SFO director unlawful in excluding QC from interview

Julie Read can exclude counsel, but she was unreasonable in this case, says judge. Photo / Dean Purcell

The director of the Serious Fraud Office acted unreasonably and unlawfully in excluding a Queen's Counsel from representing a client at an SFO interview.

The Chief Judge of the High Court, Justice Geoffrey Venning, today released a decision stating that Julie Read's exclusion of Marc Corlett QC from representing a former Zespri director at an SFO interview will be revoked.

Justice Venning found it to be unlawful and unreasonable.

The SFO has declined to comment on the scope of the investigation since it began in 2013, but Zespri has so far been hit with a $6.8 million bill for the probe.

The costs of the inquiry are being covered by Zespri's corporate body, rather than grower pools.

The case relates to a SFO investigation into affairs at Zespri. Photo / File

In an interview with the Bay of Plenty Times in June 2015, chief executive Lain Jager said the company did not know what the SFO was looking at but "we can surmise, as I think most people do, that their interest relates to the historic issues in China. But that is a surmise on our part."

In March 2013, Zespri's Chinese subsidiary, ZMMC, was fined almost $1m and an employee was jailed for five years over the underpayment of Customs duties on kiwifruit imports between 2008 and 2010.

Buddle Finlay released a statement today calling Justice Venning's decision "important and precedent setting".

Corlett was instructed to act as counsel for a former director of Zespri in an interview with the SFO. The SFO director sought to exclude Corlett on the basis that his presence at the interview had the potential to "prejudice the investigation".

The SFO concern was that Corlett could inadvertently disclose information from the former director to other interviewees for whom he also acted.

The SFO considered that such a disclosure would result in the "tailoring of evidence" given by interviewees in the course of their interviews with the SFO.

Although the courts accept the director of the SFO has an implied power to exclude counsel on reasonable grounds, the judge ruled that decision to exclude Corlett from attending the interview was not reasonable.

The court awarded costs against the SFO.

Buddle Finlay said the case will likely be of relevance to the conduct of investigations by the Financial Markets Authority and the Commerce Commission.