Brady v Ministry of Business Innovation and Employment
[2015] NZHC 1389
•1 April 2015
IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
CIV-2014-404-000445
[2015] NZHC 1389
BETWEEN SHANE BRADY
Appellant
AND
MINISTRY OF BUSINESS INNOVATION AND EMPLOYMENT
Respondent
Hearing: 16 March 2015 Counsel:
A F Pilditch for the Appellant
T J McGuigan and T Simons for the Respondent
Judgment:
1 April 2015
Reasons:
19 June 2015
JUDGMENT OF DUFFY J
[re appeal against sentence]
This reasons for judgment was delivered by Justice Duffy on 19 June 2015 at 2.15pm, pursuant to
r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Counsel: A F Pilditch, Auckland
Solicitors: Meredith Connell, Auckland
BRADY v MINISTRY OF BUSINESS INNOVATION AND EMPLOYMENT [2015] NZHC 1389 [1 April 2015]
[1] The appellant was sentenced in the District Court to eight months’ home detention on a number of charges under the Crimes Act 1961 and the Companies Act 1993. He appealed against this sentence. The appeal was originally opposed but subsequently, the respondent helpfully and responsibly acknowledged that there had been a material change in circumstance, which rendered the original sentence unsuitable. This is not to say that there was any error in approach by the sentencing judge.
[2] Once all concerned recognised that the appeal against sentence should be allowed the sentence of home detention was set aside. The appeal concluded shortly before the Easter break and so I imposed a substitute sentence then without provision of reasons. The terms of this sentence were traversed during the hearing so it came as no surprise to anyone.
[3]The new sentence was:
(a)Six months’ community detention, with a weekday curfew of from 9.00 pm to 6.00 am, and a weekend curfew from 9.00 pm to 9.00 am;
(b)200 hours’ community work; and
(c)12 months’ supervision, with a special condition that the appellant attend any rehabilitative programme directed by the probation officer.
[4]The reasons for allowing the appeal now follow.
District Court decision
[5] On 9 December 2014, the appellant was sentenced in the District Court on 27 charges, 22 of the charges were under s 377(1) of the Companies Act (making false statements relating to companies). These charges each carry a maximum penalty of five years’ imprisonment or a fine of no more than $200,000.1
1 Companies Act 1993, s 373(4)
[6] The other five charges were more serious. They were charges under s 257(1)(b) Crimes Act 1961 (using forged documents). Each of those charges carries a maximum penalty of 10 years’ imprisonment.2
[7] The offending arose as follows. The appellant was the director of a number of companies. The appellant was adjudicated bankrupt on 11 April 2013. In accordance with his status as a bankrupt, he was then required to cease his role as a director and manager. He purported to do so by filing documents with the Companies Office which would remove him as a director, and replace him with two other individuals, Anke and Samuel Gerlach. These individuals are the appellant’s ex partner and son respectively; they live in Germany and, until they were contacted by New Zealand authorities, they were unaware that he had purported to transfer his responsibilities in this way. The forgery charges relate to forgeries of the Gerlachs’ signatures on director consent forms that the appellant had submitted to the Companies Office on a total of five occasions.
[8] The charges relating to false statements arose from documents filed with the Companies Office during a period of over two years. Some of the documents were filed before the bankruptcy and so they could not have constituted holdings out that the appellant was still involved in the management and control of companies despite his bankrupt status. However, all of these documents supported the forged signatures in purporting to show the Gerlachs’ position as shareholders and directors of the companies.
[9] The pre-sentence report recommended a sentence of supervision, community detention and community work, but noted that home detention was also an option, given the seriousness of the charges and potential duration of the sentence. The appellant pleaded guilty to all the charges.
[10] The Judge addressed the appellant’s pleas in mitigation. Initially, the appellant had denied that he was the one who made the statements, saying others had completed the documents for him and he had merely submitted them. Then, he had said that he had submitted the false documents out of a desire to help his family by leaving
2 Crimes Act 1961, s 257(1).
something to them, that his decision-making was impeded by alcoholism which he was now addressing, and that no harm was done and the companies were worthless anyway.3
[11] The sentencing Judge did not accept the appellant’s submissions. The Judge took the view that the appellant was responsible for the false documents, and did not place much emphasis on his alcoholism (his alcoholism was neither here nor there). The Judge acknowledged that there was no direct financial loss, but on the other hand the companies were trading entities and the public might have been misled when accessing the Companies Office Register. The respondent had pointed to the abuse of trust, premeditation, and long duration of the offending (over a period of over two years) as being aggravating factors of the offending. The Judge accepted this submission although he noted that the premeditation and duration of the offending were really the same factor.4 He also noted that there was an abuse of trust in relation to the appellant’s son and ex-partner.
