Ba v Auckland City Council
[2015] NZHC 1639
•14 July 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CRI-2015-404-130 [2015] NZHC 1639
BETWEEN GUORONG BA
Appellant
AND
AUCKLAND CITY COUNCIL Respondent
Hearing: 6 July 2015 Appearances:
M Keall for Appellant
R Singh for RespondentJudgment:
14 July 2015
JUDGMENT OF DAVIDSON J
This judgment was delivered by me on 14 July 2015 at 4:15 pm
Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
BA v AUCKLAND CITY COUNCIL [2015] NZHC 1639 [14 July 2015]
Introduction
[1] On 16 April 2015 Ms Guorong Ba was convicted and sentenced on two charges brought under the Resource Management Act 1991. The District Court Judge rejected Ms Ba’s application to be discharged without conviction.1 She now appeals. The respondent, the Auckland City Council (‘the Council’), does not oppose the appeal, but neither does it support it.
Background
[2] The appellant was the managing and sole director of Lily Clinic Limited, which ran a business known as the Lily Clinic at 1069 Dominion Road. The appellant and her husband, Mr Ming Qin, owned a half share each in the company and the property. The business has since closed and they sold the property earlier this year.
[3] Following an inspection under warrant by the Council on 22 May 2014, five charges in total were laid against Ms Ba, Mr Qin, and Lily Clinic Limited. Ms Ba and Mr Qin were each charged with operating an entertainment facility, and establishing a residential unit, contrary to the District Plan.2 Lily Clinic Limited was charged with operating an entertainment facility contrary to the District Plan.
[4] Three rooms were being used by Lily Clinic for entertainment, when under an agreement reached with the Council in 2012 the use of two rooms only was permitted as a home occupation. The 2012 agreement resolved a contest reflected in an abatement notice and appeal against that. The charge of unlawfully establishing a residential unit related to the garage, which was converted into an additional bedroom later reconverted to lawful use.
[5] All those charged pleaded guilty at the earliest opportunity, and came up for sentence on 16 April 2015. The learned Judge ordered Lily Clinic Limited to pay a
1 Auckland Council v Lily Clinic Limited [2015] NZDC 6319.
2 Resource Management Act 1991, ss 9(3) and 338(1); City of Auckland – District Plan Isthmus
Section, rr 7.7.2.1 and 7.7.1.
fine and court costs of $15,130, Mr Qin to pay costs of $3,289, and Ms Ba to pay a fine of $6,000 plus court costs of $260.
[6] The Judge considered that Mr Qin had a marginal involvement in the
‘deliberateness’ of the offending and discharged him without conviction.
[7] The Judge refused to discharge Ms Ba without conviction on the charges of operating an entertainment facility, and unlawfully establishing a residential unit. This was despite the Council as prosecutor being neutral as to discharge. The Judge’s reasoning was that breach of the District Plan in the context of the 2012 agreement was deliberate, and such offending must be marked by conviction.
Approach to appeal
[8] An appeal against a refusal to grant a discharge without conviction is treated as an appeal against conviction.3 The relevant provisions in the Criminal Procedure Act 2011 apply.4 As explained by Duffy J in Denden v Police:5
[28] An appeal against a refusal to grant a discharge without conviction is by way of rehearing. Normal appeal principles apply as set out in Austin, Nichols & Co Inc v Stichting Lodestar. In Heke v R, the Court of Appeal confirmed the application of an Austin, Nichols approach in criminal appeals where the decision under appeal involves a matter of fact requiring judicial assessment. Later in Paia v R, the Court of Appeal confirmed the approach taken in Heke. Thus, when it comes to a decision under s 107, the appellate court must come to its own view of the merits; the weight the appellate court gives to the original decision is a matter of judgment; and that deference to the assessment of the original decision-maker is not necessary, even where the assessment requires a value judgment. If the appellate court considers that the original decision is wrong, it must act on that opinion.
Ground of appeal
[9] The sole ground of appeal is that the Judge should have discharged Ms Ba without conviction on both charges. The appellant submits that the Judge wrongly
assessed the gravity of the offence and gave too little weight to the consequences of
3 Byrt v R [2015] NZCA 41 at [10].
4 Criminal Procedure Act 2011, ss 229–236.
5 Denden v Police [2014] NZHC 1814 (footnotes omitted).
convictions, with the result that he erred when he assessed the proportionality as discussed further.
