Norris v R
[2013] NZCA 526
•31 October 2013 at 2.30 pm
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| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA59/2013 [2013] NZCA 526 |
| BETWEEN | PATRICK DEAN NORRIS |
| AND | THE QUEEN |
| Hearing: | 15 August 2013 |
Court: | Ellen France, Rodney Hansen and Mallon JJ |
Counsel: | Appellant in person |
Judgment: | 31 October 2013 at 2.30 pm |
JUDGMENT OF THE COURT
A The application for leave to adduce new evidence is dismissed.
BThe appeal against conviction is dismissed.
C The appeal against sentence is allowed in part. The order that the appellant pay reparation of $31,724.42 to the Manleys is quashed. An order that the appellant pay $40,000 reparation to Astra Enterprises Ltd (in liquidation) is substituted on the conditions set out in [108] below.
DThe appellant must resume his home detention sentence. He is to be at the address for home detention at 10.00 am on 4 November 2013, and remain there to await the probation officer and the security company representative.
____________________________________________________________________
REASONS OF THE COURT
(Given by Ellen France J)
Table of Contents
Para No
Introduction [1]
The factual narrative [4]
The trial [11]
The Judge’s reasons for verdict [19]
Does s 220 apply to this case? [28]
The elements of the offence [31]
The submissions [32]
The approach to s 220 – New Zealand [36]
The position in England and in Australia [39]
The obligations on Mr Norris as liquidator [47]
The proposed new evidence [61]
Should the new evidence be admitted? [71]
Procedural matters [90]
The s 344A application[91]
Section 347 application not dealt with prior to trial[100]
District Court rather than High Court[103]
Sentence [105]
Result [108]
Introduction
Patrick Norris was convicted after a trial before a judge alone of theft by a person in a special relationship under s 220 of the Crimes Act 1961.[1] He was sentenced by the trial Judge, Judge Behrens QC, to 10 months home detention, 100 hours community work, and was ordered to pay reparation of $31,724.42 to creditors, Mr and Mrs Manley.[2] The offending related to monies Mr Norris received as liquidator of a company called Astra Enterprises Ltd (Astra), of which the Manleys were creditors. Mr Norris banked this money into the trading account of his business, Norris Management Services Ltd (Norris Management) and it was used largely to repay debts of Norris Management or of Mr Norris.
[1]R v Norris DC Nelson CRI-2011-042-1272, 16 October 2012 [reasons for verdict].
[2]R v Norris DC Nelson CRI-2011-042-1272, 24 January 2013 [sentencing remarks].
Mr Norris appeals against his conviction and sentence. The conviction appeal raises issues about the application of s 220 to Mr Norris as a liquidator. In addition, Mr Norris says there is fresh evidence that might reasonably have led to a not guilty verdict. Finally, Mr Norris raises various procedural issues that are said to give rise to a miscarriage. On the sentence appeal, Mr Norris challenges the ability to make a reparation order in favour of the Manleys.
After setting out the background, we deal first with the conviction appeal and then with the sentence appeal.
The factual narrative
We adopt the description of the chronology set out in the respondent’s written submissions. We begin by noting that Astra’s business was buying and renovating properties. Astra went into liquidation on 28 November 2008 on the petition of the Manley Family Trust. The company had only cash assets, namely, the net proceeds of the sale of a property.
Christine Johnston was appointed liquidator. She resigned from that position on 3 August 2009.[3] Mr Norris was then appointed the liquidator. He was at the same time the director of Norris Management. At Mr Norris’ request, Astra’s assets of $80,960.51 were paid to him. Mr Norris deposited the money into Norris Management’s bank account on 10 August 2009. At that time, the account was overdrawn. By 4 November 2009 the account was again overdrawn.
[3]Ms Johnston was an accountant. This was her first liquidation. She explained that she eventually decided she did not have time to get on top of what was required of her as a liquidator.
During the liquidation, Mr Norris received three unsecured creditors’ claims, namely:
(a)on 13 August 2009 from the Manley Family Trust for $27,800;
(b)on 18 August 2009 from Bell Gully for $3,197.35; and
(c)on 26 August 2009 from the Inland Revenue Department for $33,472.48.
The only creditor to receive any payment was Bell Gully which, in April 2011, received the amount owing to it.
The Companies Office became involved in Astra’s affairs when, in March 2011, Ian Ramsay from the Companies Office was contacted by Nyle Sunderland. Ms Sunderland had worked as an assistant and office manager at Norris Management. She suggested that the Companies Office should investigate the Astra liquidation. Mr Ramsay and John McPherson were then appointed to undertake an investigation.
The important event for present purposes took place on 28 March 2011 when the Companies Office inspectors arrived at the office of Norris Management. They asked for the Astra file and related bank statements. Mr Norris asked them to come back later that day, which they did. They took away what Mr Ramsay understood was Mr Norris’ complete file in relation to Astra including bank statements. Mr Norris told them that the missing $80,960.51 had been spent on his fees.
The matter was ultimately referred to the police and Mr Norris was charged under s 220 of the Crimes Act in April 2011.
The trial
The Crown case was that Mr Norris committed an offence under s 220 as he had, with the requisite knowledge and intention, breached the statutory and fiduciary requirements applicable to him as a liquidator. For present purposes, an important plank of the Crown case was that in fact little work had been done on the Astra file and that Mr Norris had created invoices totalling some $80,000 to try and justify the dissipation of the Astra money. Mr Norris’ response was that he had done this work on the file and could prove it if he could find the original Astra file which he first discovered was missing on the day the Companies Office visited him, 28 March 2011.
The Crown case that little work had been done on the file was supported by three strands of evidence.[4] The first of these strands was the evidence of two persons, Warwick Savage and Ms Sunderland, who were working in the office of Norris Management over some of the relevant period. Both these witnesses gave evidence of concerns about the Astra liquidation and that Mr Norris was dismissive of those concerns. Mr Savage also addressed what happened on 28 March 2011 when the inspectors from the Companies Office came to inspect the Astra files.
[4]This evidence was also relevant to other aspects of the Crown case. We focus on the work done on the Astra liquidation because that is particularly relevant when we come to consider the likely impact of the proposed new evidence.
We come back later to some of the detail of their evidence but for present purposes we note Mr Savage’s evidence about the panic and flurry of activity that took place on 28 March involving the recreation of invoices for the work Mr Norris said he had done on the Astra liquidation. Mr Norris told Mr Savage that he “was always worried that Astra would be” his “Achilles’ heel”. We also note Ms Sunderland’s evidence about the lack of work done on the Astra file and of a discussion she had with Mr Norris in which he said the one liquidation file that “could bite him in the arse” was the Astra file.
