October because the judge was ill.

This will delay the trial of directors Neal Nicholls, Owen Tallentire, Colin Ryan, Robert Sutherland and Wayne Douglas until the end of 2011 or the beginning of 2012.

Chapman Tripp lawyer Roger Wallis said more than 30,000 documents had been prepared by the Securities Commission for just one of its cases. He said in some cases the commission had filed civil charges against directors alongside criminal charges, with the civil charges awaiting the outcome of the criminal proceedings.

This meant investors could be waiting up to six years before they saw any compensation.

Serious Fraud Office lawyer Patrick McCann said he was very conscious of the amount of time it took from when an investigation began to when those cases were heard in court.

"We have established new procedures to conduct them as quick as we can. There can be a delay from collapse to receiving a complaint."

McCann said an investigation could take several months before charges were laid and then once the first hearing was held, it could take twice or triple the time until the case was scheduled for trial.

He added that this problem was not unique to New Zealand as the courts were under pressure everywhere.

"The bigger the case, the longer the delay. Fraud cases don't see a quick result unless there is strong pressure from investors. High-profile murder cases get priority, it's just a matter of fact."