R v Borlase
[2017] NZHC 236
•22 February 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CRI-2015-044-1286 [2017] NZHC 236
THE QUEEN
v
STEPHEN JAMES BORLASE MURRAY JOHN NOONE
Hearing: 22 February 2017 Counsel:
BH Dickey for Crown
RM Mansfield and IM Brookie for Defendant Borlase
S Lance for Defendant NooneSentenced
22 February 2017
SENTENCING NOTES OF FITZGERALD J
Solicitors: Crown Solicitor, Auckland
To: RM Mansfield, Auckland
IM Brookie, Auckland
S Lance, Auckland
R v Borlase and Noone [2017] NZHC 236 [22 February 2017]
Introduction
[1] Mr Borlase and Mr Noone, you may remain seated until I ask you to stand. These sentencing remarks will be transcribed and a copy of them will be made available later today.
[2] Mr Borlase and Mr Noone, you appear for sentence today having each been found guilty of charges of bribery and corruption of an official pursuant to s 105 of the Crimes Act 1961.
[3] Mr Borlase, I found you guilty of eight charges, six of which relate to the provision of payments and benefits to Mr Noone. The remaining two concern the provision of benefits to Mr George. Mr Noone, I found you guilty of six charges relating to the acceptance of payments and benefits from Mr Borlase (via the company Projenz), and these charges “mirror” the first six charges against Mr Borlase.
[4] As you will be aware, the maximum penalty for each of these charges is
seven years’ imprisonment.
[5] In these sentencing remarks, I will first summarise the factual background to your offending. Those facts are obviously well known to you and your counsel and are set out in detail in my reasons for verdicts. It is important to go through these matters as the others here in Court today and the wider public have a right to know the basis upon which I am sentencing you today.
[6] After addressing those matters, I will then address the relevant sentencing purposes and principles, and I will then consider your sentence Mr Borlase, and then Mr Noone’s.
Background to the charges
Introduction
[7] Mr Borlase and Mr Noone, you have known each other since the late 1990s. In around 1997, Mr Borlase established Projenz, which provided engineering
consulting services, particularly in relation to roading. It was originally a “one man band” organisation, though over time, other engineers were contracted as sub- consultants. In around 2000, a second director and shareholder also joined the company.
[8] Within a few years, one of Projenz’ main clients was Rodney District Council (RDC). This is when you, Mr Borlase, first met Mr George, as he was one of your primary client contacts at that time.
[9] Mr Noone, you first contracted to Projenz as a sub-consultant in 2000. This was originally in a business development and traffic safety engineering role, on an exclusive basis. This continued until around 2002, when you terminated your exclusive arrangements with Projenz. However, you continued to provide traffic safety sub-consultancy services to Projenz over the period 2002 to 2006. You also consulted to other entities during that period, including to RDC itself, the New Zealand Transport Agency (NZTA) and Queenstown Lakes District Council (QLDC).
The RDC period
[10] In April 2006, Mr Noone you were employed by RDC as Director of Transport. This was a very senior role reporting directly to the Chief Executive. You initially took up the role on a four day per week basis, so that you could continue some of your private consulting work. You discussed this with the Chief Executive at the time and she was agreeable to this, but only on the basis the work concerned matters outside of Auckland. This was to avoid any actual or perceived conflicts of interest.
[11] You did not disclose to her at the time, however, that you had or proposed to have any existing or ongoing financial arrangements with Projenz. This was a serious failing on your part, as any financial arrangement with a supplier to RDC gave rise to actual or perceived conflicts of interest.
[12] Later, in June 2008, you were appointed Director of Infrastructure at RDC. This involved a substantial salary increase and the role also reported directly to the
then new Chief Executive. This was a full-time role. Again, you discussed your private consulting work with the Chief Executive, but did not disclose any purported arrangements with Projenz. Rather, you indicated that your primary client was QLDC, but that the work was winding down. That was untrue, as at that time, you were receiving far greater sums of money from Projenz, and those payments were by no means winding down. In fact, they would only “wind up”.
[13] The evidence shows that from the time you commenced employment at RDC and until the creation of Auckland Transport in November 2010, you tendered an invoice to Projenz every month (bar one), and sometimes more than one invoice per month, for purported consulting services provided to Projenz. These varied in amount, but were generally for around $8,000 to $10,000 per month. The invoices stated on their face that you were working around 90 to 110 hours every month for Projenz. During the RDC period, you were paid a total of approximately $660,000 by Projenz for the purported consulting services.