The second strand of evidence relied on by the Crown was evidence as to the limited contact between Mr Norris and those who might have expected to hear from him in relation to the liquidation. These witnesses were in two groups. First, there was evidence from the various creditors and/or their advisors. Secondly, there was evidence from one of the two former directors of Astra, from her lawyer and from the solicitor for the other director of Astra who had by then died. These witnesses all gave evidence of the very limited contact they had had with Mr Norris and, variously, difficulties in getting any information as to what was happening with the liquidation.
Finally, the Crown called evidence from Laurence Chilcott, an insolvency practitioner. He described the Astra liquidation as a “simple” one. He said the only claim that would need to have any further investigation was that of the Manley Family Trust. In terms of that debt he said the matter could be dealt with in a straightforward manner. If the liquidator was not satisfied with the information supplied, the liquidator could request further information from the creditor and if still not satisfied then simply reject the claim. Mr Chilcott noted that Mr Norris had raised invoices totalling $85,610.57 including GST for his fees which he considered was excessive for this liquidation. Ignoring a few small invoices for staff time, Mr Chilcott worked off a total of $76,050 excluding GST. On this sum, he noted that at a charge-out rate of $200 per hour (Mr Norris’ first invoice was quoted at $225 per hour) that amounted to a total of 380 hours.
At trial, as on appeal, Mr Norris disputed that there were any requirements applicable to liquidators that established the fiduciary relationship he said was necessary to found criminal liability. He also said that as liquidator he was an agent for the company so any fiduciary relationship “is for the statutory purpose of the liquidation … and not for persons”.[5] He further maintained that he had done considerable work on the Astra liquidation and the invoices produced after the Companies Office inspectors’ initial visit, whilst recreated, were genuine.
[5]Reasons for verdict, above n 1, at [28].
Mr Norris gave evidence as did Claire Parr, his partner, who was also an accountant and who worked in the office of Norris Management. Again, we will come back to some of that evidence later. At this point we need only note that it was not disputed that Mr Norris said the Astra file was his Achilles’ heel or that it could come back to bite him. Nor did Mr Norris dispute that there was panic at the time of the Companies Office visit. Rather, Mr Norris said his comments about the Achilles’ heel and that the file would come back to bite him related to the costs he had incurred as against the lack of recovery. He said there was panic because the Astra file was lost.
Ms Parr confirmed Mr Norris’ evidence about the nature of the work done. She claimed there were problems with obtaining source documentation and signs of other properties and dealings.
The Judge’s reasons for verdict
Judge Behrens noted that there was no dispute that the money was paid into the Norris Management bank account and that the bank account was on two occasions in overdraft so that by 4 November 2009 the money was gone. Nor was there any dispute that the money was used to buy items for and repay debts of Norris Management or Mr Norris.
The Judge found as a matter of law that Mr Norris had control of the property in circumstances in which he had a duty imposed by statute and regulation as well as a fiduciary duty to account for or deal with that property. Judge Behrens considered that a fiduciary duty could “flow from a statutory duty, the two need not be mutually exclusive”.[6]
[6]Reasons for verdict, above n 1, at [36].
The Judge next accepted the argument for the Crown that the requirements imposed on Mr Norris by the Companies Act 1993 and the relevant regulations referred to a liquidator’s duties with regard to creditors, for example, to protect, realise and distribute assets of the companies to creditors and to correctly deposit monies to the credit of the company. That led to the Judge concluding, again as a matter of law, that there were requirements in relation to the creditors that were binding on Mr Norris.
Judge Behrens then dealt with the question of Mr Norris’ knowledge of the circumstances requiring him to account for or deal with the property. On this the Judge’s findings were as follows:[7]
[H]e was an experienced liquidator who was involved in 28 liquidations … at the time of the Companies [O]ffice inspection. Of particular significance was the unchallenged evidence of his former employee Ms Sunderland, that he said about the Astra file “it[’]s the one that will bite me on the arse”. Also significant was her evidence, which I accept, that no work was carried out on the Astra file between May and October 2010 and that the file went “missing” from [Norris Management’s] office … at the time of the inspection and was returned some time after the inspection.
[7]At [45]. The Judge refers in this passage to the date of inspection as being earlier than March 2011 but that appears to be an error.
The Judge also referred to Mr Savage’s evidence in this context. Particularly, Judge Behrens referred to the fact that Mr Savage had looked at the Astra file in mid‑July 2010 and had tried to raise with Mr Norris his concern that the monies had been deposited into Norris Management’s working account and had been used, in Mr Savage’s view, inappropriately. The Judge referred also to Mr Savage’s description of what had happened when the inspectors arrived and his conversation with Mr Norris on that day.
The Judge rejected as unreliable and untruthful Mr Norris’ explanation for the panic and as to the loss of the Astra liquidation working file in December 2010 on a trip to the North Island.
The Judge noted also Mr Norris’ argument that his deposit of the funds in the Norris Management working account complied with the relevant regulation. The regulation in issue provides for the monies received from the company by a liquidator to be deposited in a bank account to the credit of the company or a trust account.[8] Mr Norris did not argue that the regulation did not apply, but that he had complied with it. The Judge took this as an acceptance and understanding by Mr Norris of his liquidation responsibilities. In this context, the Judge accepted Mr Chilcott’s evidence that the payment of the Astra monies into the Norris Management bank account was a failure to comply with the regulation.
[8]Companies Act 1993 Liquidation Regulations 1994, reg 37, discussed below at [52] and [56].
Finally, Judge Behrens dealt with Mr Norris’ intention. In this context, Judge Behrens rejected the claims of Mr Norris and Ms Parr that they “went to great lengths after the inspection to engage with the IRD as a creditor, to investigate a supposed debt to Astra and to generate the invoices”.[9] The Judge noted that Mr Norris had produced what he said were notes for a liquidation “budget” worked on before his decision was made to proceed with the liquidation and the trips Mr Norris said he had made to Auckland in respect of the liquidation. On this the Judge said:
[59] I do not accept his evidence or Ms Parr’s about that. Plainly they were unable to provide contemporaneous records to confirm or verify the work claimed to have been done in connection with the Astra liquidation. I do not accept that the liquidation “budget” was prepared when they said it was. I find that it was probably prepared after the inspection. There was no original document able to be produced and the copy is, in my view, suspect as a provider of reliable information.
[60] Both Mr Norris and Ms Parr, I find, engaged in a blatantly dishonest course of action to try and cover up Mr Norris’s failure to deal with or account for the property of Astra to the creditors. I find this because I accept Ms Sunderland’s and Mr Savage’s evidence about what went on before and after the inspection as well as the documented and reliable evidence of what was actually done with the property.
