Clifford v The Queen
[2012] NZCA 134
•3 April 2012
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA591/2011 [2012] NZCA 134 |
| BETWEEN GERARD THOMAS CLIFFORD |
| AND THE QUEEN |
| Hearing: 27 March 2012 |
| Court: Randerson, Keane and Lang JJ |
| Counsel: P H B Hall for Appellant |
| Judgment: 3 April 2012 at 1 p.m. |
JUDGMENT OF THE COURT
The appeal against sentence is dismissed.
REASONS OF THE COURT
(Given by Lang J)
Following a very lengthy trial in the District Court, Judge Joyce QC found Mr Clifford guilty on two counts of conspiring with two other persons to use documents with intent to defraud. On 26 August 2011 the Judge sentenced Mr Clifford to concurrent sentences of four years imprisonment on each charge.[1]
[1] R v Briggs & Ors DC Auckland CRI-2008-004-19028, 26 August 2011.
Mr Clifford appeals to this Court against the sentence that the Judge imposed. He contends that the Judge adopted a starting point that was too high, and that he failed to give adequate recognition to mitigating factors. As a result, he contends that the end sentence of four years imprisonment was manifestly excessive. He also contends that the end sentence that Mr Clifford received was disparate to that imposed on one of his co-offenders, Mr Robert Briggs.
Factual background
Mr Briggs and his wife were the controlling entities behind a charitable trust known as the Actives Charitable Trust. The Trust held a licence issued under the Gaming and Lotteries Act 1977 authorising it to conduct games of chance using gaming machines. The Trust derived substantial income through this activity. It was required to apply and distribute that income in terms of the deed under which it was constituted and for the purposes specified in the gaming licence.
Mr Clifford’s companies owned tennis ball lobbing machines for use in training tennis players. They entered into lease arrangements with several tennis organisations under which the tennis organisations agreed to pay inflated prices to rent the machines. The tennis organisations entered into the leases on the understanding that they would receive grants from the Trust to meet the cost of leasing the machines. They had the ability to terminate the leases if they did not receive the grants.
Mr Clifford’s companies then issued invoices to the tennis organisations for the rental of the machines. The tennis organisations paid the invoices using grants they received from the Trust. Mr Briggs and/or his creditors then rendered invoices to Mr Clifford’s companies in respect of consultancy services they had never provided. Mr Clifford used the rental payments his companies received from the tennis organisations to pay those invoices.
Mr Briggs and Mr Clifford received substantial sums of money as a result of this arrangement. During the period between August 2003 and July 2005, the Trust made grants to tennis organisations totalling $1.706 million. The tennis organisations paid Mr Clifford’s companies the sum of $1.296 million by way of rental payments in respect of the machines. During the same period, Mr Clifford’s companies paid invoices rendered by Mr Briggs’ companies and/or his creditors totalling $646,775. Mr Clifford and his companies retained approximately $650,000. The tennis organisations benefited by having the use of the machines and also by retaining cash from the grants totalling $409,225.
The victims of the offending were the persons or entities who would otherwise have derived benefits as a result of distributions made by the Trust.
The Judge’s approach on sentencing
The Judge took the view that the purposes and principles of sentencing required him to hold Mr Briggs and Mr Clifford accountable for the harm caused to the community, to promote in them a sense of responsibility for their offending and to denounce and deter them and others from engaging in similar conduct in the future.
He considered that the scheme was completely dishonest, and it enabled the conspirators to receive substantial sums of money over a lengthy period. In addition, Mr Briggs had breached his fiduciary obligations to the Trust by diverting monies away from it for his own benefit and that of Mr Clifford. He considered that there was also a degree of premeditation in the offending, because Mr Briggs and Mr Clifford had gone to some lengths to devise and disguise the true nature of the arrangement.
The Judge considered Mr Briggs and Mr Clifford to be equally culpable. He rejected the Crown’s submission that an appropriate starting point was a sentence of six and a half years imprisonment. Instead, he selected a starting point of five years imprisonment.
The Judge then applied a discount of 20 per cent to reflect mitigating factors personal to Mr Clifford. These included a lack of previous convictions and the fact that Mr Clifford suffers from mental health issues. For that reason the Judge concluded that a sentence of imprisonment will be more difficult for Mr Clifford to serve than it might otherwise be. He also noted that the Christchurch earthquake had caused Mr Clifford and his family very real difficulties, and that Mr Clifford’s absence from his family whilst serving a sentence of imprisonment will add to these.
This produced an end sentence of four years imprisonment.
Was the starting point too high?
