Anderson v Police

[2023] NZHC 2644

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CRI-2023-425-16

[2023] NZHC 2644

BETWEEN

MELANIE TYRELLE ANDERSON

Appellant

AND

NEW ZEALAND POLICE

Respondent

Hearing:	20 September 2023 (By way of AVL)
Appearances:	S N McKenzie for Appellant J A T Ross for Respondent
Judgment:	21 September 2023

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 21 September 2023 at 3 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

ANDERSON v NEW ZEALAND POLICE [2023] NZHC 2644 [21 September 2023]

Introduction

[1]                 On 16 June 2023, the appellant, Ms Anderson, was sentenced to nine months’ home detention on five charges of theft by a person in a special relationship.1

[2]                 She appeals her sentence on the single ground that there was insufficient credit allowed to recognise her efforts in paying reparation in full and her remorse.

Facts of the offending

[3]                 The offending arose in the context  of  Ms  Anderson’s  employment  with two Invercargill-based companies. In both roles, she was involved in the administration of accounts and had the ability to pay accounts owed and wages. She embezzled funds from both companies in order to pay for personal expenses.

[4]                 In respect of the first company, Ms Anderson was involved in payroll, data entry, accounts receivable and payable, debit reconciliation, and other general administration. Between 2016 and 2019, she created fraudulent creditor payments to businesses that traded with the company and paid $19,245.40 directly into her personal account. She overpaid herself in the amount of $6,278.33. That offending came to light in 2020, and a forensic account was engaged and fees of $6,614.63 were incurred.

[5]                 Ms Anderson was employed at the second company from around August 2016. She took over a more substantial role in this company following an owner becoming seriously ill. She had extensive access to account information, and trust was reposed in her. On several occasions, Ms Anderson paid herself more than she was entitled to for annual leave and sick leave. This totalled to $12,744.50. Ms Anderson also paid herself $24,138.78 after creating more than 40 false invoices ostensibly from businesses which traded with the company. In mid-2019, the company started to notice unexplained cash flow issues and had to sell assets to keep the business afloat. Ms Anderson confided to the company’s accountant in 2020 that she had been taking money from the business.  The company incurred accounting fees totalling $7,139.38

1      R v Anderson [2023] NZDC 12119.

investigating the payments. In November 2020, Ms Anderson paid back $7,000. In December she paid $20,000.

[6]                 Reparation of $32,138.36 was sought on behalf of the first company, reflecting the amounts wrongfully paid to Ms Anderson and accounting fees. Reparation of

$17,022.66 was sought by the second company, reflecting the theft and the accounting fees but minus the amounts already repaid.

Principles on appeal

[7]                 Appeals against sentence are allowed as of right by s 244 Criminal Procedure Act 2011 and must be determined in accordance with s 250 of that Act. An appeal against sentence may be allowed by this Court only if it is satisfied there has been an error in the imposition of the sentence and a different sentence should be imposed.2 As the Court of Appeal identified in Tutakangahau v R (quoting the lower court’s decision), a “court will not intervene where the sentence is within the range that can properly be justified by accepted sentencing principles”.3 It is appropriate for this Court to intervene and substitute its own views only if the sentence being appealed is “manifestly excessive” and not justified by the relevant sentencing principles.4

District Court decision

[8]                 At the sentencing  indication,  Judge  Farnan  adopted  a  starting  point  of  30 months’ imprisonment. A full guilty plea discount was considered appropriate, but only five per cent was available for prior good character as the offending spanned several years. At the time of the sentencing indication, Ms Anderson had paid $27,000 in reparations and further reparations were sought, both in respect of the money taken from the two companies and for the accounting fees they had incurred as noted above.