[61] I also accept Mr Chilcott’s evidence that a reasonable fee for the work that should have been required for this liquidation was $12,000 plus GST. It was also his opinion that the hours claimed to have been worked were excessive and not necessary.
[9]At [58].
The Judge considered that this evidence strongly supported the Crown submission that Mr Norris dealt with or failed to account for the monies in accordance with the requirements of the creditors of Astra. The Judge was satisfied on this element beyond reasonable doubt. The Judge found the first count proved and convicted Mr Norris. The Judge did not therefore need to consider the alternative count that relied on a failure to deal with the property rather than, as in the first count, a failure to account.
Does s 220 apply to this case?
Section 220 of the Crimes Act deals with theft by a person in a special relationship. Subsection (1) provides that the section applies to any person:
... who has received or is in possession of, or has control over, any property on terms or in circumstances that the person knows require the person—
(a)to account to any other person for the property, or for any proceeds arising from the property; or
(b)to deal with the property, or any proceeds arising from the property, in accordance with the requirements of any other person.
Subsection (2) deals with the intention required and provides that everyone to whom s 220(1) applies commits theft who:
... intentionally fails to account to the other person as so required or intentionally deals with the property, or any proceeds of the property, otherwise than in accordance with those requirements.
Finally, ss 220(3) and (4) provide as follows:
(3)This section applies whether or not the person was required to deliver over the identical property received or in the person’s possession or control.
(4)For the purposes of subsection (1), it is a question of law whether the circumstances required any person to account or to act in accordance with any requirements.
The elements of the offence
No issue is taken with Judge Behrens’ description of the elements of the offence. The Judge said that the Crown had to prove beyond reasonable doubt the following four elements:[10]
1. That Mr Norris had control over property;
2.That that control was in circumstances that required him to account for (count 1) or deal with (count 2) the property, or any proceeds arising from it, in accordance with the requirements of any other person;
3. That Mr Norris knew of those circumstances; [and]
4.That he intentionally dealt with (count 1) or intentionally failed to account for (count 2) [sic] the property or any proceeds arising from it otherwise than in accordance with those requirements.
The submissions
[10]Reasons for verdict, above n 1, at [16].
In his first ground of appeal Mr Norris challenges both the finding that he had control of the property in circumstances that required him to account for it and the finding that he knew of those circumstances.
The main thrust of his argument in relation to this aspect is that the circumstances were not such as to require him to account. The submission is that s 220 requires a fiduciary element or the earmarking of the property in the hands of the defendant and a breach or departure from the strict terms thereby imposed. The statutory obligations on liquidators, Mr Norris argues, do not impose the necessary fiduciary element. Another way of putting this is to say that there are no specific terms and Mr Norris did not have the requisite knowledge of those terms. Moreover, he submits any accounting requirement imposed is a requirement to account to the company and not to the creditors.
In the commentary on s 220, the authors of Adams on Criminal Law state that a distinction is to be made between terms or circumstances requiring “an accounting or payment for property or proceeds, and terms or circumstances which create only a personal liability which may be enforced by civil action”.[11] Mr Norris says that as liquidator he is in the latter camp.
[11]Bruce Robertson (ed) Adams on Criminal Law (online looseleaf ed, Brookers) at [CA220.03].
The submission for the respondent is that the Judge was right. Mr Ebersohn who presented this part of the case for the respondent submitted that the test is not whether a person is a fiduciary. He emphasises that the liquidator receives assets under statutory obligations so that there is a “fiduciary element” or earmarking of the assets. Further, the assets are not received for the liquidator’s personal use but for the creditors and thereafter the company’s shareholders.
The approach to s 220 – New Zealand
This Court in R v Norris said that it was “an essential ingredient” of an offence under the predecessor to s 220 that the receipt of the money was “on terms requiring the recipient to account or pay”.[12] Citing R v Scale the Court said that:[13]
It now appears established law that there must be something in the nature of a fiduciary element, or the “earmarking” of the money, for [s 220] to operate.
[12]R v Norris (1993) 11 CRNZ 56 (CA) at 59.
[13]At 59 citing R v Scale [1977] 1 NZLR 178 (CA).
The requirements of s 220 were discussed more recently in Nisbet v R.[14] This Court discussed the authorities on the predecessor to s 220 and observed that those cases made it clear that the section applied “if a person agreed to take money on terms requiring it to be paid to a third person and then failed to do so”.[15] Those terms could be “merely contractual”.
[14]Nisbet v R [2011] NZCA 285, [2011] 3 NZLR 4.
[15]At [27].
The Court also referred to R v Prestney where Blanchard J observed that guilt under the section turns on “the nature of the obligation which the accused has expressly or implicitly accepted in relation to [the property’s] use or application”.[16] The Court in Nisbet also noted that simply because a relationship was a fiduciary one that was not necessarily the end of the inquiry. It was still necessary to look at the circumstances. The Court expressed its conclusion in this way:[17]
[A] requirement will be established under s 220(4) if the facts relied upon by the Crown establish a contractual obligation on the part of the accused to deal with property in a particular way. Whether or not it will arise from a fiduciary relationship will depend upon the circumstances. We leave open, because it does not arise in the present case, the possibility that the requirement might otherwise be imposed by law.
The position in England and in Australia
[16]R v Prestney [2003] 1 NZLR 21 (CA) at [23] as cited in Nisbet v R, above n 14, at [29].
[17]At [33].
It is useful to briefly canvas the English and Australian authorities as there are similar provisions in those jurisdictions.
The basic definition of theft in England is similar to that in New Zealand.[18] The equivalent provision to s 220 of the Crimes Act is s 5(3) of the Theft Act 1968 (UK), which relevantly defines “belonging to another” in this way:
Where a person receives property from or on account of another, and is under an obligation to the other to retain and deal with that property or its proceeds in a particular way, the property or proceeds shall be regarded (as against him) as belonging to the other.
[18]Theft Act 1968 (UK), s 1(1).
The Court of Appeal’s observations in R v Arnold on s 5(3) are helpful.[19] In that case, the Court said that s 5(3) covers property received from someone else “under an obligation short of actual trusteeship”.[20] The Court continued:[21]
So far as its limits are concerned, it is of course well-established that the obligation of the recipient must be a legal as opposed to a moral or social obligation. However, provided the obligation is one which clearly requires the recipient of the property to retain and deal with that property or its proceeds in a particular way for the benefit of the transferor, we see no good reason to introduce words of limitation in relation to the interest of the transferor, save that at the time of handing over the property to the recipient he should lawfully be in possession of it in circumstances which give him a legal right vis-à-vis the recipient to require that the property be retained or dealt with in a particular way for the benefit of the transferor.