[14] As you are aware, I found that no such consulting services were provided by you, and rather the sums were paid to you by Projenz, at Mr Borlase’s direction, in connection with your official role at RDC. In summary only, the reasons I found this included:
(a) there being no documentary evidence whatsoever of the purported consultancy services over a seven year period;
(b)the entry into further standalone agreements for consultancy service (which I will address later), and there being no plausible evidence of how the purported work under those agreements differed from the purported work under the monthly invoices (which continued to be paid in parallel);
(c) the sheer number and scale of the invoices and level of work said to be carried out while you were in full time employment;
(d)the fact that others who ought to have known about the purported consultancy services gave evidence that they did not, and unreliability and lack of credibility in respect of other evidence in this regard; and
(e) the non-disclosure of the purported arrangements over the seven year period.
[15] During the RDC era, substantial other benefits were also provided by Projenz to both you and Mr George. In relation to you, Mr Noone, these related mainly to international travel (for example, paying for upgrades to business class fares for international travel; travel and accommodation in Dubai; family travel to and accommodation in Australia); and paying for your mobile telephone bills. The total amount of the benefits in respect of which I found the charges made out over the RDC period totalled $27,983.04.
[16] Benefits provided by Projenz to Mr George during the RDC era, and in respect of which I found the Crown had proved the charges to the requisite standard, totalled $55,659.64. These largely related to paying for Mr George’s and his family’s travel (including to Cambodia; Thailand; a number of family trips to Fiji; to Hong Kong; and for a family member of Mr George’s to travel from London to Melbourne).
[17] I found these payments and benefits were provided in connection with and with the intent to influence Mr Noone and Mr George in their official roles. I also found that they fell well outside the “de minimis” exception to the statutory provisions, namely corporate hospitality considered to be part of the “usual courtesies of life”.
[18] Also relevant is that in 2008, RDC conducted a substantial tendering process, referred to as “Infrastructure One”. Projenz participated in that tender process and secured significant contracts as a result. You were not on the evaluation panel Mr Noone, or directly involved in the decision making as to who was to be successful in the tender. But you were the client lead. None of the benefits being provided were disclosed during that tender period. Witnesses with significant
experience in tender processes and probity audits said that had such benefits been disclosed, it would have been an extremely serious issue which would have needed to be raised at the highest levels within RDC.
[19] It is also relevant, however, that there was no evidence of actual assistance provided by you or Mr George to Projenz during this tender process (or during a subsequent tender process at Auckland Transport, to which I will refer later). Nor was there any evidence that Projenz would not have been successful to a similar or the same degree in that tender process, absent the significant benefits being provided. A number of Council witnesses gave evidence that Projenz was ultimately very good at what it did.
[20] One other matter of significance occurred during the RDC period. In June
2010, Mr Noone and Projenz entered into an agreement by which Mr Noone would be paid $200,000, plus $30,000 in “disbursements” by Projenz, in addition to the regular monthly payments that continued to be paid. Again, I found that there were no genuine consultancy services provided by you, Mr Noone, pursuant to that arrangement. You were paid the amounts pursuant to this one off agreement over a seven month period. Over that period, you were being paid in excess of $40,000 per month by Projenz, all of which went undisclosed.
The Auckland Transport period
[21] This pattern of offending continued upon the formation of Auckland Transport. Mr Noone, you were offered and accepted the role of Manager, Road Corridor Maintenance at Auckland Transport. Again this was a senior, full-time role. Again, and despite two separate discussions with your superiors about your private consulting work, you did not disclose any financial relationship or arrangements with Projenz. Instead, you said your consulting role extended to a few days a year, and you only mentioned NZTA. Again, this was untrue.
[22] During the Auckland Transport period, you continued to tender an invoice to Projenz every month, and sometimes more than once a month, each being in an amount of around $9,000 to $10,000. Like the RDC period, the invoices stated that you were carrying out around 90 – 100 hours of work per month for Projenz.
[23] During the Auckland Transport period, Projenz also continued to provide significant other benefits to you and Mr George. In relation to you Mr Noone, these primarily related to Projenz paying for more than 50 nights of hotel accommodation in Central Auckland (on the basis you were having marital difficulties at the time and Mr Borlase was happy to help you out). Other benefits included the provision of an iPad; and continuing to pay for your mobile telephone bills (which totalled more than $10,000). I found the Crown had made out the charges in respect of these benefits to the extent of $28,881.38.