[12] The Judge considered three decisions: Hunter v Police, Ministry of Economic Development v Moratti, and R v Singh.5 He concluded that the offending was serious. It was not confined to false and misleading statements under the Companies Act, but also involved forgery on five separate occasions. It violated the integrity of the Companies Office Register in a cynical manner.
[13] The Judge imposed a starting point of one year, six months imprisonment. There was a three-month uplift for totality, taking the total sentence to one year, nine months’ imprisonment. There was a small discount for the appellant’s personal circumstances, although the Judge was sceptical as to whether the appellant’s remorse was genuine. The full 25 per cent guilty plea discount was given. The Judge considered that this would reduce the nominal sentence to between one year, two months’ and one year, four months’ imprisonment. As the end sentence was less than two years, non-custodial sentences were considered and a sentence of home detention
3 R v Brady DC Auckland CRI-2014-404-4899, 9 December 2014 at [7] - [8], [14], and [18] - [19].
4 At [9] - [11], [14], and [18] - [19].
5 Hunter v Police [2012] NZHC 3249; R v Singh [2014] NZHC 209; Ministry of Economic Development v Moratti DC Auckland CRN-05004500673, 8 July 2005 (mis-cited in the judgment as MED v Horati and MED v Moreti).
imposed. Citing deterrence as the most relevant factor, the Judge rejected community detention as an option.
[14]The end sentence was eight months’ home detention with special conditions.
Case for the appellant
[15] The appellant submitted that the sentence was manifestly unjust because the Judge placed too much emphasis on deterrence, and not enough on rehabilitation. Further, he failed to impose the least restrictive sentence available in the circumstances, with the result that the sentence imposed was disproportionately severe on the appellant in his particular circumstances. In the alternative, the appellant submitted that, due to new information tendered to the Court in support of this appeal, there were exceptional circumstances that justified allowing the appeal in terms of Tutakangahau v R.6 The new information related to the appellant’s alcoholism and the possibility that he might relapse if he had to spend too much time at home alone and unoccupied.
[16] The appellant submitted that he never denied the offending, but only denied making some of the forged documents. He admitted filing them from the start, which was enough to constitute the offence, whether or not he had actually prepared them. The rest of the appellant’s argument on this point amounted to a suggestion that the Judge’s finding that the appellant was “minimising” the offending was incorrect.
[17] The appellant also submitted that the sentence imposed was based on the false understanding that the companies continued to trade throughout the period of the offending.7 The combination of the Judge’s mistaken impression that he had denied liability, and the mistaken impression that the companies continued to trade and/or the appellant got some financial advantage out of the offending led the Judge to form an adverse impression of the appellant, which motivated his emphasis on deterrence as a sentencing principle.
6 Tutakangahau v R [2014] NZCA 279, at [26] – [31] discussing s 250(2) of the Criminal Procedure Act 2011, [2014] 3 NZLR 482.
7 This was not argued by the prosecution, and if it had been then a different charge would have been used.
[18] The appellant submitted that the reason the Judge imposed home detention, and not community detention with supervision, was in order to serve the purpose of deterrence, both for the appellant personally and for others dealing with the Companies Act. Given that, in the appellant’s submission, the emphasis on personal deterrence was not warranted, the sentencing approach was not justified. Less emphasis should have been placed on general deterrence, and more on rehabilitation.
[19] The appellant made various additional submissions in support of this contention, noting in particular that the appellant’s status as a bankrupt would also prevent him from offending further because he is prohibited from managing companies, and that the offending occurred while he was a serious alcoholic, a problem which he is now addressing through rehabilitation. He had attended a residential rehabilitation programme in Thailand in 2013 and had been sober ever since. The appellant argued that a sentence of home detention increased the risk of a relapse into alcoholism, because it isolated the appellant and restricted his ability to attend daily Alcoholics Anonymous meetings or to work. He contended that a sentence of home detention “denounced and deterred only”; no balance was struck with rehabilitation. If the sentence caused the appellant to relapse into alcoholism, that would be a disproportionately severe impact on him. He affirmed in his affidavit that community detention, community work and supervision would help him because they would allow him to continue his recovery by attending programmes daily, going to the gym, preventing himself from being isolated, and allowing him to give back to the community, righting past wrongs in accordance with the 12 steps of Alcoholics Anonymous.
[20] In the alternative, the appellant submitted that the specifics of his alcoholism constituted exceptional circumstances warranting judicial intervention. So that, even if the sentence originally imposed were correct, this Court could commute the sentence to one of community detention, community work, and supervision. The appellant submitted that if this were to occur, the Court may wish to impose sentences at the higher end of the range.
