Lock v The Queen
[2019] NZCA 473
•2 October 2019 at 10.00 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA653/2017 [2019] NZCA 473 |
| BETWEEN | TREVOR JAMES LOCK |
| AND | THE QUEEN |
| Hearing: | 31 July 2019 |
Court: | Miller, Peters and Woolford JJ |
Counsel: | M W Ryan for Appellant |
Judgment: | 2 October 2019 at 10.00 am |
JUDGMENT OF THE COURT
AApplication for leave to admit further evidence granted.
BAppeal against conviction dismissed.
CAppeal against sentence allowed in part. Sentences on charges 19 and 20 (providing false information to the Serious Fraud Office) are to be concurrent with charges 1, 9 and 17.
____________________________________________________________________
REASONS OF THE COURT
(Given by Miller J)
This appeal against conviction and sentence is about what passed between Mr Lock and his then counsel, Jeremy Bioletti, at his trial on multiple charges of deceiving business clients to secure a pecuniary advantage or benefit. It is his case that Mr Bioletti: failed to call Mr Lock despite clear instructions that he wanted to give evidence; failed to present the defence that he wanted to advance; and failed to call witnesses whom Mr Lock had told him to call.
Each of these failings, if established, would lead to the conclusion that Mr Lock did not have a fair trial and his appeal must be allowed, whether or not they affected the result.[1]
The charges
[1]Criminal Procedure Act 2011, s 232(4)(b). See for example R v K(CA421/2008) [2009] NZCA 176; and Mateparae v R [2017] NZCA 231.
The charges were brought by the Serious Fraud Office and tried before Judge Collins sitting as a judge alone. The following overview is drawn from his reasons for verdict:[2]
[1] At material times the defendant Trevor James Lock was a man in his early 50s. He had tertiary qualifications in science. He had significant work experience in food production, particularly in the dairy sector.
[2] During 2012–2015 he operated two companies relevant to these charges. The first was Nubiotics Limited, the second Nu-Brands Limited and Mr Lock was the mind and operating hand of both companies. He and they were based in Morrinsville.
[3] The evidence established that by early 2012 Mr Lock personally was in severe financial difficulties. He had personal financial obligations he could not meet. His then operating mechanism Nubiotics Limited had no assets and little cashflow. From June 2012 the Crown allege that Mr Lock embarked upon a course of conduct that provides a context for many of the charges.
[4] The Crown case is that the course of conduct involved a pattern of behaviour. In summary the Crown says that pattern involved individual instances of obtaining a deposit from a particular customer who wished to import either infant milk formula or Manuka honey. The deposit was then utilised to meet Mr Lock’s personal debts, or living costs or the operating overheads of Nubiotics or Nu-Brands. In each instance virtually no part of a deposit was utilised to advance the contractual obligations to provide product to an export market.
[5] The recurring pattern of conduct the Crown allege then sees Mr Lock deceive those who have paid a deposit. That deception is said to occur when Mr Lock was pressed for either delivery of the milk powder or honey or refund the deposit. The Crown allege in a number of the charges that he then told one or more lies to “buy time”.
(Footnotes omitted.)
[2]R v Lock [2017] NZDC 16796 [DC verdict].
There were 20 charges. Eleven of them were for obtaining by deception,[3] the essential elements being: the obtaining of something of value, being a pecuniary advantage or benefit; the absence of any claim of right; and the obtaining was brought about by statements the defendant either knew to be false or was reckless as to their truthfulness.
[3]Crimes Act 1961, s 240(1)(a).
Mr Lock also faced four charges of forgery,[4] two of using a document,[5] one of theft in a special relationship,[6] and two of providing false information to the Serious Fraud Office.[7]
[4]Two brought under s 256(1) and two under s 256(2) of the Crimes Act.
[5]Crimes Act, s 228(1)(b).
[6]Crimes Act, s 220(1)(b).
[7]Serious Fraud Office Act 1990, s 45(e).
The charges related to Mr Lock’s conduct between May 2012 and October 2015. Over that period he entered contracts to supply milk products and honey to seven customers on behalf of his companies, Nubiotics and Nu-Brands. He sought deposits from the customers. The Crown said that he obtained deposits by making false representations and avoided claims for repayment by making false claims afterward.
