Jain v The Queen
[2018] NZCA 408
•5 October 2018 at 2.00 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA335/2018 [2018] NZCA 408 |
| BETWEEN | JOTI JAIN |
| AND | THE QUEEN |
| Hearing: | 30 August 2018 |
Court: | Miller, Mallon and Gendall JJ |
Counsel: | P F Wicks QC for Appellant |
Judgment: | 5 October 2018 at 2.00 pm |
JUDGMENT OF THE COURT
AThe application for leave to adduce further evidence is declined.
BThe appeal is dismissed.
____________________________________________________________________
REASONS OF THE COURT
(Given by Mallon J)
Introduction
Joti Jain pleaded guilty to 21 charges of tax evasion.[1] She was sentenced in the High Court to nine months’ home detention.[2] She appeals against her sentence on the ground that it is manifestly excessive because sentencing Judge, Moore J, adopted a starting point that was too high. She also contends the Judge failed to provide a discount for relevant personal mitigating factors.
[1]This involved 17 charges of aiding the provision of false, incomplete or misleading information to the Commissioner of Inland Revenue intending to evade assessment or payment of tax (under the Tax Administration Act 1994, ss 143B(1)(c), 143B(1)(f) and 148); and four charges of aiding companies to knowingly not provide information to the Commissioner when required, with intent to evade the assessment or payment of tax (under ss 143B(1)(b), 143B(1)(f) and 148).
[2]R v Jain [2018] NZHC 981.
Ms Jain also seeks leave to adduce new evidence. This evidence is an affidavit from Rupinder Chahil, a co-defendant with whom she was in a personal relationship at the time of the offending.
Background
Mr Chahil has been in property development and hospitality since 2000. One of his businesses was a chain of Indian restaurants, named Masala. These restaurants were operated by 17 Masala companies. Ms Jain had met Mr Chahil in 2002 and was initially employed in one of the Masala restaurants. She later became a general manager and a named director of four of 17 companies (the Jain companies) and was involved in the matters that are the subject of the charges.
The offending involved systematic underreporting of cash sales at the Masala restaurants by filing false or misleading GST returns over a period of six years (1 April 2008 to 31 March 2014). These returns underreported some $6.5 million in sales, with a total of $800,555.05 of GST evaded. The offending also involved failing to provide income tax returns for the Jain companies over a period of four years (31 March 2010 to 31 March 2014).
The summary of facts acknowledged that Ms Jain’s involvement was carried out on Mr Chahil’s instructions. It also set out Mr Chahil’s involvement in the offending, and that of Mr Gupta who was the group accountant for the Masala companies. Mr Chahil and Mr Gupta have also been charged with money laundering. Ms Jain received an immunity against prosecution for her role in this aspect of the offending.
Personal circumstances
Ms Jain has convictions for other offending concerning the Masala restaurants. This involved providing false and misleading information to Immigration New Zealand and employee exploitation over the period between May 2012 and October 2014. She was sentenced in the District Court at Auckland on 16 October 2015 to 11 months’ home detention.[3] After serving that sentence she was served with a deportation notice to India. She returned to India in early 2017.
[3]Ministry of Business, Innovation and Employment v Jain [2015] NZDC 21123.
On 23 May 2017 Ms Jain was granted a limited visa to return to New Zealand. As stated on that visa, it was granted “for the express purpose of facing charges brought by the Inland Revenue Department (IRD) and to provide evidence in any court proceedings relating to her co-defendants”. The visa also stated that Ms Jain could not undertake employment nor study in New Zealand.
Ms Jain returned to New Zealand under that visa on 8 June 2017. She entered guilty pleas in the High Court to the tax charges on 21 August 2017. She was not sentenced until 8 May 2018. At that time she was sentenced to imprisonment because she did not have a suitable home detention address. That sentence was deferred to 29 May 2018. She was resentenced to home detention on 28 May 2018 by which time she had a suitable address.
Ms Jain’s explanation for the tax offending, as set out in her pre-sentence report, was that she was only a “front face director” acting on the instructions of Mr Chahil. She said Mr Chahil was violent, had assaulted her several times and she was afraid of him. The pre-sentence report informed the High Court Judge that Ms Jain has two adult children and was living with one of them while awaiting sentencing. She was also supported by her ex-husband who had returned from overseas to support her. She owned a property in Remuera but was not living there due to safety concerns. She wished to remain in New Zealand due to fears for her safety in India.
In a letter addressed to the Judge, Ms Jain provided further detail. She explained that she had come to New Zealand from India with her husband and two children in May 2001. Her husband left New Zealand in 2006 and after that she entered a relationship with Mr Chahil. Mr Chahil was physically and emotionally abusive to her throughout their relationship.
Ms Jain said she was merely a “proxy” director and shareholder in the Jain companies. Mr Chahil was the true owner and (shadow) director of them and all the other Masala companies. This had come about when Mr Chahil was convicted and sentenced to 18 months’ imprisonment for violence offences. Mr Chahil could not sponsor new chefs from India. Ms Jain and others were made directors and shareholders in the hope that Immigration New Zealand would approve work visas for prospective employees.