[19]R v Arnold [1997] 4 All ER 1 (CA) at 9.
[20]At 9.
[21]At 9 (citations omitted).
Parry and Smith and Hogan also identify that the obligations may be imposed by the general law.[22] Smith and Hogan states that qualifying obligations may be imposed by statute:[23]
It is possible for the obligation to be imposed on [the defendant] by statute. No doubt when the State pays housing benefit to [the defendant] to enable [the defendant] to pay his rent, the expectation is [the defendant] will use that money to pay his landlord, but it was held in Huskinson that [the defendant] was not guilty of theft where he spent some of the money received as housing benefit on himself. There was nothing in the relevant legislation suggesting that [the defendant] was bound to pay that money or its proceeds to the landlord. [The defendant] could have met his legal obligation to pay the rent from any sources, such as an unexpected win on the lottery and spent the benefit as he chose.
[22]Jacques Parry Offences Against Property (Waterlow Publishers, London, 1989) at [1.39]; and David Ormerod Smith and Hogan’s Criminal Law (13th ed, Oxford University Press, New York, 2011) at [19.3.3.7].
[23]At [19.3.3.7] (footnote omitted).
Our research has found one case in England where an insolvency practitioner (appointed as such under the Insolvency Act 1986 (UK)) was convicted of theft under s 5(3) of the Theft Act. In R v Adams (Christopher), the appellant, Mr Adams (whose appeal was dismissed) had been appointed supervisor of three distinct voluntary liquidation and bankruptcy processes.[24] A supervisor is closely equivalent to a liquidator when insolvency is voluntary. The Court of Appeal described Mr Adams’ role as follows:[25]
As an Insolvency Practitioner the appellant’s task was to administer bank accounts, referred to as “estate client accounts” which were established specifically to receive monies from insolvent individuals or companies so that they might be passed on under suitable arrangements to the creditors of the individuals or companies in part settlement of their debts owed to the creditors.
[24]R v Adams (Christopher) [2003] EWCA Crim 3620.
[25]At [4].
Mr Adams found his own uses for the money he had received on behalf of the insolvent estates, for example, servicing an overdraft. Rejecting an argument on appeal that banking technicalities regarding overdrafts meant there was no chose in action to steal, the Court of Appeal said this:[26]
Upon the cheque being paid into the office account, the appellant was subject to an obligation to deal with it or its proceeds for the benefit of [the bankrupt’s] creditors or indeed to an extent to the benefit of [the bankrupt]. It is right … that the monies in the hands of a supervisor such as the appellant here in relation to [a voluntary insolvency] are held on trust for the creditors. It does not seem to us that that means that the debtor has no interest in the matter, at least where the cheque in question has been paid into an account belonging to the supervisor where it has no business to be. It seems to us, on the facts that eventuated here, that s 5(3) of the Theft Act applies. …
[26]At [19].
In Australia the theft provisions differ from State to State and as between States and the Commonwealth. However, provisions broadly matching s 5(3) of the United Kingdom Act have been enacted in the Commonwealth,[27] Victoria,[28] the Australian Capital Territory[29] and the Northern Territory.[30]
[27]Criminal Code Act 1995 (Cth), s 131.6.
[28]Crimes Act 1958 (Vic), s 73(9).
[29]Criminal Code 2002 (ACT), s 305(4).
[30]Criminal Code Act 1983 (NT), s 209(4).
It is clear from the descriptions of these various provisions in the commentary that the sections operate similarly to s 5(3) of the Theft Act in England.[31] That no doubt reflects the fact that they were modelled on the English Act. In particular, it is only a legal (not a moral or social) obligation that will suffice. Halsbury’s Laws of Australia says that a contractual obligation will qualify, but goes on to note that a more general fiduciary obligation will too.[32]
The obligations on Mr Norris as liquidator
[31]Halsbury’s Laws of Australia (1995) vol 9 Criminal Law at [130–5620]; and see David Lanham and others Criminal Laws in Australia (The Federation Press, Sydney, 2006) at 343–344.
[32]At [130–5620].
We turn then to consider the relevant provisions in the Companies Act and in the Companies Act 1993 Liquidation Regulations 1994 and their effect.
Section 253 of the Companies Act sets out the principal duty of a liquidator. That is:
(a)To take possession of, protect, realise, and distribute the assets, or the proceeds of the realisation of the assets, of the company to its creditors in accordance with this Act; and
(b)If there are surplus assets remaining, to distribute them, or the proceeds of [their realisation], in accordance with s 313(4) of this Act—
in a reasonable and efficient manner.
Section 255 of the Act sets out other duties of the liquidator. Those duties include, shortly after commencing to act, sending a report to every known creditor with a statement of the company’s affairs and proposals for conducting the liquidation.[33] Section 255(2)(d) requires the liquidator to send reports at six-monthly intervals.
[33]Section 255(2)(c)(ii)(A).
Section 256 contains duties of the liquidator in relation to accounts. The liquidator must keep accounts and records of the liquidation. Further, s 257 requires that at the completion of a liquidation the liquidator must account to every creditor whose claim has been admitted. This is achieved by sending the creditor a final report and a statement of realisation and distribution in respect of the liquidation.
Reference should also be made to sch 6 of the Companies Act which sets out the powers of liquidators and to sch 7. Schedule 7 states that the liquidator must first pay, in the order of priority listed, various payments to preferential creditors. That suggests it is not open to a liquidator to use the money for expenses other than those properly incurred in carrying out the liquidation.
Regulation 37 of the Companies Act 1993 Liquidation Regulations deals with the treatment of funds from a company and provides that a liquidator must deposit the funds of a company under the liquidator’s administration in:
(a)a bank account to the credit of the company; or
(b)a trust account—
at a registered bank.
In addition, reg 38(1) provides that, notwithstanding reg 37, in any liquidation all or any part of the balance standing to the credit of the company in any bank account or trust account maintained by the liquidator, and not required for the time being to meet claims against the company, “may be invested in any registered bank or in any Government securities or any other securities as authorised by the Court”. Regulation 38(2) provides that:
All dividends, interest, and other profits from investments under this regulation shall from time to time as received be paid into the bank account or trust account kept by the liquidator under regulation 37 … .
Finally, reg 28 deals with the remuneration of certain liquidators. Regulation 28(1) provides that unless the Court otherwise orders (under s 276(2)) the remuneration of, relevantly, every liquidator appointed under s 241(2)(c) is the greater of either an amount of $2,000 or a fee calculated on an hourly rate in accordance with a specified limit.