[24] In respect of benefits provided to Mr George, these related mainly to paying for several trips by Mr George and members of his family to Japan; the provision of an iPad to Mr George and an iPhone to a member of his family; and thousands of dollars in taxi fares. These benefits totalled $44,571.55.
[25] Another tender process occurred during this period, referred to as the “TSS” tender. Projenz participated in that process and was successful in securing significant contracts as a result. Again, none of the benefits being provided to Mr Noone or Mr George were at that time disclosed. Like the RDC tender, however, there were no findings of improper conduct by either Mr Noone or Mr George during the tender process.
[26] One further relevant event occurred during the Auckland Transport period. In June 2012, two days after Projenz was awarded contracts pursuant to the TSS tender, another one off agreement was entered into between you, Mr Noone, and Projenz. Pursuant to this arrangement, you were paid a further $40,000 (plus disbursements) over a four month period. Again, these amounts were paid in addition to the monthly amounts that continued to be paid to you. Like the earlier $200,000 consultancy agreement, I found that no genuine consulting services were provided pursuant to this agreement.
Summary of benefits provided
[27] To summarise the benefits and amounts provided, Mr Noone, in respect of charges 1, 2 and 6 against you, which relate to the purported consultancy services, you received a total of $1,103,002.28.
[28] Mr Noone, in respect of charges 3, 4 and 5, which relate to the other benefits provided, you received benefits totalling $56,864.42. Mr Borlase, these amounts are mirrored in charges 4, 5 and 6 against you.
[29] Mr Borlase, in respect of the two further charges against you, which are charges 7 and 8, relating to benefits provided to Mr George, a total of $100,231.19 in benefits was provided.
[30] Two further points are worth noting at this stage.
[31] First, there is no doubt that the payments and benefits provided to Mr Noone and to Mr George were provided in the context of a “culture of collaboration” being encouraged by both RDC and Auckland Transport. However, I want to make clear that a culture of collaboration in no way extended to, sanctioned or excused the provision of such significant payments and benefits.
[32] Second, the Crown did not offer evidence of improper acts or advantage that you, Mr Noone, or Mr George gave to Projenz as a direct result of the benefits you were receiving. During the hearing, Mr Borlase’s counsel suggested that there was no scope for Mr Noone or Mr George to influence matters to Projenz’ advantage. I rejected that suggestion. For example, in one of the very few documented communications between you in respect of the consulting invoices, being an email about Mr Noone tendering an invoice at a time Mr Borlase was not expecting it, you, Mr Noone, said that you would generate appropriate RDC purchase orders (for work) to cover the invoice, and that you would “make them ongoing opportunities for Projenz”.
[33] Nevertheless, the position remains that I made no findings of acts, improper or otherwise, carried out by either Mr Noone or Mr George directly as a result of the benefits they received.
Impact of offending
[34] Your offending is not victimless. It has impacted at least two aspects of the community.
RDC/Auckland Transport
[35] First, there is the impact on each of RDC and Auckland Transport and their employees.
[36] Obviously RDC ceased to exist as of November 2010. However, I have received and read a victim impact statement from Mr Edmonds, the Chief Infrastructure Officer at Auckland Transport.
[37] That statement makes it clear that your offending has had a very real impact on Auckland Transport, as well as its employees. First, there is the financial cost to Auckland Transport, indirectly flowing from your offending. I say “indirectly flowing”, as it was not suggested by the Crown that either RDC or Auckland Transport suffered any direct financial loss as a result of the offending. However, the victim impact statement refers to Auckland Transport having incurred substantial sums in legal and forensic accounting costs associated with these matters – though it is to be expected that some of this amount will have related to employment issues to which your offending also gave rise.
[38] Mr Edmonds also describes the very real reputational damage from the media attention and public suspicion arising from this case. He also records the time and stress on employees directly impacted by and involved in the various investigations and court proceedings. Mr Edmonds also reports that your actions have impacted more generally on employee morale, such as some employees being embarrassed to say they work for Auckland Transport and the (unjustified) risk of being “tarred with the same brush”, given the identity of their employer or the team in which they worked.
The broader community/public
[39] The second effect of your offending goes wider and deeper, and extends to the community as a whole. I accept and adopt Lang J’s observation in sentencing
Mr George, that offending of this nature has a wide effect, tarnishing New Zealand’s
current reputation as a place where public corruption is virtually non-existent.1
[40] The Supreme Court in Field v R also confirmed the broader effects of this type of offending:2
The offering and acceptance of substantial benefits in relation to official acts is corrupt because it has the tendency to promote corruption. This tendency arises because the giving and acceptance of such benefits creates an environment in which …an official who receives such benefits will come to expect similar benefits in the future and is likely to act accordingly; and … members of the public who know about, or suspect, what has happened will come to believe that unless they too provide such benefits, they will not receive dispassionate consideration and, if prepared to provide such benefits, will receive corresponding advantages.
