Bergen v Ministry of Business, Innovation and Employment

[2019] NZHC 1129

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CRI-2019-409-8

[2019] NZHC 1129

BETWEEN

ALEX OLIVER BERGEN

Appellant

AND

MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT

Respondent

Hearing:

23 May 2019

Appearances:

T H Aickin for Appellant

H F McKenzie for Respondent

Judgment:

24 May 2019

JUDGMENT OF COOKE J

[1]    Alex Bergen was charged with three offences under the Companies Act 1993. He sought a sentence indication, which he accepted. On 18 October 2018, following his reasoning in the sentence indication, Judge Gilbert sentenced him to two years and three months’ imprisonment.1 The Judge refused name suppression on 19 December 2018. While Mr Bergen originally indicated he wanted to appeal the suppression decision, he now appeals the sentence imposed. The prosecutor, the Ministry of Business, Innovation and Employment, does not dispute the change in appeal direction but submits the appeal should be dismissed.

Facts

[2]    Mr Bergen has used numerous aliases. Born Wayne Jury Eaglesome, since 2004 he has legally changed his name to Alexander Bollingbroke-De Villiers,

1      Ministry of Business Innovation and Employment v Bergen [2018] NZDC 22068.

BERGEN v MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT [2019] NZHC 1129 [24 May 2019]

Alexander Newman, Richard Mountjoy, Bernhardt Bentinck, George Von Rothschild, Alex Bergen and, since charges were laid, to Barnaby Gordon. He has informally gone by many other names. He was charged and sentenced here under the name of Alex Bergen.

[3]    Mr Bergen’s criminal history is extensive. On the prosecutor’s count, he has 261 previous relevant convictions in New Zealand between 1993 and 2013, and five previous relevant convictions in the United States of America between 1996 and 2001. These are dishonesty-related convictions and have led to numerous sentences of imprisonment. He also has convictions for sexual offending, obstructing the course of justice, and breaches of Court orders.

[4]    As a result of qualifying convictions, Mr Bergen was prohibited from being a director or promoter of, or in any way, whether directly or indirectly, being concerned or taking part in the management of a company unless he first obtained the leave of the court. On the District Court’s and prosecutor’s understanding, the prohibition was for a period of five years between 24 January 2013 and 23 January 2018. Mr Bergen now disputes this.

[5]    Mr Bergen had not obtained leave of the Court to be a director or to be involved in the management of a company. The Ministry of Business, Innovation and Employment (MBIE) had written to Mr Bergen in relation to the prohibition on     22 August 2016 and had spoken with him by phone on 30 June 2016. Mr Bergen says he did not receive the letter. He admits receiving the phone call but says the dates of his prohibition were not discussed.

[6]    Between 3 April 2017 and 7 July 2017, under the name Bernhardt Bentinck, Mr Bergen was both a director and took part in the management of the company Ugly House Services Ltd (UHSL).

[7]    On 4 April 2017, Mr Bergen submitted to the Companies Office a Consent and certificate of director or directors of proposed company form, providing that he would be a director of UHSL. Companies Office records show that he has been a director of UHSL since 4 April 2017. UHSL went into liquidation on or about 6 July 2017.

Mr Bergen was charged with being a director of UHSL while prohibited to so under s 382(4) of the Companies Act.

[8]    Between 3 April 2017 and 7 July 2017, Mr Bergen was directly or indirectly concerned or took part in the management of UHSL in ways including dealing with the Companies Office to lodge documents and incorporating UHSL, setting up relations with 2degrees Ltd and acquiring something in the order of 50 mobile phones, being involved in the allocation and transfer of shares, and putting UHSL into liquidation. Mr Bergen was charged with being concerned or taking part in the management of UHSL while prohibited to do so under s 382(4) of the Companies Act.

[9]When UHSL was put into liquidation, it had an unpaid debt to 2degrees Ltd of

$94,761.86. This sum is predominantly the cost of the mobile phones acquired, a number of which were later found listed for sale on TradeMe.

[10]   Above Mr Bergen’s signature on the Consent and certificate of director or directors of proposed company form, submitted on 4 April 2017, is the statement:

Director’s consent

I consent to be a director of the above company and certify that I am not disqualified from being appointed or holding office as a director of a company.