[21] The appellant annexed a report from a psychotherapist, Bob Kelly, to his affidavit. Mr Kelly’s report documented the appellant’s alcoholism and the efforts he
has made to recover. However, Mr Kelly also opined that the appellant was at a critical point in his recovery from alcoholism. In Mr Kelly’s view the early stages of recovery are the most difficult and vulnerable to relapse. Mr Kelly was concerned that the appellant’s increased thoughts about drinking were warning signs to relapse. His consumption of alcohol had occurred while he was at home alone. Since he had commenced serving the sentence of home detention, the isolation and tie to his home environment, where most of his alcoholic drinking occurred, have placed him at greater risk of a return to alcoholism. In Mr Kelly’s view the appellant was anxious and struggling to maintain his sobriety. Mr Kelly’s report showed that the appellant would benefit from the social interaction and other positive effects of being in a structured work environment. Employment offered a solution to the pressures the appellant had suffered since the confinement to his home.
[22] The information and expert advice that Mr Kelly provided was not available to the sentencing Judge. Whilst he had been warned that home detention might have a detrimental effect on the appellant’s recovery from alcoholism, the report from Mr Kelly indicated that the warning was becoming the reality.
[23] The appellant had obtained an offer of employment available to him from Kelly Parsons of KHP Builders Ltd but that brought with it further problems. There was no other prospect of employment presently available to him.
[24] The appeal was adjourned part-heard to enable the probation service to investigate the offer of employment from Mr Parsons. The circumstances of the employment suggested that it may not be approved by the probation service while the appellant was serving a sentence of home detention. This was because the proposed job placed the appellant in a position of some responsibility where he would not always be under supervision. The adjournment was for the purpose of permitting the probation service to make further enquiries.
[25] I was assisted by an urgent report prepared by Brendan Hurley of the probation service. I record my gratitude to Mr Hurley for the thorough enquiries and report that he provided to me in the limited time available for him to do so. The report noted that the appellant lived with his brother, Glen Brady, and a friend, Chris Hall. The
probation service has supported the appellant in treating his alcoholism throughout his sentence of home detention. To that end, he has received permitted absences to seek medical and counsellor support. He was currently receiving five absences per week to attend Alcoholics Anonymous. To further support his mental wellbeing and recovery from knee surgery, he was permitted two absences to attend a local gym per week and, in addition to this, he received one social absence per fortnight to visit his father in South Auckland.
[26] Mr Hurley recorded that the appellant has shown exemplary compliance with his sentence of home detention and provided verification of his absences as and when required.
[27] Mr Hurley contacted Kelly Parsons, whose company has offered the appellant work as a leading hand carpenter. Mr Parsons confirmed that he was prepared to employ the appellant while he was on home detention. The sticking point, however, was that the appellant would be employed as a leading hand carpenter and in this capacity, he would be required to go to worksites by himself that were outside of three sites nominated in a letter provided by Mr Parsons.
[28] As regards the three nominated sites, Mr Parsons noted that Mr Parsons could provide approved sponsors to be registered with the probation service at each of these worksites. The role of the sponsors would be to record the location of the site and the times the appellant spent working there.8 Mr Parsons was also prepared to provide the probation service with his own company worksheets, as further verification of the appellant’s employment. However, Mr Parsons also stated that if the appellant were unable to go to other worksites, his employment would be untenable.
[29] The condition that the appellant be able to go to worksites other than the three nominated worksites was the factor that precluded the probation service from supporting Mr Brady’s proposed employment as it currently stood. This was because his movement beyond the three nominated worksites would preclude the probation service from being able to monitor his whereabouts at all times.
8 This was a necessary requirement if the sentence of home detention were to be adjourned to allow the appellant to be employed by Mr Parsons.
[30] The appellant relied on the fresh information before this Court to support the argument that the original sentence should be replaced with something that was equally severe, but which would permit the appellant to escape from the conditions that were placing his rehabilitation at risk.
Case for the respondent
[31] Initially, the respondent submitted that the seriousness of the offending justified an emphasis on deterrence; this being more important than rehabilitation in dictating the sentence.
[32] The respondent also submitted that the sentence was not unjust. The appellant was just as able to engage in rehabilitative programmes on home detention as he would be on community detention, and likewise, he could work on home detention (although this would require approval from a Probation Officer). Community detention and supervision would not serve the purposes of denunciation and deterrence; the offending was serious and the issue was the integrity of the Companies Office, which meant that the potential for loss, and not actual loss, was a key consideration.
[33] At the outset, therefore, the respondent submitted that there were no exceptional circumstances that would warrant judicial intervention. Whilst more detail on the appellant’s alcoholism was provided to this Court, nonetheless, the sentencing Judge was aware that he was a recovering alcoholic and sentenced him on that basis. The detail on the risk of relapse did not provide a materially different factual matrix in terms of sentencing.
