R v Chand

[2020] NZHC 1081

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI-2019-004-5696

[2020] NZHC 1081

THE QUEEN

v

SUNIL CHAND

Hearing:	21 May 2020
Appearances:	B H Dickey and R Williams for Crown A Kashyap for Defendant
Judgment:	21 May 2020
Reasons:	21 May 2020

REASONS FOR JUDGMENT OF LANG J

[on application for order discharging defendant without conviction]

This judgment was delivered by me on 21 May 2020 at 3.30 pm.

Registrar/Deputy Registrar Date……………

R v CHAND [2020] NZHC 1081 [21 May 2020]

[1]    Mr Chand has pleaded guilty to one charge of corruptly giving a gift to an agent, his co-defendant Mr Sundeep Rasila, without the knowledge of Mr Rasila’s principal, the Auckland Council.1 The maximum penalty for this offence is seven years imprisonment.

[2]    Mr Chand sought an order under s 106 of the Sentencing Act 2002 discharging him without conviction. He contended the consequences of a conviction will be out of all proportion to the overall gravity of his offending. The Crown opposed the application. It said the likely consequences of the offending are entirely proportionate to its gravity.

[3]    I received written submissions from both the Crown and counsel for Mr Chand prior to the sentencing hearing this morning. During the hearing I advised counsel I proposed to decline the application and would give my reasons in writing. These are the reasons for my decision.

Approach

[4]    An application for discharge without conviction is governed by s 106 of the Act, which relevantly provides as follows:

106    Discharge without conviction

(1) If a person who is charged with an offence is found guilty or pleads guilty, the court may discharge the offender without conviction, unless by any enactment applicable to the offence the court is required to impose a minimum sentence.

…

[5]    In applying s 106, the Court must follow the guidance contained in s 107 of the Act. This provides:

107    Guidance for discharge without conviction

The court must not discharge an offender without conviction unless the court is satisfied that the direct and indirect consequences of a conviction would be out of all proportion to the gravity of the offence.

1      Secret Commissions Act 2010, ss 3(1) and 13.

[6]    A court considering an application for discharge under s 106 must consider three issues.2 It must first assess the gravity of the offending having regard to the facts of the particular case. This exercise is not restricted to the aggravating and mitigating factors of the offending itself. Factors personal to the offender may also be relevant.3 Next, it must identify the direct and indirect consequences of a conviction being entered. In this context there must be a “real and appreciable” risk that any posited consequence will occur.4 Thirdly, the court must determine whether the consequences of a conviction would be out of all proportion to the gravity of the offending. There is a residual discretion not to grant a discharge but that will rarely be exercised where the statutory criteria have been met.

The offending

[7]    Mr Rasila was employed by the Auckland Council (the Council) as a procurement relationship specialist between June 2012 and 28 April 2016. This role required him to maintain the Council’s relationships with suppliers of goods and services, and in particular, office supplies.

[8]    Before he began working at the Council Mr Rasila worked for a company of which Mr Chand was also an employee.5 The two men have been friends for a long time, and Mr Rasila also boarded with Mr Chand’s family for a period of approximately six years between 2005 and 2011. They maintained their friendship after Mr Rasila commenced working for the Council. During this period Mr Chand went on to establish his own commercial printing and office stationery supply company, On Time Print Finishers Limited (On Time Print).

[9]    As part of its services, the Council supplies members of the public with property files for a fee. These contain information held by the Council that may be of interest to persons seeking to purchase or obtain information about properties in the Auckland area.

2      R v Hughes [2008] NZCA 546, [2009] 3 NZLR 222 at [16] to [17].

3      Z (CA447/2012) v R [2012] NZCA 599, [2013] NZAR 142 at [27]; DC (CA47/2013) v R [2013]

NZCA 255 at [35].

4      DC (CA47/2013) v R, above n 4, at [43].

5      Mr Chand has pleaded guilty to a charge of providing a gift to Mr Rasila without the knowledge of the Council: Secret Commissions Act 1910, ss 3(1) and 13.

[10]   Up until 2015, the Council delivered its property files to recipients on compact discs. During that year the Council investigated the possibility of delivering information to recipients on USB devices. Mr Rasila was one of the Council’s staff members responsible for investigating the proposed transition to USB devices. At that time his role at the Council was focussed on the maintenance of the Council’s relationship with a single supplier of office products, Staples Limited. His involvement in the establishment of a new contract for the procurement of USB devices was therefore outside the normal course of his duties.

[11]   Mr Rasila knew that the new contract would be awarded to the supplier who could supply the devices at the cheapest price. Between September and December 2015 he undertook his own investigations online and obtained a quote for the bulk supply of USB devices from a wholesale company based in China. Mr Rasila then contacted Mr Chand and arranged for Mr Chand’s company, On Time Print, to submit a quote to supply USB devices to the Council. Messrs Rasila and Chand agreed that, if On Time Print secured the contract, it would purchase USB devices from the Chinese company and on-sell them to the Council for a profit.

[12]   During January 2016 Mr Chand submitted a quote on behalf of On Time Print to supply the Council with 22,000 USB devices. Between January and March 2016 Mr Rasila also sought quotes on the Council’s behalf from other suppliers, including Staples Limited and the company that had formerly employed him and Mr Chand.

[13]   Mr Rasila provided the Council’s management team with On Time Print’s quote. He did not, however, advise them of the quote he had obtained from the Chinese company or that his former employer had submitted a quote for the supply of the devices at a lower price than that quoted by On Time Print.

[14]   Not surprisingly, the Council’s management team awarded the contract for the supply of the devices to On Time Print as the lowest bidder. This meant the Council paid approximately $27,000 more than it would have done if it had been aware of the other quotes. On Time Print stood to make a profit of approximately $57,000 from the sale of the USB devices to the Council under the contract. The contract required

On Time Print to supply the Council with the devices in two consignments, each comprising 11,000 devices.