[11]   Mr Bergen was prohibited from being a director of a company at that time. He was charged with making a false or misleading statement under s 377(1) of the Companies Act.

[12]   Each of the three charges has a maximum penalty of five years’ imprisonment or a fine not exceeding $200,000.

District Court decision

[13]   In the sentence  indication  on  1  August  2018,  Judge  Gilbert  described  Mr Bergen’s “relentless dishonesty”. He noted that any tailing off of offending in recent years was only really during periods of imprisonment, and Mr Bergen’s “default position… when [he is] in the community appears… to be dishonesty”. The Judge considered the primary purposes of sentencing Mr Bergen were the need to hold him

accountable, to deter him and to protect the public. On the material before him, the Judge considered that Mr Bergen’s culpability was higher because UHSL was “always going to be a vehicle for incurring obligations that [Mr Bergen] had no real prospect of repaying”, rather than a business operating legitimately but for a breach of a ban on being a director.

[14]   In those circumstances, in the sentencing indication the Judge decided that MBIE’s suggested starting point of 14 to 18 months’ imprisonment was insufficient. He adopted a starting point of two years’ imprisonment, which he considered to be “the bare minimum appropriate”.

[15]   The Judge made an uplift of one year for Mr Bergen’s prior convictions. He acknowledged this would be higher than a normal uplift for prior convictions, but said:

… a person’s prior history brings into sharp focus the need to protect the public and unfortunately yours is a case more than virtually any other that I have seen where that particular purpose of sentencing is front and centre on the stage.

[16]   With a 25 per cent discount for guilty pleas, the indicated final sentence was two years and three months’ imprisonment. The Judge noted that even if the sentence had been lower than two years, “home detention would never be an option” for     Mr Bergen.

[17]   Mr Bergen accepted the sentence indication, pleaded guilty, and was sentenced by Judge Gilbert on 18 October 2018. Mr Bergen offered to make reparation of

$30,000 to 2degrees Ltd, at $10,000 per year after he was released from prison. The Judge declined to make such a reparation order as he considered it was unrealistic, and declined to give any credit for the willingness to make reparation. As indicated, the Judge sentenced Mr Bergen to two years and three months’ imprisonment.

Principles on appeal

[18]   Appeals against sentence are allowed as of right by s 244 of the Criminal Procedure Act 2011 and must be determined in accordance with s 250 of that Act. An appeal against sentence may only be allowed by this Court if it is satisfied that there has been an error in the imposition of the sentence and that a different sentence should

be imposed.2 As the Court of Appeal mentioned in Tutakangahau v R quoting the lower court’s decision, a “court will not intervene where the sentence is within the range that can be properly be justified by accepted sentencing principles”.3 It is only appropriate for this Court to intervene and substitute its own views if the sentence being appealed is “manifestly excessive” and not justified by the relevant sentencing principles.4

Appellant’s submissions

[19]   Ms Aickin, for Mr Bergen, submits that the end sentence of two years and three months’ imprisonment was manifestly excessive, and that a relevant fact was not taken into account, or alternatively an erroneous matter was taken into account in sentencing.

[20]   A key point in relation to the appeal is that Mr Bergen submits the conviction date for the qualifying offences, triggering the prohibition period, was earlier than first thought. This would mean that Mr Bergen’s prohibition period actually ended in May 2017, in the middle  of  Mr  Bergen’s  three-month  period  running  UHSL.  This, Ms Aickin submits, would reduce Mr Bergen’s culpability and justify a shorter sentence.

[21]   Mr Bergen was charged with seven offences in 2012, six of which were relevant dishonesty offences. They included four charges of using a document for pecuniary advantage, one charge of accessing a computer system for a dishonest purpose, and one charge of obtaining by deception (over $1,000). Mr Bergen says he entered guilty pleas to these charges on 7 May 2012, and thus convictions would have been entered on that date, not when he was sentenced on 24 January 2013. As such, his five-year prohibition should have ended on 6 May 2017, not 23 January 2018. He has only now established this through contact with the Auckland District Court, after sentencing for the instant offences.