The defence broadly was that the element of obtaining a pecuniary advantage had not been proved or there was no causal connection between any deception and the benefit. The defence otherwise argued that the facts had not been made out.
Mr Lock did not give or call evidence, and there was little dispute about the facts, most of which were proved by documentary exhibits. The Judge recorded that:
[9] Very little, if any factual matters were in dispute. There were many documentary exhibits. They were produced by consent. The actual transactions, communication between Mr Lock and various customers, the receipt of funds into particular bank accounts, the application of those funds from the bank accounts and the representations that Mr Lock made to various witnesses/customers was not challenged. No credibility or reliability findings are required in this case.
The Judge’s findings: an example
The Judge found the Crown claims unanswerable on the evidence. By way of illustration, we recite his findings on charge 1:[8]
[8]DC verdict, above n 2.
Charge 1 — Section 240(1)(a) Crimes Act 1961 — obtaining by deception:
That Trevor James Lock between 5 April 2013 and 8 May 2013 at Morrinsville, by deception and without claim of right, obtained control over property, namely $113,075.00 by making false representations intended to deceive any person and known by him to be false or being reckless as to whether they were false in a material particular.
Particulars:
False representations made to Austrina International Pty Ltd or its agents, including:
• that he was ready to start production so that 20% payment was due (SFO 247 and SFO 256);
• that the order to GMP had been placed again (SFO 256).
[38] By written agreement dated 17 May 2012 Austrina International Pty Ltd contracted with Nubiotics Limited to buy 45,000 cans of infant formula. Pursuant to that agreement Austrina paid $160,000.00 by way of deposit on 20 June 2012.
[39] None of that deposit was spent by the defendant to advance the contract for the supply of infant formula to Austrina. By the end of July 2012 those funds had been spent by the defendant on a variety of items including repayment of personal debt.
[40] From the payment of the deposit in June 2012 through to December 2012 the defendant communicated with Austrina in a way which suggested the contract was being advanced. Any delay was attributed to the time involved in getting regulatory approval within China for the formula and for labelling.
[41] On 12 April 2013 the defendant emailed Austrina as follows:
Please find attached invoice for payment. I think this is the best way to do this. We are ready to start production so the 20% payment is due.
[42] Further, on 19 April 2013 the defendant emailed Austrina:
Finally we can start moving on this. I have placed the order again and also sent through the artwork and manufacturing specifications so we have already begun the process.
[43] The representations in those emails were false. Production was purported to be undertaken by GMP. The witness Ravinesh Kumaran, the Financial Controller of GMP at the time, made clear in his evidence on multiple occasions that production would not commence unless the deposit requirements of GMP had been met.
[44] GMP’s deposit requirements were never met. Therefore the position was never reached where production was due to commence.
[45] Incidental to this charge but importantly in terms of the contract Mr Kumaran finally came to the view the GMP staff were spending far too much time and effort on the defendant’s proposals with no funds ever eventuating. He ultimately terminated all dealings with Mr Lock.
[46] As a direct result of the defendant’s representations, as particularised in the charge, and also against the continued indication that the contract was being advanced Mr Kerley of Austrina authorised the further payment on 8 May 2013 of $113,075.00. Mr Lock had been pressing for this payment.
[47] Therefore, to conclude charge 1:
(i) the defendant gained control over $113,075.00;
(ii)the defendant had no claim of right and no evidential foundation exists to suggest otherwise;
(iii) false representations were made by the defendant;
(iv) the defendant knew those representations were false;
(v)the representations were causative of the obtaining by the defendant of $113,075.00.
[48] None of the above conclusions were challenged in any way during the hearing, and nor could they be. Mr Bioletti did not pursue the futile with respect to this charge. The defendant put the Crown to proof and the Crown have proved all essential elements beyond reasonable doubt.
(Footnotes omitted.)
It will be seen that representations were proved and shown to be false, unequivocally so in the Judge’s view. The Judge also found that Mr Lock knew his representations were false and that the representations caused the other party to confer a benefit upon him. The Judge found all charges proved beyond reasonable doubt.[9]
The conviction appeal
[9]DC verdict, above n 2, at [187].
