Accused alleges his business legitimately used chemical as paint stripper and thinner
New Zealand’s Supreme Court rejected an application seeking permission to assail the Court of Appeal’s dismissal of an appeal against convictions for seven charges of possessing and supplying industrial chemical hypophosphorous acid (HPA) for the manufacture of methamphetamine.
In Dunn v R [2025] NZSC 163, the applicant owned a paint business. He argued that his business had a legitimate use for the HPA as a paint stripper, thinner, and anti-rust treatment.
At the jury trial, the Crown asserted a circumstantial case, which depended on inferences drawn from the evidence.
A forensic accounting expert called by the Crown described about $1.8m in cash deposits and transactions associated with the paint business, the applicant, and his family – $1,471,160.13 of which comprised cash deposits into the business bank accounts – as unexplained.
In appealing his convictions, the applicant raised multiple grounds, such as the lack of a lies direction, insufficient directions on inferences, an inverted burden of proof, and an improper reference to potential methamphetamine yield.
After the hearing, the applicant wanted to reopen the appeal and challenge the Crown’s financial analysis through fresh evidence from his own forensic accounting expert, who argued that the Crown’s expert used a flawed methodology.
New Zealand’s Court of Appeal dismissed the appeal and refused to admit the fresh evidence. It saw no error in the trial judge’s directions and characterised the evidence of the defence’s forensic accountant as speculative, inconsistent with the evidence, and lacking in cogency.
The applicant applied for leave to appeal. The Supreme Court of New Zealand dismissed the application.
The Supreme Court deemed it unnecessary in the interests of justice to hear and determine the appeal on any of the advanced grounds. It ruled that the proposed grounds raised no matter of general or public importance and no risk of a substantial miscarriage of justice.
First, the Supreme Court rejected the applicant’s proposed ground alleging the absence of a lies direction. It held that the lack of a lies direction could have made his trial unfair or his conviction unsafe:
The Supreme Court noted that the applicant’s experienced trial counsel did not seek a lies direction, considered it unhelpful and counterproductive to the defence, and described it as tantamount to telling the jury that the applicant had lied under oath or to the police.
The Supreme Court added that the applicant’s trial counsel directly and meticulously addressed the allegations of lying during closing and clearly presented an alternative, innocent explanation before the jury.
The Supreme Court determined that the jury critically accepted the Crown’s case, rather than assuming the applicant’s guilt, given that it acquitted him of the charges arising from the first HPA shipment.
Second, the Supreme Court rejected the proposed ground asserting inadequate directions regarding inferential reasoning.
According to the Supreme Court, rather than needing to issue a direction on inferential reasoning in a case inviting inferences from the evidence, the trial judge only had to provide sufficient directions on the burden and standard of proof beyond a reasonable doubt in the circumstances of the case, which the judge did here via a standard Wanhalla direction.
The Supreme Court said a substantial amount of circumstantial evidence supported the applicant’s guilt. It added that the jury could find the applicant’s innocent explanation implausible and reject it as a reasonable alternative to the Crown’s case.
Lastly, the Supreme Court rejected the applicant’s challenge against the finding that the new evidence of the defence’s forensic accountant lacked cogency.
The Supreme Court perceived four general deficiencies in the proposed expert’s new evidence. It noted that the applicant could apply to the Criminal Cases Review Commission for an assessment of these deficiencies.