We consider it is plain from a consideration of these provisions that, as liquidator, Mr Norris has acquired the funds on specific terms. The relationship is more than that of a debtor and creditor. The funds have been acquired for a particular purpose and so were earmarked in the sense referred to in the cases we have discussed. The money was not his to use as he liked. That is sufficient to resolve this question.
As to reg 37, Mr Norris says that any bank account will do and as long as there is a journal entry that will suffice. Accordingly, on his analysis, payment of the money into Norris Management’s business account and its almost immediate use by the company for its trading purposes was not problematic. The words of reg 37 require that the payment be made to a bank account to the credit of the company in liquidation if not put in a trust account. If the money is then used for trading purposes it is no longer in a bank account to the credit of the company. As the respondent submits, the idea is to make sure the funds are kept separate from the liquidator’s personal assets or from other assets generally. The regulation gives effect to the principle that the money does not belong to the liquidator. It can be used to pursue the proper costs and expenses of the liquidation but not as the liquidator’s personal funds. As it happens, that view is consistent with the evidence of Laurence Chilcott.
In a further development of his argument, Mr Norris says Judge Behrens was wrong not to take any account of the current insolvency industry practice as presented in evidence relating to the applicable insolvency industry guidelines as prepared and distributed through the Institute of Chartered Accountants. Mr Norris says that these guidelines do not advise or note with any caution any specific terms or special requirements relating to any fiduciary obligation imposed from any terms for funds received, held or dispersed by liquidators.
This argument cannot assist Mr Norris. There are applicable requirements. Further, those requirements impose the type of obligation to account envisaged by s 220(1) of the Crimes Act. Further, we agree with the Judge’s finding that Mr Norris knew of them and so he knew the terms on which the property was received. We consider, for the reasons given by Judge Behrens, that this element of the charge was proved beyond reasonable doubt.[34]
[34]Summarised above at [22].
As to the duty to account to creditors, again, we agree with the Judge’s reasoning.[35] One of the texts summarises the position in this way:[36]
… the liquidator has duties under the [Companies] Act which are focussed on protecting creditors. … It has been said that [the duty in s 253] and a liquidator’s duty to have regard to the views of creditors gives rise to a duty of care owed to the creditors.
[35]Summarised above at [20]–[21].
[36]John Farrar and Susan Watson (eds) Company and Securities Law in New Zealand (2nd ed, Brookers, Wellington, 2013) at [31.5.1(1)] (footnotes omitted).
Accordingly, we consider the Judge was correct on the questions of law challenged by Mr Norris on appeal. We turn now to consider the proposed new evidence.
The proposed new evidence
Mr Norris seeks leave to adduce new evidence from Russell Raharuhi and from Stephen Rowland.[37] Mr Raharuhi is an acquaintance of the appellant and of Mr Savage. Mr Rowland is a private investigator and repossession agent who works for Mr Norris on occasions. Essentially this evidence is directed towards Mr Norris’s claim that the Astra liquidation file was removed from the office of Norris Management by Mr Savage. We interpolate here that Mr Savage in his affidavit filed in response to those of Messrs Raharuhi and Rowland accepts he took documents from the office but not any material from the Astra liquidation file. A bundle of the documents Mr Savage says he took has been filed on the appeal.
[37]There are three affidavits from each deponent.
The evidence from Mr Raharuhi was that Mr Savage worked for him from about mid-2010 assisting with PAYE and GST accountancy matters. His evidence deals with four aspects. First, he says that as Mr Savage’s relationship with Mr Norris deteriorated, Mr Savage spoke in a derogatory manner about Mr Norris and did various things which Mr Raharuhi construed as an attempt to “take him down”. Essentially, Mr Raharuhi says that Mr Savage was in cahoots with the Companies Office with a view to getting a conviction against Mr Norris.
The second aspect Mr Raharuhi deals with is the removal of documents from the office of Norris Management. Mr Raharuhi says that from at least late January to March 2011, Mr Savage told him that he was removing further files and documents from Mr Norris’ office. He says he was shown these documents and he discusses their nature.
Thirdly, Mr Raharuhi says that the bundle of documents Mr Savage has filed as the documents Mr Savage removed from Mr Norris’ office are not the documents Mr Raharuhi saw.
Finally, Mr Raharuhi confirms the evidence of Mr Rowland to which we now turn about an occasion when Mr Savage tried to get Mr Rowland to look at the documents Mr Savage had taken from the office of Norris Management.
Mr Rowland says that in late May 2011 on the instructions of Mr Norris he went to the business owned by Mr Raharuhi where Mr Savage worked. He says that Mr Savage tried to show him documents in his office and in a car. In his initial affidavit, Mr Rowland said he was not interested in the contents of them. He says he cannot recall what was there but states:
It was very clear that they were company documents because I recognised Mr Norris’ company name on some of them. There was some in brown manila folders, and I can recall some handwritten pages. There may have been some A4 lever arch files but I cannot recall precisely.
Again, Mr Rowland says that the documents he saw are not the documents Mr Savage has filed with the Court. The latter documents were a lesser volume. Further, by the time of his third affidavit (4 July 2013) Mr Rowland said:
What I saw was just documents, brown manila folders again containing more documents, and possib[ly] some A4 lever arch files also containing documents.
…
The documents that Mr Savage attempted to show me were documents clearly relating to Mr Norris’ past liquidations and they were certainly business documents associated to or from Norris Management Services Ltd ... .
…
I can clearly recall that the majority of the documents in this box were handwritten pages. I recognised the pages as from an A4 maxi pad looseleaf refill with punched holes on the far left hand side of the page. The writing on these pages was in blue pen and looked like originals, and there was other writing on the pages as well in different colours. I could not read the writing.[38]
[38]There was evidence Ms Parr used a blue pen.
Both Mr Raharuhi and Mr Rowland were cross-examined. Mr Raharuhi accepted that he did not really know what the documents were. He did say there were letterheads with Norris and “things like that” but “I didn’t actually get to open them up and have a good look of what was going on”. He explained that he did not come forward earlier and tell Mr Norris or anyone else what was going on because he was “oblivious to what was going on and no-one actually asked me” and he was “just standing by Mr Savage”.
Mr Rowland accepted that he only viewed the documents briefly and he could not be sure or positive what was in them. He too did not raise the matter at the time despite knowing that the employment relationship between Mr Norris and Mr Savage had broken down. He too said that he looked at the documents and although taking no notice of what they were about did observe that they were on Norris Management letterhead and that some of the documents were handwritten.
