Murray v Police

[2015] NZHC 1771

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CRI-2015-419-15 [2015] NZHC 1771

BETWEEN

LANCE GRAY MURRAY

Appellant

AND

NEW ZEALAND POLICE Respondent

Hearing:	29 July 2015
Appearances:	S Cameron for Appellant T Needham for Respondent
Judgment:	29 July 2015

(ORAL) JUDGMENT OF WOODHOUSE J [on appeal against sentence]

MURRAY v NEW ZEALAND POLICE [2015] NZHC 1771 [29 July 2015]

[1]      This is an appeal against a sentence of 23 months imprisonment imposed by Judge D M Wilson QC.1   Mr Murray was convicted of five representative charges of using a document for dishonest purposes, each carrying a maximum term of imprisonment of seven years, and one charge of carrying on a business fraudulently, with a maximum term of five years imprisonment.  The offending occurred over a period of approximately 12 months.

Background

[2]     Mr Murray obtained $174,633.00 by fraud.   This involved processing unauthorised transactions using client credit cards, offering promotions for subscriptions to his magazine but not delivering the promised goods and services, not paying invoices, not paying charities after charity auctions, and dishonouring cheques.

[3]      It  is  relevant  to  note  that  the  offending  can  be  divided  into  two  broad categories.   One concerned the fraudulent use of credit cards.   This involved approximately $100,000.   This offending occurred over a period of one month in August 2011 and over a period of four months between April and July 2012.  The other types of offending occurred over a 12 month period between August 2011 and September 2012.

[4]      Approximately $59,000 of the total was recovered.  Part of that was repaid by the appellant when confronted by some of his victims.   The sum involved was approximately $33,000.  The balance was reimbursed by the credit card companies. The shortfall was therefore approximately $116,000.  On the question of reparation the Judge concluded that it was unrealistic to expect that the appellant had any

means of repaying any further money.

1      New Zealand Police v Murray [2015] NZDC 8864.

The issue

[5]      The single central issue on this appeal is whether the Judge was in error in exercising his discretion on sentence not to impose home detention.   The Judge focussed on deterrence.   He adopted a starting point of two and a half years imprisonment, referred to remorse and the effect on Mr Murray’s life, but did not provide a reduction in that regard, and then reduced the starting point by 25 per cent to reflect early guilty pleas.

The arguments

[6]      The  appellant,  through  Ms  Cameron,  argues  that  the  Judge  erred  in  not imposing home detention.  She submitted, amongst other submissions, that the Judge erred by not considering the least restrictive outcome, the desirability of keeping offenders in the community where possible, that home detention was more suitable having regard to the purposes and principles of sentencing, and the appellant’s previous good character.   Ms Cameron also referred to the fact that, although the total taken was close to $175,000, the amount not recovered by victims was the sum of approximately $116,000.   Ms Cameron submitted that the Judge overstated the gravity of the offending.   In her oral submissions she focussed two essential propositions.   The first was that there was undue, or perhaps exclusive, focus on deterrence.   The second was that there was no assessment of the question as to whether home detention would meet deterrence and other relevant purposes of sentencing.

[7]      For the respondent, Ms Needham quite properly emphasised the fact that, on the question as to whether there should be home detention or imprisonment, the Judge was exercising a discretion.  In consequence, an appeal directed to that part of the decision is subject to the well-known limits on an appeal against exercise of a discretion.  Ms Needham further submitted that in cases of fraud, or certainly cases of fraud of this nature, the cases indicate that deterrence is a purpose of sentencing which requires emphasis and, as I understood the submission, that it is or can be a dominant consideration in terms of purposes.   Ms Needham submitted also that it was open to the Judge, and within his discretion, not to give a discount for matters such as remorse, having regard to the gravity of the offending.

[8]      In referring to submissions, I note that I have provided the barest outline only. I have received helpful submissions from both counsel.   It is also appropriate to record in that regard that there was a reasonable amount of analysis of the details of the offending by Ms Cameron which has been of assistance.  Ms Cameron did not appear for Mr Murray in the District Court.  Neither did Ms Needham.  I apprehend from the judgment (although I cannot be certain) that a reasonable amount of the detail provided to me, together with the range of submissions and references to other authorities, were not available to the Judge.