[41] I accordingly do not accept your counsels’ submissions that there was no harm, or no substantial harm, from this offending. Put simply, the public’s trust in the manner in which officials carry out their duties is seriously undermined.
[42] I now turn to address the sentencing principles I must take into account and their application in this case. I have also received and considered detailed sentencing submissions from the Crown and each of your counsel, and listened to the oral submissions today. I will refer to these during the course of my analysis.
Sentencing principles
[43] When considering the sentences in this case, I am required by to keep in mind a number of purposes and principles of sentencing.3 I accept the Crown’s submission that your sentences should hold you accountable for your offending; promote in you a sense of responsibility for the harm that you have caused; to provide for the interests for your victims; to denounce your conduct; and also to deter you and others from committing similar offences in the future. I consider the
latter two purposes to be particularly relevant in a case such as this.
1 R v George [2016] NZHC 2067 at [37].
2 Field v R [2011] NZSC 129, [2012] 3 NZLR 1 at [61].
3 Sentencing Act 2002, s 7.
[44] I must also take into account a range of sentencing principles.4 Those which assume particular importance are the need to reflect the gravity of your offending, including your individual degrees of culpability; the need for consistency in sentencing; and the effect of the offending on any victims. I must also impose the least restrictive outcome that is appropriate in the circumstances.
[45] The first step I will take in establishing your sentences is to fix what is referred to as a “starting point”. This will reflect your respective levels of culpability, by reference to the aggravating and mitigating factors of your offending. I will then adjust that starting point upwards or downwards, having regard to aggravating or mitigating factors that are personal to each of you. As you both pleaded not guilty to the charges, there is no need for the third step, which is to apply a discount for any guilty pleas.
[46] I am also mindful of the Court of Appeal’s guidance that with multiple offences, as in this case, the total end sentences must reflect the totality of your offending.5
Mr Borlase
Starting point
[47] Turning to your starting point, Mr Borlase, I note there is no established benchmark for cases of this kind. In fact, there are very few, if any, cases of real similarity.
[48] I have considered the Court of Appeal’s guidance with respect to determining culpability in fraud-related cases6 – noting of course that this is not a fraud case. Nevertheless, the principles are helpful and many are, in my view, equally applicable here. Those principles are the nature of the offending; its magnitude and sophistication; the type and circumstances of the victims; the motivation for the
offending; the amounts involved; the losses caused; the period over which the
4 Sentencing Act, s 8.
5 R v Hughes [2012] NZCA 388 at [27]; reflecting earlier observations in R v Xie [2007] 2 NZLR
240 (CA). See also R v Dodd [2013] NZCA 270 at [32].
6 R v Varjan CA97/03, 26 June 2003 at [22].
offending occurred; the seriousness of any breaches of trust involved; and the impact on victims.
[49] I have already outlined the significant harm caused to RDC, Auckland Transport and the broader community. I consider there are two further aggravating factors; first, the duration of the offending; and second, the scale of the amounts involved.
[50] The offending occurred over a period of some seven years. Given this, your counsel has suggested in written submissions that you “normalised” what was occurring. You continue to take that view, as is evident from your pre-sentence report. However, I have found that the conduct for which you have been found guilty was far from normal and acceptable, and put simply, was unlawful. Further, and as the Supreme Court observed in Field, activity such as this is corrupt as it has
a tendency to promote corruption.7
[51] The scale of the amounts involved exceeds all cases to date under the bribery and corruption provisions. While I accept that the amount involved is not a determinative factor in and of itself, there is no doubt that it is relevant when assessing the degree of culpability and looking to ensure consistency across difference cases, and Mr Mansfield properly accepted that today.
[52] A further aggravating factor is breach of trust. I accept your counsel’s submission that this factor is not as strong as it is in the case of the official concerned. But nevertheless, there was a close and lengthy relationship between your company and RDC and Auckland Transport. That close relationship provided a platform for the offending to continue to the extent and in the manner in which it did.
[53] Finally, there is an element of deception, as at no stage did you actively disclose the benefits or payments you were providing to Mr Noone or to Mr George,
including during the two tender processes.
