Mount v R
[2015] NZCA 489
•19 October 2015 at 11.45 am
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA674/2014 [2015] NZCA 489 |
| BETWEEN | ANTHONY PAUL MOUNT |
| AND | THE QUEEN |
| Hearing: | 20 August 2015 (further submissions received 14 September 2015) |
Court: | Ellen France P, Courtney and Clifford JJ |
Counsel: | S J Zindel for Appellant |
Judgment: | 19 October 2015 at 11.45 am |
JUDGMENT OF THE COURT
A The appeal against conviction is dismissed.
B The appeal against sentence is allowed.
CThe sentence of six years nine months with a minimum period of imprisonment of 50 per cent of that sentence imposed on the charges set out at [98] is quashed. In its place a sentence of six years imprisonment is substituted.
DThe sentence of nine months imprisonment on the remaining charges is confirmed, to be served concurrently.
____________________________________________________________________
REASONS OF THE COURT
(Given by Ellen France P)
Table of Contents
Para No
Introduction [1]
Factual background [3]
The case goes to trial [15]
The Judge’s reason for verdicts [25]
A fair trial? [39]
(a)The circumstances in which Mr Mount came to be tried without
a lawyer [45]
(b) The manner in which the trial Judge presided [52]
(i)Did Mr Mount appreciate his jeopardy?[53]
(ii)Requests for assistance [65]
(c)The benefit of guidance from a lawyer [72]
(d)The personal characteristics of the appellant[73]
(e) and (f) The complexity and legal analysis required; the Crown and
defence cases[77]
Conclusions on fair trial[87]
Other matters [88]
Sentence [94]
Result [99]
Introduction
Anthony (Tony) Mount was convicted after a retrial before a Judge alone of 76 counts of fraud.[1] He was sentenced by the trial Judge, Judge Tompkins, to six years and nine months imprisonment with a minimum period of imprisonment of 50 per cent of that sentence.[2] Mr Mount appeals against conviction and sentence.
[1]R v Mount DC Nelson CRI-2011-042-968, 10 December 2014 [reasons for verdicts].
[2]R v Mount DC Nelson CRI-2011-042-968, 17 December 2014 [sentencing remarks].
The principal issue raised on the appeal is whether Mr Mount had a fair trial. He says he did not, essentially because he represented himself at the retrial and was not given sufficient assistance to do so. To put this issue in context we need to first set out the factual background, the course of the proceedings and the Judge’s reasons for verdicts.
Factual background
Mr Mount was a financial consultant and investment advisor operating in Nelson. He ran this business under the name Independent Financial Consultants Ltd. This was essentially a one person operation. Over many years he managed the investment portfolios of his clients after he entered into agreements with them to purchase, monitor and sell investments on their behalf. In the majority of cases he would receive lump sums from them for investment, and appears to have had authority to sell on behalf of his clients. One client, Mrs Pullar, was wary of such an arrangement. In relation to her, Mr Mount would advise on an investment and the price and if she agreed, she would provide him with the funds.
The client monies were held in an ASB account with an “01” suffix. This account was known as the IFC01 trust account. Mr Mount told his clients the account was operated like a solicitor’s trust account. However, Mr Mount’s own money was intermingled with client money in the account. For example, Mr Mount kept his own trading capital in this account and paid for personal expenditure from it.
Each client had a trust account ledger. The Judge found that records referred to as IFC01 transaction lists that were kept within Mr Mount’s computer system amounted to trust account ledgers. The IFC01 transaction list recorded each transaction in the IFC01 trust account on behalf of the client.
Most clients received six-monthly review reports from Mr Mount. Mr Mount called these reports “Portfolio Monitoring Reviews” (PMR). The evidence showed the usual approach was for the client to be charged an annual percentage-based fee, “calculated as a percentage (usually between 0.5%–2%) of the client’s annual portfolio value, as reported to the client” by Mr Mount.[3]
[3]Reasons for verdicts, above n 1, at [106].
The thrust of the Crown case was that, over a period of about ten years, Mr Mount stole $510,671.54 from his clients by inflating the reported purchase price of investments bought on their behalf and by deflating the reported sale price of the investments sold or redeemed on their behalf. The Crown called this activity “skimming”.
There were difficulties in tracing the skimmed money but the Crown maintained that much of the money stolen by Mr Mount found its way into a paint company he purchased called BioPaints Ltd. There was evidence that between 2002 and 2011 Mr Mount advanced personal loans to BioPaints Ltd to the value of $3,685,500 (as at 31 March 2011).
Mr Mount’s activities came to light when one client, the D & VE Gregory Family Trust, sought a complete reconciliation of their account Mr Gregory and his accountant compared the prices reported by Mr Mount and recorded in their trust ledger against the prices obtained from Mr Mount’s share brokers, First New Zealand Capital (First NZ Capital). A number of discrepancies were identified. When, ultimately, no satisfactory explanation was provided by Mr Mount for those discrepancies, Mr Gregory went to the police.
Mr Mount was interviewed by police in relation to three clients on 6 September 2010. The Crown’s written submissions accurately summarise Mr Mount’s responses, namely, that he:
40.1Denied deliberately misleading any clients, saying that he didn’t do things like that.
40.2Said that any discrepancies were probably caused by a systemic failure in the computer system.
40.3Questioned the figures that had been obtained by the Police and said that he did not believe there was any discrepancy.
40.4Gave no explanation for misrepresenting to clients the purchase price, sale price or current value of their investments.
40.5Made no suggestion that the discrepancy amounts had been retained or applied for the benefit of the client. His position was that there were no discrepancies.
After further files were analysed by the police, charges were laid in relation to a large number of clients. In the end, the trial proceeded in relation to 18 clients to keep the case manageable.
The alleged offending was reflected in an indictment containing 76 counts made up as follows:[4]
(a)18 counts of theft by failing to account under s 222 of the Crimes Act 1961, as it stood prior to 1 October 2003;
(b)48 counts of theft by a person in a special relationship under s 220, relating to events after 1 October 2003;
(c)one count (count 4) of reproducing a document with intent to deceive under s 258;
(d)one count of obtaining by a false pretence under s 246(2), as it stood before 1 October 2003; and
(e)eight counts of obtaining by deception under s 240(1)(a).