Discharges without conviction generally
[10] A sentencing Judge has the discretion to discharge without conviction a person who is found guilty or has pleaded guilty to an offence.6 That discretion must not be exercised unless the court is satisfied that as a matter of fact the direct and indirect consequences of a conviction would be out of all proportion to the gravity of the offence.7 As the Court of Appeal stated in DC (CA47/2013) v R:8
At the first stage it is necessary to consider the gravity of the offence, the direct and indirect consequences of a conviction, and whether those consequences are out of all proportion to the gravity of the offence. In a composite way, this is a jurisdictional test. The second stage of exercising what is a residual discretion is only engaged if that jurisdiction is established.
[11] When assessing the gravity of the offending, all aggravating and mitigating factors relating to the offending and the offender are relevant.9 However, provided that all relevant factors are considered in the context of s 107 of the Sentencing Act 2002, the precise point at which they are considered – in assessing gravity or in determining proportionality – is unlikely to be material.10
[12] All indirect and direct consequences of conviction are relevant to the proportionality assessment under s 107. The Court does not need be satisfied that the consequence is inevitable; rather, the test is whether there is a real and appreciable risk the consequence would occur.11
[13] There is no onus of proof under s 107. The Court must assess all relevant material before it, and decide on the basis of that information whether the
disproportionality test is made out.12 The gravity of the offence and the
6 Sentencing Act 2002, s 106.
7 Section 107.
8 DC (CA47/2013) v R [2013] NZCA 255 at [31] (footnotes omitted).
9 At [35].
10 Z (CA447/12) v R [2012] NZCA 599, [2013] NZAR 142 at [28].
11 DC (CA47/2013) v R, above n 8, at [43].
12 R v Hughes [2008] NZCA 546, [2009] 3 NZLR 222, at [49].
consequences of conviction are, therefore, a matter of judicial assessment, and the fact the prosecutor is neutral to discharge without conviction does not determine the outcome.
The gravity of the offending
[14] The appellant’s primary submission was that the sentencing Judge was wrong to describe the appellant’s conduct as “deliberate”, and that the offences were of such gravity to militate against discharge without conviction.
[15] On 10 October 2011 the Council had issued Lily Clinic Limited and the appellant as its managing and sole director with an abatement notice for breaching the home occupation rules by operating a commercial business in a residential zone.13
[16] The abatement notice was appealed and following mediation, on
7 March 2012, the Council and the company agreed (among other things) that no more than two bedrooms were to be used for the entertainment business. Ms Ba as managing director signed this agreement. On 27 March 2012, in accordance with cl 7 of the agreement, the Council confirmed the agreement and its terms by letter. This established a lawful basis for home occupation entertainment activity, as circumscribed.
[17] Although agreement allowed inspection once per month, it was not until two years later that Council inspectors visited the premises under warrant and found the business was being operated in a manner contrary to that agreement as three rooms were in use for entertainment, and the garage was being used unlawfully for residential purposes.
[18] The Council was neutral as to discharge without conviction in the District
Court and addressed whether it considered the breach was deliberate in its submissions on sentence:
13 Resource Management Act 1991, s 322(1)(a)(i).
The informant notes that the defendants accept the offending was avoidable and that it resulted from a lack of care on their part that they regret. They also accept that the 3 offences relating to the operation of an entertainment facility are a direct breach of the mediated settlement in March 2012. While the defendants maintain the offending in relation to all 5 charges was not deliberate and that their understanding of their obligations was significantly affected by the passage of time and the language barrier they fully accept their failure to clarify their obligations before acting was careless and without excuse. On the basis of the explanations offered by the defendants the Council neither accepts not rejects their contention the offending was not deliberate.
[19] The District Court Judge considered that there could be no doubt that Ms Ba knew she was acting contrary to the 2012 agreement, because of the way the Council’s stance regarding lawful use of the property had been brought to her attention, and the subsequent mediation. He considered Ms Ba’s position to be somewhat different from Mr Qin’s. He refused to discharge her without conviction on this basis, and emphasised the importance of adherence to District Plans.
[20] On appeal Ms Ba maintained the breach was unintentional and that her understanding was affected by the passage of time, given a two year gap between the agreement and the inspection, and inherent language difficulties. Ms Ba supplied an affidavit where she stated (in Mandarin) that her first language is Mandarin and her second language is English. This was confirmed in two statements attesting to Ms Ba’s and Mr Qin’s good character, and their limited grasp of English. Overall the submission on appeal is that the Judge should not simply have drawn the inference that the breach was deliberate by virtue of the appellant’s execution of the agreement and her responsibility for operating the business, without more evidence to support that conclusion, and without, it was said, having sufficient regard to the explanation offered.