District Court sentencing

[9]      At the outset, after a brief description of the offending, the Judge referred to submissions for the prosecution relying on two cases, Thompson v R and Hogan v Ministry of Social Development.2    I note that both of these decisions preceded the amendment to the Sentencing Act 2002 (the Act) introducing home detention as a substantive sentencing option.  The Judge then noted defence submissions on home detention.  There was a concise outlining of the offending.  The Judge at this point did not refer to the more detailed information that is now available to me.

[10]     The Judge then said:

[7]       I accept the submission of the prosecutor that this was sustained, deliberate and premeditated fraud.  It was obviously deceitful conduct.  You knew  the  business  was  in  dire  straits  and  the  256  victims  have  been adversely affected.  They have been annoyed, they have been embarrassed, disappointed, they felt shame at trusting you and they have suffered from stress.  Some of them have had emotional effects and all of them have been adversely affected financially.   Because there were so many victims restorative justice has been declined in this case.

[8]       Now there were 131 unauthorised transactions and the scale and duration of that and the number of victims are all relevant matters to be taken into account.   I acknowledge of course that you have no previous convictions.  The credit to which you are entitled [for] that has to be to some extent offset by the circumstances, duration and effect of your offending.

2      Thompson v R (1996) 14 CRNZ 235; Hogan v Ministry of Social Development (2005) 23 CRNZ

500.

[11]     The  Judge  then  referred  to  further  prosecution  submissions,  including reference to three cases, from which the prosecution submitted that the starting point should be three to three and a half years.3  The Judge continued:

[10]     Mr Quin on your behalf submitted that some of those cases are different type of commercial fraud and of course he is right about that, after all there is no tariff and some of them are old.  He submitted to me that the goal posts in sentencing have shifted and that in your particular case an appropriate starting pint would be in the two to two and a half years range. He then went on to submit that by the time there is a discount for the guilty plea you would be brought within the range of a sentence of home detention.

[11]      I   acknowledge   of   course   that   the   probation   officer’s   report recommends a sentence of home detention and it does so after assessing your future risk which is low and it refers of course in detail to the effect that you have already suffered from the offending.  It has been at a monumental effect on your life, on your self-respect and on your family and of course your financial base is gone and is unlikely to be ever recovered and that is why you are not going to be able to pay any reparation.   You have expressed remorse for the offending and you said if you were able to do so you would address these debts. I think that is unlikely.

[12]     In my view the correct starting point for offending of the character that I have been describing is a sentence of two and a half years.  Against that I would allow the full 25 per cent deduction which leads to a sentence of

23 months.   In my view notwithstanding that that falls within the area at which  community  detention  or  home  detention  could  be  considered  the

response of the Court would be inadequate if the deterrent jail term which is

appropriate was not imposed. Accordingly, on each of these charges you are concurrently sentenced to 23 months in prison.

Evaluation

[12]     As the Judge observed there is no tariff judgment for cases involving fraud. The Judge cited the case of Thompson earlier mentioned, where the Court said:4

The assessment of an appropriate sentence for commercial fraud is not without difficulty — particularly where the offending is by a person of standing in the commercial community.   Some of the relevant principles were mentioned in R v Gunthorp but, as said there, the circumstances will vary and there can be no set tariff.  As mentioned, there are to be borne in mind the difficulty of detention and the reliance upon the accuracy of financial reporting which is vital to a credible securities market. The amount of direct or indirect losses flowing from the offending is relevant through quantum is not necessarily a true measure of criminality.   Recourse to dishonesty because of inability of persons of standing to confront failure has been at the heart of much commercial fraud.  We agree with the sentencing

3      Whitelaw v R [2012] NZCA 438, Doolan v R [2011] NZCA 542; R v Holland-Kearins [1999] DCR 535.

4      Thompson v R, above n 2 at [23].

Judge that there is an arguable point whether such motivation is any less culpable than greed.