[4]Reasons for verdicts, above n 1, at [11]. Mr Mount was discharged on one further charge.
The nature of the offending encompassed in the indictment was summarised by Judge Tompkins when he said:[5]
In effect Mr Mount, when investing his clients’ funds, invested less than he told his clients he had and kept the difference, and when investments were realised he passed on to his clients less than the investments were sold for and kept the difference.
[5]Sentencing remarks, above n 2, at [2].
The single count of forgery (count 4) was related to count 1 (theft by failing to account to the D & VE Gregory Family Trust). It involved a contract note for one of the count 1 purchases which purported to show a price for the transaction almost identical to the false price reported to the D & VE Gregory Family Trust.
The case goes to trial
The timeline of relevant events is set out in Appendix 1 to this judgment. For present purposes, we need to note that the first trial against Mr Mount commenced before Judge Harrop in the District Court on 24 June 2013. Mr Mount was represented by Jonathan Eaton QC and John Sandston. In his opening statement,
Mr Eaton said if there were any discrepancies, Mr Mount did not create those deliberately or dishonestly.[6]
[6]Judge Harrop commented that Mr Eaton in his opening “made it clear that there [was] no dispute that there was a fiduciary relationship and that Mr Mount knew he was required to deal with the funds in the way which was directed or authorised by the investors”: R v Mount DC Nelson CRI-2011-42-3067, 3 July 2013 at [14].
In the course of the first trial, on 1 July 2013, and in advance of cross‑examination of the Crown’s financial expert witnesses, the Crown was given a selection of hard copy transaction lists from Mr Mount. These were said to have been printed out from the working version of the computer-based investment management and journaling system called IMS on Mr Mount’s laptop. As Judge Tompkins said:[7]
These contained figures ostensibly supporting Mr Mount’s defence, and in particular, contained the incorrect figure reported to the client, but also, in another column, the correct price. The defence advised that it would assert that IMS had erroneously transposed columns of figures when producing reports so that the client was given the wrong figures, essentially by accident.
[7]Reasons for verdicts, above n 1, at [184].
At the same time Mr Mount provided the police with a laptop. Mr Mount said that this laptop had been seized by police on two earlier occasions. The trial was adjourned to allow the Crown experts to examine the printed material and the laptop in advance of cross-examination. Although the police had obtained and cloned a number of computers prior to the first trial, the police had been unable to run the IMS system. The data obtained from those computers was not useable.
Judge Tompkins sets out in some detail the inquiries undertaken by the police after the adjournment of the first trial.[8] We need only note at this point, first, that the evidence showed the laptop Mr Mount provided during the trial – contrary to Mr Mount’s assertion – was not one provided to police prior to trial and that the IMS material on the laptop had been altered. Secondly, for reasons we do not need to go into, the further inquiries undertaken by the police led to the original, unadulterated IMS databases becoming available to them mid-2013. As Judge Tompkins said, this enabled the Crown witnesses “to fill otherwise existing gaps in the money trail and to permit the creation of uninterrupted transaction histories by the Crown’s expert accounting witnesses” in the second trial.[9]
[8]At [187]–[210].
[9]At [214].
Various scheduling difficulties resulted in the first trial being abandoned and the trial was rescheduled and heard before Judge Tompkins commencing on 13 October 2014. By that point in time, the effect of civil proceedings against Mr Mount, brought by various former clients seeking to recover losses, was that Mr Mount was out of funds. He sought and was granted legal aid, but on the condition that he must agree to the registration of a charge over his house. He refused to agree to the charge and declined legal aid. Mr Mount accordingly represented himself at the second trial.
At the second trial, by consent, Judge Tompkins had before him all of the evidence given at the first trial. Some of that evidence was supplemented by further cross‑examination. Judge Tompkins therefore had before him evidence in two broad categories. In the first category was the evidence from Mr Mount’s clients and from Richard Bodman, the compliance director for First NZ Capital. The clients gave evidence at the first trial, as did Mr Bodman.
The Judge also had before him a range of expert evidence. The experts can also be placed in two categories. The first category comprises those who dealt with Mr Mount’s computers and the IMS system Mr Mount ran to manage the data. For example, Jurgen Heissner, a computer and software engineer and designer, set up IMS for Mr Mount in the mid-1990s. He told the Court about the backup systems for IMS and explained that IMS and all its records were fully editable.
Secondly, the Judge heard from the experts who reconstructed the relevant financial transactions. They included Denise Phillips, a forensic accountant employed by the Serious Fraud Office, and Kelvin Scoble, a qualified chartered accountant. The experts had “voluminous financial source data and documentation”.[10] A helpful example of the type of analysis before the Judge is found in the evidence of Dorothy (Raelene) Craig, a certified fraud examiner. An example of her analysis is set out in Appendix 2 to this judgment.
[10]Reasons for verdicts, above n 1, at [301].
The trial took place over a two-week period.
In his defence, Mr Mount sought to show discrepancies arose from computer malfunctions. He also sought to characterise his relationship with the clients as that of debtor and creditor only. He focused on what he described as the absence of “specifics” as to any agreement about his reinvesting monies and the possibility any discrepancies were accounted for by authorised transactions such as the payment of fees. Finally, he sought to cast doubt on the First NZ Capital figures at a more general level.
The Judge’s reasons for verdicts
After setting out the background, Judge Tompkins dealt first with the evidence about the laptop handed over to the police during the first trial. The Judge concluded that the evidence he heard about what occurred with the laptop was “compelling, and … unanswered in any substantive way”.[11] In particular, Judge Tompkins found Mr Mount had tried to alter the IMS database that he had installed on the laptop and then tried to pass that off to the police and the Crown, and through them the Court, as original client records that could be relied on. The Judge said:
[212] He did this intending that the altered IMS database would be used to bolster the heralded defence of computer error as the explanation for the discrepancies, and to substantiate his account, for example as given in outline form to police in his recorded interview on 6 September 2010, of inadvertent transposition of fields within IMS, not involving his intervention, so as to negate any fraudulent or dishonest activity or intention on his part.
