R v Ayub HC Auckland CRI 2003-090-9666

[2005] NZHC 1722

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI 2003-090-9666

QUEEN

v

MOHAMMED AYUB

Hearing:         21 April 2005

Appearances: KJ Glubb for Crown

DG Young for Prisoner Judgment:  21 April 2005

SENTENCE OF COOPER J

Solicitors:
Meredith Connell, Crown Solicitors, PO Box 2213, Upper Shortland Street, Auckland.

Copy:    DG Young, PO Box 105310, Auckland

R V AYUB HC AK CRI 2003-090-9666 [21 April 2005]

[1]    Mr Ayub, you appear today for sentence on 45 counts of which you were convicted at the conclusion of the trial on 15 October 2004. You are also to be sentenced on a charge of wilfully attempting to pervert the course of justice, to which you pleaded guilty and of which you were convicted by Potter J on 16 March this year.

[2]    There have been delays in arranging for your sentencing today which mean that an undesirable length of time has now elapsed since the conclusion of your trial. It is, I think, in the circumstances appropriate that I record what has occurred.

[3]    Having received the jury’s verdicts and convicted you on 15 October 2004, I remanded you in custody to 25 November. I asked for a pre-sentence report to be prepared, and also, having regard to the nature of the bulk of your offending, I asked for a reparation report to be prepared under s 33 of the Sentencing Act. Further, I directed you to make a declaration as to your financial capacity in  accordance  with s 42 of that Act.

[4]    Following those events on 15 October 2004, there have been a series of further remands. The Probation Service was not able to accommodate preparation of the required reports within the time frame necessary for the sentencing to proceed on 25 November, and on that day I further remanded  you  in  custody for  sentence  on 9 December.

[5]    On 1 December I was advised that your then counsel, Mr Kaye, would be unable to appear on 9 December due to a matter proceeding in the Court of Appeal in Wellington on that day. Then, on 8 December 2004, I was handed a letter from the Probation Service that advised me that you had declined to be interviewed by the assigned probation officer and had instead, required to be interviewed by another officer, whom you had named. However, the letter said that it had been established that your request was not appropriate given a potential conflict of interest between you and the probation officer whom you had nominated. The Probation Service

suggested that, if you were prepared to be interviewed by the probation officer, who had been originally assigned the task, a further one week’s remand would be necessary to complete the report. In the circumstances, there was a further remand to 17 December 2004.

[6]    On 16 December 2004, Mr Kaye wrote to the Registrar advising that you had been visited by a probation officer and it appeared that you would now consent to a probation report being prepared. A subsequent report from the Probation Service which was dated 11 February 2005, in fact advised that a probation officer had attempted to interview you on 15 December 2004, but that you had declined to proceed with the interview on the basis that you would not submit to it until you had received further legal advice as to the approach that you should take in that interview.

[7]    So that, in the circumstances, the report was not ready for the sentencing on Friday 17 December 2004 and on that day Mr Kaye appeared on your behalf, and confirmed that you accepted in the circumstances that the matter would have to be further adjourned, and that you would be further remanded in custody for sentencing in 2005. So I again remanded you in custody accordingly, this time for sentence on 11 February 2005.

[8]    As it transpired, it would not have been possible for me to deal with the matter on that day because of other judicial business but in any event, the pre- sentence report had still not been prepared. The Probation Service’s report of 11 February 2005 in fact had recorded two further unsuccessful attempts to interview you on 24 January and 28 January 2005, on both of which occasions you had declined to be interviewed. On the first occasion you apparently again relied on the need to obtain legal advice prior to the interview. On the second, you had referred to an intention to obtain different legal representation and again indicated that you would not be interviewed until you had received legal advice.