This argument is primarily based on the proposition that, unlike Mr Briggs, Mr Clifford’s role in the offending did not involve the breach of any fiduciary obligations. For that reason his counsel contends that he is less culpable than Mr Briggs, and the Judge was therefore wrong to treat both men as being equally culpable. He submits that an appropriate starting point for the sentence to be imposed on Mr Clifford was between three and four years imprisonment.
The Judge expressed his conclusion in relation to the starting point as follows:[2]
At the heart of the offending here lies the fact that these two men cynically conspired to use Actives, a charity, as a cash cow to further their own greedy ends. The circumstances of their conspiratorial activities were such that, though the one might have ended up with more money than the other, it was the combination of what each could offer so as to facilitate the wrongful activity that allowed it to start up and then continue for a very appreciable, in the overall, period of time.
Yes, Mr Clifford was at one removed from the trust obligations, but then he provided the means by which an illusion of integrity might attach to the scheme. The description “tennis machines conspiracy” was not misplaced.
What these men got up to was an egregious abuse of access to charitable funds in unalloyed violation of both statutory – that is the Gambling Act – purposes and the charitable objectives of the trust itself. The two of them used and abused charity monies for nothing but personal, be it direct or indirect, gain or advantage. That inevitably meant – as each could not help but have appreciated – a very considerable, because basically it matched the amounts taken, community benefits loss.
Speaking then of the conspiracy counts, and rehearsing that the reason for there being two was simply a technical one of a law change part way through, I see no good reason to distinguish between the two of them, Mr Briggs and Mr Clifford, in reaching a starting point of five years.
[2] At [73]-[76].
We accept that Mr Clifford did not owe fiduciary obligations to the Trust. Nevertheless, he knew that he was receiving the benefit of funds that Mr Briggs had diverted from the Trust in breach of his fiduciary obligations to it. We see little distinction in terms of culpability between a person who diverts funds away from a trust in breach of his or her fiduciary obligations to it, and a person who receives such funds in the knowledge that they have been diverted by another person acting in breach of fiduciary obligations.
Mr Briggs undoubtedly played an important role in implementing the scheme. He had access to the income earned by the Trust, thereby enabling the grants to be made to the tennis organisations. There can be no doubt, however, that Mr Clifford also played a very important role in the conspiracy. He was responsible for approaching the tennis organisations and entering into lease agreements with them. He provided the machines and rendered invoices for the rental payable in respect of them. Having received payment, he attended to paying the invoices rendered by Mr Briggs’ companies and/or his creditors. It would not have been possible for Mr Briggs to divert funds away from the Trust and back to himself unless he had the assistance of somebody who was prepared to undertake the role that Mr Clifford played in the conspiracy. We therefore consider the Judge was entitled to conclude that Mr Clifford’s culpability was equal to that of Mr Briggs.
Counsel for Mr Clifford also submits that the Judge erred when he stated that the offending had occurred between August 2003 and March 2006. He points out that Mr Clifford made the last payment under the scheme in July 2005. He submits that this error may have led the Judge to select a starting point that was too high for both Mr Clifford and Mr Briggs.
Counsel for the Crown responded to this submission by pointing out that Mr Briggs caused the Trust to make grants to one sporting organisation in July 2005 and March 2006. That organisation ultimately elected not to accept the grants, and repaid them on 20 March 2006. Counsel for the Crown submitted that this demonstrated that the conspiracy remained operative until at least March 2006.
We accept that this evidence demonstrates that Mr Briggs certainly believed that the scheme remained operative up until March 2006, and there is nothing to suggest that Mr Clifford took a different view. It is not necessary to deal with this issue further, however, because the fact that the conspiracy may have lasted for eight months less than the Judge believed to have been the case is immaterial. The important point is that it remained operative for a considerable period of time, and enabled both Mr Briggs and Mr Clifford to receive very substantial sums of money.
Finally, counsel for Mr Clifford submits that the starting point that the Judge selected was too high having regard to the nature of the offending. That submission needs to be measured against the starting points selected in other comparable cases. The cases having the closest factual similarities to the present case are Serious Fraud Office v Todd[3] and Serious Fraud Office v Wijeyaratne.[4] The offenders in those cases were business partners who operated several hotels. They allowed gaming trusts to place gaming machines in their establishments. They also assisted sporting organisations to obtain grants from the trusts who operated and derived income from the gaming machines. Once those organisations received the grants, the offenders rendered false invoices to them. This enabled the offenders to be compensated for the assistance they had provided to the sporting organisations. Through their participation in this dishonest scheme each offender received approximately $500,000. In each case the sentencing Judge selected a starting point of five years imprisonment.
[3] The Serious Fraud Office v Todd DC Auckland CRI-2006-004-26099, 7 December 2007.
[4]The Serious Fraud Office v Wijeyaratne DC Auckland CRI-2006-004-26100, 7 December 2007.
