Mehta v The Queen
[2017] NZCA 491
•31 October 2017 at 11.30 am
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA660/2016 [2017] NZCA 491 |
| BETWEEN | VIKRAM MEHTA |
| AND | THE QUEEN |
| Hearing: | 5 October 2017 |
Court: | Winkelmann, Wylie and Whata JJ |
Counsel: | A Arman for Appellant |
Judgment: | 31 October 2017 at 11.30 am |
JUDGMENT OF THE COURT
The appeal against sentence is dismissed.
____________________________________________________________________
REASONS OF THE COURT
(Given by Winkelmann J)
On 28 November 2016 following a seven‑day judge‑alone trial before Judge Cunningham in the District Court at Auckland, Mr Mehta was convicted on two charges of obtaining by deception pursuant to s 240 of the Crimes Act 1961.[1] On 3 March 2017 he was sentenced by Judge Cunningham to concurrent sentences of two years’ imprisonment.[2] He appeals that sentence on the grounds that the Judge erred in refusing to grant him home detention.[3] Mr Mehta says that other offenders convicted of similar offending have been sentenced to home detention and, further, that the Judge failed to take into account a number of matters relevant to whether home detention was appropriate.
The offending
[1]R v Mehta [2016] NZDC 23773 [Conviction decision].
[2]R v Mehta [2017] NZDC 6700 [Sentencing notes].
[3]In his amended notice of appeal filed on 21 August 2017, Mr Mehta confirmed he was not pursuing an appeal against conviction (which was originally filed).
Mr Mehta was the sole director and shareholder of Flexi Buy Ltd, a mobile trader or “truck stop” business that sold electronics and other household items from door to door. The offending occurred in the period from 1 January 2013 to 28 February 2014, and related to representations made to customers by Flexi Buy salespeople inducing them to enter into credit contracts. Customers were told that Flexi Buy would deliver their goods after they had made a specified number of payments. Judge Cunningham found that Mr Mehta instructed Flexi Buy salespeople to make representations about when goods were delivered to customers, knowing those representations to be false and that the goods would not be delivered to them on time.[4]
[4]Conviction decision, above n 1, at [165].
The Judge found that many of the payments were transferred to Mr Mehta personally, who then spent the funds not on the purchase of the goods in question but on himself. She found that the company did not have the means to meet its contractual obligations to customers yet continued to represent it would deliver the goods in return for payments.
Over the charge period Flexi Buy entered into contracts with 300 to 360 customers, from whom the total amount received was at least $159,864.22. Of those customers, only nine ultimately received any goods from Flexi Buy. Two who did receive goods gave evidence at trial. Both said they only received their goods after complaining or threatening to complain about Flexi Buy or Mr Mehta to the police, Fair Go or the Commerce Commission.
Part way through the charge period, Mr Mehta went to India for a period of about five months. In his absence the business failed to honour its contractual obligations, but Mr Mehta continued to spend personally substantial sums of money paid by Flexi Buy customers. When he returned from India he engaged a company to debit the bank accounts of customers who had signed contracts with Flexi Buy, and he did so without authority. He deducted a blanket sum of $400 from each customer, some of whom had less than that amount left to pay on their contracts in total. A small number of those customers had already paid for their goods in full.
Mr Mehta was convicted as a party, but his role lay at the heart of the offending. He created the Flexi Buy business model, operated the company’s accounts and decided the geographical areas in which it would target business. Although he personally signed up only two of the customers, he procured others (the salespeople) to make misrepresentations to secure further contracts and the payments that flowed thereafter. The Judge was not satisfied the entire business had been set up as a fraudulent enterprise from the beginning, but she did conclude that “if Flexi Buy did ever intend to deliver products”, that intention had “definitely gone” by the end of the charge period.[5]
Sentence
[5]Conviction decision, above n 1, at [144].
The Judge identified the sentencing purposes of denunciation and deterrence as important in sentencing Mr Mehta because of the nature of the offending.[6] The factors she subsequently addressed were as follows:
(a)The extent to which Mr Mehta benefited personally from the offending — Judge Cunningham said at least $40,000 of the net customer payments of $159,864.22 was spent for Mr Mehta’s personal benefit.[7]
(b)The value of the fraud. Although the offending involved a net loss of approximately $140,000, the Judge accepted Mr Mehta’s argument that because of deficiencies in how the charges were particularised, she should only take into account the loss suffered by those customers who had given evidence.[8] She therefore proceeded on the basis that the loss caused by the offending was $23,990.20.