[213] It follows that the hard copy documents provided by Mr Mount during the first trial and which, in effect, led to that trial being adjourned, were false but were intended to further that heralded defence.
[11]Reasons for verdicts, above n 1, at [211].
Judge Tompkins then dealt with the single forgery count. On this count Judge Tompkins accepted the evidence of Mr Bodman from First NZ Capital. On that basis, the Judge said that while “superficially” the document looked like a genuine First NZ Capital contract note, “it clearly [was] not, for all the reasons particularised by Mr Bodman”.[12] The Judge considered the formatting and alignment errors were “glaringly obvious”, as were the errors of substance.[13] For example, the contract note reference related to a different transaction, the purchase of the 3,400 units took place on 24 December 2002 not 20 December 2002 as recorded on the note, and the client number was not the D & VE Gregory Family Trust’s client number or indeed a client number existing in the First NZ Capital system.[14]
[12]At [235].
[13]At [235].
[14]At [231].
The Judge was satisfied that the information the accounting experts worked with showed what had happened to the funds. The analysis of the First NZ Capital contract notes, the First NZ Capital transaction lists, the IFC01 trust ledger information, the PMR reports and the resulting variances was not challenged “in any substantive fashion”.[15]
[15]At [302].
There was another important aspect of the evidence that the Judge took as both confirming Mr Mount’s direct involvement in changing the purchase or sale figures from First NZ Capital and dispelling the suggestion that the discrepancies arose from accidental misreporting of data by IMS. We refer here to a series of handwritten annotations on numerous contract notes found by the police at Mr Mount’s premises.[16]
[16]At [300]. We attach an example as Appendix 3.
The Judge explained that although Mr Mount had told Mr Gregory’s accountants that the various physical documents had been destroyed, in fact about 1,000 original contract buy and sell notes predating December 2002 were found in his offices. The information on these documents matched the data as set out in the First NZ Capital transaction advice.[17] The Judge noted that a feature of many of those contract notes were the handwritten numbers written on them. Judge Tompkins took from the circumstances, the way Mr Mount operated his one person business, the evidence of his office assistant and the “irresistible inference arising from the figures comprising each annotation”, that these handwritten figures could only have been written by Mr Mount himself.[18]
[17]At [292].
[18]At [294].
Judge Tompkins found it was “notable” that “these handwritten figures correspond[ed], either exactly or extremely closely, to the inflated figure as reported to the individual client”.[19] In other words, the price of the investment as reported by Mr Mount to the client was at variance with the actual price on the contract note but matched the handwritten figure. The Judge’s conclusion on this aspect was as follows:
[299] The reasonable and indeed inevitable inference is that, in order to keep track of his own dishonest distorting of the figures, Mr Mount was in the habit of jotting the increased or different figure down on the individual contract note when it arrived in his office. This was, perhaps, to aid his own arithmetic to ensure that the increased figures reported to a client for a group of purchases all added up to, or closely matched, the total amount that the client had given him to invest on their behalf.
[19]At [295].
The Judge saw this as “compelling” evidence of Mr Mount’s dishonesty.[20] It was also relevant to rebut any suggestion that the discrepancies were caused by “an unintended and accidental computer or systemic error” in which Mr Mount took no active role.[21]
[20]At [300].
[21]At [300].
The Judge concluded that the overall impact of the essentially unchallenged financial analysis was that for each of the counts the money was available for use by Mr Mount and the individual clients were deprived of those amounts.[22]
[22]At [304].
Judge Tompkins then dealt with various matters raised by Mr Mount in defence. He referred to cross-examination by Mr Mount endeavouring to show that computer or data manipulation errors by the computer system or changes to the IMS system, for example when it was being updated or altered or affected by power cuts, might be responsible for the discrepancies. The Judge said that nothing he had heard would “account for the volume, the repetitive nature, and in particular the correspondence between the handwritten notations on the contract notes and those altered figures”.[23] The Judge was also satisfied beyond reasonable doubt that the cumulative effect of the evidence led to the inevitable inference that in creating the discrepancies Mr Mount did so with intent to defraud.[24]
[23]At [305].
[24]At [306].
The Judge rejected the submission from Mr Mount that there was no special relationship between himself and the clients but, simply one of debtor and creditor. Given the emphasis by Mr Mount in assurances to clients and on occasion on oath in the High Court civil proceedings that the money was being dealt with in “trust accounts”, the submission that a mere debt obligation was created was “remarkable”.[25]
[25]At [314].
The Judge also did not accept the submission that authorised transactions, for example the payment of fees, accounted for the identified discrepancies. The Judge saw the two, that is, the identified discrepancy on the one hand and “the properly authorised and paid drawdown or fee on the other” as distinct.[26]
[26]At [317].
Judge Tompkins dealt with and rejected Mr Mount’s submission as to a lack of accuracy or lack of completeness in the First NZ Capital figures. The accuracy of those figures was supported by, for example, the original contract notes as well as the evidence of the experts such as Ms Craig. Further, of over more than 829 individual trades, Mr Mount did not challenge the accuracy of the First NZ Capital figures relating to a particular trade. The Judge rejected any suggestion that there were inaccuracies in the primary documents or that this documentation was in any substantive way incomplete.
Judge Tompkins also rejected Mr Mount’s submission regarding the absence of “specifics” as to any agreement about his reinvesting monies. The Judge saw the fallacy in this submission as best illustrated by looking at what Mr Mount did when winding up or liquidating a client’s portfolio. At that point, Mr Mount did retain sums of money when there was no legitimate reason to do so.[27]
[27]At [322]–[326].
Mr Mount was accordingly convicted on all 76 charges.
A fair trial?