Counsel for the Crown has also drawn our attention to other cases in which broadly similar offending and broadly similar starting points have been adopted.[5] Having regard to these cases, we are satisfied that the starting point that the Judge adopted in the present case was within the range available to him.
Did the Judge give adequate recognition to mitigating factors?
[5]R v Watson CA233/01, 19 December 2001; R v Child & Courtney HC Auckland T000708, 21 June 2002; R v Jackson DC Manukau CRI-2005-092-13658, 15 December 2006; R v Staples DC Christchurch CRI-2003-009-2010, 6 May 2004.
The fact that Mr Clifford exercised his right to defend the charges meant that the Judge was not able to reduce the starting point he identified to reflect guilty pleas. Nor had Mr Clifford expressed remorse for his offending, or offered to pay reparation.
Counsel for Mr Clifford submits, however, that the Judge ought to have given Mr Clifford an additional discount to reflect the fact that he had embarked on the offending after having received legal advice to the effect that it was legitimate. This submission faces an immediate hurdle, because the Judge found that Mr Clifford had only made selected facts available to the persons from whom he sought legal advice. This prompted the Judge to conclude that Mr Clifford had thereby ensured that he received advice that he wanted to hear. We are not in a position to re-visit that conclusion, which was clearly open to the Judge on the evidence. We therefore do not consider that the Judge was obliged to give any additional discount for this factor.
We consider that the Judge took into account all the mitigating factors that were available in the circumstances. We agree with his assessment that a discount of 20 per cent contained “an element of sheer mercy”.[6] We do not consider that any further discount could be justified.
Was the end sentence disparate to that imposed on Mr Briggs?
[6] R v Briggs, n 1 at [87].
As this Court explained in R v Lawson,[7] the underlying rationale for the parity principle is the need to protect the integrity of the criminal justice system. Consistency in the treatment of offenders who are involved in the same unlawful enterprise is an important sentencing principle.[8]
[7] R v Lawson [1982] 2 NZLR 219 (CA) at 223.
[8] Sentencing Act 2002, s 8(e).
The fact that an unduly lenient sentence has been imposed on another co-offender does not, however, mean that an otherwise appropriate sentence should be reduced in order to remedy the disparity. In Mau’u v R this Court said:[9]
On a number of occasions, this Court has emphasised that “a gross and unjustifiable disparity” does not necessarily result in the reduction of a sentence imposed on a co-offender. This is reflected in the principle that no greater adjustment is appropriate than is necessary to protect the integrity of the criminal justice system. For example, in both R v Ryder and R v Thompson,[10] this Court observed that an appellate court must consider “whether reducing a proper sentence imposed on one offender in order to bring it into line with the sentence imposed on a co-offender would itself cause public concern at the administration of justice”. Two wrongs do not make a right.
[9] Mau’u v R [2011] NZCA 385 at [28].
[10] R v Ryder CA116/98, 23 June 1998; R v Thompson CA245/98, 22 December 1998.
In order to determine whether the sentences can properly be regarded as disparate, it is necessary to consider how the Judge came to impose an end sentence of four years ten months imprisonment on Mr Briggs. In reaching that sentence, the Judge was required to have regard to several factors that did not play any part in the sentence he imposed on Mr Clifford.
First, Mr Briggs had pleaded guilty at the commencement of the trial to six charges of accepting gifts contrary to the provisions of s 4 of the Secret Commissions Act 1910. The Judge considered that, on their own, those charges warranted a starting point of two years six months imprisonment. Having regard to totality principles, however, he added an uplift of just twelve months to the starting point of five years imprisonment he had selected on the conspiracy charges. This led to an end starting point of six years imprisonment.
In terms of aggravating factors, the Judge declined to add an uplift to reflect the fact that in 2006 Mr Briggs had been convicted of an offence against the Gambling Act 2003 in respect of an incident that had occurred in July 2004.
The Judge then considered mitigating factors. These included efforts that Mr Briggs had made to deal with his addiction to gambling, as well as his guilty pleas. Mr Briggs had also pleaded guilty to the conspiracy charges at the end of the Crown case. The Judge allowed a discount of ten per cent for each of these factors. This produced the end sentence of four years ten months imprisonment.
We consider that the Judge was justified in taking each of these steps, although we agree with his assessment that the discount given for mitigating factors was generous. A right-thinking member of the public would certainly understand why Mr Briggs received an end sentence of four years ten months imprisonment whilst Mr Clifford received an end sentence of four years imprisonment. We do not consider that any issue as to disparity arises.
Result
The appeal is dismissed.
Solicitors:
Crown Law Office, Wellington for Respondent
0
0
0