[9]                 The Judge indicated a discount for paying reparation was appropriate and indicated a credit of 10 per cent. The Judge also said, “further discounts for paying reparation and discounts for restorative justice, if it takes place, can be given at

2      Criminal Procedure Act 2011, ss 250(2) and 250(3).

3      Tutakangahau v R [2014] NZCA 279, [2014] 3 NZLR 482 at [36].

4      Ripia v R [2011] NZCA 101 at [15].

sentencing”.5 The discounts afforded at that stage resulted in a sentence of 18 months’ imprisonment, which the Judge indicated would be converted to nine months’ home detention. She added that the sentencing indication was “predicated on the basis that reparation will be paid in full by sentencing, no further offending, and a suitable address for home detention”.6

[10]             Judge Farnan’s sentencing indication was adopted by Judge Walker when he sentenced Ms Anderson on 16 June 2023. He summarised the sentencing indication as indicating a sentence of nine months’ home detention “but only on the basis that reparation was paid in full by sentencing, there was no further offending, and there was a suitable address”. There was no discussion of any further discounts, and he imposed the sentence of nine months’ home detention.

Submissions

Appellant’s submissions

[11]             Mr Ross, for Ms Anderson, advances a focused appeal. The only issue taken with the sentence concerns discounts for reparations paid and remorse. Instead of the 10 per cent discount given, he suggests the discount should have been between 20 and 30 per cent.

[12]             In support of this submission, he explains that Ms Anderson has gone to some effort to ensure the victims were repaid. She sold her family’s vehicles to pay the initial amount of $27,000 and borrowed a modest vehicle from a family member to continue to travel to  work.  To  pay the remaining reparation, she borrowed from  two separate family members and is currently repaying the first of these loans at $500 per week, after which she will have to pay off the second loan. In order to do this, she is working up to six days a week at the local freezing works and is living a more frugal life.

[13]             In submitting that a higher discount should be available for paying full reparations, Mr Ross notes that, at the sentence indication hearing, the Crown

5 At [38].

6 At [42].

submitted she was entitled to “a discount of 15 per cent for partial reparation”. Given that by the time she was sentenced, she had paid reparation in full, he says the Crown clearly anticipated a discount greater than 15 per cent would be available. In his submission, the authorities support a credit of 20 to 30 per cent in circumstances such as this.

[14]             In R v Pian, a defendant repaid $630,000 which was obtained by deception, along with $30,000 in interest.7 This was reflected in a 20 per cent discount to the starting point. The Judge also made a discrete allowance for remorse of five per cent to reflect the payment of interest in addition to the full repayment.

[15]             In Zhang v R, a 20 per cent credit for payment of reparation was given for repaying funds obtained through dishonesty.8 On appeal, the Court of Appeal acknowledged there were cases where more significant discounts had been afforded, even where the reparation made was not for the full amount defrauded, although the cases did not persuade the Court that the adjustment of 20 per cent in this case was insufficient.

[16]             In Watene v R, Isac J was considering an appeal against sentence for an appellant who had burned down her ex-partner’s uninsured home, causing a loss of around $150,000.9 She was paying $100 per week towards reparation and had withdrawn $5,000 from her Kiwisaver account, which was the maximum amount which could be released on a substantial hardship ground, to pay the victim.

[17]In discussing what discounts should apply, Isac J said the following:

[50] The authorities cited in Hall’s Sentencing suggest that discounts of as much as 50 per cent have been made for offers of amends and reparation payments. As the Court of Appeal observed in R v Clotworthy, the appropriate level of discount will depend on the facts of the case and a close assessment of the relevant sentencing considerations. The nature of the offer, the effect of the payment on the offender, and whether the offer is voluntary will be relevant. A voluntary payment (amends) is different to a payment ordered by the Court (reparation) and may indicate remorse and a desire to atone especially if it is likely to cause hardship. The nature of the offending

7      R v Pian [2020] NZHC 2724.

8      Zhang v R [2022] NZCA 267.

9      Watene v R [2023] NZHC 441.

and the harm caused, the extent to which the offer of amends mitigates the victim’s loss, and whether the victim accepts the offer, are also factors likely to be highly relevant. Whereas payments by perpetrators of, for instance, sexual offending have often been given little weight. Payments in amends appear to have been afforded significantly more weight in offending that primarily involves financial loss, such as by fraud or property damage. Overall, it is clear that a highly fact-specific approach is necessary.

