Former NZ Wine Co boss Peter Scutts appeals conviction on taking kickbacks

Monday 19th October 2015

Former New Zealand Wine Co chief executive Peter Scutts is appealing his conviction on charges of taking kickbacks worth $64,000.

Scutts, who is 59 and a former boss of the Auckland Blues rugby franchise, was sentenced to 8 months’ home detention in July after being found guilty in May on 16 charges of dishonestly using a document and one secret commission charge of receiving reward for procuring contracts.

On advice from Scutts, NZWC entered into a contract to supply wine to Australia based wine wholesaler, Liquor Marketing Group, in 2011. However he failed to advise the NZWC board that he was earning commissions of A$1 for every case of the supplied wine that LMG sold.

In her decision, Justice Mary Peters found the agreement to pay the kickbacks was reached before NZWC signed the supply contract with LMG in March 2011.

Scutts' lawyer, John Billington QC, told the Appeal Court in Auckland today that the High Court judge failed to “consider the totality of the evidence” and reversed the onus onto the defendant to prove he was innocent rather than the Serious Fraud Office proving his guilt.

He said the judge rejected evidence from two LMG senior executives without giving adequate reasons for that and that her reasoning fell short of what’s expected from a judge alone hearing a case rather than a jury. He described it as a “judicial embarrassment”.

The Appeal Court judges agreed there was “skinny reasoning” given in the case.

Serious Fraud Office lawyer Rachael Reed said there was only one real live issue in the case – whether the benefit Scutts received from the deal was agreed to prior to his advising, in his role as an agent, for NZWC to sign the supply deal. Scutts moved from being an agent to chief executive of the wine company in July 2011, a role he held until the company merged in 2012 with Foley Family Wines. The company made a complaint to the SFO about the payments the following year.

A breach of the Secret Commission Act occurs when someone advises a person to enter into a contract with a third party and receives or agrees to receive a gift or reward from that third party without the original person’s consent or knowledge.

Reed said the judge shouldn’t have to give reasons for every point raised in the case and that her decision had sufficiently addressed her thinking around the key issue.

The case mainly hinged on the date of a letter which offered to make payments to a company associated to Scutts based on the quantity of supplied wine sold. The SFO contended the letter dated October 2010 proved the intended benefit to Scutts was decided before the contract was signed. The judge rejected evidence by LMG’s Douglas Finlay that the correspondence was sent much later, in early 2012.

Billington claimed the SFO didn’t call other key LMG witnesses that could have corroborated Finlay’s evidence.

LMG faced a problem when NZWC wouldn’t provide a photo of the winemakers it wanted to use to help market the supplied wine, and the defence case was that the payments related to Scutts supplying a photo of his son, Oliver, to LMG to be used in marketing brochures for the same payment referred to in the 2010 letter.

Justice Peters said in her decision that the first occasion Oliver Scutts’ photo was used to promote LMG’s own label wine was in September 2011, some four months after his father, Peter, submitted the first invoice in dispute.

The appeal court judges reserved their decision. If the conviction is overturned, Billington said he was seeking an acquittal while the SFO wanted a retrial.

BusinessDesk.co.nz

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