The appeal does not confront the Judge’s findings directly. Mr Ryan’s submissions focused rather on the conduct of trial counsel, as noted earlier. In accordance with usual practice a waiver of privilege was given and Messrs Lock and Bioletti swore affidavits and were cross-examined before us.
An affidavit of Brian Ellis was also filed. He is a former solicitor who deposed that he could have given evidence that a transaction for the sale of honey was cancelled after the deposit was paid because the purchasers had failed to supply a letter of credit to guarantee payment of the balance, leaving Mr Lock with the deposit. Although he evidently was unaware of it, Mr Ellis was in fact a witness for the Crown at trial. He had given a brief and it was admitted by consent. We return to his evidence below.
There was a direct conflict between Messrs Lock and Bioletti. Mr Lock deposed that he instructed counsel that he never intended to defraud; there were delays in performance but they were genuine. Mr Bioletti did not cross-examine witnesses about this or put Mr Lock’s case. He did not follow instructions to discredit a witness who had served a prison sentence for fraud either. At the end of the Crown case Mr Lock told Mr Bioletti that he wanted to give evidence but Mr Bioletti failed to advise him about the pros and cons or give him an opportunity to go into the witness box. Rather, Mr Bioletti assured him that there was a technical defence based on a Privy Council case.
Mr Lock also said that he had previously developed a defence strategy with a barrister, Stuart Connolly, who has since died. They proposed to call five or six named witnesses, one of them was Mr Ellis. Mr Bioletti was told to call those people but did not. (Mr Ellis is the only one of them to have sworn an affidavit deposing to what he might have said had he been called.)
Mr Lock also said that Mr Bioletti did not fully explain the right to trial by jury, advising rather that the technical legal nature of the defence made a judge alone trial preferable.
Lastly, Mr Lock complained that Mr Bioletti failed to get a certified copy of all client files held by the two companies, on computer hard drives.
Mr Bioletti flatly rejected these claims. He deposed that Mr Lock instructed that he had made the representations and had deceived the complainants. That precluded a defence based on lack of intent. Mr Lock’s “defence” was that he was expecting a large sum of money from overseas and would repay the complainants. The defence had to be one of denying that Mr Lock received a pecuniary advantage or benefit.
Mr Bioletti deposed that he did follow instructions, which were that Mr Lock accepted he had made false representations. The Crown case on that point was unanswerable. Mr Lock never instructed that he wanted to give evidence, nor did he say that he wanted trial by jury or that he wanted Mr Bioletti to call witnesses. He does not recall being asked to obtain copies of the hard drives.
The oral evidence resolved the conflict between client and former counsel. We are satisfied that Mr Lock admitted that he had made false statements which can only have been made with the intention of deceiving the clients. He may have hoped all would go well and may have meant to deliver the product or repay the clients in time but that is no answer to the charges. He did not instruct Mr Bioletti to call specific witnesses; rather, he wanted counsel to contact them. Mr Lock decided on advice to opt for a judge-alone trial. He knew he could give evidence but accepted counsel’s advice that he should not. The documents that Mr Lock referred to appear to have been disclosed and were discussed between him and Mr Bioletti at a number of meetings.
That being so, we are not dealing with a fundamental failure of counsel. The question is whether something went wrong at the trial and whether there is a real possibility that that event affected the result.[10]
[10]Criminal Procedure Act, s 232(4)(b).
We note that there is one respect in which an error was established. Mr Bioletti did not tell Mr Lock that he might benefit at sentencing were he to offer a guilty plea to the Serious Fraud Act charges, which he admitted. It was not suggested before us that by doing so Mr Lock would necessarily compromise his defence to the other charges. Mr Bioletti’s explanation was that guilty pleas to these charges would not have a material effect on sentence. We will return to this point when dealing with the sentence appeal.
Nothing went wrong at trial
As noted, the conviction appeal does not confront the Judge’s findings directly. Mr Ryan’s written submissions focused rather on showing that there had been a fundamental error of a kind justifying a retrial without further inquiry into the merits of Mr Lock’s defence. However, Mr Lock maintained that he never meant to defraud anyone and also that witnesses ought to have been called.