7 Field v R (SC), above n 2, at [61].
[54] I accept that some of the benefits were provided “out in the open”, such as Mr George’s travel voucher in 2006. You also refer in the pre-sentence report to matters such as the “long lunches” as being out in the open, though I have not found you guilty in respect of those matters. That is also the case in respect of conference travel, including with partners. But the evidence demonstrates that you were quite alive to the need to keep certain matters secret or confidential, such as paying for RDC employees’ personal travel and Mr Noone’s personal hotel accommodation.
[55] Your counsel also places much emphasis on the context in which the benefits were provided, said to be a pre-occupation with client relationship building that crossed a (blurred) line. In respect of those benefits on which I found you guilty, I do not consider there is a blurred line. And it is not at all clear to me how the significant monthly payments to Mr Noone fall within that theory. Your counsel submits that you may have formed the view that, over time, those payments represented a normal business expense. Even if that were the case, the point remains that they were not paid in respect of consulting advice that Mr Noone provided to Projenz every month. The only logical inference to draw from the sheer scale and nature of the payments is that they were intended to influence Mr Noone.
[56] In terms of mitigating factors, your counsel has submitted in written submissions that the fact that Projenz was thought generally to provide good quality work to RDC and Auckland Transport is a mitigating factor. I disagree. Rather, the provision of sub-standard services as a result of the offending might have been an aggravating factor.8 But there is no suggestion of sub-standard services in this case. Nor do I accept the submission in the written submissions that the fact Mr George took advantage of the benefits you provided to him is a mitigating factor. Rather, his
behaviour highlights the tendency for this type of offending to promote corruption. Ultimately, individuals become greedy.
[57] There is one other matter that is appropriate to deal with at this point. The
Crown submits that your culpability is inherently higher than that of Mr Noone given the intent to influence element of the s 102(2) offence. I disagree.
8 See, for example, the United Kingdom’s Sentencing Council’s Definitive Guidelines to
sentencing for Fraud, Bribery and Money Laundering offences.
[58] First, the “intent to influence” element in the offence for the provider of the benefits makes clear that the provider of benefits can only be guilty of corruptly providing inducements, and not also the provision of “after the event” gratuities. The offence in respect of the official is accordingly wider, as it captures both inducements and gratuities.
[59] Second, I have found that the element of “intent to influence” does not require an intent to influence an official to carry out an improper act. It does not, therefore, connote anything obviously sinister or immoral in its own right. It is simply to provide a benefit intending to influence the official in some way in the exercise of his or her official acts.
[60] Third, there is no suggestion in any of the authorities that s 105(2) is inherently more serious than s 105(1), given the “intent to influence” element. Rather, the position seems to be, and I agree, that offending by the official is more serious, given the significant abuse of trust inherent in that offending.
[61] In setting the starting point, I have also looked for other analogous cases. Counsel for the Crown and for each of you and Mr Noone have also referred me to a number of authorities.
[62] Given the infinite variety of ways in which offending of this kind can be carried out, those other authorities are of limited assistance. All counsel have recognised this. Nevertheless, I have carefully considered those other cases, as it is important to assess relative culpability.
[63] I start with the sentencing of Mr George.9 Mr George pleaded guilty to offences involving the receipt of benefits totalling $103,580. Aggravating factors were considered to be the lengthy period over which the offending occurred (which is the same as in this case) and that it occurred in relation to two separate entities, again as in this case. The third aggravating factor was the amount in issue, which was considered significant. Lang J also referred to the breach of trust, the repetitive
nature of the offending and the element of deception. The most significant
9 R v George, above n 1.
aggravating factor, however, was the harm that the offending has the potential to cause. In all those circumstances, Lang J adopted a starting point of three years and nine months’ imprisonment.
[64] Given in your case, Mr Borlase, your offending involved the provision of benefits to two officials, and in much higher amounts, there is no doubt to me that your offending is more serious than Mr George’s.
[65] The Crown has also referred to Field,10 where a Member of Parliament received $50,000 worth of free tiling services in connection with his official role. There were also charges of perverting the course of justice. There were no findings of improper conduct on the MP’s part as a result of receiving the benefits. As Mr Lance has pointed out, the sentencing Judge adopted a starting point on the corruption charges of five years (and an end sentence of four years), and a starting point of four years on the charges of perverting the course of justice (and an end sentence of two years). However, the Court of Appeal observed that the end sentences could have been reversed.11 As your counsel submits, this suggests that a starting point on the corruption charges for the MP of around three years was appropriate. Again, while corrupt payments received by an MP may be considered
inherently more serious than corrupt payments made to another kind of official, the amounts in this case, and the period over which the offending occurred, are significantly greater than in Field. These factors make this a more serious case.