In R v Condon, the Supreme Court distinguished between two situations.[28] The first is where an accused person conducts his or her own defence to a serious charge “without having declined or failed to exercise the right to legal representation”.[29] The second situation is where an accused person “makes an informed choice to go to trial without a lawyer, or is rightly refused legal aid” or where further delay in the holding of the trial cannot be tolerated.[30]
[28]R v Condon [2006] NZSC 62, [2007] 1 NZLR 300.
[29]At [79].
[30]At [80].
In the first situation the Court said, prima facie, an unfair trial will have resulted. The onus is on the Crown “to satisfy the appeal Court the trial was actually fair”.[31]
[31]At [79].
In the second situation, the Court said there will have been no breach of the rights in s 24 of the New Zealand Bill of Rights Act 1990. The Court continued:[32]
But even in such circumstances an appeal Court must still examine the overall fairness of the trial, as was done in the New Zealand cases cited earlier, because the right to a fair trial cannot be compromised – an accused is not validly convicted if the trial is for any reason unfair. If there has been no breach of the appellant’s right to representation, because the trial Court was properly “satisfied” in terms of s 30(2) of the Sentencing Act, the conviction will not be set aside unless the appellant can persuade the Court that the trial was unfair because the defence could not, in the particular case, have been adequately conducted without the assistance of counsel. In some circumstances the manner in which the accused through his or her own choice or conduct came to be unrepresented may be relevant to the assessment of fairness. It is unnecessary to say more about that in the present case.
[32]At [80].
The Court outlined a number of considerations to be evaluated by the appeal Court in the assessment of fairness. Those considerations include:[33]
(a)the circumstances in which an accused person came to be tried without a lawyer;
(b)the manner in which the trial Judge presided, including any explanation of court procedures;
(c)whether the accused person had the benefit of guidance from a lawyer or counsel assisting at any time before or during the trial;
(d)the personal characteristics of the appellant, including previous courtroom experience;
(e)the complexities and legal analysis required of the case; and
(f)the nature of the Crown case and how effectively the defence was conveyed.
[33]At [81]–[82].
Finally, as this Court in R v Chatha observed, the question of whether the appellant has met the burden of showing unfairness must be considered in the context of an accused person’s “right to represent him or herself (even badly)”.[34]
[34]R v Chatha [2008] NZCA 547 at [124] citing R v McFarland [2007] NZCA 449 at [53].
It is clear Mr Mount falls within the second category as he made an apparently informed choice to go to trial without a lawyer and was rightly refused legal aid. We accordingly evaluate Mr Mount’s appeal by reference to the considerations outlined in Condon.
(a) The circumstances in which Mr Mount came to be tried without a lawyer
As we have noted, when this matter first went to trial in July 2013 Mr Mount was represented by Messrs Eaton and Sandston.[35] The first trial was aborted in September 2013.[36] Mr Mount continued to be represented by Messrs Eaton and Sandston until they were granted leave to withdraw on 5 February 2014, some eight months prior to commencement of the second trial.
[35]Mr Mount was initially represented by Mr Sandston and Graeme Downing. Mr Eaton became involved from November 2010.
[36]R v Mount DC Nelson CRI-2011-42-3889, 20 September 2013 (Minute of Judge S M Harrop).
Mr Mount was initially meeting counsels’ costs himself. However, in the context of the civil proceedings to which we have referred, brought by some of the complainants in the criminal trial and others who said Mr Mount had lost their funds, Mr Mount’s assets were frozen.[37]
[37]Hannay v Mount HC Nelson CIV-2010-442-473, 30 November 2010; Hannay v Mount HC Nelson CIV-2010-442-473, 20 December 2010; Hannay v Mount HC Nelson CIV-2010-442-507, 19 April 2011; and Hannay v Mount [2011] NZCA 530.
In May 2013[38] and again in August that year,[39] Dobson J in the High Court granted exemptions from the freezing orders for various expenses, including legal expenses for civil and criminal proceedings and accounting fees.
[38]Hannay v Mount [2013] NZHC 1016.
[39]Hannay v Mount [2013] NZHC 2011.
Mr Mount’s funds became unavailable to him after the entry of summary judgment against him in mid-December 2013.[40] He sought and, on 19 March 2014, was granted legal aid. His assigned lawyer was Mr Sandston. On 28 March 2014 Mr Mount advised the legal aid authorities that “[b]ased on the conditions set, I have decided to decline the granting of legal aid”. This was a reference to the requirement that Mr Mount agree to the registration of a charge over his home. The letter from the grants officer on behalf of the Legal Services Commissioner explained “[t]his means [the home] cannot be sold without [Mr Mount] repaying what [he owes]”.
[40]Hannay v Mount [2013] NZHC 3497.
When Judge Zohrab asked Mr Mount where things had “got to in terms of representation” at a callover on 3 April 2014, Mr Mount explained he was granted legal aid but declined it.[41]
[41]R v Mount DC Nelson CRI-2011-042-968, 3 April 2014.
Through Mr Zindel, Mr Mount suggests he felt unable to sign an authorisation for the land charge while the civil creditors were “already swarming”. This explanation is not accepted by the Crown.
We consider the circumstances in which Mr Mount came to be tried without a lawyer do not assist him on appeal. If Mr Mount was unclear about the effect of charge on his home it is surprising Mr Mount did not raise concerns with someone, for example the grants officer.
(b) The manner in which the trial Judge presided
A number of criticisms are made under this heading. In particular, it is said that the Judge should have done more to warn Mr Mount of the dangers of proceeding on an unrepresented basis. Secondly, Mr Zindel says there were indications that Mr Mount needed assistance that were not dealt with. We address each in turn.
(i)Did Mr Mount appreciate his jeopardy?
There was no specific warning given to Mr Mount about the dangers of proceeding on an unrepresented basis. The impression we have, albeit one based solely on the record, is that there was nothing to suggest that type of intervention was necessary. At the start of the trial, Judge Tompkins asked Mr Mount whether he was aware of the process that would be followed. Mr Mount said he thought he was. As we shall discuss later, Mr Mount had experience of court procedures and had been represented from September 2010 to February 2014. Further, there are examples in the record where Judge Tompkins obviously did consider there was a need for some explanation because he explained various aspects of trial procedure to Mr Mount.