We also had evidence from Mr Savage, Elisabeth Thomson (the Deputy Registrar of Companies), and from Mr Ramsay and Mr McPherson (both of whom are with the Companies Office). The thrust of that evidence is to deny any allegations of wrongdoing and collusion. Mr Savage said he did not remove documents from Mr Norris’ office other than his own personal work. Mr Savage and Mr Ramsay were cross-examined by Mr Norris.
Should the new evidence be admitted?
The approach to the admission of this evidence is well settled.[39] The principles were discussed most recently by the Privy Council in Lundy v R.[40] In that case, their Lordships referred to the established tests of credibility and freshness and to the need to consider the effect of the new evidence on the safety of the conviction. As to the latter, we also have to consider whether the fresh evidence, if considered alongside evidence given at the trial, might reasonably have led the judge to return a verdict of not guilty. Their Lordships observed that the nature of the “overriding” test is that the new evidence should be admitted if the interests of justice require it.[41]
[39]Fairburn v R [2010] NZSC 159, [2011] 2 NZLR 63 at [25]; R v Bain [2004] 1 NZLR 638 (CA) at [18]–[27]; Bain v R [2007] UKPC 33, (2007) 23 CRNZ 71 at [34].
[40]Lundy v R [2013] UKPC 28 at [120].
[41]At [119].
We can deal with whether the evidence is fresh shortly so we deal with that first. The Crown accepts the evidence is fresh. We proceed on that basis although we note that the suggestion Mr Savage received some form of inducement from the Companies Office was put to Mr Ramsay at trial so that was an obvious line of inquiry for Mr Norris to pursue at the time. That said, we agree the issue is the credibility or cogency of the new evidence and its potential impact on the verdict.
At the outset, we can reject as not credible the suggestion Mr Savage was offered incentives and somehow colluded with the Companies Office. Ms Thomson deposes that the records of the Companies Office indicate that Mr Savage did not seek any incentive and that no such incentive would be offered to someone in Mr Savage’s position. Ms Thomson goes on to say no concessions were offered to Mr Savage in relation to personal or corporate insolvency matters. Ms Thomson was not cross-examined. Mr Ramsay denied any contact with Mr Savage prior to the visit by the Companies Office to Norris Management. He was not directly challenged on this. He also says that Mr Savage did not get any favourable treatment.
The focus for present purposes is therefore on the possible impact of the evidence of Messrs Raharuhi and Rowland. The high point of this argument for Mr Norris is that Judge Behrens rejected evidence from Mr Norris and Ms Parr and referred in this context to Mr Norris’ inability to provide contemporaneous records and the absence of any original of the budget for the liquidation. At its high point then, this evidence may have provided an explanation for the lack of the originals. However, for the following reasons, we do not consider the proposed new evidence is sufficiently cogent to meet the test for admission.
First, Mr Rowland’s evidence is of seeing the documents in late May 2011. That post-dates the visit to the Norris Management office by the Companies Office and so does not tell us anything about the timing of the removal of those files. Mr Raharuhi’s evidence on its face is stronger in this respect as he refers to the period from January to March 2011 when Mr Savage told him that he was removing further files.
Secondly, neither man had a good look at the papers and so neither is able to confirm that this was the Astra liquidation file. Mr Rowland expressly said he was not interested in looking at the documents and Mr Raharuhi accepted he did not really know what they were. In their subsequent affidavits both evince a greater recollection of what the documents looked like but still are not able to be specific about what they saw. This simply means that the two men saw some documents some of which were on Norris Management letterhead. The evidence is therefore highly equivocal both as to whether the documents belonging to Norris Management that Mr Savage was not entitled to have were in fact removed at all and as to whether what the two men saw related to Astra. When Mr Raharuhi had a closer look (what he described as a “little skim” and a “quick little nosey”) at the documents he could not identify them with any specificity. One of the key documents on Mr Norris’ account was the budget for the costs of the liquidation. Mr Norris said that the original of this document was in the file he lost in Auckland. Neither Mr Raharuhi nor Mr Rowland claim to have seen the original of this document in Mr Savage’s possession.
Finally, when this evidence is brought into the mix alongside of the other evidence at trial it is plain that the proposed new evidence does not meet the threshold. At this point, we need to discuss further some of the evidence from Mr Savage, Ms Sunderland and Mr Norris at trial.
The key points from Mr Savage’s evidence were as follows. He had not done any work on the Astra file personally[42] but he had had a look at the file and rang Mr Norris expressing some concerns about it. Mr Savage explained he was concerned because he could not find any evidence to support the fact work had been done on the file. He said that Mr Norris told him that there were various files in storage at a storage facility. When Mr Savage contacted the storage facility he was told they were aware of no files. Mr Savage got in touch with Norris Management’s solicitors. The solicitors proposed a meeting between the appellant, themselves and Mr Savage. Mr Norris refused to attend and Mr Savage’s employment with the company came to an end. Contact ceased at that point until Mr Savage was engaged by Norris Management in October 2010 to review Mr Norris’ dealings at the request of the Companies Office. He carried on in that role, whilst keeping his own clients, until May 2011.
[42]Mr Norris makes something of a document in Mr Savage’s handwriting headed up: “Astra Enterprises Limited” which he put to Mr Savage in cross-examination before us. The document on its face is consistent with Mr Savage’s explanation that this would have been prepared when Mr Savage was dealing with the audit of Norris Management.
Mr Savage gave evidence that he was at the office of Norris Management on 28 March 2011 when the Companies Office inspectors visited. He described what ensued as follows:
Frankly, panic, um, there was a flurry of, um, activity, … obviously Mr Norris was there, and basically he got the Astra file out, um, and then started giving instructions around the place with regard to it and, um, said that he needed copies of everything for the Companies Office and then, um, said that, ah, he would need invoices for an amount to cover at least $80,000.
When asked what he understood was meant by needing invoices he said:
Simply that, um, there had been no invoices re – created, sent out, or attributed to work done on Astra Enterprises Limited.
Mr Savage then described Mr Norris getting out his diaries and writing in his diaries and “some type of sheet of paper alongside”. Invoices were then constructed to the amount of more than the $80,000. Mr Norris told Mr Savage at the time that he had to account for the total amount of the fees because there were no funds available for Astra and made the remark we have earlier referred to, namely, that he “was always worried that Astra would be my Achilles’ heel”.
Mr Savage said he was not aware of any work having been done on the Astra file by either Mr Norris or his partner, Ms Parr.
