Campbell v Police

[2013] NZHC 838

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CRI-2013-454-8 [2013] NZHC 838

BETWEEN  GLADYS RUTH CAMPBELL Appellant

ANDNEW ZEALAND POLICE Respondent

Hearing:         16 April 2013

Counsel:         C P Brosnahan for the Appellant

A C Whittaker for the Crown

Judgment:      19 April 2013

RESERVED JUDGMENT OF GODDARD J

This judgment was delivered by me on 19 April 2013 at 4.00 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:      B D Vanderkolk, PO Box 31, Palmerston North 4440

Roger Crowley, PO Box 744, Wanganui

Counsel:       C P Brosnahan, PO Box 785, Wanganui.

CAMPBELL V POLICE HC PMN CRI-2013-454-8 [19 April 2013]

Circumstances of the offending

[1]      Ms Campbell was employed full-time as accounts administrator at Aztec Engineering (the Company) on 23 February 2010.  Her duties included the payroll management for 30 staff; the management of accounts payable and monies received; the invoicing of customers; and payment of supplier invoices.

[2]      Between 16 March and 8 December Ms Campbell falsified and manipulated entries in the Company’s accounting system.  Specifically, she created fictitious company names similar to the Company’s actual providers and generated supporting documentation  in  order  to  obtain  payment  authorisations  from  the  managing directors of the Company.  One hundred and four such transactions were completed totalling $252,402.80 and the money was paid into her own bank accounts.

[3]      Ms Campbell also used the accounting system to overpay herself holiday and sick leave to a total sum of $8,802.20.  Overall, Ms Campbell fraudulently obtained

$261,205 from her employer.

[4]      Mr Brown, a director and shareholder of the company told the Court in his victim impact statement that Ms Campbell’s offending had caused severe financial hardship and distress to the company and its directors at a time when the company was already struggling financially because of the recession.   Mr Brown and his fellow director had been required to extend the company’s overdraft and to inject a further $35,000 into the company.  This money represented personal savings and education funds for Mr Brown’s children.  The depletion of the company’s funds by the appellant put the company and the future of its other employees in jeopardy

[5]      Understandably,  Mr  Brown  and  his  co-director  and  their  families  have suffered severe emotional strain as the result of the appellant’s offending as well as the undeserved financial pressure she has put them under.

[6]      Mr Brown has expressed his absolute disgust at the violation, mistrust and betrayal displayed by the appellant, especially when she was paid well and treated

with the utmost respect and dignity by the directors and staff at Aztec Engineering. Naturally, Mr Brown and his co-director feel very betrayed by the breach of trust.

[7]      A further unfortunate aspect is that, since sentence was passed, the reparation ordered is not likely to be able to be paid to the victims, as the appellant has been declared bankrupt and the available funds held by the Official Assignee will be used to pay all creditors and will not be available to be used to pay reparation.  Therefore, the issue of reparation requires revisiting on appeal.

Grounds of appeal

[8]      In the notice of appeal the following two grounds of appeal were set out:

(a)The sentencing Judge failed to place proper weight on the mitigating features personal to the appellant, which resulted in insufficient discount being deducted from the starting point and a manifestly excessive  sentence.     Had  proper  discount  been  afforded  to  the appellant then the end sentence would have fallen below two years; and

(b)The sentencing Judge erred in concluding that home detention would not have been imposed, and should have taken a compassionate approach to sentencing in light of the personal circumstances of the appellant.

The Offender

[9]      Ms Campbell is a 64 year old woman with a history of depression and a gambling addiction, for which she has now sought help.  She has two adult children. The money she obtained through her offending was used to supplement her gambling addiction at the rate of between $600 and $700 per day.

[10]     The  pre-sentence  report  recommended  home  detention  with  a  special condition that Ms Campbell receive counselling to address her gambling addiction. The reasons advanced for this recommendation were that:

(a)the risk of re-offending and risk of harm to others was low because she has sought assistance following the offending and her lack of offending history;

(b)she has shown remorse, saying she is ashamed of the offending and did not mean to hurt anyone;

(c)her motivation to comply with any sentence imposed by the Court was assessed as high; and

(d)it was considered that home detention would promote rehabilitation of the gambling addiction.