[22]   Ms Aickin acknowledges that this would not alter Mr Bergen’s liability for submitting the Consent and certificate of director or directors of proposed company

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].

form on 4 April 2017, which resulted in the charge of making a false statement. However, the charges of being a director of UHSL and taking part in the management of UHSL were based on a period of offending of three months, between 3 April 2017 and 7 July 2017. Ms Aickin submits that it follows that if the offending could only be said to have occurred over a one-month period immediately prior to the expiration of his prohibition period, his culpability for the offending must be greatly reduced.

[23]   Ms Aickin also submits that his sentence was manifestly excessive as the Judge did not give credit for Mr Bergen’s remorse. Mr Bergen was living overseas when he became aware of the charges and voluntarily returned to New Zealand to answer them. Ms Aickin submits that this factor, along with his cooperation with authorities, prompt guilty pleas, and offer to pay reparation are relevant to his remorse and justify a discrete discount additional to the discount for his guilty plea. Ms Aickin submits that “capacity to pay reparation is not the true issue, it is a defendant’s willingness to do so, which should properly be taken into account”.

[24]   Ms Aickin finally submits that the starting point and uplift for previous convictions were manifestly excessive. She notes that the prosecutor proposed a much lower starting point than eventually adopted by the Judge. Presuming the Court accepts the earlier date of conviction, the length of the period of offending is lesser than the District Court Judge was aware and thus the offending can be seen as less serious.

[25]   Ms Aickin notes that even a modest reduction in sentence would likely have a real impact on Mr Bergen’s release date, as if the sentence drops below two years he could avoid going before the Parole Board.

Respondent’s submissions

[26]   Ms McKenzie, for MBIE, notes that at the prosecution and sentencing stages, MBIE had relied on the Certified Extract of the Court Record, the Criminal and Traffic History print out, and MBIE’s correspondence with Mr Bergen for the date of conviction being 24 January 2013.

[27]   Ms McKenzie has also made enquiries with the Auckland District Court to establish the correct dates that convictions were entered. The documents provided by the District Court, attached to her submissions, appear to show that of the six charges Mr Bergen faced, on 7 May 2012 he only entered guilty pleas to five of them. It appears he maintained a not guilty plea on one of the charges of using a document for pecuniary advantage until it was vacated and a guilty plea entered on 7 August 2012. There is no record of a conviction being entered on that date.

[28]   Ms McKenzie notes that s 376 of the Criminal Procedure Act 2011 deems a person to be convicted if a court proceeds to sentence a defendant without formally making an order convicting them.

[29]   Using a document for pecuniary advantage is a qualifying offence for a prohibition under the Companies Act. Thus, Ms McKenzie submits that for the other five offences, the prohibition period began on 7 May 2012, but another prohibition period was triggered by the later guilty plea. That prohibition period, she submits, began on 24 January 2018, when Mr Bergen was deemed to be convicted under s 376 of the Criminal Procedure Act. Alternatively, it  began  on  7 August  2012,  when Mr Bergen pleaded guilty. On that basis, Ms McKenzie submits Mr Bergen was still subject to a period of prohibition throughout the offending, whether the prohibition period ended on 6 August 2017 or on 23 January 2018.

[30]   Ms McKenzie submits that the full 25 per cent discount Mr Bergen received for his early guilty plea and acceptance of responsibility was sufficient to address  Mr Bergen’s return to New Zealand and cooperation with authorities. No further discount was required.

[31]   In terms of reparation, Ms McKenzie submits that Mr Bergen should not get credit for making an offer to pay reparation which he would not be able to pay. Otherwise, “any offender could make unrealistic offers of reparation for a reduction in sentence, gain credit for this, but know they would never be able to pay”. Further, she submits the refusal to make a reparation order benefits Mr Bergen, and thus he

should not be entitled to any additional discount. Ms McKenzie quotes Venning J in

Price v Police:5

Importantly, in considering whether and to what extent reparation should be taken into account the Court is required to take into account whether the offer is genuine and significantly in this case, capable of fulfilment.

[32]   Ms McKenzie notes that it appears Mr Bergen acquired the 50 mobile phones from 2degrees Ltd within one week of the company being set up. This supports the point made by the Judge that UHSL appeared to be set up for illegitimate purposes.

