Scott Watson's appeal being heard in Supreme Court

Scott Watson's defence lawyers argue police pressured and "primed" a key witness to identify Watson as the man he saw boarding a yacht with Ben Smart and Olivia Hope in the early hours of New Years' Day.

The argument came as Watson's appeal of his double-murder conviction is being heard in the Supreme Court.

Watson was sentenced to life imprisonment for murdering Ben Smart and Olivia Hope in the Marlborough Sounds and has now been behind bars for 27 years.

The Blenheim friends, aged 21 and 17, were last seen stepping off a water taxi onto a stranger's yacht in Endeavour Inlet the early hours of 1 January, 1998, after a New Year's Eve party at Furneaux Lodge.

Their bodies have never been found.

Watson was found guilty of the murders in 1999 after an 11-week jury trial involving about 500 witnesses.

He appealed his convictions after the trial but the application was dismissed. He made another two applications that were unsuccessful before a 2017 bid for a royal pardon was granted, with the case heard by the Court of Appeal in 2024.

Watson's Supreme Court appeal focuses on one key point - the photo identification process used in the original trial.

Water taxi driver Guy Wallace identified Watson by photo montage on 20 April 1998 as the mystery man with Smart and Hope boarding a yacht - the last place they were ever seen.

Defence lawyer Nick Chisnall KC said that photo montage evidence was "inadmissible" and "tainted", but had been a "crucial part" of the Crown's case.

Chisnall said by the time Wallace was shown the montage, it was about three and a half months after Watson was identified as the suspect, and Hope and Smart disappeared.

"We say that it was profoundly contaminated by outside influences earlier in the investigation," Chisnall said.

He said police had had already shown Wallace a photo of Watson in early January 1998, but Wallace had told police he didn't recognise the man.

Chisnall argued police pressured Wallace in the days after this, saying Watson had been identified by others as the "lone" man, the "sleazy" man, the "mystery man", which suggested he was the key suspect.

"Media saturation" also identified Watson as a suspect and his boat Blade as featuring heavily in the investigation, Chisnall said.

"Then we say the final nail in the unfairness coffin, is the fact that the police created an unfair and improper montage that predisposed Mr Wallace and others to select Mr Watson."

Chisnall referred to expert evidence raised the Court of Appeal which criticised the photo identification process as a "show up" - by police showing a single photo of Watson, and their naming of him to Wallace, they "directly communicated" to an eye-witness who the central suspect was.

"...In my submission, police primed Mr Wallace to identify Mr Watson, and that tainted the identification procedure in that point onwards."

Chisnall KC said a detective applied "moral pressure" to Wallace in a video interview, suggesting he wasn't telling the truth about who he saw, and that he needed to for Smart and Hope's families.

Chisnall also criticised the photograph of Watson police used in Montage B, with his eyes only half open.

He said police could have used other photographs with Watson's eyes fully open, taken from a front on perspective, similar to photos of other people they provided.

He said that Wallace said at time of the trial that he was drawn to this characteristic of the eyes in the photo montage, in the context of a trial about a party and intoxication.

Watson's second lawyer Kerry Cook KC said if this appeal is successful, there shouldn't be a retrial, due to the effect of the passage of time and the media involvement, including news coverage, and books.

"That's very difficult to unwind."

Wallace - a key eyewitness - had died, Cook KC said.

"This case is singular in the way in which the media and the nation has been captured by it, and that has implications."

The hearing is in front of Chief Justice Helen Winkelmann, Justices Ellen France, Joe Williams, Francis Cooke and Stephen Kós, and it continues on Wednesday, when the Crown will respond to Watson's arguments.