Henderson v The Queen

[2021] NZHC 2259

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI-2021-404-156

[2021] NZHC 2259

BETWEEN

COLIN CLARK HENDERSON

Appellant

AND

THE QUEEN

Respondent

Hearing:

30 August 2021

Counsel:

L Ameye for Appellant

J Mara and E Hoskin for Respondent

Judgment:

31 August 2021

JUDGMENT OF WHATA J

This judgment was delivered by me on 31 August 2021 at 3.00 pm.

Registrar/Deputy Registrar Date: ………………………….

Solicitors:           Crown Law, Wellington

HENDERSON v R [2021] NZHC 2259 [31 August 2021]

[1]    Colin Henderson appeals against a sentence of eight months’ home detention imposed by Judge Collins in the Auckland District Court1 for three offences, to which Mr Henderson pleaded guilty: managing a company while bankrupt (representative),2 concealing  property3  and  misleading  the   Official   Assignee   (representative).4 Mr Henderson appeals on the bases the starting point was inappropriate and that a larger discount for guilty pleas should have been afforded to him. He seeks a substituted sentence of 5 months’ home detention. Mr Henderson also applies to adduce evidence on appeal.5

Background

[2]On 3 February 2011, Mr Henderson was adjudicated bankrupt owing creditors

$85,210.63. On 4 February 2011, by way of letter, he was told that had to advise the Official Assignee of any changes in income and employment and that he was subject to restrictions on managing a business or being a company director. In breach of these requirements, Mr Henderson operated a produce brokering business for several years without notifying the Official Assignee. In the period 15 February 2011 to 25 May 2017, $208,272.71 of funds were transacted through Mr Henderson’s bank account in respect of his brokering business. He received a further $37,334.68 between July 2017 and March 2018. He also misled the Official Assignee about his income. The offending involved transacting under various trading names.

[3]    Mr Henderson was charged on 22 September 2017 but did not plead guilty until the morning of the trial on 18 June 2018. The next day he filed a memorandum indicating that he wanted to contest the summary of facts or withdraw his plea. His application to withdraw his plea was dismissed on 4 February 2019 and a disputed facts hearing was set down for 23 September 2020. However, shortly before the hearing, a summary of facts was agreed,6 including a statement that the business

1      R v Colin Clark Henderson [2021] NZDC 6870 [District Court decision].

2      Insolvency Act 2006, ss 436(1)(b) and 149(1)(a). Maximum penalty two years’ imprisonment.

3      Insolvency Act, s 420(2)(a). Maximum penalty three years’ imprisonment, a fine of $10,000, or both.

4      Insolvency Act 2006, s 440(1)(b). Maximum penalty 12 months’ imprisonment, a fine of $5,000, or both.

5      Under s 334 of the Criminal Procedure Act 2011.

6      Under s 9 of the Evidence Act 2006.

income does not take into account any outgoings and therefore the actual profit     Mr Henderson derived is unknown.

[4]    Mr Henderson is 71 years old. He contracted a serious blood infection in April 2019, symptoms of which include debilitating heart failure and atrial fibrillation. He has also battled with pancreatitis, cellulitis and anaemia. His condition was recently described as life threatening.

[5]    In fixing sentence the Judge referred to the fact that Mr Henderson never disclosed his bank account or quantum of funds deposited in it.7 The Judge found that it is very clear that Mr Henderson misled the Official Assignee and were economical with the truth over many years about his sources of income and his employment. The Judge noted Corrections’ pre-sentence report was unfavourable and agreed with the Crown’s starting point of two years and four months’ imprisonment.8 That starting point was discounted by 10 per cent because of Mr Henderson’s ill health, and a further five per cent for his late guilty pleas. That brought the nominal sentence to two years’ imprisonment. The Judge then commuted this to a sentence of 11 months’ home detention, before reducing the end sentence further to 8 months’ home detention on account of Mr Henderson’s ill health.9 The Judge noted that, but for Mr Henderson’s health, his sentence would have “unquestionably” been one of imprisonment.10

Application to adduce evidence

[6]    Mr Henderson applies to adduce evidence as to the level of profit or income derived from his business in the form of an affidavit of a forensic accountant, Paul Moriarty, dated 5 August 2021. To be admissible, evidence adduced on appeal must be fresh, credible and cogent.11 According to Mr Moriarty’s evidence, the income derived from the brokerage was relatively modest at about $18k.