[11]    At sentencing Ms Campbell submitted a number of letters to the Court in support of a sentence of home detention.  These were from the Salvation Army Recovery  Church  group  and  other  officers  of  the  Salvation  Army  verifying Ms Campbell’s regular attendance at addiction recovery sessions and her attendance at a Life Skills Community Garden Project.

[12]     In addition reports were presented to the Court from the Problem Gambling Foundation verifying that Ms Campbell had attended a number of counselling sessions and was cooperative and motivated towards addressing her gambling addiction; and a psychiatric assessment report describing health problems relating to anxiety and depression.

The sentencing decision

[13]     After traversing the backgrounds facts and referring to letters and reports

submitted  to  the  Court  in  counsel’s  submissions,  Judge  Lynch  referred  to  the

principles of sentencing to which he would have particular regard.  These were the gravity and culpability of the offending; consistency with sentences imposed on other offenders for like offending; and the least restrictive outcome appropriate in all the circumstances.

[14]     From a starting point of three years and nine months, identified by the Judge as  appropriate  in  Ms  Campbell’s  case  and  based  on  the  relevant  factors  in R v Varjan1  and R v Hayes2  the Judge deducted five months for remorse, age and lack  of  previous  convictions;  a  further  three  months  to  reflect  Ms  Campbell’s physical and mental health and addiction issues; and 10 months for the early guilty plea.

[15]     The final sentence imposed was two years and three months imprisonment. In  passing  sentence  the  Judge  observed  that  even  if  the  sentence  imposed  had allowed for the possibility of home detention, he would not have granted it because such a sentence would not have met the purposes of sentencing.  In the Judge’s assessment Mrs Campbell’s culpability was serious.  She had systematically “ripped off” the company, abused her position and the trust placed on her in doing so.

[16]     As earlier noted, reparation of $110,000 was also ordered.  This was ordered, to be deducted from Mrs Campbell’s superannuation benefit upon her release.  In fixing this sum the Judge had regard to monies available with the Official-Assignee consequent upon Mrs Campbell being adjudicated bankrupt.

[17]     In  determining  what  a  final  sentence  should  be,  the  Judge  took  care  to traverse all factors.  He referred to the duration and frequency of the offending: 104 separate transactions over a 21 month period.  He referred also to the degree of premeditation and planning: this involved the creation of fictitious provider company names, bank accounts and supporting documentation.  The Judge found these factors constituted premeditation and planning “significantly above that inherent in the charge itself”.  Then there was the abuse of trust.  In this regard,  the Judge found there had been a “gross” breach of trust and abuse of authority.  Finally, there was

the degree of loss and the harm resulting.  The Judge noted that Ms Campbell’s offending had had a significant impact on the directors and shareholders personally and on the Company itself.

[18]     The Judge considered a number of similar cases.  Amongst these were cases reviewed by Ms Whittaker for the Police in her submissions on sentence.  These included the decisions of the High Court in Prewett v Police3  and R v Phipps.4    In both cases, for various reasons, sentences under two years imprisonment had been imposed and leave to apply for home detention granted.  The cases turned on their particular facts.

[19]     The Judge referred to the decision in Thomas v Police5 as particularly helpful. In Thomas, the appellant was an account manager who misappropriated funds of

$312,467.27 over a period of three years.  The company incurred costs of $100,000, which included professional fees and bank interest.  The appellant had no previous convictions and had repaid $150,000 at the time of sentencing.  In the District Court, the sentencing Judge adopted a starting point of almost four years and, after mitigating features were taken into account, a final sentence of two and a half years was imposed. That sentence was upheld by the High Court.

[20]     In computing what deductions should be made from the start point of three years and nine months identified by the Judge and after deducting five months for Mrs  Campbell’s  remorse  and  her  age,  the  Judge  noted  that  care  was  needed regarding her previous good record. The Judge said:

Care is needed regarding previous good record.  The reason for that is plain. For over a year and a half you were plundering this company, treating it as your own personal bank account.  However, your preparedness to meet, through the official assignee, payment of what you can fortifies my assessment that it is proper to provide for this discount.