Failure to challenge the Crown’s case as to mens rea
Mr Lock’s claim in this regard faces formidable difficulties. To begin with, it assumes that an intention to defraud is an element of the offences. As Mr Bioletti pointed out and Mr Davey argued, that is not so:
(a)The charges of obtaining by deception under s 240(1)(a) required that he make false representations intending to deceive and known by him to be false (or being reckless about that) in a material particular;
(b)The charges of forgery under ss 256(1) and (2) required proof that Mr Lock intended to use false bank statements to obtain a pecuniary advantage or benefit;
(c)The s 220 charge of theft in a special relationship required proof that he intentionally dealt with property in a manner he knew to have been unauthorised;[11] and
(d)The charges of using a document under s 228, which involved the use of a worthless cheque and a false certificate of analysis, required proof that he acted dishonestly — but dishonesty in that context means the absence of belief that the relevant act was done with the authority or consent of someone entitled to give such authority or consent.[12]
[11]Tallentire v R [2012] NZCA 610, [2013] 1 NZLR 548 at [54].
[12]Crimes Act, s 217.
Next, it appears that Mr Lock hoped all would be well when he secured funding from overseas. There was evidence, consistent with that given by Mr Bioletti, that Mr Lock had sought funding but was the victim of an advance fee fraud. To assume in his favour that he meant to deliver the promised product, and tried to obtain the funding he needed to do so, is not to accept that he lacked the dishonest intent required for each of the charges at the time he made the relevant representations or committed the forgery or other wrong.
Next, Mr Lock sought to persuade us that what he did was in accordance with the commercial contracts. He gave no details of this claim. He called in aid the evidence of Mr Ellis, which we have summarised above. Mr Ellis deposed that Mr Lock had negotiated a contract with a company called Ling Hai for the sale of honey and the deposit was paid into his trust account. Ling Hai was meant to establish a letter of credit for the balance, but did not. Rather, it sought repayment of the deposit. As Mr Davey submitted, this evidence has nothing to do with Mr Lock’s behaviour in applying the deposit to purposes having nothing to do with the acquisition and supply of honey. He was convicted of a) having the money released from the trust account contrary to Ling Hai’s express requirement that it be disbursed only to advance the purchase of the honey and b) falsely representing that it was still there.
This evidence, such as it is, falls far short of showing that there is an arguable case that what Mr Lock did was justified under contracts with the customers. We observe that no mention was made of this defence in Mr Ellis’s evidence at trial, which dealt with the movement of Ling Hai’s money in and out of the trust account.
Finally, Mr Lock had admitted to Mr Bioletti that he made the false representations and forged the bank statements. He repeated some of those admissions before us. In those circumstances it was impossible for counsel to do more than put the Crown to proof of the mental element and it is impossible for us to say that any question of a miscarriage of justice arises.
Failure to call witnesses
Mr Lock named the witnesses whose evidence he says could have assisted him. He gave their names to Mr Bioletti, who did not contact them. However, only one of them, Mr Ellis, has sworn an affidavit on appeal. Another, Mr Connolly, is deceased. We will not speculate on what the other witnesses might have said, beyond noting that some were character witnesses whose evidence could hardly have helped Mr Lock in circumstances where the Crown case so clearly demonstrated that he had made false representations to his clients.
Crown case unanswerable
On the record, including the evidence before us, we agree with Judge Collins that the Crown case was unanswerable and the verdicts inevitable.
Mr Lock would have been wise to plead guilty and throw himself on the mercy of the trial court. We make this point because he hinted at it in his oral evidence before us, stating that he has since been told that the Serious Fraud Office were surprised that he made no approach. On the evidence before us, though, he maintained, and still does, that he was not guilty. Mr Bioletti said that Mr Lock insisted that money would come from overseas and all would be well. That being so, Mr Lock cannot now blame counsel for his failure to take the only course that was realistically open to him.