[9]    On 15 February 2005, Mr Kaye appeared. That was the alternative date that had been arranged when the sentencing could not proceed on the 11^th. He sought leave to withdraw because you no longer wished him to represent you and indeed,

had criticised his conduct of your defence at the trial. In the circumstances disclosed I felt that I had no option but to grant Mr Kaye’s application for leave to withdraw and I did so. I then addressed you, making it plain that it was imperative that  you take the necessary steps to obtain new counsel and also to co-operate with the Probation Service. You were again remanded in custody, so that sentencing could take place on Tuesday 22 March 2005. So that the Court could be satisfied that you were taking the appropriate steps to obtain new counsel, you were also directed to appear at the call-over before Potter J on Wednesday 2 March.

[10]   The next event that I should record is that on 16 March 2005 you pleaded guilty before Potter J to the charge of wilfully attempting to pervert the course of justice that I mentioned at the outset. But it was not until 15 March 2005 that the Registry was advised through your new counsel, Mr Young, that you had agreed to co-operate for the purpose of preparation of the pre-sentence report. That meant that the Probation Service were not in a position to complete the report in time for the scheduled sentencing on 22 March.

[11]   You appeared again before me on 22 March. Having heard from counsel I decided that since there was now the prospect of a probation report being prepared then notwithstanding the remarks that I had made on 15 February 2005 about an intention to sentence you with or without such a report, having consistently sought the provision of the report and your co-operation to that end, I should grant one further adjournment to enable the report to be prepared. Consequently, and against Mr Glubb’s opposition for the Crown, I again remanded you in custody for sentencing today.

[12]   The length of time that has now elapsed since you were convicted is regrettable. I have to say, however, that in large part it is a result of your own  actions. I mention these matters so as to record the reasons for the delays that have arisen and also as the context for my view that, notwithstanding the delay that has occurred, it is not appropriate that the sentences that would otherwise have been imposed, be reduced on account of that delay.

[13]   For completeness, I mention also that I have not taken these events into account in any way as aggravating, or in any other respect, as influencing the sentence that I am about to impose.

[14]   The charges of which you were convicted at your trial, with one exception, involved offences of dishonesty. Nine charges were laid under s 246(2) of the  Crimes Act, seven of which alleged that you obtained money by means of a false pretence, and two of which alleged that you attempted to do so. Twenty-two charges were laid under s 229A of the Crimes Act and involved allegations that with intent to defraud you used documents capable of being used to obtain a benefit or pecuniary advantage for the purpose of obtaining for yourself or another person, such a benefit or pecuniary advantage.

[15]   You were also convicted on three counts of forgery laid under s 265 of the Crimes Act, seven counts of being a party to a company carrying on business with intent to defraud creditors of the company or other persons, those charges being laid under s 380 of the Companies Act 1993; three counts of perjury laid under s 109 of the Crimes Act, and one of threatening to kill under s 306 of that Act. In addition, there is the other charge already mentioned, of attempting to pervert the course of justice laid under s 117(1)(e) of the Crimes Act, to which you pleaded guilty in March.

[16]   The charges laid under s 246(2) of the Act were based on a scheme that you had in pursuance of which you placed newspaper advertisements offering, through the vehicle of a company called Trendy Homes Ltd, land and housing deals. The Crown’s case at the trial was that you obtained money from person attracted by the advertisements on the basis of false representations that you would purchase  land and construct a dwelling for them. In two cases, the Crown’s case was that you attempted to do so. That is, that you attempted to obtain money.

[17]   Those to whom you made the false representations were generally persons who had very little money and little ability to obtain money directly from other lending institutions, and they were, for that reason, susceptible and vulnerable to the false hopes that you offered them. The sums that you succeeded in obtaining from

them were not large in absolute terms. There was $1,100 from the Brodies; $3,500 from the Chettiars’ and the Clarkes’ and Mr Jarden and Ms Law, Fale Leilua and Gurcharan Sood; $3,400 from Teisa Vaikeli and Malia Nau – they having retained

$100 for personal needs at the time.