[34] However, the respondent revisited its approach during the course of the appeal. It sensibly and responsibly recognised a number of factors which when combined amounted in my view to a material change of circumstances that warranted this Court imposing a different sentence. Those factors were as follows. The appellant’s alcoholism had contributed to his offending. The appellant was doing what he could to address this problem. The probation service were seeking to help him in this respect, and it acknowledged that while serving the sentence of home detention he had
behaved in an exemplary fashion. An alternative sentence of equal severity that would remove the appellant from social isolation was available.
Discussion
[35] The parties accepted that if I was satisfied that there had been a material change of circumstance since the sentence was imposed in the District Court, this would support me interfering with the sentence on appeal.
[36] The most comparable case to the present is Hunter v Police.9 Mr Hunter pleaded guilty to six charges of forgery. The forgeries were a series of emails purporting to be from a lawyer, which Mr Hunter used to try to persuade the woman he was in a relationship with to buy property with or for him. Mr Hunter had a significant criminal history, but had not offended in the previous five years, and alcoholism and post-traumatic stress disorder played significant roles in causing his offending. The offending was unsophisticated and no one suffered any financial loss as a result of the offending (because it was stopped before loss became an issue).
[37] Mr Hunter was initially sentenced to twelve months’ home detention, but the sentence was successfully appealed on the basis that there were substantial facts relating to the offender’s personal history or circumstances that were not before the Court at sentencing.10 Those substantial facts were that Hunter would not be able to work if he were subject to a sentence of home detention, which would increase his risk of reoffending. He could, however, work under a sentence of community detention. Considering those facts, a sentence less restrictive than home detention could be imposed which would serve the purposes of accountability, deterrence, and imposing the least restrictive sentence appropriate. The sentence was replaced with a sentence of six months’ community detention.
[38] R v Singh is also relevant.11 Six persons were sentenced for between two and six charges relating to falsifying electoral documentation in the Papatoetoe ward in relation to the election of board members on the Otara – Papatoetoe Local Board. The
9 Hunter v Police, above n 5.
10 Summary Proceedings Act 1957, s 121(3)(b).
11 R v Singh, above n 5.
charges were under s 257(1)(c) of the Crimes Act, which carries the same penalty as the forgery charges now in issue. They had registered voters as residing in the Papatoetoe Local Board area when in fact those people did not reside there. There, as here, the offending was serious in terms of its effect on the public interest, but little actual harm accrued to individuals. Only one of those involved, the candidate in the local board election, stood to gain. The Judge also took account of the fact that in the offenders’ cultural context, it might not be seen as dishonest, but rather helpful, to help others fill in forms. Three of the appellants received sentences of community detention and 200 hours community work. The sentences of community detention were for five months, six months and three months each. The case involved a total of 24 counts of fraud, and therefore is similar to the offending in this case.
[39] In this case, the strongest argument for allowing the appeal was that relating to the appellant’s prospects of rehabilitation. In that respect, the relevant factors in the case seemed quite similar to those in Hunter. Unlike the sentencing judge, I had the benefit of Mr Kelly’s report, which emphasised the risk to the appellant’s recovery from alcoholism. It follows, therefore, that Mr Kelly’s report provided me with more contemporary material and more helpful material than would have been available to the sentencing judge. Whilst the sentencing judge explicitly addressed the appellant’s alcoholism at sentencing and decided that home detention was still appropriate he reached this conclusion without the benefit of the information that was available to me. By the time of the appeal the appellant was part way through the sentence of home detention, and so a better assessment of the deleterious effect of this sentence on the appellant’s recovery from alcoholism could be made.
[40] The impact of the sentence of home detention was such that it was essentially setting the appellant up to fail. Part way through the sentence he was showing signs of being overwhelmed by pressures that were likely to lead to him drinking alcohol again. At the same time a rescue remedy in the form of an offer of employment was available to him. The problem was the only position the employer could offer the appellant was one that the probation service could not approve.
[41] The respondent accepted the substituted sentence was as stern a response to the offending as was the original sentence. Thus, the deterrent effect of the sentence was
the same. On theother hand the prospect of the appellant working for Mr Parsons, and so being removed from the isolation imposed by the sentence of home detention, enhanced the prospects of his recovery from alcoholism and removed the risk of him sliding backwards in that respect. Thus, the substitute sentence achieved better rehabilitation prospects. Those better prospects, when coupled with as good a deterrent effect, led me to conclude that there were exceptional circumstances to justify allowing the appeal and imposing another sentence. Accordingly I imposed the sentence described in herein.12
Duffy J
12 At [3].
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3
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