[13]     The Judge implicitly gave some emphasis to the concluding comments in that passage.   That is understandable.   But the facts of the Thompson case bear no comparison to this case.   Thompson was a case of complex commercial fraud and resulted in an end sentence of six and a half years imprisonment.  I also note that the Court of Appeal was not saying that the motivation is irrelevant.   I would also observe that there can nevertheless be no credit to the appellant in this case in relation to his motivation which appears to have been to try to prop up a failing business, with an associated motivation being an unwillingness to face up to the financial realities.

[14]     Another relevant case is a decision of the Court of Appeal in R v Varjan.5

The Judge does not appear to have been referred to this decision.   The Court of Appeal in that case provided the following broad guidelines to assess culpability in fraud offending:

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

[23]      It is the assessment of culpability that comparison with other cases is to be undertaken.   Matters of mitigation such as reparation, co-operation with investigators, plea, remorse and person circumstances necessarily must be assessed in each particular case.

[15]     In Varjan, a mortgage manager from a bank misappropriated $546,000 by falsifying documents.   A sentence of two years eight months was reduced to two years with leave to apply for home detention.   The starting point adopted by the Court of Appeal was three years.

[16]     R v Iosefa is another relevant case.6    This is a case that was referred to the

Judge.  In that case a solicitor stole $83,700 from a vulnerable elderly client and did

this over an extended period of time.  A sentence of ten months imprisonment was quashed on appeal and four months home detention substituted. The Court said:

[41]      The sentence of home detention introduced by the 2007 amendment indeed provides a real alternative to imprisonment.   It carries with it in considerable measure, the principles of deterrence and denunciation.   It is clear parliamentary policy that for short-term sentences, those of two years or less, the restriction on liberty through home detention can more appropriately be imposed by a sentence of home detention than by imprisonment.  In cases of more serious offending which justify a sentence greater than two years, the sentence of home detention will not be available and in such cases in accordance with the hierarchy of sentencing in s 10(a) a sentence of imprisonment usually will be required to reflect the purposes of denunciation and deterrence.

[17]     I pause at this point to note that in my opinion these cases make clear that deterrence is  not  the purpose of sentencing which should  be the  sole  focus  on sentencing.  These cases also make clear that deterrence, and other punitive aspects of sentencing, can be met with sentences of home detention notwithstanding the relative gravity of the offending.  These are the matters of principle that need to be addressed on this appeal, and it is for this reason that I will not refer to starting points in all of the cases that I mention.

[18]     Two other decisions are of assistance, and again in cases which appear not to have been cited to the Judge.

[19]   In Ransom v R, Ms Ransom committed benefit fraud.7     She obtained approximately $128,000 over a period of ten years.  The Court of Appeal quashed an

18 months sentence of imprisonment and imposed a sentence of nine months home detention.  The nine months was a reduced period because Ms Ransom had by that stage spent time in prison.  There was also a sentence of 75 hours community work. There were other personal factors of relevance and having no application in this case, but it is the broader principle which makes the end result relevant to the present appeal.

[20]     I will mention one other case by way of comparison.  This is a decision in

Fitzmaurice v Police.8    There is some similarity on the facts — at least in a broad

way.   A sentence of two  years three months imprisonment was imposed in the District Court.  The appellant was a priest who offended over a period of five and a half years.  He stole approximately $149,000.  He used cheques, cash withdrawals from ATM machines and automatic payments into his personal account to divert money available to meet parish purposes into his own hands.  He was convicted of six charges of using a document, one of obtaining by deception and one of illegally accessing a computer.  He entered a guilty plea at the first reasonable opportunity. On appeal Panckhurst J quashed the sentence and imposed a sentence of ten months home detention.   The Judge took into account personal factors which have no particular relevance to the present case, beyond the point that I have been seeking to emphasise, and that is the appropriateness of taking personal factors into account.  In that case the Judge took account of the offender’s depressive disorder and gambling addiction coupled with a long period of waiting before the charges were actually laid.