3      Prewett v Police HC New Plymouth CRI-2007-447-000006, 13 June 2007.

4      R v Phipps HC Christchurch, CRI-2006-009-007912, 30 August 2007.

5      Thomas v Police HC Auckland, CRI-2008-404-00343, 9 February 2009.

The argument on appeal

[21]     Mr Brosnahan, for the appellant, advanced three matters on appeal: first, that the Judge had not placed sufficient weight on Ms Campbell’s personal factors mitigating her sentence to a term at or below two years; second, that home detention should have been imposed; and third, that the reparation payment ordered was inappropriate.

[22]     In relation to the first ground, Mr Brosnahan argued that a sentence below two years should have been imposed, submitting that insufficient weight had been placed on Ms Campbell’s lack of previous convictions, her age, poor mental and physical health, the steps she had taken to address her offending and gambling addiction, her early guilty pleas and her genuine remorse.

[23]     In  particular,  Mr  Brosnahan  submitted  that  Ms  Campbell  should  have received a greater discount for her palpable remorse.  In R v Hessell6  the Supreme Court determined that an allowance of up to 10 per cent discount should be given for remorse alone.   He submitted that in Ms Campbell’s case only an 11  per cent discount had been allowed to cover her age, her lack of previous convictions and her remorse.

[24]     Mr Brosnahan further submitted that Ms Campbell should also have received a greater discount for her lack of previous convictions and good character and questioned  the  Judge’s  reasoning  that  “care  is  needed  regarding  previous  good record” in Ms Campbell’s case simply because her offending had spanned a significant  period  of  time.    Mr  Brosnahan  submitted  that  the  duration  of  her offending   was   already   reflected   in   the   starting   point   adopted   in   assessing

Ms Campbell’s overall culpability, citing R v Webb7 in support.

[25]     In Webb the offender was convicted of sexual offending spanning a four year period.    On appeal,  the fact  the  offender,  who  had  no  convictions  prior  to  the

offending had not committed any further offending in the subsequent intervening

12 year  period.     This  caused  the  sentence  to  be  reduced  by  25  per  cent. Mr Brosnahan argued that Ms Campbell should have received a similar discount.

[26]     Mr Brosnahan also cited Fitzmaurice v Police.8   Mr Fitzmaurice was a priest who stole $150,000 from the Parish over five years to fuel his gambling addiction. Panckhurst J held that the failure by the sentencing Judge to recognise the good character of the appellant, notwithstanding the offending spanning over five years, was to double count an aggravating feature that had already been accounted for in assessing his culpability.  The offender’s sentence was reduced because of his good character and the positive steps the offender had made towards his rehabilitation prior to sentencing.  Mr Brosnahan argued that while presumably Judge Lynch had taken into account the steps Ms Campbell had taken prior to sentencing as an indicator of her remorse in allowing a five month discount, these steps deserved greater individual recognition.

[27]    In relation to the second ground of appeal Mr Brosnahan submitted that a sentence of home detention would meet the principles and purposes of sentencing because it would meet the purpose of deterrence.  Home detention is an alternative imprisonment  that  carries  with  it  a  considerable  level  of  denunciation  and deterrence9 and it was imposed in Fitzmaurice v Police, despite the large amount of money involved and the duration of the offending.  The Court in Fitzmaurice held

that where there are two competing sentencing options, depression and addiction are relevant to the final disposition of the case.

[28]     This  approach  would  be  consistent  with  the  need  to  impose  the  least restrictive penalty available in the circumstances.

[29]     Mr Brosnahan also submitted that a sentence of home detention is appropriate on  compassionate  grounds,  pointing  to  Ms  Campbell’s  significant  gambling addiction, her poor mental health and her age.   He cited two cases in support:

R v Jarden,10 where the sentence was reduced because the sentencing Judge did not take into account depression and anxiety suffered by the appellant as a result of a recent tragedy; and R v Hertnon,11 where the sentence was reduced because of a psychological  report  and  the  fact  the  appellant’s  elderly  mother  had  attempted suicide.

Crown’s response

[30]     In   summary,   the   Crown’s   submission   is   that   the   credit   given   for Ms Campbell’s personal mitigating features was appropriate and the resulting end sentence imposed was not manifestly excessive.  The Crown further submitted that if the Court should find that the end sentence was manifestly excessive and the appropriate end term of imprisonment was at or below two years imprisonment, a sentence of home detention would nevertheless be insufficient to meet the principles and purposes of sentencing in this particular case.