Ms Jain said that Mr Chahil was in control of the business, apart from a period of about four months when Ms Jain endeavoured to act as restaurant manager while Mr Chahil was in prison. She followed his instructions when signing documents and carrying out all business matters. She said she had tried to disentangle herself in 2010 but when Mr Chahil was out of prison the abusive relationship continued.
In her letter to the Judge she offered her apology for the offending. She said she accepted responsibility for her actions but hoped the circumstances she had explained helped the Judge understand them.
Ms Jain’s letter attached a statutory declaration which Mr Chahil had prepared for Ms Jain’s 2017 deportation hearing. In this, Mr Chahil said that Ms Jain was a nominal director and shareholder only, she acted under his direction and instructions and had no discretionary power at all. Ms Jain also provided a statement from a restaurant manager who worked for Mr Chahil. This said that Ms Jain was a “figurehead” and Mr Chahil had all the authority. There was also a letter from a solicitor who acted for the Masala companies, and from two others associated with the Masala business, to similar effect.
There were also letters of support from her ex-husband, her daughter and son, and her son’s partner. Amongst other things, they described how difficult it was for Ms Jain not being able to work since her return to face the tax charges. Her son, for example, said she had been effectively imprisoned for eight months since her return to New Zealand as she could not travel, she could not work and pay for her own living expenses and she had nothing to keep herself occupied. Her family members said Ms Jain’s mental health had suffered during this period. There was no medical report provided in support of this.
Sentencing
In setting the starting point for the offending, the High Court Judge considered the aggravating factors of the offending. He noted that it involved a systematic and substantial fraud, with a degree of sophistication, carried out deliberately and repeatedly over a six-year period. It involved stealing from the community for self‑enrichment and it gave the Masala companies an improper commercial advantage over competitors who were acting lawfully.[4]
[4]R v Jain, above n 2, at [28]–[29].
The Judge considered Ms Jain’s role in the offending. He noted her counsel’s submission that she played a “proxy” role and the material before him which supported this submission.[5] He considered the claims in that material were not to be accepted uncritically when the summary of facts did not refer to Ms Jain acting under coercion and nor to a controlling and abusive relationship.[6] The Judge raised the possibility of adjourning the sentencing for a disputed-facts hearing to take place on Mr Chahil’s alleged dominance of Ms Jain.[7] Ms Jain’s counsel did not support this and the Judge considered it would not have a material effect on the end sentence in any event.[8] The Judge sentenced Ms Jain on the basis that, although she was not the principal offender, she fully understood the fraud and played an integral part in it.[9] He regarded her culpability as substantial but less than her co-defendants.[10]
[5]At [29].
[6]At [31].
[7]At [32].
[8]At [32].
[9]At [33].
[10]At [33].
The Judge agreed with counsel that the most comparable case for setting the starting point was Mehmood v R.[11] He also agreed that Ms Jain’s culpability was less than in that case because Ms Jain was not a director of all the Masala companies and did not exercise principal control of them.[12] The Judge considered a starting point of three years and three months’ imprisonment was appropriate.[13] He reduced this to two years and nine months’ imprisonment because of totality considerations.[14] This was because there was some overlap with the earlier offending and, if the two sets of offending had been sentenced at the same time, concurrent sentences would have been imposed.[15]
[11]Mehmood v R [2015] NZCA 338, (2015) 27 NZTC 22-020.
[12]R v Jain, above n 2, at [37].
[13]At [40].
[14]At [44].
[15]At [40]–[44].
This overlap also meant it was not appropriate to uplift the starting point because of Ms Jain’s previous convictions. The Judge applied a 25 per cent discount for Ms Jain’s assistance in the prosecution of Mr Chahil and Mr Gupta. He applied a further 25 per cent discount for Ms Jain’s early guilty plea. He declined to provide any discount for other personal circumstances.[16] This meant an end sentence of one year and seven months’ imprisonment. Ms Jain was viewed as suitable for home detention. A sentence of nine months’ home detention was imposed.[17]
Application for leave to adduce new evidence
[16]At [60]–[62].
[17]At [66]–[67].
Ms Jain applies for leave to adduce new evidence in the form of an affidavit from Mr Chahil. In this affidavit Mr Chahil says he often used Ms Jain’s name on business affairs and signed documents in her name without her knowledge. He says she was a “proxy” director and shareholder only. She had no financial interest in the business and only acted under his instructions. He also says he was threatening and aggressive towards Ms Jain and he took advantage of this to ensure that Ms Jain acted as he wished.
The leave application is opposed by the Crown on the basis the new evidence is not sufficiently fresh, credible or cogent and it is not necessary in the interests of justice that it be admitted.[18] Ms Jain’s counsel accepts the affidavit is strictly not fresh because it could have been sought earlier. He submits leave should be granted in the interests of justice. He submits the evidence confirms and expands on her limited involvement and the influence Mr Chahil had on her.
