Khan v The the Queen
[2022] NZCA 417
•7 September 2022 at 10:00 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA160/2022 [2022] NZCA 417 |
| BETWEEN | MOHAMMED MASROOF KHAN |
| AND | THE QUEEN |
| Hearing: | 15 August 2022 |
Court: | Katz, Wylie and Palmer JJ |
Counsel: | R P Chaudhry for Appellant |
Judgment: | 7 September 2022 at 10:00 am |
JUDGMENT OF THE COURT
AThe application for leave to appeal out of time is granted.
BThe appeal against conviction is allowed.
CThe conviction is quashed.
DThe sentence imposed is set aside.
ENo retrial is ordered.
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REASONS OF THE COURT
(Given by Wylie J)
Introduction
On 15 October 2018, the appellant, Mohammed Khan, was convicted following a trial before a jury in the District Court at Hamilton of one charge of causing loss by deception.[1] Mr Khan was ordered to pay reparation of $26,656.49,[2] and on 30 April 2019 he was sentenced to six months’ community detention .[3]
[1]Crimes Act 1961, s 240(1)(d).
[2]R v Chand DC Hamilton CRI-2017-019-4282, 3 December 2018 (minute of Judge Spear) at [7].
[3]R v Hussain [2019] NZDC 1270 at [20].
On 4 April 2022, Mr Khan filed a notice of appeal against both his conviction and the sentence imposed.
Leave to file an appeal out of time
The appeal was filed out of time by some two years and one month.
(a)Mr Khan has filed an affidavit explaining the reasons for his delay. He says that he experienced financial difficulties as a result of his conviction and that his wife did not support him lodging an appeal.
(b)The Crown submits that the reasons offered for the delay are unsatisfactory. Nevertheless, it acknowledges that the appeal has merit and should succeed. Accordingly, it did not oppose an extension of time for the filing of the notice of appeal.
The interests of justice must prevail. Notwithstanding that the reasons given for the failure to appeal within time are not particularly satisfactory, we grant leave to file the appeal out of time.
Background
Mr Khan went to trial with two co-offenders, Vimlesh Chand and Ashaad Hussain. A third co-offender — Sanita Singh — had pleaded guilty prior to trial.
The Crown alleged that all four defendants participated in a scheme of deception that caused loss to a finance company, New Fields Ltd. The company traded as Interface Financial (Interface) in the business of invoice factoring. It purchased invoiced debts from the vendors of goods. It was paid by the vendors’ customers on due date. The advantage for the vendors was that they obtained cashflow. Interface obtained reimbursement from the customers and charged the vendors for its services. To guard against the risk of default, Interface used standard customer and debt verification processes. It did background checks on the customers named in the invoices. It called the customers to verify their identities. It obtained from each customer a “notification of sale form” in which the customer confirmed that the debt had been incurred, that it was not disputed, and that it would be paid to Interface.
Mr Chand and Ms Singh operated a company called Chands Enterprises NZ Ltd (Chands Enterprises) which ran a store called “Big Bear”. They sold assorted homeware items and Indian goods in the store. In August 2015, they approached Interface seeking cashflow support. Invoices rendered by Chands Enterprises to its customers were provided to Interface recording significant orders. Interface agreed to pay approximately 90 per cent of the value of the invoices to Chands Enterprises’ bank account and to pay the remaining 10 per cent, less its fees, when the customers settled their accounts.
Mr Khan owned a car dealership. He also had known Ms Singh and Mr Chand for some years. The Crown case against Mr Khan was as follows:
(a)In October 2015, Ms Singh and/or Mr Chand contacted Interface, advising that they wished to sell three invoices purportedly rendered to Mr Khan’s business by Chands Enterprises.
(b)Ms Singh and/or Mr Chand provided Interface with a notification of sale form containing details of Mr Khan’s business and his personal details. The notification of sale form had been signed by Mr Khan.
(c)Ms Gallaher of Interface contacted Mr Khan by phone. She referred to the notification of sale form and requested that Mr Khan verify the invoices. Mr Khan verified the invoices and agreed to pay the invoiced debts to Interface when they fell due. Based on this assurance, Interface purchased the invoices from Chands Enterprises.
(d)In November 2015, Interface received full payment of the invoiced debts. The payment was made by Ms Singh and Mr Chand and not by Mr Khan.
(e)Interface then purchased six further invoices purportedly rendered to Mr Khan’s business by Chands Enterprises. Interface did not make any further enquiries in relation to these invoices. It suffered a loss of approximately $79,000 when some of them were not paid in full.
(f)When Interface discovered that a number of the repayments had been made by Chands Enterprises, it tried to contact Mr Khan. He was not available.
(g)In February 2016, Interface put Chands Enterprises into receivership. It approached Mr Khan again. He maintained that the invoices were genuine. When the receivers took steps to recover the invoice debts from him, he denied having had anything to do with Interface or with Ms Singh or Mr Chand.