[66] Other New Zealand cases to date under s 105 and the equivalent provisions are what might be called “outright bribery” cases,12 i.e. where improper acts by officials have been carried out as a direct result of the provision of benefits to them. For example, in Nua,13 a senior customs official accepted benefits totalling around
$200,000 over a 15 month period, in return for permitting vehicles into the country without odometer inspections or paying GST. In addition to the benefits received, there was a loss of GST revenues of approximately $293,000. The Court of Appeal
observed that a starting point of in excess of five years could have been justified.
10 R v Field HC Auckland CRI-2007-092-18132, 6 October 2009.
11 Field v R [2010] NZCA 556; [2011] 1 NZLR 784 at [185].
12 See the terminology in Field v R (CA) at [185].
13 R v Nua [2001] 3 NZLR 483 (CA).
[67] I have also been referred to R v Hutt,14 where both the giver and receiver of the benefits were sentenced. That case involved an agreement between an ACC official, Mr Mason, and Mr Hutt, by which ACC would take a lease on a building Mr Hutt was developing, in exchange for a payment to Mr Mason. Mr Mason, the official, had faced four charges pursuant to s 105, and one charge under the Secret Commissions Act. He had entered an early guilty plea, returned the entire $160,000 he had received and was sentenced in the District Court to 11 months’ home detention. In sentencing Mr Hutt, the High Court accepted that Mr Hutt’s culpability was lower than Mr Mason’s (Mr Mason having instigated the offending, faced more charges, offended over a longer period of time and involved three incidents of breach of trust). The High Court adopted a starting point for Mr Hutt of two years and
10 months’ imprisonment.
[68] I have also considered a number of other cases brought pursuant to the bribery and corruption provisions.15 However, these are quite different to the present offending, generally being cases of outright bribery of officials, but also involving much lesser benefits and periods of offending than in this case. I have not found those cases to be of any real assistance.
[69] The Crown has also referred me to R v Palmer.16 This was a case of insider trading using official information. Mr Palmer was a senior fixed interest dealer for the Government Superannuation Fund. Contrary to established rules of conduct, he used information he had acquired in his official capacity to deal in futures for his own personal benefit, totalling approximately $215,000. He was charged under s 105A of the Crimes Act, for corrupt use of official information. That offence also carries a maximum term of imprisonment of seven years. The Court of Appeal endorsed a starting point of three to four years’ imprisonment. The Court accepted that the fact that the offending occurred only once and over a 24 hour period made it
a less serious case than Nua.
14 R v Hutt HC Wellington CRI-2011-085-4011.
15 R v Griffiths and Giles DC Hamilton TT013004, 12 December 2003; R v Meyer [2013] NZHC
3500; R v Clarke HC Wellington CRI-2009-085-7789, 2 June 2011; Inland Revenue Department v Song HC Wellington CRI-2008-485-158, 10 February 2009; R v Ram CA23/94, 16 March
1994; and R v Malyon CA435/97, 18 December 1997.
16 R v Palmer CA332/03, 31 March 2004.
[70] Your counsel has also referred to the position in England, Canada and Australia.17 Some care needs to be taken in that regard, however, given the offences are framed in different ways to the New Zealand statute and the maximum penalties differ (ranging from around five years’ imprisonment to 14 years’ imprisonment). I have nevertheless considered the cases referred to, and have found the Guidelines of the United Kingdom Sentencing Council in respect of bribery and corruption to be
somewhat helpful in assessing the factors relevant to culpability.
[71] Ultimately, the facts in all of the cases to which I have referred are different to those before this Court. However, they do give rise to the question of the relative culpability between “outright bribery” cases and cases such as this, Field and George.
[72] Your counsel, and counsel for Mr Noone, strongly submit that cases of “outright bribery” must be more serious, even when the amounts involved are much lower and the period over which the offending took place much shorter. This is because of the direct causative link between the provision of a benefit to an official and the official carrying out improper acts. I accept that in general, proof of such matters will be significant aggravating factors. Nevertheless, in Field and in George, the Courts have made it clear that cases like this are nevertheless serious, given the very real harm caused, in the broader sense I have described. Cases such as this are also more insidious and have the potential to “normalise” behaviour, thus widening the scale of influence. I accordingly agree with Lang J’s observation in George that there must come a time when the distinction between the two forms of offending on the facts in any given case, becomes blurred. Common to all such offending is that
confidence in the administration of public affairs is undermined.18
[73] As a further cross-check to your level of culpability, I have also considered a number of cases of fraud more generally, including theft by a person in a special
17 R v Foxley (1995) 16 Cr App R (S) 879; R v Hussain [2016] EWCA Crim 2006; R v Karigar
[2014] ONSC 3093; Commonwealth Director of Public Prosecutions [2014] NSWCCA 176.