[18]   You obtained $2,100 from the Fishers and $1,000 from the Silas. As I say, these were not substantial sums. The total is $18,100 in absolute terms, but the victims of your conduct were not wealthy people. The loss to them was substantial. They suffered hardship and emotional stress as is detailed in the victim impact reports which I have read for the purposes of today’s hearing.

[19]   The same people were victims of the conduct on which some of the charges under s 229A of the Crimes Act were based. In those cases the Crown alleged, and the jury accepted, that you used a term loan contract that they had signed, passing it on to a debt collection agency which then, on your instructions, took action to secure payment of sums falsely claimed to be owing under the document.

[20]   The balance of the charges laid under s 229A concerned mortgage applications, or loan applications or credit applications, which were used for the purpose of obtaining a financial advantage. The victims of this conduct were the Westpac and ANZ Banks, the National Bank and other lending institutions, as well as companies whom you had gone to for the supply of goods.

[21]   The three counts of forgery were founded on false pay slips which you produced in the name of Chix International Ltd in favour of an associate, one Amrul Khan. The Crown alleged, and the jury must be taken to have accepted, that these pay slips were false, that you knew they were false and that you knew that when you made them, and that you intended that they would be acted on as if they were genuine. They were in fact used in an application made to Westpac for mortgage finance in September 2002, that application being itself one of the transactions covered by a charge under s 229A of the Act.

[22]   Seven of the counts allege offences under s 380 of the Companies Act 1983. In each case the charge was that you were knowingly a party to a named company,

carrying on business, with intent to defraud creditors of the company. Those companies were Trendy Homes Ltd, The Housing Company Ltd, MOD Developments Ltd, Florida Finance Ltd, State Construction Ltd and Red Chip Financial Ltd. You were effectively in control of those companies.

[23]   The Crown’s case was that in various different ways those companies had carried on business so as to defraud their creditors and you were a knowing party to that conduct, indeed had devised and directed it.

[24]   Also among the matters that were dealt with at the trial were three counts of perjury. In each case the charge was based on affidavit evidence that you gave in Court proceedings. The Crown alleged that you made false assertions as to fact knowing them to be false and intended to mislead the Court.  You did  this in one  case in an attempt to avoid the liability of Universal Corporation Ltd (another company that you controlled) to Auckland Landscaping Services for work  carried out by that company on a development site. Another case concerned false affidavit evidence given in litigation between Trendy Homes Ltd (another company that you controlled), and Mrs Page, who was one of the victims of the conduct charged under s 229A and 246(2).

[25]   The final case involved an affidavit that  you  swore  in  the  case  between Mr Nicholls and you, in which he was endeavouring to recover a debt that you owed him, he having lent you money as a former friend to help you out in your painting business.

[26]   I refer next  to the charge of threatening to  kill. That threat was made to Mr Sakawath Khan, another former friend who had contracted with you or one of your companies, for the purposes of construction of a house. In the course of an argument with him about the progress, or he would say, lack of progress of that development, you threatened him. You boasted to him about your martial arts expertise and you ability to kick his head in and to kill him with one kick.  He reacted to your threats by taking it seriously and telephoning the police and telling them about it.

[27]   Lastly I mention the charge to which you pleaded guilty on 16 March 2005.  It related to telephone calls that you made on Sunday 3 October, during the course of your trial. Three calls were made on that day to Mr Dilshaad Kasim, the brother-in- law of your former wife, she being a witness that the Crown intended to call at your trial. In two of those conversations you asked him to pass messages to her as to the content of the evidence she should give. Other advice that you wanted passed on  was that she should not swear an oath on the Koran and that she should, of course, not tell the police that the calls had been made.

[28]   Effectively, you were wanting her brother-in-law to tell her on your behalf, to give false evidence in her forthcoming appearance at your trial. The telephone calls were made from the Remand Centre where you were detained during the trial.