We need to deal here with two specific points. The first was one raised by this Court and that is whether Mr Mount was given a copy of the caution required to be given to an accused when undefended by s 364 of the Crimes Act. The second aspect is the effect of the Judge’s reference to Trompert v Police for the proposition that it is “sound in principle” for a Judge to draw an adverse inference against a
defendant in situations where the defendant might be expected to speak were he or she innocent.[42]
[42]Reasons for verdicts, above n 1, at [219] citing Trompert v Police [1985] 1 NZLR 357 (CA) at 358.
Section 364 of the Crimes Act provides that where on arraignment an unrepresented accused person pleads not guilty “the Court shall cause to be handed to him, before the evidence for the prosecution is heard, a written statement”. The statement is to be in the following words or words to like effect:
When the evidence against you has been heard, you will be asked whether you wish to give evidence yourself or to call witnesses. You are not obliged to give or call evidence but, if you do, that evidence may be used against you. You should consider in particular whether evidence which you can give is relevant and will assist you in your defence. If you do not give evidence no person other than the Judge and yourself may comment on that fact.
There is no record of this notice having been provided to Mr Mount. However, at the end of the Crown case, Judge Tompkins said this to Mr Mount:
Mr Mount, Mr Webber has now closed the Crown case so what that means is that the Crown have now led or adduced all the evidence that it intends to call at this trial. As you are aware, you’re under no obligation at all to either give or call evidence but if you chose to do so you can elect to do so. In the event that either you give evidence yourself or call witnesses or both, then you and those witnesses will give evidence on oath from the witness box and then Mr Webber will be able to cross-examine, not restricted just to the matters covered in your or those witness’s evidence but in relation to all matters relevant to what I have to decide which is whether the Crown has proved beyond reasonable doubt the individual and separate counts in the indictment. So, Mr Mount, do you wish to call or give – or do you wish to give evidence yourself or call a witness or witnesses.
The reference to Mr Mount being aware of the absence of an obligation suggests there had been some earlier discussion of this topic. There was certainly an earlier discussion with Mr Mount at a callover before Judge Zohrab when the Judge asked Mr Mount whether or not he was calling an expert.[43] The Judge explained there would be practical difficulties if Mr Mount left his decision in relation to that until later in the piece. We think it is implicit in that exchange that Mr Mount was aware that he did not have to call evidence.
[43]R v Mount, above n 41.
It is clear that what is required by s 364 is material compliance. For example, in R v Rakuraku this Court observed:[44]
[I]t is plain from the transcript that the accused was throughout the trial fully aware of his rights and the correct procedure. In particular he was advised of his right to call evidence as envisaged by s 365. He gave evidence himself … .
[44]R v Rakuraku CA321/01, 26 August 2002 at [7].
In R v Chatha the appellant was handed a five-page explanation of the trial process that included the s 364 notice on the first day of trial and maintained that the s 364 notice would have been swamped by the other information.[45] The Court said that the information in the s 364 notice has to be supplemented with an explanation of the trial process. The Court continued:[46]
Further, if in this case, Mr Chatha had overlooked the s 364 part of the material, his right to give and call evidence was repeated later in the trial … .
[45]R v Chatha, above n 34, at [96].
[46]At [100]. See also Page v R CA4/00, 6 June 2000 at [53]. The Supreme Court in R v Condon, above n 29 commented that the Court in Page was in error in relation to the requirements of s 30 of the Sentencing Act 2002 but did not comment on the s 364 discussion: at [33].
Absent a s 364 notice, the issue in this case is whether Mr Mount needed to be told about the impact of his not giving or calling evidence, that is, that the failure to do so might be used against him. This leads into the challenge to the Judge’s reliance on Trompert.
We need to put the reference to Trompert in context. The reference arose when the Judge was describing the evidence. Judge Tompkins noted that “in general terms no significant or substantive challenge was advanced by Mr Mount in cross‑examination to the evidence given by these crucial witnesses”.[47] After referring to some of the authorities on Trompert[48] and noting the existence of some criticism of this line of authority, for example in R v Haig,[49] the Judge said:
[223] In this case Mr Mount, the person “preserving silence” was the same person who, for practical purposes, did and controlled everything within his day to day business operations. He, of all people, should have been able to account for his actions as being honest and in the best interests of his clients.
[47]Reasons for verdicts, above n 1, at [218].
[48]Reasons for verdicts, above n 1, at [220]–[221] citing Espinosa v Department of Internal Affairs [2009] DCR 109 (HC); and R v Gunthorp CA46/93, 9 June 1993 at 59.
[49]R v Haig (2006) 22 CRNZ 814 (CA) at [127]–[128].
Although the Judge made this point it is not apparent elsewhere in the comprehensive reasons for verdicts that this aspect has been determinative. We are satisfied that the Trompert analysis was not critical to the Judge’s findings. That view is supported by the Judge’s reminder to himself later in the judgment that Mr Mount was not required to give evidence.[50]
[50]At [307].
Further, there is nothing to suggest that advice from the Judge on this topic would have altered the position. Mr Zindel submits on Mr Mount’s behalf that there was “no indication he fully appreciated his jeopardy in staying silent”. But there is no evidence from Mr Mount about this or as to what his evidence might have been if called. There is nothing before us to suggest how he might have further advanced his defence by giving evidence himself and, as we shall discuss at [85] below, the approach he took was a realistic trial tactic. Finally, absent waiver, we have no information about the extent or otherwise of any advice given to him on this topic in the context of the first trial when he was represented.
In these circumstances, even assuming no formal compliance with s 364, we are not concerned Mr Mount was left in the dark as to his jeopardy.
(ii)Requests for assistance
We turn to the submission there were indications that Mr Mount needed assistance. Mr Zindel points in this regard to Mr Mount’s application for communication assistance and various suggestions that counsel assisting be appointed.
Mr Mount applied for communication assistance under s 80(2) of the Evidence Act 2006. The application was dated 6 June 2014. The Crown in response made the point s 80 was not applicable because it deals with persons who are not proficient in English.