18 See the observations of the Court of Appeal in Palmer at [38].
relationship and obtaining by deception.19 In cases where benefits of between approximately $1m to $3m had been obtained, starting points in the vicinity of seven to nine years imprisonment have been adopted. Where the benefits obtained were around $500,000 to $750,000, starting points of around five to seven years’ imprisonment have been adopted.
[74] While those cases are obviously not directly relevant, in that they involve a defendant personally benefiting him or herself at the direct of expense of the victim, it is not correct, in my view, to suggest that they are immediately more serious than bribery and corruption. As the Court of Appeal in Nua observed:20
Theft of public funds by a public official is plainly serious enough, but it at least involves no more than an aberrant individual. The successful bribing of a public official draws others into the web of corruption. As the circle widens so does the insidiousness of the corruption and the encouragement for others to participate or copy. The opportunities are unlimited and the temptations great.
Conclusion on starting point
[75] Taking all of these matters into account, I consider the culpability of your offending, Mr Borlase, to be serious. I do not accept that it involves a low or moderate level of culpability, as suggested by your counsel. I accordingly do not agree with the submission made on your behalf that a starting point of three to four years is appropriate.
[76] Equally, however, I do not accept the Crown’s submission that your level of culpability is so high, or “right at the top of the range of offending”, as Mr Dickey has characterised it today, that a series of cumulative sentences is required to arrive at a start point of six and a half to seven and a half years. Such a starting point in my view is too high.
[77] Charges 1, 2 and 3 in relation to the consultancy payments to Mr Noone over the period 2006 to 2013 are plainly the more serious charges. I consider charges 4, 5
19 R v Douglas [2012] NZHC 2271; R v Ludlow [2013] NZCA 196; R v Wallnutt CA182/93,
8 August 1993; R v Rowley [2012] NZHC 2087; Lindup v Inland Revenue Department (2008)
23 NZTC 22,025 (HC); R v Patterson [2008] NZCA 75; Mount v R [2015] NZCA 489; Arnott vR [2015] NZCA 236; McGregor v R [2015] NZCA 565.
20 At [20].
and 6, relating to the provision of other benefits to Mr Noone over the same period to be part of the same overall offending. I have therefore considered what the total starting point should be for all this offending. Having regard to the aggravating features of the offending and the case law that I have already discussed (and in particular, George and the Court of Appeal’s observations on sentencing in Field), I adopt a starting point of five years’ imprisonment for that offending.
[78] There is then the additional offending in respect of Mr George. While in isolation, a starting point of three years’ imprisonment for this offending would in my view be appropriate, a total starting point of eight years’ imprisonment would plainly be excessive. I therefore apply an uplift of nine months’ imprisonment to reflect this further offending.
[79] This takes the total starting point to five years, nine months’ imprisonment. I am satisfied that this appropriately reflects the totality of your offending.
Aggravating and mitigating factors personal to Mr Borlase
[80] I now turn to consider whether there are any aggravating or mitigating factors personal to you.
[81] I do not consider there to be any aggravating factors personal to you, and none are suggested by the Crown. You have two earlier convictions, but they are relatively minor and unrelated to the current offending.
[82] In terms of mitigating factors, I do not detect any remorse in the observations recorded in your pre-sentence report. Indeed, the report shows a clear lack of insight by you into the nature of your offending. You continue to deny all of the offences, seek to justify your behaviour and to shift blame to others. I cannot therefore apply any discount for remorse.
[83] You otherwise come before the Court with good character. I have read all the character references provided for you, a number of which are very moving. You are highly thought of as a generous, talented, caring, family-oriented and no nonsense sort of person. You have contributed extensively to various rowing organisations.
This offending also has been a significant fall from grace for you, including in the context of the risk to your continued standing as a professional engineer.
[84] However, the authorities are clear that the extent of any discount allowed for your good character must be modest, in light of the repetitive nature of your offending over a period of many years. I accordingly allow a discount of three months for your good character and personal circumstances. This takes your total end sentence to five years six months’ imprisonment.
