Gregory Arnott pleaded guilty in the Auckland District Court to five charges of theft by a person in a special relationship and five charges of making a false statement by a promoter. He appeals against the sentence of six years imprisonment imposed by Judge Ronayne on the grounds that: first, the starting point of seven years imprisonment was excessive; and, second, the 5 per cent discount allowed from that starting point, in recognition of various mitigating personal circumstances was inadequate.[1]

Background

[1]R v Arnott DC Auckland CRI-2012-004-18343, 22 August 2014.

Mr Arnott is aged 52 years. In 2006 he set up a business as a stock broker and options trader, trading on the New Zealand and Australian stock exchanges. He had worked previously in investment advisory and broker roles.
Mr Arnott traded on an individual basis for investors, principally through three companies. Between April 2008 and May 2012 he received investments from New Zealand residents totalling AUD 4.3 million which he was authorised to trade. Instead, he dishonestly used about NZD 2.5 million, contrary to the express terms of client authorities for his own use (to buy a house worth over $700,000), to repay other investors and in part payment of an advance fee for a loan of $1.3 million, incurred in association with a notorious fraudster. All these funds were lost.
Separately, over the same period, Mr Arnott sent false statements to investors which did not reflect any trading losses. For the three years following February 2009 Mr Arnott prepared and distributed monthly statements of account showing significant investment values for investors even though he had stopped trading because of a lack of available funds. His purpose was to induce investors either to maintain what they understood were their investments with his companies or to advance further funds. In total the difference between the values reported and the actual balance of money held, which was nil, totalled about NZD 3.27 million.

District Court

In fixing a starting point of seven years imprisonment, Judge Ronayne took into account the relevant sentencing principles and purposes such as accountability, promoting responsibility, denunciation, deterrence and recognition of the interests of Mr Arnott’s victims. The Judge also took account of the overall gravity of the offending and its seriousness compared with other offending of a similar type, recognising that consistency in sentencing levels was required. For that purpose, he referred to a number of this Court’s decisions.
In summary, the Judge was satisfied that particularly aggravating features of Mr Arnott’s offending were the extent of loss or damage resulting from the offending – some $2.54…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Arnott v R

Details

AGLC: Arnott v R [2015] NZCA 236
Case: [2015] NZCA 236
Decision Date: 11 June 2015 at 10 am

CaseChat Overview and Summary

In the Court of Appeal of New Zealand, Gregory Alan Arnott, the appellant, brought an appeal against the sentence imposed by the District Court. The appellant was convicted on ten charges, including theft by a person in a special relationship and making false statements by a promoter. The court was tasked with deciding whether the starting point of seven years imprisonment was excessive and whether the 5 per cent discount allowed for mitigating personal circumstances was adequate.

The court considered the appellant's culpability and the extent of the losses caused by his offending. The appellant had received investments from New Zealand residents totalling AUD 4.3 million, which he was authorised to trade. Instead, he dishonestly used about NZD 2.5 million for his own use, to repay other investors, and in part payment of an advance fee for a loan. The court held that the appellant's culpability was high, given the extent of the losses and the abuse of trust. The court also considered the appellant's guilty pleas, expression of remorse, repayment of about $260,000, previous good character, and family support. The court found that the starting point of seven years imprisonment was within an acceptable range and that the discount allowed for mitigating personal circumstances was not inadequate.

The court held that the sentence of six years imprisonment imposed upon the appellant was within range and dismissed the appeal. The court emphasised the importance of accountability, promoting responsibility, denunciation, deterrence, and recognition of the interests of the victims. The court also noted the need for consistency in sentencing levels for similar types of offending. The court found that the sentence imposed by the District Court was appropriate and did not lead to a manifestly excessive sentence.

Orders