[21]     What may be observed at this point is that the range of factual circumstances illustrated in these various cases nevertheless indicate a broadly consistent approach in terms of principle.

[22]     In this case the Judge was exercising a discretion at the point he decided whether or not there should be imprisonment or home detention.  The grounds for home detention on appeal are circumscribed.   This was described by the Court of Appeal in Manikpersadh v R, as follows:9

We agree with counsel for the respondent’s assessment that the proper approach of an appellate Court in cases such as this is that “the choice between home detention and a short sentence of imprisonment is the exercise of  a  fettered  discretion,  with  appellate  review  focusing,  as  in  other sentencing appeals to this Court, on the identification of error, if any, in the court below”.

[23]     The Judge was alert to the principles indicating that home detention may often be appropriate for deterrence, but in my opinion the Judge did err in his

approach.  The Judge did not make any allowance for personal mitigating factors,

9      Manikpersadh v R [2011] NZCA 452.

and  notwithstanding  his  reference  to  some  of  them.   These personal  mitigating factors were reasonably significant in my judgment.

[24]     The appellant was 63 to 64 years old when these offences occurred and 66 at the time of sentencing.  The offences were totally out of character.  Apart from some historic driving offences, which the Judge and counsel accepted had no relevance of any sort, there were no previous convictions.  The appellant was to be sentenced as a first offender.  He was remorseful.  As I mentioned a moment ago, the Judge noted aspects of this at [11], quoted above.  But he made no allowance.  And in terms of the appellant’s previous good character, this was in fact cancelled out by reference to the gravity of the offence, at [8] of the sentencing notes, also quoted above.   The offences of this appellant were serious.  What he did at the age of 63 was a serious criminal lapse.  But it was a lapse late in his working life.  In my judgment principle required substantial credit for this.

[25]     I also consider that, to an extent, the Judge overstated the gravity of the offence.  This may be seen in two broad ways.  Firstly, by reference to the nature of the offending in other cases I have referred to and which resulted in sentences of home detention.   I make that observation fully recognising the relevance of the starting points in individual cases, but I have explained the way in which I have dealt with that aspect.  The other point concerns features of the offending.  The fact that there were 256 victims, for example, is a relevant consideration.  But that needs to be put into perspective.   As Ms Cameron noted, of those victims, 165 lost less than

$250, and 112 lost $60 or less.  Some did lose larger sums, and there were 15 victims sufficiently badly affected to lead them to provide victim impact statements which the Judge has referred to.  But in that context, I do consider that Ms Cameron was entitled to refer to a report in the Waikato Times recording statements by a small number of victims who lost not insignificant sums, but who considered that what had been done to them did not require a prison sentence.  I refer to these matters only because of the directive in the Act to have regard to the effect on victims. A victim’s assessment of an appropriate sentence, although in a technical sense not a matter for a victim impact statement, is nevertheless an indication of the impact on the victim.

[26]     In addition to these matters, in my respectful opinion, deterrence was given impermissible emphasis.  With due respect to Ms Needham’s submissions, and I also accept that some foundation for them can be found in observations in some cases, deterrence cannot be elevated to even the dominant consideration, let alone sole consideration, in cases of fraud.   The Act directs the Court to have regard to all relevant  purposes  and  principles  of  sentencing,  and  there  are  other  relevant provisions in the Act.  Some purposes and principles may have no application on the facts, but it is unlikely that there will be cases where the sole consideration is a single purpose of sentencing.   In this case there were a number of purposes of sentencing of significance in addition to the question of deterrence.   And on the question of deterrence, although some weight was justified in respect of deterrence of others, this is not a case where there was any need for deterrence of this appellant from further offending.  All of the information indicates the risk of further offending is negligible and probably nil.

[27]     In addition to relevant purposes, and principles, s 16 of the Act required some attention. The relevant provisions are as follows:

16     Sentence of imprisonment

(1)     When considering the imposition of a sentence of imprisonment for any particular offence, the court must have regard to the desirability of keeping offenders in the community as far as that is practicable and consonant with the safety of the community.