[29]   I have had regard to the pre-sentence report which records that although your father died when you were two years old, you had a good up-bringing in Fiji with a close relationship with your six siblings. Although money was short, your mother managed to cope and there was no violence or other forms of abuse in the family home. You completed secondary education in Fiji. Your mother’s death in 1988 evidently had a deep effect on you. By then you had moved to New Zealand but you could not return to Fiji for her funeral because by then, you had been convicted of offences in this country relating to a false passport application.

[30]   You have apparently been self-employed for most of your adult life and have engaged in various business ventures, including a painting business which you told the probation officer eventually employed a thousand people and handled large commercial contracts with construction companies. This led on to your involvement in development activities which was the context of much of the offending for which you are now to be sentenced.

[31]   You were adjudged bankrupt on 28 January 2004 and have no savings or assets from which to meet any order that the Court might make for reparation. I observe that although you evidently told the probation officer that you had no outstanding debts, in the declaration as to assets and liabilities that you made on

oath, on 16 December 2004, you stated that you had a considerable number of liabilities.

[32]   The pre-sentence report records that in your interview you continued to deny involvement in the offending and to maintain your innocence. You told the author that you had commenced the business in good faith with the intention to help people who would not be able to secure financing for a first home from the main mortgage lenders. You said that all the transactions had been legal and that all the agreements were being honoured prior to your arrest. I must say that, having presided  at  the trial, I do not accept that comment for one moment.

[33]   The denial by you of responsibility led the probation officer to record a “low motivation and readiness to change”. It is said in the report that you were “not willing to accept responsibility for your offending” and that you were “the victim of circumstances beyond your control”. You were, apparently, critical of the capacity  of the jury to understand the complexities of the financial transactions which were the subject of the charges. Again, in my view, the jury understood well what was going on.

[34]   The report stated that you were remorseful that the victims had lost money as a result of their dealings with you, that you were willing to offer your apologies and also to make reparation to those who had suffered loss.

[35]   The themes of that pre-sentence report are repeated in a long letter that you wrote to me on 18 February 2005. Essentially, in it you assert that you became involved in the transactions that formed the subject of the charges; you then became the victim of a smear campaign; a financial backer took action to cancel overdrafts and other accommodations, and your business then collapsed. I do not accept that explanation of your conduct. Even if I did, it would not explain why you threatened to sue some of the individual complainants on contracts that you knew you were not in a position to perform. Nor, would it explain the false loan applications that you caused to be made in the name of Amrul Khan.

[36]   For the Crown, Mr Glubb has submitted that your conduct has a number of aggravating features. First, he referred to planning and pre-meditation, submitting that you had developed an elaborate scheme and set about systematically promoting it to prospective clients. He referred to what he described as a breach of trust in as much as individuals had placed trust in you to perform the bargains that you had struck with them, but you had simply used that trust in order to obtain the funds fraudulently.

[37]   He referred to the fact that having obtained cash from seven  complainants and not performed, you then proceeded to attempt to enforce supposed debts owed by them, further victimising them by that conduct. You then had moved your attention to business and finance institutions and had attempted to avoid debts owed by you when Court proceedings were launched by those to whom you owed the money. He referred to what he described as the “developing nature” of the fraud inasmuch as when your scheme foundered you then made systematically, loan applications to finance houses in an effort to further fund your business.

[38]   He referred to the re-branding exercise and the number of companies that you formed in an effort to secure funding and your use of the numerous companies so formed, for fraudulent purposes. He referred to the fact that $18,100 had been obtained fraudulently from persons who could ill afford to lose that money and insofar as your attempts to obtain money from the various financial institutions were concerned, he identified a sum of over $3,500,000 as the amount which had been the subject of your, admittedly, unsuccessful attempts.

[39]   Mr Glubb submitted that there were no mitigating circumstances which I should take into account. He referred to the need for personal and public denunciation and deterrence of this kind of offending; the need to sheet home responsibility and accountability in you, for your conduct and  submitted, overall, that a sentence in the range of four to six years would be appropriate. That submission was based on a number of authorities to which Mr Glubb had referred and which I have considered for the purposes of the sentencing.