[33]   Ms McKenzie submits that an uplift of one year was not excessive in the circumstances of Mr Bergen’s prior offending and the need to protect the public from him.

[34]   Finally, Ms McKenzie takes issue with Ms Aickin’s submission relating to Mr Bergen being able to avoid the Parole Board should his sentence drop below two years. Ms McKenzie quotes the Court of Appeal cautioning against sentence being “artificially tailored to achieve a desired outcome” and says this is an irrelevant consideration.6

Analysis

[35]   To some extent the appeal seems to me to raise a point of principle. The appellant was sentenced in the District Court on a summary of facts in relation to which guilty pleas were entered. This followed from a sentencing indication. That summary of facts is now said to be wrong. It may be that the appeal Court in those circumstances should take a narrow view on the extent to which it can reopen matters that could have been contested in the District Court, similar to that employed with an appeal against a guilty plea.7

[36]   In the present case, however, even if I take a broad view, and engage in a reassessment of the factual position in light of the dispute that is now raised about the facts it seems to me that the sentence is not manifestly excessive.

5      Price v Police [2017] NZHC 2523 at [25].

6      R v Honan [2015] NZCA 94 at [34].

7      R v Le Page [2005] 2 NZLR 845 (CA).

[37]   Mr Bergen was prohibited from being a director under s 382 of the Companies Act, which relevantly states that where a person has been convicted of a qualifying offence, that person shall not be a director or take part in the management of a company without leave of the Court “during the period of 5 years after the conviction or the judgment”. As such, the dates of the convictions for the qualifying offences are clearly relevant.   But even if Mr Bergen was correct and his prohibition ended on    6 May 2017, the key elements of each charge still stand. He still made a misleading statement, he still became a director of and took part in the management of a company while he was prohibited. That company was still, as the Judge considered, established for illegitimate reasons. He was entering into contracts that created nearly $100,000 of liabilities with, it appears, no intention of honouring within a week of establishing the company, while he was still prohibited by any measure. Each of those three charges could attract a sentence of five years’ imprisonment. In those circumstances, Mr Bergen’s offending is not significantly less serious so as to justify a lesser sentence than the Judge imposed.

[38]   In any event Ms Aickin did not ultimately dispute Ms McKenzie’s submissions that the entry of the guilty plea in relation to one of the charges on 7 August 2012, or the entry of the sentence on that charge on 23 January 2013, would mean that the period of disqualification on that charge ran from one of those dates anyway. Given that, I do not think there is a material error in terms of the facts set out in the summary of facts.

[39]   In terms of discounts, Mr Bergen received a full discount of 25 per cent for his guilty plea. His voluntary return to New Zealand could justify some separate discount, but I do not accept that it has not been appropriately taken into account by the Judge in giving a full 25 per cent discount on the guilty plea.

[40]   I do not accept Mr Aickin’s submissions in relation to a discount for a willingness to pay reparation. There is no financial evidence before the Court that he would be able to fulfil such an order even if one had been made. Ms Aickin made reference to Mr Bergen having some ability to make reparation because of the skills that would allow him to be employed, and also through funds Mr Bergen may have access to overseas (in particular cryptocurrency funds), but these seem highly

speculative. As indicated in Price v Police, a defendant should not get credit for an offer to pay reparation that they are not going to fulfil.8 That is particularly so in relation to a person who engages in dishonesty offending of a repetitive kind.

[41]   There is also no reason to challenge the uplift for Mr Bergen’s prior convictions. He is, as the Judge described him in the suppression judgment, “an inveterate fraud”. The protection of the community is a paramount consideration, and Mr Bergen’s only real periods without offending appear to be during his many periods in prison.

[42]   Standing back and looking at the sentence overall, rather than the particular process by which it was reached, I also conclude that the sentence is not manifestly excessive. The repetitive nature of Mr Bergen’s offending means that the Court is presented with very little option but to impose more serious prison terms, especially when the offending involves a failure to comply with the requirements arising from previous offending.

[43]There is no basis for the appeal to be allowed, and it is dismissed.

Cooke J

8      Price v Police, above n 5.