Counsel’s failure to record instructions
This Court has long recognised that defence counsel ought to get written instructions on significant decisions.[13] That approach reflects the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 and the Practice Standards for Legal Aid Providers.[14] Mr Lock was legally aided.
[13]The authorities were collected in Chambers v R [2011] NZCA 218.
[14]Ministry of Justice Practice Standards for Legal Aid Providers (February 2017) at 4.8 and 13.13.
Mr Bioletti did not comply with these expectations. He had Mr Lock put together papers relevant to the charges and went through the charges and the evidence with Mr Lock in person. We accept that he traversed the evidence with Mr Lock and accurately understood Mr Lock’s account. But he did not obtain a signed brief of evidence. Nor did he have Mr Lock sign instructions with respect to the calling of evidence and the elections to choose a judge-alone trial and to stay out of the witness box. Mr Bioletti’s explanation was that he prefers not to engage in what he referred to as “defensive lawyering”.
It is true that written instructions allow counsel to demonstrate that they have carried out their duty to obtain and follow informed instructions.[15] By doing so counsel may eliminate the necessity for hearings like this one, in which an appellate court must resolve conflicts of evidence about the conduct of the trial. But that is not the main or even principal point of the requirement for written instructions. Put simply, written instructions reduce the potential for misunderstandings about who makes the decisions and what those decisions are.[16]
The sentence appeal
[15]Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, rr 13.3 and 13.13.1.
[16]Loffley v R [2013] NZCA 579 at [41]; and Chambers v R, above n 13, at [13]−[14].
Judge Collins sentenced Mr Lock to five and a half years imprisonment on three lead offences (two of obtaining by deception and one of theft in a special relationship).[17] He imposed concurrent sentences of one year on almost all the remaining charges.[18] He imposed a cumulative six months on the “quite separate” charges of lying to the Serious Fraud Office.[19]
[17]R v Lock [2017] NZDC 23687 at [28].
[18]At [29].
[19]At [23] and [30].
On appeal, Mr Ryan focused on the cumulative six-month sentence, noting that Mr Lock had always admitted guilt but had not been advised to plead guilty. We accept that an allowance ought to be made for that. It is of course attributable to the absence of advice rather than any error of the Judge, but it can nonetheless be characterised as an error in the sentence that ought to be redressed.[20] We will do so by making that sentence concurrent, as might have happened had the charges been met with an early guilty plea.
[20]Criminal Procedure Act, s 250(2).
The Judge made no allowance for mitigating factors:
[24] Mr Bioletti puts forward as mitigating factors that you are remorseful. I am not satisfied, Mr Lock, that you are genuinely remorseful for your victims; I have got no doubt that you are extremely remorseful for the situation in which you find yourself and in which you have placed your family but I am not prepared to give you any credit for remorse. Mr Bioletti also argues that you should have credit for the fact that you have no previous convictions and the contribution that you have made to the community in your life; nor am I prepared to give you any credit for that. The reason for that is the sustained period of offending in this case persuades me that that discount would not be appropriate.
Mr Ryan argued, citing Britow v R,[21] that an allowance ought to have been made. Mr Lock has no previous convictions, and he is a man, as the Judge recognised, of real ability who has both qualifications and experience in food production, especially in the dairy sector.
[21]Britow v R [2017] NZCA 229.
We are not persuaded, however, that the Judge was wrong. The offending occurred over a significant period, and (as the Court recognised in Britow) that diminishes any allowance that ought to be made for previous good character. The pre‑sentence report does not assist Mr Lock in this regard; it refers to a sense of entitlement, a tendency to blame others, and attempts to justify the lies he had told.
We note that Mr Ryan did not pursue an argument, made in his points on appeal, that the sentence was excessive because the amount lost to customers was $650,000. Standing back, the starting point was appropriate having regard to the extent and duration of the deception and its considerable impact on the victims.
Result
The application for leave to admit further evidence is granted.
The appeal against conviction is dismissed.
The appeal against sentence is allowed in part. The sentences on charges 19 and 20 (providing false information to the Serious Fraud Office) are to be concurrent with those on the three lead offences (charges 1, 9 and 17).
Solicitors:
Crown Law Office, Wellington for Respondent