Andrews v The Queen
[2013] NZCA 281
•4 July 2013 at 11:00am
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA159/2013 [2013] NZCA 281 |
| BETWEEN | RAYMOND ANTHONY ANDREWS |
| AND | THE QUEEN |
| Hearing: | 11 June 2013 |
Court: | Randerson, Courtney and Dobson JJ |
Counsel: | W T Nabney for Appellant |
| Judgment: | 4 July 2013 at 11:00am |
JUDGMENT OF THE COURT
The appeal is dismissed.
____________________________________________________________________
REASONS OF THE COURT
(Given by Courtney J)
Introduction
The appellant, Raymond Anthony Andrews, was convicted on 14 February 2013 following a jury trial in the Tauranga District Court of 11 charges under the Insolvency Act 1967:[1]
(a)Seven charges (counts 1–5,7,10) of being an undischarged bankrupt carrying on or taking part in the management or control of a business without reasonable cause and without the consent of the court or authority of the Official Assignee;[2]
(b)One charge (count 24) of obtaining credit of $100 or more without first informing the person giving him credit that he was an undisclosed bankrupt;[3]
(c)One charge (count 25) of obtaining property on credit by false representation without paying for the property;[4]
(d)Two charges (counts 19 and 20) of concealing property.[5]
[1]Mr Andrews was also acquitted of several other charges and pleaded guilty to three alternative charges during the trial.
[2]Insolvency Act 1967, ss 128A(1)(b) and 62(1)(a).
[3]Insolvency Act, s 128(1)(g)(i).
[4]Insolvency Act, s 126(1)(i)(i).
[5]Insolvency Act, s 126(1)(g)(i).
Judge Ingram sentenced Mr Andrews to 15 months imprisonment.[6] Mr Andrews does not challenge the term of the imprisonment but appeals the Judge’s refusal to grant him leave to apply for a substituted sentence of home detention. Mr Andrews asserts error by the Judge in placing too much weight on the nature of the offending and on the need for deterrence.
[6]R v Andrews DC Tauranga CRI-2009-070-6443, 13 March 2013.
Subsequent to filing his appeal against sentence Mr Andrews filed a notice of appeal against conviction outside the time permitted. He provided an affidavit explaining the reason for the delay. However, Mr Nabney, for Mr Andrews, advised that the appeal against conviction was to be abandoned. As a result, we do not need to deal with the issue of leave, nor with the substance of the conviction appeal.
Sentencing in the District Court
The offences with which Mr Andrews was charged were committed against the backdrop of his bankruptcy on 21 April 2008.
Counts 1 and 2 related to the management or control of Laserentals Ltd and The Laser Rental Company Ltd. These companies had been incorporated prior to Mr Andrews’ bankruptcy. An associate, Ms Porter, was listed as the director but it was Mr Andrews who controlled and directed the businesses, including employing staff and entering into business agreements. These acts were done during the course of his bankruptcy and without the approval of either the Official Assignee or the High Court.
Count 3 related to the management or control of Medprolasers/Medpro Ltd, a business relating to laser hair removal. Mr Andrews claimed to be the owner/operator of Medpro Lasers. He reached an arrangement with the owner of a beauty therapy clinic to run a clinic from those premises and asked the owner to pay him in cash. Medpro Ltd was incorporated in May 2009 with Mr Andrews’ son, who lived in Australia, listed as director and the registered office being Mr Andrews’ rented address.
Counts 4 and 5 related to the management or control of the businesses Laserentals Ltd and Medpro Ltd. The offences related to the 2010 negotiations with another company for the supply and sale of laser hair removal systems and applicators in New Zealand. Mr Andrews rendered an invoice in the name of Laser Rentals Ltd which provided his personal bank account number for payment. Later he rendered an invoice in the name of Medpro Ltd, again showing his personal bank account number for payment.
Count 7 related to the management or control of a business ADR Pty (Medical Wholesalers). Using a false name he negotiated with the owner of a beauty salon, proposing a partnership arrangement based on laser machines, with Mr Andrews conducting treatments at the salon. He rendered an invoice which resulted in the salon owner making a payment to the bank account number provided which was, in turn, transferred to his personal account. Because Mr Andrews was operating at the clinic without the machine that had been agreed on, the salon owner asked for a refund.
Count 10 related to the management or control of a business, ADR Compliance Centre Pty Ltd. In October 2010 Mr Andrews applied to the Official Assignee to undertake employment by a relative (his son) with Medpro Ltd. This application was refused. In December of that year Mr Andrews approached a company that was in the market for a laser machine. Mr Andrews supplied various options and there were emails recording the negotiation. In April 2011 Mr Andrews sent the other company a brochure containing a letter from ADR Compliance Pty, Medical Wholesalers, with details of its website. The letter showed the name Ray Andrews and the appellant’s phone number.