Ms Sunderland’s evidence was that not too long after she had begun working at Norris Management in May 2010 there was a discussion with Mr Norris about the liquidation files. In the course of that she said Mr Norris made a “flippant off-hand comment” that the one liquidation file “that could bite him in the arse” was the Astra file. She also described at one point going to file a bank statement in the Astra file and it was not in its filing spot. She said she asked Mr Norris about it and he said not to worry it was not there and it was safe. From that she assumed that it was at his home. She said that the file was returned to the premises although she could not remember quite when that was but it did arrive back and she was able to file the document.
Her evidence was that she had not raised an invoice for Astra although the raising of invoices was one of her expected tasks. She also said that no work was done on the Astra file while she was there. She did accept she had seen an invoice for $39,000 on the file for the period for 2009, which was prior to her working for Norris Management. She described the Astra file as an Eastlight folder with the paperwork in it.
We refer also to the evidence of Mr Norris at trial about the whereabouts of the file on the day of the Companies Office visit. He described his concern at the time the Companies Office inspectors arrived and that he went home to “grab” the working file. When he could not find it he said there was “mass” panic. His evidence was that Ms Parr had said she would go home and grab her file and they then made up one file based on what he called the “stat” file and the material that Ms Parr had. He said that on the stat file there were the appointments, letters and correspondence between him and the former liquidator, some of the bank statements, the liquidator reports, about three invoices, and maybe some other “bits and pieces”. He said that he told Mr Ramsay and Mr McPherson that the working file was missing. However, he did not cross‑examine Mr Ramsay on that point and in cross‑examination accepted that he could not be 100 per cent sure that he had advised Mr Ramsay of this.
Mr Norris was cross‑examined about the loss of his working Astra file. He explained that there were two working files. When he was travelling, he could only fit one of the A4 binders into his bag. On one trip to Auckland in late 2010 he had the two files.[43] He left the meeting and thinks he must have put one file into one bag and left the other one on the chair.
[43]See above at [24].
The other relevant evidence is that from Mr Chilcott. His evidence stands in stark contrast to the evidence of Mr Norris and of Ms Parr as to the nature of the work required for this file. Against Mr Chilcott’s evidence, the budget was simply fanciful.
There was, accordingly, evidence at trial accepted by the Judge supporting the Crown case that the invoices recreated after the inspectors’ visit did not accurately reflect the work done on the liquidation. Some of this evidence, particularly the panic that ensued on 28 March 2011 and Mr Norris’ comments, was not challenged. The evidence of Ms Sunderland[44] indicated the file had been missing on an earlier occasion and Mr Norris’ initial reaction suggested the file was at times kept at his home. Mr Norris also gave an explanation for the absence of the file, namely, leaving it behind by mistake. These factors are consistent with the Crown case about the amount of work done on the file and inconsistent with the inference Mr Norris now advances, namely, that Mr Savage removed the file.
[44]Discussed above at [83].
Against all of that, we can say this is not a case where the proposed new evidence might reasonably have made a difference to the verdict.
Procedural matters
We turn now to the various matters of procedure relating to the conduct of the trial and associated matters raised by Mr Norris.
The s 344A application
Prior to trial, Mr Norris advised the Crown that he objected to the admissibility of evidence flowing from the inspection of Astra’s records at Norris Management’s offices. The Crown applied for a pre-trial admissibility ruling under s 344A of the Crimes Act.
Judge Behrens was satisfied that the inspectors were authorised to inspect the Astra documents held by Norris Management.[45] They had obtained that authorisation through the delegated power of the Registrar of Companies and the authorities to each of them were produced. The Judge also considered that the inspectors had the authority to inform the police of a suspected crime under s 366(1)(g) of the Companies Act.
[45]Reasons for verdict, above n 1, at [4].
On appeal, Mr Norris reiterates his submission that the authorisation, manner and conduct of the inspection under s 365 of the Companies Act by the inspectors was ultra vires and therefore illegal and unlawful. In oral argument, Mr Norris focused on his submission that it was not possible to use s 365 of the Companies Act to start a criminal investigation. In other words, the thrust of his complaint is that the Companies Office should have passed the matter on to the police.
Dealing with that submission first, it is plain that two of the purposes for an inspection set out in s 365 were applicable in this case. Section 365 deals with the powers of inspection of the Registrar of Companies. It lists three purposes for which the Registrar or a person authorised by the Registrar may exercise various powers of inspection. The section relevantly reads as follows:
365 Registrar’s powers of inspection
(1) The Registrar or a person authorised by the Registrar may,—
(a) for the purpose of—
(i)ascertaining whether a company or a director of a company is complying, or has complied, with this Act or …; or
(ii)ascertaining whether the Registrar should exercise any of his or her rights or powers under this Act or …; or
(iii)detecting offences against this Act or the Financial Reporting Act 1993; and
(b)if, in the Registrar’s opinion, it is in the public interest to do so,—
do any of the following:
(c)require a person, including a person carrying on the business of banking, to produce for inspection relevant documents within that person’s possession or control; or
(d) inspect and take copies of relevant documents; or
(e)take possession of relevant documents and remove them from the place where they are kept, and retain them for a reasonable time, for the purpose of taking copies; or
(f)retain relevant documents for a period which is, in all the circumstances reasonable, if there are reasonable grounds for believing that they are evidence of the commission of an offence.
…
(4)A person must not obstruct or hinder the Registrar or a person authorised by the Registrar while exercising a power conferred by subsection (1).
…
(6) In this section,—
company includes an overseas company
relevant document, in relation to a company, means a document that contains information relating to—
(a) the company; or
(b)money or other property that is, or has been, managed, supervised, controlled or held in trust by or for the company.
Sarah Burnett, a solicitor who advises the Registrar, gave evidence that two of the three purposes for inspection available under s 365(1) were relevant. Those purposes were, first, ascertaining whether Mr Norris as liquidator had met his duties as liquidator and whether he had made any false statements in his liquidation report (an offence against s 377 of the Companies Act) and, secondly, assisting in establishing whether the Registrar should exercise any of his powers under the Companies Act. That would include the power under s 366(1)(g) to give to any person (including the police) documents or information for the purposes of detecting offences against any Act, in this case, the Crimes Act. Further, as Ms Inwood who presented the Crown submissions on this part of the argument submitted, this Court in considering the predecessor to s 365(1) noted:[46]
There is no reason to place any artificial restraint on the concept of compliance. It is not limited to provisions of the Act whose non-compliance is an offence; nor is it limited to those provisions enforceable only by or at the instance of the Registrar. ... Section 9A is intended to allow the documents and papers mentioned in it to be inspected in aid of remedial, protective, and penal purposes of the Companies Act.
[46]Coopers & Lybrand v Minister of Justice [1985] 2 NZLR 462 (CA) at 464.