In any event, nothing turns on this application. That is because it was advanced on the basis it would allow Mr Mount to “further understand the processes necessary to structure the defence case”. This was directed particularly to formal steps necessary to obtain third party disclosure and compile a list of witnesses.
Mr Mount made a formal application for third party disclosure and then withdrew his application for communication assistance.
It appears the possibility of appointing counsel assisting was raised by the Court. The Judge asked the registry to inquire of Mr Sandston if he would be available to “help Mr Mount prepare for trial”. The email inquiry to Mr Sandston recorded “[a]t this stage it is not [intended] that the Amicus actually be present at the trial”. Mr Sandston responded positively.
The Crown opposed appointment of counsel assisting on the basis it would undermine the legal aid system.
It seems this matter fell away when it appeared Mr Mount was, in fact, ready to proceed and had prepared his disclosure application. Again, this aspect does not assist Mr Mount.
(c) The benefit of guidance from a lawyer
As we have noted, Mr Mount was represented for a considerable period by senior counsel. For these purposes we reiterate that from mid-September 2010 to early 2014, Mr Mount was represented. That of course covered the period of the first trial. In addition, Mr Mount had the benefit of all of the evidence and cross‑examination from the first trial, which by consent was included as part of the evidence on the second trial.[51]
(d) The personal characteristics of the appellant
[51]Reasons for verdicts, above n 1, at [216].
Two points are relevant under this heading. First, by all accounts Mr Mount was very much involved in the preparation of his defence over the course of the first trial. The Crown’s submissions make the point that all disclosure went to Mr Mount personally in electronic form even when he was represented. In the written submissions for this appeal, Mr Mount says that over a four year period (2009–2013) he “completed reconstructions of all 55 complainants’ trust ledgers”. He explained that to put these reconstructions together he:
… essentially ‘followed the money’ by auditing the source documentation available (bank statements, cheque butts, contract notes and invoices) as well as other documentation such as First NZ Capital Transaction Advices, PMR’s (portfolio monitoring reviews), e-mails, letters etc. That formed parts of his defence.
Mr Mount’s familiarity with the proceedings was illustrated also by his detailed application for third party disclosure and by his approach to cross‑examination. For example, he examined witnesses on prior statements and was obviously familiar with the Summation document management system that was used in the criminal trial.
The second point we make is that Mr Mount appears to have also been very closely involved in the detail of the civil proceedings, which covered similar territory. He filed numerous affidavits in the High Court in those proceedings. Mr Webber for the Crown advises that these included affidavits challenging the methodology of the independent forensic accountants giving evidence for the plaintiffs in the civil cases. He also represented himself in this Court on the appeal against summary judgment in which he had some success.[52]
[52]Mount v Hannay [2014] NZCA 600.
In summary, it is fair to say that Mr Mount was familiar with the subject matter and had acquired a level of familiarity with the relevant procedures. He is also an experienced, numerate and articulate businessman. The subject matter of the trial is wholly within his expertise.
(e) and (f) The complexity and legal analysis required; the Crown and defence cases
We deal under this heading with the last two of the Condon factors. Several preliminary points can be made.
The fact that this was a second trial had a number of implications. First, issues about what the Crown was required to prove, particularly in relation to the counts under the old s 222 of the Crimes Act, had been resolved by Judge Harrop at the time Mr Mount was represented.[53] Secondly, as Mr Webber notes, nearly all of the Crown evidence was disclosed at a time when Mr Mount was represented. No objection was taken to any of this evidence and there were no unresolved evidential issues. Thirdly, the only new evidence came from the accountant Antony (Tony) Peters. That evidence canvassed an update of the schedules created by the other Crown expert witnesses for each transaction. Mr Peters added in a column showing the price recorded in the IFC01 transaction list for each transaction and the discrepancy between that amount and the price paid. He also edited each client’s IFC01 transaction list to replace false prices with the correct prices.
[53]R v Mount DC Nelson CRI-2011-42-3067, 19 June 2013. No issue is taken with Judge Harrop’s ruling or with Judge Tompkins’ description of the elements of the offences.
There were three pre-trial issues dealt with while Mr Mount was unrepresented. One related to an amendment to the indictment to reflect the false price figures entered into the IFC01 transaction list as opposed to the incorrect prices reported to the client. As Mr Webber notes, for the most part, this meant including the cents. Mr Mount agreed to this amendment. Secondly, there was an application for an order allowing the Crown to adduce hearsay statements and the transcripts of the evidence given at the first trial, which gave the appellant the benefit of Mr Eaton’s cross-examination of a number of Crown witnesses.[54] Mr Mount did not oppose the order in its final form. Finally, there was an application by Mr Mount for a third party disclosure order. This application was unsuccessful. That was because the subject matter Mr Mount wished to examine could not have assisted his case.[55]
[54]R v Mount DC Nelson CRI-2011-42-968, 21 August 2014 (Pre-trial Ruling 1 of Judge Tompkins).
[55]R v Mount DC Nelson CRI-2011-42-968, 21 August 2014 (Pre-trial Ruling 2 of Judge Tompkins).
The Crown case was essentially a fairly simple one. Namely, that the shares and other investments cost less than the client paid for them and Mr Mount reported incorrectly on these investments to the client. The complexities in the case came from the number of the charges, the bulk of documentation and the fact there were a range of charges with different elements. The documentation was, however, material with which Mr Mount was very familiar and a great deal of it was generated by him.
Mr Mount conveyed his defence effectively. We have already noted the Judge’s evaluation of the various defences. A review of the evidence shows Mr Mount continued to advance the strands put in play by his counsel at the first trial, for example, the reliability of the First NZ Capital documentation and the difficulties for the Crown in proving what had happened to the funds. Mr Mount prepared a written closing and delivered an oral closing address that canvassed these matters and cited relevant authorities.
Mr Zindel raises two particular matters, first, the possibility Mr Mount may otherwise have called an expert and, second, the fact he did not give evidence.