[40]   Mr Young, who has appeared today on your behalf, notwithstanding the fact that he did not appear at the trial, has in my view, ably said on your behalf  everything that could be said. It was his submission that your stance that in some  way all of this conduct was to be attributed to the actions of the funder, who in response to rumours circulating about you, withdrew its funding, was not entirely without substance, and he referred me to passages in the transcript of evidence in support of that submission.

[41]   I do not accept that there is any justification in those events for your conduct, having presided at the trial. However, Mr Young went on to refer to the lack of significant or recent previous convictions, and in that respect your only previous appearance before the Courts was the passport related offending in 1988. Although, once again, that involved dishonesty, in my view it is too long ago to have any significance whatsoever in the sentencing exercise today.

[42]   Other points made by Mr Young referred me to the absence of the use of violence, the small extent of the actual loss, the fact that this was not a case of breach of trust in the sense of a professional person breaching a fiduciary relationship, nor was it a case where trust was breached by letting down persons associated by ties of  a family kind.

[43]   He submitted that you had not been motivated out of a desire to support an extravagant life-style, but had acted so as to save a foundering business, fulfil contracts, and what he described as a sense of pride, and he reminded me that as a result of the events that occurred, you have already lost your business, lost your possessions, suffered considerable public humiliation and embarrassment and that your relationship with your wife also came to an end.

[44]   Mr Young also repeated your current stance, which is one of remorse for harm that you have caused and willingness when you are in a position to do so, to pay back the money which you wrongly took from your victims. Mr Young reminded me by reference to various authorities, that there were some distinguishing factors in the present case. I have already mentioned the fact that he submitted that large sums of money had not been involved compared with other cases. He

submitted that there had been no violence and also that your past was free of the kind of extensive offending which was behind some of the cases upon which Mr Glubb had relied for his suggestion of a sentencing range of four to six years.

[45]   Certainly, when one looks at the 597 counts of using a document with intent to defraud, coupled with 32 counts of obtaining credit by fraud, 26 of forgery and other charges that  had been laid  against  the accused  in R  v Orchard CA123/03   24 October 2003, this is not an equivalent situation. However, in that case the Court imposed a term of six years and nine months imprisonment.

[46]   Mr Young referred me to decisions of the Court of Appeal in R v Gore CA407/94 1 May 1995, and R v Hunter CA 493/93 22 April 1994, and the decision of Randerson J in Henderson v Police HC AK AP 43/99 4 May 1999 and also to the decision in R v Singh (2003) 20 CRNZ 158 (CA).

[47]   On the basis of those authorities he submitted in his written submissions that a term of between three and a half and four and a half years was appropriate.

[48]   I accept that in this case, apart from the threat to kill Mr Khan, you did not set about to demand money with menaces, and I also accept that your past history is not an aggravating feature. Nevertheless, having regard to the extent of the fraudulent conduct in which you were involved, the susceptible nature of many of your victims, the degree of pre-meditation and the elaborate steps that you took to further your dishonest activities, a sentence of imprisonment in my view, is inevitable.

[49]   I take into account also the fact that there is, only belatedly, an expression of remorse and that that is accompanied at the same time by on-going  denial of guilt and refusal to accept responsibility. There is, in the circumstances, a clear need both to deter you personally and to deter others who might be tempted to act in a similar way.

[50]   Taking into account the various matters that have been raised by counsel, it is in my view, appropriate that I essentially treat the charges laid under s 229A and

s 246(2) of the Crimes Act, both of which carry a maximum penalty of seven years, as the lead offences for sentencing purposes.

