Kerwin v Police

[2014] NZHC 2415

IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY

CRI-2014-406-10 [2014] NZHC 2415

BETWEEN

HAYDEN JAMES KERWIN

Appellant

AND

NEW ZEALAND POLICE Respondent

Hearing:	2 October 2014
Counsel:	R Harrison for Appellant E Riddell for Respondent
Judgment:	2 October 2014

INTERIM JUDGMENT OF GODDARD J

Solicitors:

Inangahua Chambers, Blenheim for Appellant

Crown Solicitor, Nelson for Respondent

KERWIN v NEW ZEALAND POLICE [2014] NZHC 2415 [2 October 2014]

Introduction

[1]      This is an appeal against sentence.

[2]      Following a plea of guilty, the appellant was convicted in the District Court on one charge of theft by a person in a special relationship and sentenced by Judge Russell to a term of imprisonment of two years, three months’.1   He was ordered to pay $50,000 in reparation.

[3]      The appellant must satisfy the Court that there is an error in the sentence imposed and that a different sentence should be imposed.

Facts

[4]      The appellant was employed by Wadsco Commercial Vehicle Centre Ltd (the Company) between July 2007 and December 2013.  He was described as a model employee for the first four years of his employment.   However, in 2011 he began stealing from the Company in order to support a methamphetamine addiction.  In the

course of 141 transactions the appellant stole a total of $90,637.20.2

[5]      The method of defalcation had a level of sophistication.  The appellant would sell parts owned by the Company and list the parts as stock in the computer system. He would also book parts to jobs that were in the workshop while selling the same parts  to  other  companies  and  to  individuals.    He  also  altered  the  Company’s computer system on a number of occasions in order to conceal his offending.

[6]      The appellant has no previous convictions.

First ground of appeal: loss suffered by the Company

[7]      In assessing the relevant aggravating factors, the Judge quantified the loss to the Company as $122,183.20.  That figure included the total amount stolen, as well

as further costs incurred by the Company directly related to the offending.

1      Crimes Act 1961, ss 220 and 223.   The maximum penalty for this offending is seven years’

imprisonment.

2      This figure was agreed upon between the parties after some dispute.

[8]      Mr Harrison initially submitted that the Judge should only have taken the agreed reparation sum between the parties into consideration.  That clearly cannot be correct.   The general approach to sentencing for fraudulent offending requires an assessment of culpability by reference to the amounts involved and to the losses suffered.3    It is the total impact of the offending on the victim that is relevant.  To focus solely on the amount of reparation agreed is artificial.

Second ground of appeal: starting point

[9]      The second ground of appeal is that the starting point was too high.

[10]     The general approach to sentencing for fraudulent offending was outlined by the Court of Appeal in R v Varjan:

[22]     Culpability is to be assessed by reference to the circumstances and such factors as the nature of the offending, its magnitude and sophistication; the type, circumstances and number of the victims; the motivation for the offending; the amounts involved; the losses; the period over which the offending occurred; the seriousness of breaches of trust involved; and the impact on victims.

[11]     In fixing a starting point of three years and three months’ imprisonment, Judge Russell assessed the aggravating features as follows: the Company was defrauded on 141 occasions over a 24 month period; the methods of defalcation showed some sophistication; the loss to the Company was $122,183.20; nothing had been repaid and repayments of only $10.00 per week had been offered; there was a gross breach of trust.

[12]     Mr Harrison, on behalf of the appellant, submitted that a starting point of three years or less would have been appropriate.   Ms Riddell for the Crown acknowledged that the starting point should have been three years.

[13]     Having regard to comparable cases referred to by the Judge, I am satisfied that a starting point of three years and three months was too high and that three years’ imprisonment is the appropriate starting point.

Third ground of appeal: Discount for mental health issues

[14]     In support of this ground of appeal, Mr Harrison submitted that the appellant should have received a discrete discount due to his mental health issues.

[15]     The appellant attributed his drug addiction to underlying mental health issues arising from a traumatic event in his past.  An alcohol and drug report dated 10 July

2014 indicated his addiction to methamphetamine was a major contributing factor to his offending.   According to the report writer, the appellant has not presented as using methamphetamine since January of this year, and all of his urine tests are clear.

[16]     A report from health and social services dated 11 July 2014 advised:

[The appellant] attended ten one to one counselling sessions … The issues addressed were grief and loss associated to a friends death by suicide and the trauma he experienced in finding the body…

To his credit [the appellant] has worked earnestly on the above mentioned

issues and remains remorseful for his actions…

At this stage [the appellant] continues to stay engaged for ongoing support and to maintain the change made thus far.

[17]     A letter from the appellant’s general practitioner advised:

[The appellant] has struggled with anxiety and depression for many years, with  his  first  treatment  with  anti-depressant  beginning  in  2009.     His problems  with chemical  abuse, using amphetamines,  was an  unfortunate attempt on his behalf to self medicate so that he could go to work.   The subsequent addiction and theft to provide the funds to obtain the amphetamines   were   an   unforeseen   complication.      Since   he   has acknowledged    his   chemical   addiction   and   his   ceased   using   the amphetamines the anxiety and depression have presented themselves to a major degree because of his original underlying problems and subsequent exacerbation associated with withdrawal from amphetamine.