Counts 19 and 20 were charges of concealing property which arose from Mr Andrews’ declaration on 19 December 2008 in his statement of affairs that he held no bank accounts but was previously with the ASB Bank. However, on 24 December 2008 he opened an account with Kiwibank and on 5 January 2011 an account with ANZ without declaring either of the accounts or income through them. An analysis of the Kiwibank account between December 2008 and August 2011 showed Mr Andrews had received lodgements totalling $100,030.57 into that account.
Count 24 was a charge of obtaining credit which related to a six month fixed term rental contract in the name of Robert Andrews and Medpro Ltd. The bond of $1200 was never paid. The weekly rent of $400 was paid in varying degrees of arrears. Mr Andrews did not inform the landlord that he was an undischarged bankrupt.
Count 25 was a charge of obtaining credit by false representation and related to Mr Andrews’ advice to TrustPower Ltd that he was the sales manager for Laser Rentals Ltd and giving the false name of Robert Anderson. He did not advise TrustPower that he was an undischarged bankrupt and currently owes $1,566.
It is evident from Judge Ingram’s sentencing notes that Mr Andrews was not an impressive witness at trial and that the Judge regarded him as manipulative, unremorseful and incorrigible. In sentencing the Judge said:
[2] The situation that led to this offending was pretty straightforward. You were adjudged bankrupt and with breathtaking arrogance you decided that you were simply not prepared to co-operate with the Official Assignee. Over a long period of time you actively connived to ensure that the Official Assignee was unable to carry out the obligations that lay on the Official Assignee with the result that you were engaged in a long term pattern of offending and deception, preying on members of the public, not only in Tauranga but around the northern half of the North Island throughout a period of several years.
[3] I do not propose to go into great detail in relation to reciting the facts, you were present throughout your trial and you know what you were involved in. You asked permission, belatedly, from the Official Assignee to be employed in a business which was ostensibly run by your son from Australia. That permission was quite rightly refused, in view of your uncooperative attitude. However, you just went right ahead and carried on with your business activities which, on the evidence that your son gave at your trial, consisted of you putting up propositions to him in Australia for things that you might like to do here in New Zealand and he would either fund them or not fund them, as the case may be.
[4] In short, Mr Andrews, you were pretty much running your own business here – using your son in Australia as a front – and busily misleading people up and down the country about what you were doing.
[5] You told a series of lies which, I have to say, in 35 years or so in the courts, I have never come across. I have met some liars in my time but the lies that you told in the course of your offending were simply outstanding, as far as I am concerned. I have to say, the evidence that you gave in front of the jury was equally impressive, you had the jury in fits of laughter at the improbability of some of your evidence. To say that you perjured yourself in your own defence is hardly an adequate description of some of the lies you told from the witness box. The jury saw right through them and you were promptly convicted in a trial that took a number of days and involved a large number of documents. The jury clearly took the view that I took, that you are a serial liar and simply could not lie straight in bed.
The Judge identified a number of aggravating features, namely the extent of the losses, the abuse of trust put in him by others, the vulnerability of the victims, the premeditated nature of the offending and, probably most significantly, Mr Andrews’ lack of honesty with the Official Assignee.
On the issue of deterrence the Judge said:
[19] … The bankruptcy laws are designed and intended to allow people to recover from financial disaster and move on with their lives. The price of that is co-operation with the Official Assignee. Those who do not and who lie to the Official Assignee, as you did, and mislead members of the public left, right, and centre, as you did, can confidently expect a significant sentence of imprisonment. We simply will not put up with people carrying on the way you have carried on. The community needs protection from the likes of you and I need to be sending a message to everybody concerned; co-operate with the Official Assignee and comply with your obligations or get used to the idea that you will be spending time in prison.
The Judge also identified the need for rehabilitation but rejected the probation officer’s conclusion that Mr Andrews would not be a significant risk to the public in future, saying that he had no doubt that Mr Andrews would continue to be a significant risk. The Judge accepted that he is “a serial liar and this is large-scale long-term fraud.” Although acknowledging entitlement to credit for the guilty plea, the Judge did not accept that Mr Andrews was particularly remorseful, notwithstanding that the probation report indicated that he was accepting at least some responsibility. The Judge concluded that:
[25] The circumstances of your offending are such that it seems to me that the sentence of imprisonment is the only practical sentence open to me. I am satisfied on the basis of the applicable authorities (and in that regard I quote R v Holt [2006] CCR 669 (CA)) and bearing in mind the statutory factors that, in these circumstances, a sentence of imprisonment is required and that the purposes for which the sentence is being imposed, cannot be achieved by any less restrictive sentence or combination of sentences. That means I am not prepared to give you leave to apply for home detention.