[21] There is inherent attraction in the Judge’s approach. When a solemn and contested process concludes by an agreement which makes clear what is lawful, which is then breached, in most cases it will be a reasonable inference that the breach was deliberate. The courts should not condone flagrant breaches of concluded agreements in any setting, but where no evidence is heard on a pivotal factual issue the finding of deliberate breach must be reached with care. Even then the gravity of
the offending and the overall proportionality assessment is not determined by this one factor of deliberate breach, as reference to authority makes clear.
[22] The learned Judge did not refer to the two explanations advanced by the appellant: first, her poor grasp of the English language, and second, the passage of time. Those facts must be put into the mix with the background of the abatement notice, an appeal and resolution by an agreement with a hand-drawn plan showing Rooms ‘1’ and ‘2’.
[23] While the explanation of carelessness is not compelling on initial consideration, Ms Ba has no previous convictions and is of good character. There is no evidence of contact between her company and the Council between 2012 and
2014, nor evidence of warnings, nor evidence that she attempted to hide her offending from the Council.
[24] The Lily Clinic was using three rooms (rather than two) for entertainment purposes. This was not a breach of such magnitude that irresistibly invites the inference that Ms Ba must have known she was acting in breach of the agreement. While Ms Ba was a signatory to the agreement and managing director of the Lily Clinic it is possible that Ms Ba simply did not actively turn her mind to the agreement after two years or have a sufficient grasp of its terms, which included other definitions of part-time and full-time work.
[25] Although not evidential, the Council has not pursued conviction on the basis it does not have a concluded view on whether the offending was deliberate. The Council was involved in the protracted dispute before agreement was reached and one might think that it would press for the conclusion reached by the Judge.
[26] As Judge Tremewan said in a similar context in Waitakere City Council v
Casey:14
[28] Though the decision is mine, I place real weight on the fact that the Council does not oppose the discharge sought — since the Council serves as a guardian policing these breaches and is well placed to make assessments as
14 Waitakere City Council v Casey DC Waitakere CRN-5090-500-899, 12 May 2006.
to the relative seriousness of those cases involving breaches of the relevant legislative requirements.
[27] The sentencing Judge placed weight on the need for deterrence and denunciation and there will be cases where it is appropriate to focus on these factors, but if the Council considered there to be a real need for deterrence and denunciation one would expect it to pursue conviction. The Council is well placed to determine, at a threshold level, whether there is a need to denounce and deter or not. The Council has thoughtfully approached the issues of whether the breaches were deliberate and their discharge without conviction. I applaud its careful consideration and fairness as the informant.
[28] I conclude that at the least Ms Ba should have known she was operating her business in breach of the 2012 agreement, and that of itself means the offending is of consequence. I differ from the Judge on this point as without hearing evidence I think the breach should be treated not necessarily as the product of “a high degree of deliberateness” but possibly the result of carelessness with an unacceptable indifference to ensuring compliance. That conclusion is sufficient to dispose of this appeal, but I bring other considerations to account.
[29] First, although the gravity of Ms Ba’s offending is greater than her husband’s, as she was managing director and signatory to the agreement, I do not think it is so much greater to make such a difference when it comes to the proportionality assessment. Ms Ba should be treated the same as Mr Qin unless there is some supervening factor to the contrary.
[30] However, even with a finding of deliberate breach I reach a different conclusion as to gravity. Counsel for the appellant cited a number of cases in the Resource Management Act context in which discharges without conviction were granted despite findings that the conduct was deliberate. Gravity is to be assessed in the round. The fact a breach is deliberate does not necessarily determine the gravity of the breach, as this is only one aspect of assessment.
[31] The breach derived from the legal position as it was settled in 2012, and the breach had no effect on the environment. There is no evidence of any other effect
with which the legislation is primarily concerned. There is no loss, harm, or damage resulting from the offending other than the breach itself, and remedial steps were taken to return the second residential unit to its original condition, and to terminate the business.
[32] The appellant cites in support Bruce v Canterbury Regional Council,15 where water was taken for irrigation in a manner not expressly allowed by the Regional Plan or resource consent, and the conduct was held to be deliberate. The Court recognised the need for the Informant Council to demonstrate that breaches of water rights were taken seriously and commented:16
… That objective has been achieved. There can be no doubt that the point has been made that anything savouring of a breach will likely result in a prosecution …
[33] The High Court on appeal granted a discharge without conviction based on two pivotal considerations, there being no harm to the environment, and the defendant was able to call in credit an exemplary record. The Court ordered payment of costs in the sum of $6,000.
[34] In Christchurch City Council v Lewis,17 earthworks were undertaken without resource consent resulting in subsidence affecting other owners. Costly remedial work had been undertaken, and the conduct was deemed deliberate but at the lower end of the scale. A discharge was granted on the proviso that a contribution of
$8,000 was paid towards costs.