(footnotes omitted)

[18]             In Watene, Isac J concluded that a credit of 30 per cent was appropriate to reflect both the reparation payments and the appellant’s remorse. Although Isac J quashed the $150,000 reparation order and instead imposed an order of $30,000, he placed weight on the means of the person making amends, and the fact that her efforts would have a significant impact on her own financial wellbeing and the quality of her retirement, in setting the level of discount.

[19]In Richards v Police, the appellant defrauded his employer of approximately

$50,000.10 The appellant, at the time of sentencing, had only been able to offer to repay $150 to $200 per week, and a two month credit on the 20 month starting point was afforded. On appeal, the situation had changed. He had been able to pay a lump sum of $10,000 towards reparation and withdraw $38,000 from his Kiwisaver account to repay the $50,000 in full. Collins J considered it was appropriate to apply a discount of six months to the prison sentence to reflect the full reparation paid. That amounted to a 30 per cent discount on the 20 month starting point.

[20]             In summary, Mr Ross says that allowing only a 10 per cent credit for the full repayment of over $70,000 prior to sentencing, and with no additional credit for remorse, was clearly inadequate. Had a 20 to 30 per cent discount been afforded for reparation and remorse, a home detention sentence of between six and seven and a half months should have been imposed.

10    Richards v Police [2018] NZHC 2288. This was the only amount which could be demonstrated on the businesses records which went back one year, and was not necessarily the full amount of the offending.

Respondent’s submissions

[21]             The respondent’s position is that the overall discount of 40 per cent cannot be criticised, and the end sentence of nine months’ home detention is not manifestly excessive. First, Ms McKenzie notes Ms Anderson received a full 25 per cent discount for her guilty plea. She notes that while guilty pleas to two charges were entered early, the plea to the remaining three was only entered following the sentencing indication, some 11 months after the charges were first called.

[22]             In support of the submission that the guilty plea discount was generous, she notes the following observation by Brewer J in Harnett v Ministry of Social Development:11

[30] I consider the discount of 25 per cent for the pleas of guilty to be generous. I acknowledge it has become almost automatic for some Judges to give the full discount, so long as pleas are not entered just before trial. But that is not the law.The Supreme Court in Hessell v R, rejected an approach which would mean that where a plea is entered promptly, even in the face of a very strong prosecution case, the maximum discount must be given.12 What is required is a proper evaluation of all the circumstances in which the plea is entered. In Mr Harnett’s case, his offending, once discovered, was ineluctable.

[23]             In the circumstances, a 25 per cent guilty plea was generous and a lesser discount could have been given.

[24]             In terms of the discount for reparation, Ms McKenzie considers the sentencing indication made it clear that a discount of 10 per cent would be available on payment of full reparation. She also submits that any discount for reparation necessarily takes into account remorse. Ms McKenzie accepts that 10 per cent on its own would be at the lower end of the available range. However, she considers that in conjunction with the five per cent discount for previous good character and the full 25 per cent discount for guilty plea, the end sentence cannot be described as manifestly excessive.

11     Harnett v Ministry of Social Development [2018] NZHC 1160.

12     Hessell v R [2010] NZSC 135, [2011] 1 NZLR 607 at [51].

Discussion

[25]             I begin by considering whether the discount for the reparations paid was appropriate. First, I observe that Judge Farnan was affording a 10 per cent discount for the reparations paid to date and signalled, at [38] of her sentencing indication, that further discounts would be available if further reparation was paid. Similarly, the Crown’s submissions supported a 15 per cent discount for “partial reparation”, indicating a higher discount was available for full repayment. However, those views are not determinative. The ultimate question is what level of discount is appropriate for the reparations paid in this case.