[18]Lundy v R [2013] UKPC 28, [2014] 2 NZLR 273 at [120].
We decline to grant leave. As is accepted, it is evidence that could have been sought earlier. It has a degree of credibility in that it is consistent with other material before the Judge at sentencing. However, like that material, the claims that are made are quite general and they therefore cannot be accepted uncritically in the absence of a disputed-facts hearing. That possibility was not pursued at the time of sentencing when it could have been. The evidence is also not especially cogent. Similar material was before the Judge. The affidavit is essentially Mr Chahil’s further confirmation of that information. The Judge took it into account in deciding Ms Jain was less culpable than Mr Chahil. In these circumstances, had the affidavit been before the Judge, it would not have had a material effect on the sentence. It is therefore not in the interests of justice to grant leave.
First appeal ground: starting point
Ms Jain submits the starting point of three years and three months’ imprisonment was manifestly excessive in light of her role in the offending and the abusive nature of Mr Chahil’s relationship with her. She submits the Judge wrongly assessed the extent to which her offending involved an abuse of trust given these matters. She says the Judge should have adopted a starting point well below the four year starting point in Mehmood because of these matters.
We do not accept these submissions. The Judge accepted Ms Jain’s lesser culpability but was entitled to view her role as nevertheless substantial. As the summary of facts described, Ms Jain played a critical role albeit under Mr Chahil’s instructions. She was involved in instructing the managers to generate the cash sales reports, she attended the meetings at which the cash from the managers was collected and was involved in counting it, she collected the cash directly from the tills of the restaurants from time to time and she sometimes accompanied Mr Chahil when the cash was taken to Mr Gupta’s office.
We agree Mehmood provides an appropriate comparison. Mr Mehmood was convicted of 144 charges involving a calculated and systematic fraud on the New Zealand public of $1 million which this Court described as a gross breach of trust. The Court described the four-year starting point in Mehmood as “well justified” by the scale of his offending.[19] There is no mathematical percentage by which a secondary offender’s starting point should be reduced from that adopted for a principal offender. It depends on the circumstances. When assessed against Mehmood, it was open to the Judge in this case to take the starting point he did, particularly in light of the arguably generous totality adjustment he made.
Second ground of appeal: mitigating factors
[19]Mehmood v R, above n 11, at [27].
Ms Jain submits the Judge was wrong not to allow a discrete discount for Ms Jain’s voluntary return from India to New Zealand, her inability to work while she was on bail awaiting sentence, the adverse impact on her health and her genuine remorse.
The Judge considered each of these factors. He explained why he considered they did not warrant any further discount to the sentence.[20]
[20]Jain v R, above n 2, at [60].
The Judge accepted a voluntary return to a jurisdiction to face charges can warrant a discrete discount. He gave three reasons for not doing so in this case. First, Ms Jain had already received a substantial discount for her cooperation with the authorities as well as receiving an immunity on the monetary laundering charges.[21] To provide a further discount for her voluntary return would be unduly generous and to some extent double counting. Secondly, the information in the pre-sentence report suggested Ms Jain returned to New Zealand because she believed she would be a witness in the investigation of Mr Chahil rather than that she was to face charges.[22] Thirdly, Ms Jain had wanted to remain in New Zealand when she was deported. As her children are here and she was hoping to obtain a work permit to remain here, the Judge considered it was not a great hardship for Ms Jain to return.[23]
[21]At [56].
[22]At [57].
[23]At [58].
For the same reason, he did not regard the period Ms Jain had been on bail awaiting sentence as a great hardship. The bail conditions were not particularly onerous.[24] There was nothing unusual about the time Ms Jain had spent on bail and nor that she could not work during the period. The Judge regarded Ms Jain as largely minimising her role rather than remorseful for what she did. No discount for these matters was therefore warranted.[25]
[24]At [59].
[25]At [61].
The Judge noted Ms Jain was already receiving a 50 per cent discount for her cooperation and guilty pleas. If a further discount was applied he considered the sentence was at risk of being manifestly inadequate for the offending.[26]
[26]At [60].
The only error Ms Jain points to in the Judge’s consideration of these matters concerns the reasons she returned to New Zealand. Her counsel provided her limited visa details which expressly record that she was returning to face charges the IRD had brought. However, this was only one of the factors the Judge took into account in declining to provide a further discount. It does not follow that the Judge should have applied a further discount if he had correctly understood that she knew she would face charges on her return.
The Judge was correct to take into account the other incentives for her return, including her family ties and the 25 per cent discount already provided for her cooperation. His assessment of the other mitigating factors relied on was well open to him. We are not persuaded that Ms Jain’s voluntary return in the knowledge she would be facing charges should have led to a further discount to her sentence. Looked at overall the sentence of nine months’ home detention was available.
Result
The application for leave to adduce further evidence is declined.
The appeal is dismissed.
Solicitors:
Ryken & Associates, Auckland for Appellant
Crown Solicitor, Auckland for Respondent