(c)The serious impact the offending had on the victims. Many of the victims had paid close to or in excess of $1,000 but received nothing in return. The offending targeted people on low incomes, who could ill afford to lose that amount of money. For all but three of the victims who provided victim impact statements, their only means of support was a government benefit. A number of the victims had illnesses. The victims were largely unsophisticated in matters of finance and some were clearly vulnerable.[9]
(d)The offending involved a breach of trust.[10]
[6]Sentencing notes, above n 2, at [36] and [46].
[7]At [49].
[8]At [35].
[9]At [51].
[10]At [52].
Taking all of these aggravating features into account, the Judge selected a starting point of two years’ imprisonment.[11] She then considered but rejected various arguments that Mr Mehta should receive a reduction in sentence because of:
(a)His personal circumstances, including his immigration status and the difficulties for him as a new immigrant in establishing a new life.[12]
(b)His claims to be remorseful.[13] The Judge noted Mr Mehta’s expressions of remorse recorded in the pre-sentencing report, but was not persuaded he was remorseful for his actions. She said Mr Mehta completely lacked insight into the effect of his criminal offending on other people, and did not accept responsibility for his part in what occurred.
(c)His offers of reparation.[14] Although it was submitted for Mr Mehta that his willingness to pay reparation should be taken into account, the Judge was not satisfied that this willingness was genuine — she narrated the history of those offers and the absence of any payment.
[11]At [58].
[12]At [60].
[13]At [13].
[14]At [15].
The Judge then addressed whether to impose a sentence of home detention rather than one of imprisonment, but concluded that a sentence of imprisonment was necessary to serve the purposes of deterrence and denunciation.[15]
Arguments on appeal
[15]At [67].
Mr Arman for Mr Mehta argues that offending of equivalent seriousness to that of Mr Mehta’s has been the subject of home detention sentences in the past, citing a number of decisions. He also argues that there are a number of relevant factors that were not properly addressed by the Judge when determining whether home detention was an appropriate sentence:
(a)Mr Mehta was a first‑time offender of previous good character;
(b)he was assessed by the pre-sentence report writer as being at low risk of re-offending;
(c)he demonstrated partial remorse and offered to pay reparation;
(d)he would suffer unique shame because of publicity within the Indian community;
(e)the convictions would affect his ability to reside within New Zealand, potentially separating him from his wife;
(f)Mr Mehta’s wife had significant medical issues both during and after the investigation and was reliant on Mr Mehta’s support; and
(g)Mr Mehta’s personal circumstances related to his wife’s miscarriage and subsequent depression.
Analysis
Mr Arman referred us to many sentencing decisions which he said show that home detention was an available sentence in this case and so should have been imposed.[16] We do not propose to traverse those authorities as they are of little assistance. Each is distinguishable, involving offenders and offending with different characteristics. For example, in R v Iosefa the Judge’s decision to impose a sentence of home detention included consideration of the offender’s remorse and guilty plea.[17] In Serious Fraud Office v Hall the offending occurred in a (commercial) context where the victims were not properly characterised as vulnerable.[18] The Judge also took into account that Mr Hall was in employment, had shown genuine remorse and had the care of two teenage children.
[16]R v Iosefa [2008] NZCA 453; Serious Fraud Office v Hall [2017] NZDC 12349; Fitzmaurice v Police [2013] NZHC 494; Schwanecke v Police HC Wellington CRI-2010-435-9, 10 September 2010; and Commerce Commission v Taylor [2015] NZDC 9803.
[17]R v Iosefa, above n 16.
[18]Serious Fraud Office v Hall, above n 16.
In her sentencing notes in this case, Judge Cunningham referred to other cases where home detention had been imposed for fraud offending.[19] She was aware that home detention was an available sentence in fraud offending, but her decision not to impose such a sentence was based upon her consideration of the case before her. That was the correct approach.
[19]Sentencing notes, above n 2, at [55].