(h)At trial, Mr Khan’s evidence was that Ms Gallaher contacted him seeking credit references for Ms Singh and Mr Chand because they had previously purchased a car from him. He denied having any legal interest in one of the businesses to which invoices had been rendered and denied that the signatures on the notification of sale forms were his.
The offending alleged to have been committed by Mr Hussain was in all essential respects identical.
Mr Khan and Mr Hussain were both charged with causing loss by deception, contrary to s 240(1)(d) of the Crimes Act 1961. As noted, on 15 October 2018, Mr Khan, together with Mr Hussain and Mr Chand, was found guilty of the charge.
Mr Hussain’s appeal
On 20 May 2019, Mr Hussain filed a notice of appeal. Inter alia, he alleged that the trial Judge erred in directing the jury on the elements of the offence charged.
The appeal came before this Court in February 2020. The relevant question in the Judge’s question trail which was challenged on appeal read as follows:
Has the Crown proven beyond reasonable doubt that [Mr Hussain] played a knowing part in the scheme of deception of [Interface] by confirming at times that the invoices were legitimate[?]
This Court concluded that:[4]
(a)It was not sufficient for the jury to only consider whether Mr Hussain played “a knowing part in the scheme of deception”.[5] The question did not specify what knowledge Mr Hussain was required to possess or the date at which the state of his knowledge was to be assessed. It did not require the jury to be sure that Mr Hussain knew, when he spoke to Ms Gallaher of Interface, that Chands Enterprises would be issuing further false invoices in the future. The Court held that this was an essential element the Crown was required to establish to prove that Mr Hussain knowingly assisted in deceptive conduct that was causative of Interface’s loss.[6]
(b)The reference to Mr Hussain confirming “at times” that the invoices were legitimate created a further difficulty.[7] It was a reference to conversations that Mr Hussain had had with Interface and the receiver, but these conversations took place after the final invoices had already been purchased by Interface. Any statements made by Mr Hussain could not have contributed to the loss sustained by Interface. The jury may have wrongly taken them into account when considering the state of Mr Hussain’s knowledge.[8]
Accordingly, the Court found that the jury was not properly directed on an essential element of the offence and that irrelevant considerations introduced by the question trail may have influenced the verdict in relation to Mr Hussain.[9] The appeal was allowed, Mr Hussain’s conviction was quashed and a retrial was ordered.[10]
Mr Khan’s position
[4]Hussain v R [2020] NZCA 85.
[5]At [28].
[6]At [28].
[7]At [29].
[8]At [29].
[9]At [30].
[10]At [31]–[33].
Mr Khan’s position is identical to that of Mr Hussain. Both Mr Khan and Mr Hussain faced the same charge. They were tried at the same time. The Crown case against both was in all material respects the same. Both advanced similar defences. The question trails used by the Judge for Mr Khan and Mr Hussain were, in all essential respects, identical.
The Crown accepts that Mr Khan’s position cannot be distinguished from Mr Hussain’s position. It acknowledges that, given this Court’s decision in relation to Mr Hussain’s appeal, Mr Khan’s appeal must be allowed.
The Crown’s concession is appropriate and properly made. Mr Khan’s appeal against conviction is accordingly allowed. As a result, it is not necessary for us to separately consider the appeal against sentence.
Result
The appeal against conviction is allowed.
Mr Khan’s conviction is quashed.
The sentence imposed on Mr Khan is set aside.
Retrial
This Court ordered that Mr Hussain should face a retrial. We were advised by counsel for the Crown that a fixture was allocated for the retrial but that, in light of lengthy delays and rescheduling arising out of the COVID-19 pandemic, there were discussions between the Crown and counsel for Mr Hussain regarding a potential resolution. Interface, as the victim of Mr Hussain’s offending, was consulted. It was reluctant to participate in a retrial. It was only concerned about recovering the monies it had lost. The Crown accepted that Mr Hussain had already served a sentence of community detention and that he had paid the total reparation ordered by the District Court. The matter was resolved on the basis that the reparation paid to Interface would be retained by it and that no steps would be taken by Mr Hussain to recover the monies paid. The Crown then sought and obtained leave to withdraw the charge pursuant to s 146 of the Criminal Procedure Act 2011.
We raised with counsel whether we should order a retrial for Mr Khan. Counsel for Mr Khan advised that he would speak to his client regarding the reparation payment made pursuant to the sentence imposed. He has filed a memorandum advising that Mr Khan will not seek to recover the reparation payment already made to Interface.
The Crown does not, as a result, seek an order for a retrial.
Mr Khan has effectively served the sentence imposed. Reparation has been paid to Interface and Mr Khan, through his counsel, has agreed not to seek recovery of the monies paid. No retrial is ordered.
Solicitors:
Chaudhry Legal, Manukau for Appellant
Crown Solicitor, Manukau for Respondent
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