The idea that there were ulterior purposes was put to Ms Burnett and she denied that. There is no evidence of such ulterior purposes.
Mr Norris also challenges what he calls an “anticipatory” direction to disclose under s 366(1)(g) or a pre-approved discretion to disclose under s 366(3)(i). Ms Burnett confirmed in her evidence at trial that it was intended to indicate to the inspectors that they had the Registrar’s pre-approval to speak to the police. Section 366 deals with the disclosure of information and reports. Section 366 states that:
366 Disclosure of information and reports
(1)A person authorised by the Registrar for the purpose of section 365 who has—
(a)obtained a document or information in the course of making an inspection under that section; or
(b)prepared a report in relation to an inspection under that section—
must, if directed to do so by the Registrar, give the document, information, or report to—
…
(g)any person authorised by the Registrar to receive the document, information, or report for the purposes of detecting offences against any Act.
…
(3)A person authorised by the Registrar for the purposes of section 365 who has—
(a)obtained a document or information in the course of making an inspection under that section; or
(b)prepared a report in relation to an inspection under that section—
must not disclose that document, information, or report except—
(c)in accordance with subsection (1) or subsection (2); or
…
(h) in the course of criminal proceedings; or
(i)subject to the approval of the Registrar, for the purpose of detecting offences against any Act.
(4)A person who fails to comply with this section commits an offence and is liable on conviction to the penalty set out in section 373(2).
On this aspect Judge Behrens stated:[47]
[11] It seemed to me that despite the qualifying words referred to, the inspector was authorised under s 366(1)(g) to give the information to police. I did not see that the “anticipatory” authority was invalid. Further, I construe the words as being a statutory authority to enable police to receive information they would otherwise not be entitled to and which Mr Ramsay was obliged to give them.
[12] Mr Ramsay’s evidence satisfied me that he had uncovered evidence of criminal offending under the Crimes Act in that on the face of it, [Mr Norris] had not only failed to account to creditors of the company for funds received in the course of liquidation but had applied those funds to his own or his company’s purposes without any authority whatsoever.
[47]Reasons for verdict, above n 1.
We agree. There is nothing in the words of s 366 to suggest that the direction to give a document to the police cannot be made in advance of an inspection and on the basis that it is to be given if evidence of criminal offending is uncovered.
Section 347 application not dealt with prior to trial
Prior to trial, Mr Norris indicated that he would make an application for a discharge under s 347 of the Crimes Act. The Judge noted that Mr Norris pressed that at the end of the Crown case. Judge Behrens dealt with this as follows:[48]
Sitting as a judge alone I held there was the necessary quality and quantity of evidence upon which I could reasonably convict [Mr Norris] and I continued with the hearing.
[48]Reasons for verdict, above n 1, at [13].
Mr Norris says that the fact the Judge did not deal with this application prior to trial compressed the timeframe for preparation for trial. He also says that this meant that he had no reasons for the decision to decline the application prior to trial.
As to the first point, there is nothing to indicate any difficulty caused by the timeframe. Mr Norris was on notice from at least 27 July 2012 that the trial was due to proceed on 3 September 2012. Further, it is not suggested there is any aspect of the defence not advanced because of the timeframe. As to reasons, in this case, the failure to give reasons in advance was potentially only relevant to the prospect that Mr Norris might plead guilty. It is not suggested that he may have pleaded guilty and indeed he is still denying any breach of s 220.
District Court rather than High Court
The final point Mr Norris makes is that he sought a transfer of the case to the High Court. That was declined and Mr Norris says that decision was wrong.
As counsel for the respondent explains, at the time of Mr Norris’ trial the District Courts Act 1947, not the Companies Act, governed which court these proceedings should be heard in.[49] Under the District Courts Act, the District Court had presumptive jurisdiction over this offending. Mr Norris knew this having two weeks earlier been granted a judge alone trial in the District Court. Despite that, four working days prior to trial, Mr Norris applied to transfer the trial to the High Court. That application was decided the next day. Miller J concluded it was not in the interests of justice to transfer the matter to the High Court more than 18 months after the charges had been laid and three days out from trial, simply because the High Court has supervisory jurisdiction over liquidators.[50] There is no error in this judgment or prejudice arising from it.
Sentence
[49]District Courts Act 1947, pt 2A (repealed from 1 July 2013 by the Criminal Procedure Act 2011).
[50]Norris v R [2012] NZHC 2212.
Judge Behrens took a starting point of two years imprisonment.[51] Taking into account the impact of the offending on Mr Norris’ business and his undertaking to honour any reparation order, Judge Behrens imposed a final sentence of 10 months home detention, 100 hours community work, $31,724.42 in reparation to be paid to Mr and Mrs Manley ($5,000 payable immediately and then by instalments of $100 per week) and six months post-detention conditions.
[51]Sentencing remarks, above n 2, at [7].
The only challenge on sentence is to the order that reparation be paid to the Manleys. The Crown accepts that it was not correct to order the payment of reparation to the Manleys because they are not “victims”.[52] The Crown accepts that the victim in this case is Astra which has been restored to the register and is under the control of the (now) liquidator. Astra suffered a direct loss of over $80,000.
[52]Kapa v R [2012] NZSC 119, [2013] 3 NZLR 1 at [11] per Elias CJ, McGrath, William Young and Chambers JJ.
Mr Norris was content to leave it to the Court to determine whether reparation was payable to Astra. We see no reason not to keep Mr Norris to his undertaking. The initial figure for reparation of $31,724.42 represented the amount owed to the Manleys. With the substitution of the company as the recipient of reparation there is no need to confine reparation to that amount. A higher figure may be appropriate reparation. We consider that a reparation order of approximately half of the amount owing is appropriate in this case. We order accordingly. We consider, as acknowledged by the Crown, that reparation for the full amount may result in reparation being payable for an unreasonable period.
Result
For these reasons, the application for leave to adduce new evidence and the appeal against conviction are dismissed. The appeal against sentence is allowed in part. The order that Mr Norris pay reparation of $31,724.42 to the Manleys is quashed. An order that Mr Norris pay $40,000 reparation to Astra Enterprises Ltd (in liquidation) is substituted. We understand that Mr Norris has paid $5,000 as directed by the Judge. We direct the Registrar of the District Court at Nelson to determine the conditions of payment of the reparation, in particular, to enter into an arrangement allowing payment by instalments. Mr Norris must resume his home detention sentence. He is to be at the address for home detention at 10.00 am on 4 November 2013, and remain there to await the probation officer and the security company representative.
Solicitors:
Crown Law Office, Wellington for Respondent
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