[35] In Auckland City Council v Hanney,18 two residential units were occupied without the required consent and, again, the effects of the offending were minimal, but the offending itself was deliberate. The defendants were not cooperative or remorseful, and the gravity went beyond trivial offending. The offending was less serious than a deliberate and systematic deception of the Council for financial gain.
The implication for travel were brought to account. The Court granted discharge
15 Bruce v Canterbury Regional Council HC Timaru CRI 2004-476-15, 6 April 2005.
16 At [40].
17 Christchurch City Council v Lewis EC Christchurch CRN 0500-950-4494, 24 May 2006.
18 Auckland City Council v Hanney DC Auckland CRI 2014-004-4045 and 4046, 2 October 2014.
without conviction provided the defendants contributed to costs of $4,950 following the judgment in Bruce v Canterbury Regional Council.
[36] In Selwyn District Council v MET,19 the defendant draftsperson committed a deliberate breach and should have known better but the gravity of offending was held to be in the low to moderate range. The effect of a conviction on future employment was regarded as a real and appreciable risk, discharge without conviction was granted.
Aggravating and mitigating factors of the offender
[37] Gravity must also be assessed against aggravating and mitigating factors of the offender. The agreed summary recorded the apology of the defendants, their acceptance that the offending was avoidable, and that it resulted at the very least from a lack of care on their part. The appellant and other offenders had not been repeatedly pressed by the Council, to import any sense of stubborn defiance. Rather the evidence is that Ms Ba was remorseful and cooperative. She has no previous convictions and is of good character.
[38] Gravity is also to be assessed against the wider interests of the community, here expressed by the stance of Council.20 This is not a case where the Council asserts convictions are necessary to uphold the integrity of District Plans and the rule of law. In part that need is reflected in the conviction of the company and the significant financial penalties imposed, including those on Ms Ba.
[39] Overall I assess the gravity of the offending to be low, or moderate if the conduct were to be taken as deliberate, and I do not consider that the offending must
be marked out with a conviction.
19 Selwyn District Council v MET DC Christchurch CRN 1200-950-3174, 1 August 2013.
20 R v Hughes, above n 12, at [41].
Consequence of convictions and proportionality
[40] With gravity assessed in the round as above, I have no difficulty in concluding the convictions will or may reasonably be taken to have a disproportionate effect.
[41] Ms Ba wishes to apply for New Zealand citizenship. She has been a permanent resident since 2006, and Mr Qin since 2012. The couple are settled in Auckland, and have a relationship of some eight years duration. Her counsel submit and I accept that a conviction would disqualify her from applying for New Zealand citizenship for three years and will at least cast a shadow over her ability to meet the good character requirements as she would need to disclose all convictions. The appellant acknowledges that she may obtain citizenship in due course but it will be at least seven years before the appellant can with any confidence apply to realise her aspiration to become a New Zealand citizen, pursuant to ss 6 and 7 of the Criminal Records (Clean Slate) Act 2004.
[42] I consider the consequence these convictions would have on Ms Ba’s citizenship prospects are of consequence in their potential effect, and serious in the delay and uncertainty otherwise caused, and would be out of all proportion to the gravity of Ms Ba’s offending.
[43] There are two other consequences mooted by the appellant, neither of which I give much weight. First is the submission that a conviction would have a deleterious impact on the appellant’s travel as a Chinese citizen. The Judge was not satisfied there was a real and appreciable risk of this and I agree. While she would have to disclose her convictions when applying for foreign visa, she would be delayed at best; or jeopardised at worst in her ability to utilise the fast track entry process enjoyed by New Zealand citizens if she was granted citizenship. This is a possibility and I put it no higher than that.
[44] Ms Ba also maintains that convictions would limit her future retraining and employment options, as set out in her affidavit. There is a concern that the appellant and her husband may need to borrow money for future business activity, and a
conviction or convictions could jeopardise that borrowing. Again this is a possibility but I put it no higher than that.
[45] The discussion above tends to obscure the fact Ms Ba personally, and through her company interests has paid a substantial financial penalty, to which may be added Mr Qin’s penalty. They are a couple. An overall perspective of proportionality must recognise the sanctions which remain.
[46] For the reasons above I conclude that the s 107 test is met, and it is appropriate to exercise the discretion to discharge the appellant without conviction under s 106 of the Act.
Disposition
[47] The appeal against the convictions is allowed and Ms Ba is discharged without conviction on charges CRN14004504976 and CRN14004504987. The fines and costs orders are unaffected.
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Davidson J
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