[31]     Ms Whittaker pointed out that the discount given of eight months (17.7 per cent) for personal mitigating features, with a further 10 month (27 per cent) discount for the early guilty plea, amounted in fact to a total discount of 40 per cent from a starting point of three years and nine months imprisonment.

[32]     Referring to the case of Fitzmaurice, Ms Whittaker submitted that the same approach applied in the present case.  That approach was to treat the appellant’s anxiety, depression and gambling addiction as relevant to the question of whether a sentence alternative to imprisonment should be imposed, rather than as mitigating features  justifying  a  discount  in  sentence.    Ms  Whittaker  pointed  out  that  in Ms Campbell’s  case  the  Judge  had  allowed  her  a  three  month  discount  for  her physical and mental health, even though, on the analysis in Fitzmaurice, he would

have been entitled not to do so.   Ms Whittaker referred also to R v Brooking12  in

which the Court of Appeal accepted that the fact the offending was committed to fuel a self-induced addiction was not an available mitigating feature.  This finds a clear

10     R v Jarden [2008] NZSC 69.

11     R v Hertnon HC Palmerston North CRI 2007-031-536.

parallel in Ms Campbell’s offending, said to have been committed to fuel a gambling addiction.

[33]     In relation to whether a sentence of home detention would suffice to meet the principles and purposes of sentencing, in particular denunciation and deterrence, should this Court find the end sentence should fall at or below two years imprisonment, Ms Whittaker referred to the fettered discretion that the choice between home detention and imprisonment involves, with appellant intervention focusing on whether the sentence erred.13    Whilst acknowledging that in Prewett v Police and R v Phipps the offenders were granted leave to apply for home detention, Ms Whittaker noted that in both cases full reparation of $83,100 and over $70,000 respectively  had  been  paid  and  the  offending  was  less  serious  than  that  in Mrs Campbell’s case.  Ms Whittaker also submitted that the offending in Fitzmaurice was less serious than Mrs Campbell’s given the amount of money stolen, as is

reflected in the starting points adopted.

[34]     In   relation   to   a   reduction   in   sentence   on   compassionate   grounds, Ms Whittaker noted that the threshold for a compassionate approach is very high and generally reserved for cases involving personal tragedy such as Jarden v R and R v Hertnon.

Jurisdiction

[35]     The Court’s powers on appeal are derived from s 121 Summary Proceedings Act 1957, which provides that if the sentence (either in whole or in part) is one which the Court imposing it had no jurisdiction to impose, or is one which is clearly excessive or inadequate or inappropriate, or if the High Court is satisfied that substantial facts relating to the offence or to the offender's character or personal history were not before the Court imposing sentence, or that those facts were not substantially as placed before or found by that Court, the High Court can quash or

vary the sentence.

13     Manikpersadh v R [2011] NZCA 452 at [12]; Broekman v R [2012] NZCA 213 at [22].

[36]     In  R  v  Monkman,  the  Court  of  Appeal  explained  the  term  “manifestly

excessive in the following terms:14

Whether a sentence can be said to be manifestly excessive turns on the maximum sentence prescribed by law for the offence; the level of sentencing customarily observed with respect to that offence; the place which the conduct in question assumed on the scale of seriousness of offences of that type; and the personal circumstances of the offender (to the extent that they are relevant with respect to the particular kind of offending).

[37]      When considering if the sentence was manifestly excessive, the focus is on the  correctness  of  the  end  result,  not  the  process  by  which  the  sentence  was reached.15  As the Court of Appeal recently observed in Ripia v R:16

... this Court has consistently observed that sentence appeals will almost always turn on a consideration of whether the final outcome is manifestly excessive. The route by which the judge reached that outcome will be relevant to the analysis, but seldom in itself pivotal.

Discussion

[38]     Judge Lynch took a meticulous approach to the sentencing exercise and gave careful consideration to all competing factors, including all mitigating features relevant  to  Ms  Campbell,  and  had  regard  to  both  relevant  precedent  and  the applicable principles.   It cannot therefore be said that the sentence imposed was either  manifestly  wrong  or  wrong  in  principle.     It  was  clearly  within  the discretionary range and contained no errors of approach or principle.