7 District Court decision, above n 1, at [3].

8 At [4].

9 At [6].

10 At [5].

11     Lundy v R [2013] UKPC 28, [2014] 2 NZLR 273 at [117]-[120]; and R v Bain [2004] 1 NZLR 638

(CA) at [22] and [26].

[7]    This evidence is not fresh. It could have been assembled well before sentencing. It is cogent insofar as it reveals the scale of the benefit to Mr Henderson associated with the offending. I am prepared to allow it in on that basis. But for reasons that I will shortly explain, I do not consider it makes a material difference to the outcome in this case.

Threshold on appeal

[8]    Mr Henderson has a first appeal against sentence as of right under s 244 of the Criminal Procedure Act 2011. This Court must allow the appeal if it is satisfied there was an error in the sentence and a different sentence should be imposed.12 Otherwise, the appeal must be dismissed.13

Assessment

[9]    Mr Ameye, counsel for Mr Henderson, submits the starting point imposed in the District Court was too high, referring to R v Andrews.14 I agree in part. First, in Andrews, from a starting point of 18 months’ imprisonment on 11 charges, the District Court Judge imposed a sentence of 15 months’ imprisonment.15 The Court of Appeal was only concerned with whether the sentence should have been commuted to a sentence of home detention.16 The appeal was dismissed.17 It therefore offers little direct assistance to the present case save insofar as that Court emphasised the importance of deterrence in cases like this.

[10]   Second, a starting point of 18 months’ imprisonment for concealing property together with a ten-month uplift for the deception and managing a company while bankrupt charges appears severe in comparison with R v Clarke, which Mr Ameye also relied on.18 That case involved seven charges and arguably a higher level of

12     Criminal Procedure Act, s 250(2).

13     Section 250(3).

14     R v Andrews [2013] NZCA 281.

15     R v Andrews DC Tauranga CRI-2009-070-6443, 13 March 2013.

16     Above n 14, at [18] and following.

17 At [28].

18     Clarke v Ministry of Business, Innovation and Employment [2020] NZHC 63.

sophistication,19 and attracted a starting point of 22 months’ imprisonment.20 But, the period of the offending in this case, six years, is a seriously aggravating feature not present in Clarke. It reveals an arrogant disregard by Mr Henderson for his obligations while insolvent. It mandated a firm deterrent response. Having said that, and with the benefit of the review undertaken by Woolford J in Clarke, a starting point of 28 months’ imprisonment is disproportionate to the offending. A starting point in the order of 22-24 months’ imprisonment for the totality of the offending better reflects Mr Henderson’s culpability.

[11]   I turn then to the discount for personal factors. An eight-month sentence of home  detention  broadly   corresponds   to   16-month   term   of   imprisonment.   Mr Henderson therefore received cumulative discounts of about 12 months from the starting point, or 42 per cent. That is a very generous discount given that a five to 10 per cent discount for his guilty pleas was within range.   The effect of this is that    Mr Henderson received a 32-37 per cent discount for his personal circumstances. From a starting point of 22 months, that is still an effective cumulative discount of 27 per cent. The commuting of sentence to home detention also reflects a strongly rehabilitative approach. While understandable given Mr Henderson’s poor health, it was nevertheless generous when compared to the outcomes, imprisonment, in the cases cited to me.21

[12]   Overall, even assuming a starting point of 22 months’ imprisonment, an end sentence of eight months’ home detention is within range.

Result

[13]The appeal is therefore dismissed.

19 Mr Clarke was an accountant. His offending related to extravagant spending shortly before his bankruptcy, supervision of a bookkeeper, failure to file a statement of affairs or keep and preserve a proper record of transactions, failure to answer questions and concealing funds totalling

$78,048.49 and fraudulently disposing of shares valued at $180,000 and $100,000. See [94] and following.

20 Clarke, above n 18, at [95] and [97].

21     Refer Andrews, above n 14, at [20] onwards and the cases cited therein; and Clarke, above n 18,  at [62].