As to the first, Mr Zindel refers in particular to the single forgery charge. The evidence on that came from Mr Bodman. Mr Bodman was cross-examined by Mr Eaton at the first trial. That material was before Judge Tompkins. Mr Bodman was further cross-examined by Mr Mount. In the first trial there was no disclosure by the defence of evidence to be given by an expert witness as required by s 23 of the Criminal Disclosure Act 2008, which suggests that the defence did not intend to call an expert.
There was some reference subsequently to defence experts. Funds were released for this purpose and obviously some forensic computer work was undertaken. Moreover, there is nothing before us to indicate what evidence might have been called in this respect. One inference is that it transpired that no challenge could be made to the Crown experts’ conclusions.
As to Mr Mount giving evidence, we have touched on that already. Mr Webber submits that it was apparent that Mr Mount was going to be called at the first trial. He bases that submission on provision of information at the first trial that Mr Mount would have had to be called to adduce. However, as we have noted, it subsequently emerged that this documentation was inaccurate. In those circumstances we agree with the Crown’s submissions that not giving evidence was a realistic tactical approach. The best chance for Mr Mount was to do as he did, that is, to seek to chip away at the Crowns’ expert witnesses.
In summary, this was a relatively straightforward case. The complexities came from the bulk of the documentation and from the number and range of charges. Mr Mount was well familiar with the transactions and showed he was capable of advancing his defence. He had the benefit of the earlier evidence and in cross‑examination was able to develop defences advanced on his behalf by counsel in the first trial. Although he contends that there are concerns arising from his failure to give and call evidence, absent any indication as to what that evidence might be we do not see this aspect as critical.
Conclusions on fair trial
In conclusion, we are satisfied the defence was adequately conducted without the assistance of counsel and no issue of an unfair trial arises. We emphasise the circumstances in which Mr Mount came to be unrepresented, his extensive engagement with the trial processes whilst represented, his own expertise, the strength of the Crown case and the fact the available defences were advanced.
Other matters
We need to deal under this heading with four other aspects. First, in written submissions, Mr Mount was critical of the fact he was not arraigned on each count but rather, a guilty plea was simply entered for all counts.
The Crown explained Mr Mount had agreed there was no need for him to be arraigned on each count. Rather, guilty pleas were taken as read on all counts. The process followed was in accordance with s 355 of the Crimes Act. That section stated that an accused person “upon being called upon to plead, [is] entitled to have the indictment … read over …, if he so requires”. We understand the same process was followed in the first trial with the agreement of Mr Eaton. There is nothing in this point and it was properly not developed in oral argument.
Secondly, various criticisms are made about the way in which the Crown advanced its case. However, on analysis, there is nothing in any of these matters. For example, Mr Mount complains a witness, Mr Taylor, was not called. However, by consent, his evidence was read.
The third aspect relates to pre-trial delay. We are satisfied that the delay until the first trial was not undue. The first set of charges were laid on 8 September 2010 with other sets of charges following. The first trial commenced on 24 June 2013. The period of delay between the first and second trials reflected Mr Mount’s activities in seeking to introduce what Judge Tompkins found were fabricated documents into evidence. The defence then had to consult computer experts. There is nothing to indicate any prejudice arose from either period of delay, no doubt reflecting the fact the trial was based largely on documentary evidence.[56]
[56]CT v R [2014] NZSC 155, [2015] 1 NZLR 465 at [29]–[32].
Finally, Mr Mount raises various other points, for example, a challenge to the accuracy of the First NZ Capital documentation. These are matters that were all canvassed at trial and were dealt with by the Judge. The accuracy of the First NZ Capital documentation was backed up by source documentation such as cheque stubs and deposit slips. The idea that client funds were dealt with in accordance with obligations was explored at trial. There is nothing in these other matters of detail. These matters were not developed in oral argument.
The appeal against conviction is dismissed.
Sentence
Mr Mount maintains he did not make submissions on sentence because he was unaware he could do so. There is no merit in this submission. The record shows Mr Mount’s bail was continued for the very purpose of enabling Mr Mount to prepare submissions. In any event, none of the matters Mr Mount now says he would have raised relate to matters that would cause us to revise the sentence.
There is one aspect of the approach to sentencing that has led to a manifestly excessive sentence. The Judge adopted a starting point of six years imprisonment on each of the theft by failing to account, theft by a person in a special relationship, the reproducing a document with intent to deceive and the obtaining by deception of over $1,000. No issue can be taken with that.
However, the Judge uplifted that six year figure by nine months to reflect Mr Mount’s actions during the first trial. This is a reference to his altering the computer records. Absent any charge and conviction for this conduct we do not see this as a permissible basis for an uplift.
The same reasoning has been applied to support the imposition of a minimum period of imprisonment of 50 per cent of six years and nine months. To the extent the reasoning relies on this aspect there is a suggestion of punishing Mr Mount for matters for which he was not convicted. We accept there is a valid concern about the protection of the community but there is nothing to say that a first period of imprisonment with eligibility for release after one term will not adequately meet that concern.
For these reasons, the appeal against sentence is allowed. The sentence of six years nine months with a minimum period of imprisonment of 50 per cent of that sentence imposed on the charges of theft by failing to account, theft by a person in a special relationship, reproducing a document with intent to deceive and obtaining by deception of over $1,000 is quashed. In its place a sentence of six years imprisonment is substituted. The sentence of nine months imprisonment on the remaining charges is confirmed, to be served concurrently.
Result
For these reasons, the appeal against conviction is dismissed and the appeal against sentence is allowed with the amendments set out at [98] above.
We are grateful to Mr Zindel for his assistance to the Court.