[39]     The thrust of the case on appeal is that insufficient account was taken of Mrs Campbell’s personal mitigating features, in particular her gambling addiction, her great remorse and her early guilty pleas and cooperation.  Whilst all of those factors were acknowledged by Judge Lynch, the self-induced gambling addiction, whatever its genesis, is not an available mitigating feature, as clearly stated in Fitzmaurice and Brooking.    As  Ms  Whittaker  also  stated,  there  is  no  established  causative  link between  Mrs  Campbell’s  anxiety,  depression  and  gambling  addiction  and  the

offending she committed.  To permit a self-induced gambling addiction to reduce a

14     R v Monkman CA445/02, 3 March 2003 at [6].

15     R v MacCullouch [2005] 2 NZLR 665 (CA) at [50].

16     Ripia v R [2011] NZCA 101 at [15].

sentence would not provide necessary deterrence to others who might be inclined to fund such habits with the fruits of other people’s labour and deterrence is clearly a very relevant factor in relation to offending such as this.  As Ms Whittaker also pointed  out,  in  Mrs Campbell’s  case  Judge  Lynch  did  allow  her  a  three  month discount for her physical and mental health, even though, on the analysis in Brooking and Fitzmaurice, he would have been entitled not to do so.

[40]     The decision of the Court of Appeal in R v Davis17  there are a number of parallels with the present case.  That appeal was on the basis that the sentence was manifestly excessive and home detention should have been imposed.  The facts were very similar.  From a starting point of four years the Judge in Davis deducted one year for her guilty pleas, health and personal circumstances, lack of previous convictions and the fact that full reparation had been made.  The Court of Appeal found the starting point of four years imprisonment was plainly not out of the available range and that on a totality basis the sentence imposed was not manifestly excessive.      Furthermore   a   sentence   of   home   detention   would   have   been inappropriate.

[41]     Every case must be determined on its own merits and a slide-rule approach to sentencing cannot be taken.  Regard must be had to broadly similar situations and applicable principles in achieving sentencing consistency.

[42]    Given the aggravating features of the amount of money stolen, the 104 transactions and the breach of trust, made both personal and general deterrence critical, so that the reduction for compassionate reasons had to be appropriately measured against that.   Standing back and looking at the matter on a totality basis, the carefully assessed start and end points are unassailable and the discounts given were all that might be afforded in the sorry circumstances of this case.   Nor was there  any  error  in  stating  that  home  detention  would  not  meet  the  purposes  of

sentencing.

17     R v Davis [2009] NZCA 26.

Reparation

[43]     The orders for reparation require revisiting.  This was addressed at [38] of the Judge’s sentencing notes.  Correspondence had been provided from the Official Assignee  which  indicated  that  $63,957  was  available,  less  $11,000  for  the bankruptcy costs.  In addition, a further $20,000 was available from Kiwisaver.  As Mr Brosnahan submitted, the Judge clearly had in mind that a total of $72,957 was available to the Official Assignee from external sources to go towards reparation.

[44]     The Judge then made an order for reparation of $110,000, with the effect, that Mrs Campbell would be responsible for making reparation payments over and above those coming from the external sources in the sum of $37,043.

[45]     The Official Assignee has advised that there is no money available from that source for reparation and it is not clear that reparation is a provable debt in bankruptcy,  according  to  correspondence  received  by  Mr  Brosnahan  from  the Official Assignee.

[46]   The respondent nevertheless seeks full reparation of $261,205.61 whilst acknowledging that the amount of reparation ordered will have to be realistic given the financial resources of the appellant.

[47]     It is difficult to see any other way of dealing with the issue of reparation other than to substitute the orders made for a realistic order, which is difficult in the circumstances.  However, it is important that some reparation is made to the victims. I therefore make an order for reparation in the sum of $37,000, which equates to the amount Judge Lynch had in mind should be paid by the appellant by way of fortnightly deductions from her superannuation benefit upon her release, if no other means were available to her for making reparation.  If the sum is able to be paid sooner out of the funds held by the Official Assignee, should that be legally possible, the value of the sum will be greater as it will be sooner in the hands of the victims.

Result

[48]     The appeal is dismissed.  There will be an order for reparation in the sum of

$37,000 to replace the previous order for reparation in the sum of $110,000.

Goddard J