In deciding upon any sentence, what is required of the sentencing judge is an assessment of the particular offending and the particular offender, against the purposes and principles of the Sentencing Act 2002. One key rule is contained in s 16 — a Judge must not impose a sentence of imprisonment unless satisfied that it is necessary to do so for one of the listed purposes of sentencing, and that those purposes cannot be achieved by a sentence other than imprisonment.
Counsel for Mr Mehta argues that the Judge failed to consider relevant factors but it is clear that she addressed most of the factors he highlights. The Judge addressed and rejected Mr Mehta’s claim to be remorseful, finding that he lacked insight into the impact of his offending on his victims.[20] She also took into account his various offers to pay reparation but discounted them, given his failure to carry through on any of his offers.[21] We see no error in her approach to either issue. Similarly, we consider that the Judge was entirely right to put to one side the impact of the sentence upon Mr Mehta’s immigration status.[22] As the Judge said, that was a matter for the immigration authorities.
[20]At [14].
[21]At [15].
[22]At [13].
Mr Arman says the Judge should have taken into account the impact of Mr Mehta’s imprisonment on his wife because of her medical condition. But the Judge did take that into account, referring to medical records she had been handed and noting that the condition was not life‑threatening. The Judge continued:[23]
While I acknowledge that whatever sentence is imposed will affect Mr Mehta’s wife I cannot see that it is very different from the way that families of sentenced persons are affected by every sentence that is imposed in every Court in this country and I do not think that it should make any difference to the sentence that I impose in this case.
[23]At [62].
At the hearing of the appeal further medical records were handed up. These were not produced in an affidavit as they should have been and we have no way of judging the significance of what is described in them. Mr Arman could not assist us with that. We decline to read those records. Of more significance, however, is the absence of any evidence that Mr Mehta’s wife is so dependent upon him that she will suffer hardship above and beyond that which is the usual consequence of the imprisonment of a close family member.
We note that the Judge did address the submission that Mr Mehta’s offending could have been linked to his wife’s ill health at the time, a reference we take to be to the miscarriage she suffered. The Judge noted, however, that by that time “frankly, all the damage had been done” by Mr Mehta in terms of the offending.[24] The Judge was clearly right to give this no weight in her consideration of the appropriate sentence.
[24]At [61].
As to the absence of previous convictions, while it is true the Judge did not mention this, we do not consider she was in error in failing to weigh this factor in favour of home detention. Mr Mehta arrived in New Zealand on a visitor’s visa in October 2009 and by January 2013 had commenced his offending. Three years without offending in New Zealand is insufficient evidence that he was a person of good standing. Moreover, the offending for which he was convicted continued over a period of 13 months. This was not a one‑off fall from grace.
Mr Arman refers to the unique shame Mr Mehta will suffer in his community because of publicity within it. It is not clear this submission was made to the Judge but, if it was, she was right to give it no weight. Shame and loss of standing within the community are the natural consequences of conviction and sentence. And in reality it is the fact that Mr Mehta has committed these offences which will cause him to lose standing within his community.
To conclude, we see no error in the Judge’s methodology. As the Crown submits, there was much to indicate a sentence of imprisonment was required in this case and little to point to a sentence of home detention. Although the total amount of the loss as weighed by the Judge ($24,000) may not have been great, the harm was considerable. Mr Mehta’s victims were people who could not afford to lose $1,000. It is clear that Judge Cunningham addressed herself to s 16 of the Sentencing Act. Although she accepted that home detention can be a deterrent sentence, she said:[25]
In my view because of the seriousness of what occurred here I am not minded to impose home detention. In my view it needs to be a sentence at the top of the hierarchy of sentences to send a message to Mr Mehta and to any other person who seeks to, in my words, rip off vulnerable people. That such behaviour that breaches the criminal law will be met with the full force of the criminal law. That sentence will be on both charges a sentence of two years’ imprisonment.
[25]At [67].
Accordingly, we are satisfied that the Judge did not err in her approach to sentencing Mr Mehta and that in the circumstances of the case a sentence of imprisonment was appropriate.
Result
The appeal against sentence is dismissed.
Solicitors:
Crown Solicitor, Auckland for Respondent
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