The Judge took a starting point of 18 months imprisonment, applied a deduction of three months to reflect the guilty pleas on charges that were alternatives to those on which Mr Andrews had been convicted, and imposed a final sentence of 15 months imprisonment.
Was the Judge wrong to refuse leave to apply for a substituted sentence?
Mr Nabney advised that Mr Andrews had sought leave to apply for a substituted sentence.[7] There was no suitable address for home detention at the time of sentencing but an address could now be made available because Mr Andrews’ son is prepared to rent a property for that purpose.
[7]Provided for by s 80I Sentencing Act 2002.
Mr Nabney submitted that, in refusing to consider the possibility of home detention, the Judge put too much emphasis on the seriousness of the offending and on the need for deterrence. In particular, Mr Nabney suggested that by concluding that a sentence of imprisonment was the only practical sentence open to him, the Judge had effectively closed the door on sentences other than imprisonment for breaches of the Insolvency Act. Mr Nabney submitted that treating a term of imprisonment as virtually inevitable for this type of offending overstates the seriousness of it. He pointed to the maximum penalty of three years imprisonment for the offences that Mr Andrews was convicted of, suggesting that home detention must be a possibility in some cases.
Mr Nabney submitted, further, that to impose a term of imprisonment on Mr Andrews was unfair because his offending was less serious than a number of the other cases in which terms of imprisonment had been imposed. He particularly compared the circumstances of R v Holt, on which the Judge relied, with those of the present case.[8] Mr Andrews had no previous convictions and had not previously been bankrupted, whereas the appellant in R v Holt had been bankrupted on a previous occasion.
[8]R v Holt [2006] DCR 669 (CA).
There is no tariff case for offending of this kind and we accept that imprisonment is not inevitable for this type of offending. However, judges sentencing on such offending are invariably concerned to reinforce the purpose of the legislation. As a result, deterrence, both general and personal, is usually a significant factor in sentencing. Recent similar cases, including those in which the possibility of home detention was specifically considered, have all resulted in terms of imprisonment being imposed.
In R v Holt, on which the Judge specifically relied, a sentence of nine months imprisonment (including a reduction for age and health) was upheld on appeal.[9] The appellant in that case had been bankrupted twice and was charged with one count of carrying on business as an undischarged bankrupt and another of buying and selling motor vehicles as a business without the consent of the Official Assignee. Losses of $55,000 were associated with the offending.
[9]At [69].
Subsequent cases have taken the same approach. Goodeve v Ministry of Economic Development concerned the unsuccessful appeal against a term of 18 months imprisonment.[10] The offending there involved a number of charges of obtaining credit and unlawful engagement in a prescribed business without the authority of the Official Assignee, with associated losses of $100,000.
[10]Goodeve v Ministry of Economic Development HC Rotorua CRI-2009-463-48, 8 July 2009.
In R v Whitelaw a starting point of nine months imprisonment was taken for one charge of failing without reasonable cause to comply with the Insolvency Act 1967 by entering into or carrying on business without the consent of the Official Assignee, the offending stretching back over a period of some three years.[11] Home detention was refused.
[11]R v Whitelaw HC Hamilton CRI-2008-019-7254, 1 December 2009.
Finally, in Burchell v R, which involved two charges of carrying on business as an undischarged bankrupt with estimated losses of $90,000–$100,000, the Court of Appeal upheld a sentence of nine months imprisonment as within the available range.[12] In that case, a sentence of home detention was considered and refused on the basis that protection of the public and the integrity of the legislation could not adequately be addressed by that sentence.
[12]Burchell v R [2010] NZCA 252.
We do not accept that the Judge made any error in his assessment of the seriousness of Mr Andrews’ offending or the importance of deterrence. On any view, Mr Andrews’ offending was serious. It must be regarded as more serious than the offending in R v Holt, despite Mr Andrews’ lack of previous convictions, because of the number of charges on which he was convicted, the period of time over which the offending occurred, the fact that there were losses to innocent third parties in excess of $50,000 and the concealment of over $100,000 in income from the Official Assignee.
Also significant was the Judge’s view that, although Mr Andrews accepted some responsibility for the offending, he was not particularly remorseful. The Judge plainly viewed Mr Andrews as untrustworthy and unlikely to change, a view we consider to be justified. It is evident from the nature of the offending that, provided Mr Andrews has access to a phone or computer, he is able to offend and likely to do so. In these circumstances the Judge was entitled to conclude that imprisonment was the only practical and appropriate sentence available.
Result
The appeal is dismissed.
Solicitors:
Crown Solicitor, Auckland for Respondent
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