Mr Noone
Starting point
[85] I accept the Crown’s submission that your offending is more serious than Mr George’s. Not only were you in a more senior position than Mr George, but the benefits provided to you by Projenz were significantly higher. Like in the case of Mr Borlase, the sums of money involved are an aggravating factor to the offending. So too is the lengthy period of time over which it occurred. I have already referred to the insidious nature of this type of offending, and the resulting harm your offending caused to RDC, Auckland Transport and to the wider community.
[86] I also consider that your culpability in respect of these charges is greater than that of Mr Borlase. I accept your counsel’s submission that, in the case of an official, a breach of trust is inherent in the offence. However, given your senior role at both RDC and Auckland Transport, I consider your offending involved gross breaches of trust. This is illustrated by the fact that you had discussions on no less than four separate occasions with your immediate superiors about your private consulting work, and in each case, you actively misled them as to the nature of that work and the money you were receiving from Projenz.
[87] You also failed to disclose the very significant benefits you were receiving during the Infrastructure One and TSS tender processes. Your pre-sentence report records that you believed others within Council were managing any possible conflicts of interest. I simply do not accept this. I have no doubt that you knew precisely what was required by way of disclosure, but chose not to do so.
[88] Your position of authority and leadership also meant that you failed to “set the right tone” within your own team. I refer to one instance by way of example only. At a very early point in the offending period, Mr Borlase, on behalf of Projenz, gave Mr George a personal travel voucher worth over $4,000, in the context of Mr George’s 60th birthday. The voucher was presented at a dinner, at which you were present. Two much more junior RDC employees, showing significant insight, counselled Mr George that he should not accept the gift. You were aware of the gift, but did not seek to dissuade Mr George from accepting it. Had you done so, some of
the subsequent offending in this case may not have occurred.
[89] I accordingly consider your level of culpability to be serious. For that reason, I do not accept your counsel’s submission that a starting point of three and a half to four years’ imprisonment is appropriate.
[90] The charges in relation to the consultancy payments, charges 1, 2 and 6, are also the most serious in your case, though I view charges 3, 4 and 5, in relation to your receipt of other benefits over the same time period, to form part of the same overall offending. I have therefore considered what an overall starting point should be for all this offending. For the reasons stated earlier, I consider that a starting point greater than Mr Borlase’s offending in relation to the provision of benefits to you is warranted. I therefore adopt a starting point of five years and six months’ imprisonment.
Aggravating and mitigating factors personal to Mr Noone
[91] I now turn to consider whether there are any aggravating or mitigating factors personal to you. You have no prior convictions. There are no suggested aggravating factors personal to you.
[92] In terms of mitigating factors, you deserve some credit for your prior good character. I have read the character references provided, and all speak extremely highly of you, both personally and professionally. You are clearly a talented individual. Your offending, and its consequences, will be an unfortunate stain on your reputation for some time to come. However, as noted in the case of Mr Borlase,
the length of time over which your offending took place means that this can be a modest adjustment only.
[93] I have also read your pre-sentence report. I believe that you show insight, though somewhat limited, into your offending, and as a result, some genuine remorse.
[94] In light of your insight and remorse, the pre-sentence report recommends a sentence of home detention. As I am sure you will be aware, and as Mr Lance has properly acknowledged today, that is simply not an option that is available to me under the sentencing principles that I am required to apply. On any view, such a sentence would be manifestly inadequate.
[95] To reflect your good character, remorse and insight into your offending I apply an overall discount of six months. That takes your total end sentence to five years’ imprisonment.
Sentence
[96] Mr Noone and Mr Borlase would you now please stand. [97] Mr Borlase:
(a) In respect of each of charges 1 and, 2 and 3, I sentence you to five
years, six months’ imprisonment.
(b) In respect of each of charges 4, 5 and 6, I sentence you to two years’
imprisonment.
(c) In respect of each of charges 7 and 8, I sentence you to two years, six
months’ imprisonment.
[98] All of the above sentences are to be served concurrently. In other words, the total sentence I have imposed is one of five years, six months’ imprisonment.
[99] Mr Noone:
(a) In respect of each of charges 1, 2 and 6, I sentence you to five years’
imprisonment.
(b) In respect of each of charges 3, 4 and 5, I sentence you to two years
six months’ imprisonment.
[100] All of the above sentences are to be served concurrently. In other words, the total sentence I have imposed is one of five years’ imprisonment.
[101] You may both stand down now please.
Fitzgerald J
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