(2)     The court must not impose a sentence of imprisonment unless it is satisfied that,—

(a)     a sentence is being imposed for all or any of the purposes in section 7(1)(a)  to  (c), (e), (f), or (g); and

(b)     those purposes cannot be achieved by a sentence other than imprisonment; and

(c)     No other sentence would be consistent with the application of the principles in section 8 to the particular case.

…

[28]     The personal mitigating factors I have referred to would, in my judgment, have reduced the starting point of two and a half years by six to nine months.  That would reduce a prison sentence to 21 to 24 months.  The reduction that the Judge did

allow for the guilty pleas would then reduce a prison sentence to around 16 to 18 months.  Those reductions were required in my judgment.  This would not, of itself, justify home detention.  That is to say, reducing the indicative prison sentence from

23  months  to  around  16  to  18  months,  does  not  axiomatically  lead  to  home detention.  But it does bear importantly on the question.  And, in this case, the Judge did not assess the matter with an indicative prison sentence of 16 to 18 months.

[29]     The remaining consideration is that the appellant has already served almost ten weeks of his sentence.   This will have gone some way in meeting punitive aspects of the sentence.

[30]     I am satisfied home detention should have been imposed, possibly with some community work.  It may also be noted that the availability of combined sentences such as home detention and community work, or other combinations, is an additional important consideration in assessing the appropriate sentence where there are proper options between imprisonment or a lesser sentence.

[31]     Given the time already served, I will not impose a community work sentence on top of home detention.  And some adjustment of the term of home detention is required — that is to say, adjustment of the term would have otherwise been appropriate of approximately 12 months.

Result

[32]     The sentence of imprisonment is quashed.

[33]     It is not possible to impose a home detention sentence immediately because the address originally proposed for home detention, and found to be suitable, is no longer the proposed address.  I discussed with counsel the most appropriate way to deal with this.   Having received submissions, I concluded that it would not be appropriate to leave Mr Murray in custody with leave to apply for home detention or pending  a  positive  report.    I  am  satisfied,  in  all  the  circumstances,  that  the appropriate course is to direct that he be released on bail on terms I will come to pending imposition of a formal sentence of home detention on the assumption, which I am satisfied is well founded, that there will be a positive home detention report.

The reason that I am confident is that the proposed address is in central Hamilton and  the owners of the  property,  who are  friends  of the appellant,  have already indicated that they are willing to have Mr Murray complete a sentence of home detention at that address and, in the meantime, to have him there on bail subject to a

24 hour curfew.  If there is any unforeseen problem, it can be dealt with at the time on referral to me.

[34]     The alternative would be to remit the matter back to the District Court for sentencing, but I am doubtful that that will advance the matter in any significant way of a practical nature, and it will create a slightly artificial situation given the fact that what is contemplated is completion of a sentence now imposed by me.

[35]     The further formal directions are as follows:

(a)      Mr Murray is forthwith to be released on bail pending imposition of a new sentence.

(b)      On  release,  he  is  to  travel  directly  to  the  specified  address  in

Hamilton.

(c)      He is to remain at that address on a 24 hour curfew, with two provisos I will note, pending completion of a home detention report for that address and, assuming it is a positive report, formal imposition of a sentence of home detention as already indicated.

(d)The first proviso in respect of curfew is that Mr Murray is to attend the appropriate office of the community probation service in Hamilton as and when directed to do so by a probation officer in respect of any matter  that  may  be  required  for  completion  of  a  home  detention report.

(e)      The other proviso is that Mr Murray may leave the address in the event of any medical, or similar, emergency and, on notice to the

Probation Service, if he needs to get medical treatment or necessary attention of that nature.

[36]     The home detention report is to be forwarded to me with the file on receipt. If the home detention report for the specified address is for some reason negative, I

will give further directions.

Woodhouse J

Solicitors:

Crown Solicitor, Hamilton