[18]      In order to be of direct relevance, however, there must be a causative link

between the offending and the appellant’s mental health issues.4

[19]     Ms Riddell suggested the primary cause of the offending was the appellant’s

drug addiction, rather than his underlying mental health issues.  To give a discrete

discount in such circumstances would, she submitted, be wrong in principle and contrary to public policy.

[20]     The doctor’s report confirmed that the appellant used methamphetamine to treat his underlying anxiety and depression.   This, it is said, led to his addiction, which in turn led to the appellant’s offending.  It is contended that if the appellant is able to address his addiction and his underlying psychological issues his risk of re-offending may be reduced.  As recorded, he has already taken steps towards this by engaging with health and social services.

[21]     Depression and anxiety (for whatever reason) leading to disinhibition through substance or alcohol abuse, followed by a need to fund an expensive drug addiction will not, however, exonerate criminal offending, although these factors may well explain why it occurred.  I accept Ms Riddell’s submission that to accept such factors as justifying a discrete discount would be wrong in principle and contrary to public policy.

Fourth ground of appeal: Discount for engaging in restorative justice and amount of reparation

[22]     The appellant’s sentence was reduced by two months for his remorse and one month for his participation in restorative justice: a combined discount of just over five per cent.   Mr Harrison submitted this was an insufficient discount to reflect those factors.

[23]     Judge Russell noted that, at the restorative justice meeting, the appellant had apologised to those affected by his offending and made an offer to pay reparation at

$10.00 per week, which would increase when he gained future employment. However, he had not at that time been willing to sign over ownership of his vehicle to the Company as part reparation.  Coupled with the offer of such minimal weekly reparation, this was perceived by the victim as indicative of a lack of remorse and the meeting was abandoned.

[24]     Mr  Harrison  contested  this  portrayal  of  the  restorative  justice  meeting, advising the Court that the victim Company said that if he signed over ownership of

his vehicle to them, they would deduct $5,000 from the reparation figure.   The appellant had felt his vehicle was worth more.  Since their meeting, the appellant has received a sum of money from the resolution of relationship property issues and this, along with the proceeds of sale of his car, has been paid towards reparation (a total of

$14,000).  In addition, he has now been able to find part time work and says he is paying reparation of up to $50 per week.

[25]     Ms Riddell argued that the discount was generous at the time, given the restorative meeting was unsuccessful and remorse appeared to be limited at that time.  She referred, in contrast, to other cases where a discount of 8 per cent has been allowed for remorse, if restorative justice has been successfully completed.

[26]     In discussion with counsel at the appeal hearing this morning, I inquired whether the victim Company may consider it now in its best interests if the appellant were to continue in his current employment and therefore be able to continue his weekly reparation payments of up to $50?  If the owner’s view were that there would be sufficient retribution in the appellant being sentenced to home detention, so that he could continue in employment and continue paying reparation, then the Court is prepared to consider whether the reparation of $14,000 that is now available post the restorative justice meeting and the fact the appellant has found part time work and will pay reparation of up to $50 per week, would reflect greater contrition than had been  in  evidence  earlier  and  justify  a  greater  percentage  discount  for  genuine remorse.  I left it as very much a matter for the owner of the Company to consider and come back to the Court on.

[27]     The hearing was stood down so that both counsel could take instructions on and report back to the Court.

[28]     Ms Riddell has taken interim instructions directly from the owner of the company, who says he does not accept there is true contrition, to the degree that would be required; and believes the current sentence to be appropriate.  His view is that any reparation payments may be offset by potential loss in other ways through the appellant’s current employment, which he believes is with a business competitor. He has apparently not yet received any of the reparation payments made to date.

Mr Harrison has also taken interim instructions from the appellant and spoken with his new employer.   There is not sufficient time, however, to positively canvas all aspects that the Court needs to consider in reaching a conclusion on reparation and the appellant’s true prospects of rehabilitation.   There is much at stake for all concerned and the Court requires more information and of a formal nature.   For those reasons, I am adjourning the appeal for a further period until 28 November

2014 at 10.00 am, to enable affidavits and any other relevant information on health, employment and reparation matters to be placed before the Court.

Interim decision

[29]     The sentence will ultimately be adjusted to take account of the reduction in starting  point  to  one  of  three  years.    Reconsideration  of  the  reduction  already allowed  by the  Judge  for  remorse  and  for  participation  in  restorative  justice,  a combined discount of just over five per cent, will not be undertaken until the appeal hearing resumes on 28 November 2014.

Interim bail

[30]     In  the  meantime,  the  appellant  is  granted  a  continuation  of  bail  on  the following conditions:

(a)     he is to reside at the address of 16 Macey Crescent, Blenheim; (b)         he is to observe a 24 hour curfew to the above address unless:

(i)     he is travelling to and from and attending work at Lent Trucking

(to carry a log book for work attendance purposes); (ii)     he is attending counselling or medical appointments;

(iii)as an exception to (i) and (ii) above he may, if in the constant company of  either of  his  parents,  leave  the  residence on  three occasions per week for non-medical or counselling reasons;

(c)     the current surrender passport condition is to remain.

Interim order for payment of reparation

[31]     The  District  Court  at  Nelson  is  directed  to  pay to  the  order  of Wadsco Commercial Vehicle Centre Limited the sum of $14,215.00 currently held under PPN number 1512341396 in the name of Hayden James Kerwin of 16 Macey Crescent, Blenheim.

Goddard J