[26]             In that regard, I start by considering how the payment of voluntary reparations meets the purposes of sentencing. It clearly holds the offender accountable for the harm done to the victim. It also promotes in the offender a sense of responsibility for and an acknowledgement of the harm caused. It provides for the interests of the victim of the offence, and it provides reparation for the harm done by the offending. Thus, the payment of full reparation for the harm done meets a number of important purposes of sentencing, and that must be fairly reflected in sentencing.

[27]             In the present case, Ms Anderson has met not just repayment of what she took, but also repayment of the accounting costs incurred by both victims. She did that, not as the result of a Court order, but, voluntarily, in advance of sentencing. It also was done at some sacrifice to the appellant. She did not have the funds readily available and has had to materially modify her standard of living in order to meet the costs of paying reparation.

[28]             I also note that reparation was important to the victims. The owners of Gracetek Ltd speaks of the cost of employing accountants to prove the extent of her offending and says her offending has “cost us money we simply didn’t have”. The owner of Eden Haulage Ltd was critical of Ms Anderson for not showing remorse or paying reparation. While the payment of reparation will not remedy all the harm of her offending, it clearly addresses a significant aspect of it.

[29]             In my view, victims of offending which has caused them financial loss want to see defendants incentivised to repay that loss in full. That can be achieved by granting

meaningful discounts when payment in full is made, particularly where that is done in advance of sentencing so that there is no uncertainty about when or if payment will be made.

[30]             In my view, a 25 per cent discount is appropriate in this case to reflect the fact that repayment was made in full of both the money taken and the accounting fees incurred, and this was done prior to sentencing and at considerable cost to the appellant.

[31]             However, I do not consider, in this case, that any further discount is required to reflect remorse. While I acknowledge that Ms Anderson has written letters of apology and has offered to go to restorative justice, the victim impact statements suggest that if there was remorse, it was belated. The owners of Gracetek Ltd say that Ms Anderson left them feeling like they were the ones in the wrong as she “argued every dollar she stole from us”. Similarly, the owners of Eden Haulage Ltd say her “disputing our accountants figures” and entering not guilty pleas were “an absolute kick in the guts”.

[32]             However, I would not disturb the other discounts provided by the Judge. Guilty pleas were entered promptly to the charges where the evidence was strongest and to the balance of the charges, reasonably far in advance of trial, and following payment of full reparation. I see no reason to disturb the guilty plea discount.

[33]             I also would not disturb the good character discount. Good character is a mandatory consideration under s 9(2)(g) of the Sentencing Act. Good character is seen as mitigating for two primary reasons as noted by the Court of Appeal in Taylor v R:13

First, a defendant without prior convictions (and otherwise generally of good character) deserves some leniency for an offence that represents an isolated lapse from grace. Indeed, that singular fall is a punishment in itself. Secondly, a greater capacity for rehabilitation (and reduced probability of reoffending) may be inferred from good character (positive community engagement and the absence of prior convictions).

(footnotes omitted)

13     Taylor v R [2017] NZCA 574 at [24].

[34]             Here, Ms Anderson was in her forties before this offending began, she had never offended before, and the modest good character discount was not inappropriate.

Conclusion

[35]             For the reasons set out above, I consider the discount afforded for payment of full reparation was too low. I would adjust it to 25 per cent. When the total discounts are subtracted from the starting point, an end sentence of 13 and a half months’ imprisonment results. I am satisfied that should be converted to a home detention sentence of seven months.

[36]             Accordingly, the appeal is allowed. The sentence of nine months’ home detention is quashed, and in its place a sentence of seven months’ home detention is imposed. In all other respects, the sentence in the District Court is confirmed.

Solicitors:

Crown Solicitor, Invercargill

Copy to:
J A T Ross, Barrister, Invercargill