[51]   Forgery, of course, is a crime which carries a greater maximum penalty, namely a term of ten years. However, it was the conduct subject to the  charges  under s 229A and s 246(2) which, in my view, is more serious in this case. Adopting that approach, it seems to me that a term of imprisonment which takes into account the gravity of the overall offending, but which is not out of proportion to the individual offences, is a term of four years.

[52]   In respect of the counts of threatening to kill, forgery and perjury, a sentence of two years will, in my view, be appropriate. Concurrent sentences of one year should be imposed in respect of the charges laid under the Companies Act.

[53]   In respect of the charges that you attempted to obtain by false pretences under s 246(2) of the Act, in each case sentences of six months imprisonment will be appropriate.

[54]   Mr Glubb submitted that I should treat the perjury charges as being different in kind and so impose cumulative sentences having regard to s 84(1) of the Sentencing Act. In my view, whilst that submission is not without merit, they are similar to the other offending in the sense that they were all, of course, of their nature, occasions when you acted dishonestly. They were also both in timing and, I think, ultimately in setting, offences which were linked inasmuch as in each case the false evidence arose in a matter arising out of your business affairs.

[55]   I am, however, persuaded by Mr Glubb’s submission that the charge to which you pleaded guilty of attempting to pervert the course of justice, should be treated as different in kind. It arose, of course, when you were actually on trial in respect of all the other offending. It is particularly serious when any attempt is made to attempt to influence the evidence intended to be given by a witness and that is what occurred in this case. Counsel referred me to the decisions of the Court of Appeal in R  v  Hillman CA 14/92 14 May 1992 and R v Clutterbuck CA372/99 17 November 1999. I do not see what happened in this case as analogous to the facts which were before

the Court in those cases. There was no actual or threatened violence or threat of  other form of retribution which was the subject of the messages that you left to be passed on to the witness. Also, as Mr Young reminded me, the conversation did not actually take place direct with the witness.

[56]   There was comprehensive review of relevant authorities by Potter J in R v Dutt HC AK T025524 2 April 2004. She said at paragraph [21] of that decision that  a review of the cases indicates that three years imprisonment appears to be reserved for relatively serious cases and a starting point in the range of 18 months to two years is suitable for less serious attempts to pervert the course of justice. Hillman  and Clutterbuck were, in her view, authorities for those propositions and she also said that that approach was reflected in the other decisions to which she had referred.

[57]   I think a starting point of 18 months would be appropriate in respect of this particular offence. I bear in mind not only the matters to which Mr Young referred and which I have summarised above, but also the fact that as Mr Glubb put it, the witness whose evidence you attempted to influence was one which was very important in the context of the trial, she having been your former wife, and present at the property in Colwill Road, from which you ran your fraudulent businesses. An attempt to alter the evidence that she was otherwise to give might have been important in the outcome overall of the trial. Consequently, although I think the conduct is less serious than that which was before the Court of Appeal in  the Hillman and Clutterbuck cases, nevertheless, I think that this conduct was indeed, serious.

[58]   In that case, however, I have to take account of the fact that you pleaded guilty at a fairly early stage and consequently, the sentence that I impose in respect of that matter, will be one year’s imprisonment.

[59]I summarise the position then, that I have reached.

·     On each of the counts of which  you  have  been convicted  under  s 246(2)  and  s 229A of the Crimes Act, you are sentenced to four years imprisonment.

·     In respect of the counts alleging forgery, perjury and threatening to kill, you are sentenced in each case to two years imprisonment.

·     In respect of the charges alleging that you attempted to obtain by false pretences, also laid under s 246(2) of the Crimes Act, you are sentenced in each case to terms of six months imprisonment.

·     In respect of the charges laid under s 380 of the Companies Act 1993, you are sentenced in each case to one year in prison.

[60]   All of the sentences to which I have referred so far, are to be served concurrently.

[61]   On the charge of attempting to pervert the course of justice, laid under s 117 of the Crimes Act, you are sentenced to one year’s imprisonment. That term is to be cumulative on the other sentences that I have imposed.