Solicitors:
Crown Law Office, Wellington for Respondent
Appendix 1
Chronology
| Date | Event |
| 8 September 2010 | First set of charges laid (2 charges). |
| 13 September 2010 | First appearance on first set of charges. Mr Mount was represented from this appearance until 5 February 2014.[57] |
| 27 September 2010 | Further charges laid. |
| 1 November 2010 | Further charge laid. |
| 30 November 2010 | Plaintiffs in High Court civil proceedings obtained ex parte orders freezing Mr and Mrs Mount’s assets.[58] |
| 16 December 2010 | Ronald Young J in the High Court discharged freezing orders.[59] |
| 17 December 2010 | Further charge laid. |
| 20 December 2010 | Miller J in the High Court stayed Ronald Young J’s decision, effectively imposing an interim freezing order pending disposition of appeal to the Court of Appeal.[60] |
| 16 March 2011 | Committal on first set of charges. |
| 13 April 2011 | Court of Appeal allowed appeal against Ronald Young J’s decision.[61] |
| 19 April 2011 | Plaintiffs in second High Court civil proceedings obtained interim freezing order.[62] |
| 26 May 2011 | MacKenzie J in the High Court discharged second freezing orders (interim freezing orders dated 1 and 29 June 2011 protected investors’ position pending appeal).[63] |
| 21 and 28 September 2011 | Second set of charges laid. |
| 3 October 2011 | First appearance on second set of charges. |
| 14 October 2011 | Court of Appeal allowed appeal against MacKenzie J’s decision, granted second freezing orders.[64] |
| 18 January 2012 | Committal on second set of charges. |
| 19 May 2012 | Case joined for the two sets of charges. |
| 8 May 2013 | Dobson J in the High Court granted exemption from freezing orders for living expenses, legal expenses for civil and criminal proceedings, and accounting fees.[65] |
| 17 June 2013 | Trial scheduled to start on this day. It had been agreed in the previous week that with the reduction in the scope of the indictment and therefore of the evidence to be called the trial would begin on 24 June 2013 instead.[66] |
| 19 June 2013 | Judge Harrop declined Mr Mount’s applications for order quashing 18 counts of theft and for s 347 discharge in relation to the same counts.[67] |
| 24 June 2013 | First trial commenced. |
| 2 July 2013 | First trial adjourned until nominal date of 9 July 2013. |
| 9 July 2013 | First trial adjourned. |
| 9 August 2013 | Dobson J in the High Court granted further exemption from freezing orders.[68] |
| 23 August 2013 | Matthews AJ in the High Court granted leave to bring summary judgment application.[69] |
| 20 Sept 2013 | First trial aborted.[70] |
| 15 October 2013 | Dobson J in the High Court dismissed application for review of the decision of Matthews AJ granting leave to bring a summary judgment application and granted further amendment to extent of exemption from freezing orders.[71] |
| 19 December 2013 | Matthews AJ in the High Court granted summary judgment against Mr and Mrs Mount and Independent Financial Consultants Ltd for breach of fiduciary duty.[72] |
| 5 February 2014 | Messrs Eaton and Sandston granted leave to withdraw before Judge Davidson in the Blenheim District Court. |
| 19 March 2014 | Legal aid granted (legal aid lawyer Mr Sandston). |
| 28 March 2014 | Legal aid declined by Mr Mount. |
| 3 April 2014 | Callover where Mr Mount advised Court he had been granted legal aid but had declined it and that he would not be calling any expert evidence. |
| 15 May 2014 | Callover where Mr Mount confirmed he had received his file from Mr Eaton, that he would not be calling any expert evidence and that he was happy with the October trial date. |
| 6 June 2014 | Mr Mount applied for communication assistance under s 80 of the Evidence Act. |
| 25 June 2014 | Judge at callover raised issue of appointment of amicus. |
| 14 July 2014 | Application by Mr Mount for non-party disclosure under s 24 of the Criminal Disclosure Act. |
| 8 August 2014 | Crown gave Mr Mount witness list for second trial. |
| 21 August 2014 | Mr Mount withdrew application for communication assistance at pre-trial hearing before Judge Tompkins. |
| 10 October 2014 | Crown gave Mr Mount updated witness list for second trial. |
| 13 October 2014 | Second trial commenced. |
| 8 December 2014 | Court of Appeal confirmed High Court summary judgment decision but allowed appeal to the extent of reducing the judgments in favour of three claimants.[73] Mr Mount represented himself and Mrs Mount. |
[57]Mr Mount was originally represented by Messrs Sandston and Downing. From November 2010 until 5 February 2014 Mr Mount was represented by Messrs Eaton and Sandston.
[58]Hannay v Mount HC Nelson CIV-2010-442-473, 30 November 2010.
[59]Hannay v Mount HC Nelson CIV-2010-442-473, 16 December 2010.
[60]Hannay v Mount HC Nelson CIV-2010-442-473, 20 December 2010.
[61]Hannay v Mount [2011] NZCA 148.
[62]Hannay v Mount HC Nelson CIV-2010-442-507, 19 April 2011.
[63]Hannay v Mount HC Nelson CIV-2010-442-507, 26 May 2011.
[64]Hannay v Mount [2011] NZCA 530.
[65]Hannay v Mount, above n 38.
[66]R v Mount DC Nelson CRI-2011-42-968, 17 June 2013 (Minute 1 of Judge S M Harrop).
[67]R v Mount DC Nelson CRI-2011-42-3067, 19 June 2013.
[68]Hannay v Mount, above n 39.
[69]Hannay v Mount [2013] NZHC 2168.
[70]R v Mount, above n 36.
[71]Hannay v Mount [2013] NZHC 2677.
[72]Hannay v Mount, above n 40.
[73]Mount v Hannay, above n 52.
Appendix 2 – Ms Craig’s evidence relating to count 1
TRUSTEES IN THE D & VE GREGORY FAMILY TRUST
The Trustees of the above trust entered into an agreement with Mr and Mrs Mount on 15 December 2002 and provided a cheque for $300,000 for the purpose of investment.
Appendix 3 – Handwritten annotations
The extract set out below relates to Mr Mountfort (count 51). The Crown case was that Mr Mount overstated the price paid to First NZ Capital for some Property for Industry shares. The price paid to First NZ Capital was $9,524.30. The contract note had a handwritten figure “10,524” on it. The figure entered into the IFC-01 transaction list on IMC for this sale, and as reported by Mr Mount to Mr Mountfort, was $10,524.30.
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