[15]   Mr Rasila left the Council’s employment at the end of April 2016. In August 2016, after the first consignment of USB devices had been delivered, Mr Rasila approached Mr Chand and asked for a payment of $15,000 for facilitating the contract awarded to On Time Print. This amounted to approximately ten per cent of the original value of the contract.6 Mr Rasila requested payment in the sum of $7,500 immediately and the balance was to be payable following delivery of the second consignment. Mr Chand drew a cheque payable on his company’s account for the sum of $7,500 and handed this to Mr Rasila. Mr Rasila then cashed the cheque and deposited the bulk of the proceeds into his own bank account.

[16]   In the affidavits he filed in support of his application Mr Chand sought to mitigate the culpability of the offending by claiming he had brought the offending to the Council’s attention by lodging a complaint about Mr Rasile’s conduct when he met with Mr Ulysis Alejandrino, a Council procurement officer, on 20 December 2016. The Crown disputed this evidence and I conducted a disputed facts hearing at the commencement of the sentencing hearing this morning.

[17]   For the reasons given in my sentencing remarks I preferred Mr Alenjandrino’s evidence regarding this issue.7 Mr Alejandrino said he and Mr Chand had met at a coffee shop on 20 December 2016 to discuss the possibility of Mr Chand doing further business with the Council. During this discussion Mr Chand told Mr Alejandrino about the payment he had made to Mr Rasila and also said Mr Rasila was demanding a further payment in the sum of $7,500. Mr Alejandrino said Mr Chand asked whether he should make this payment to Mr Rasila or to Mr Alejandrino. He said he gained the impression Mr Chand wanted to pay the money to him rather than to Mr Rasila.

[18]   Mr Alejandrino’s evidence persuades me that Mr Chand did not make any complaint about Mr Rasila’s conduct to Mr Alejandrino. Rather, he raised the issue in

6      The value of the contract was ultimately reduced by approximately $8,000 after the Council elected not to have its logo on the USB devices.

7      R v Mr Chand [2020] NZHC 1077 at [16]-[17].

the context of seeking to extend his business relationship with the Council. It follows that Mr Chand’s culpability is not lessened by the fact that he alerted the Council to Mr Rasila’s activities. Furthermore, On Time Print stood to make a significant profit from the arrangement and this, coupled no doubt with pressure from Mr Rasila, prompted his decision to make the payment.

Gravity of offending

[19]   The seriousness of Mr Chand’s offending was much less than that of Mr Rasila because he did not instigate either the offending or the request for the payment to be made. Mr Rasila was the instigator of both. Furthermore, Mr Chand was not subject to the obligations imposed on public officials, and he did not make the payment to Mr Rasila until well after his company had been awarded the contract to supply the USB devices to the Council. Up until that point he had arguably not committed any offence.

[20]   The culpability of Mr Chand’s actions lies in the fact that persons who contract to supply products to public bodies should never pay money to employees of those bodies. It does not matter whether a payment is made before or after a contract has been awarded. Either way, payments or gifts made in this context undermine the entire procurement process. They cannot be tolerated because over time they come to be expected both by those making the payments and those receiving them. With some recent notable exceptions conduct such as this represents a form of corruption that has not been a feature of public authority administration in this country to date. The end result if they continue is the loss of this country’s reputation for honesty and transparency in public authority administration. In addition, when activity such as this comes to light it creates suspicion and mistrust in both the business community and the community as a whole. It calls into question the integrity and robustness of the processes adopted by the public body in question and its employees.

[21]   Mr Chand’s knowledge about what was happening is encapsulated in the following paragraph of the affidavit he provided in support of the present application:

27.Sundeep provided me the details of a supplier he had sourced and told me that if I used his contact, my “tender” would most likely be accepted as he was the person in charge of influencing the decision as

to who the preferred supplier to the Council was so long as the quotes were reasonable.

[22]   Taking these factors into account I assess the gravity of Mr Chand’s offending before taking into account mitigating factors as being low to moderate.

[23]   Mitigating factors include an early guilty plea and remorse, coupled with Mr Chand’s previous good character. Once these are factored into the equation I categorise the overall gravity of Mr Chand’s offending as low.

The consequences of a conviction

[24]   Mr Chand sold the business formerly operated by On Time Print in 2017. He plans to set up another business importing office products as well as printing supplies and machines. These plans are currently on hold as a result of the present proceeding. He is currently working as an Uber driver to support his family. He has a daughter with learning difficulties due to a medical condition that causes developmental delays.

[25]Mr Chand describes his future work prospects as follows:

52.The profit for me will be in sourcing various printing products from China and or other markets and selling it to retailers including various cheaper good quality alternatives which remain available but has not been marketed or tried and tested in New Zealand.

53.I know that with a conviction my word will carry absolutely no weight when I try to sell products to the companies.

54.After a lot of hard work over 30 years, I have achieved a level of seniority and knowledge of how the whole printing industry runs.

55.I am assured of should bel work from various companies but I have not started the relationship of the business for the fear of losing money and likelihood of some of these high profile companies’ reluctance to deal with a convicted fraudster.

56.I am well aware and have been advised by many people in the printing Industry some of whom I had made contact about purchase of various products from me that if I was to be convicted of the offence that I have been charged with, there is a serious possibility that my Associate’s and connections I know within the industry will not deal with me as it may affect their reputation also.

57.I have accordingly but for a few companies not approached a number of them/or sought their guidance in this matter directly for I fear that

once they become aware of the charge which I have pleaded guilty to I would be discarded from work been passed on to me.

58.I fear that I would certainly not receive work from Government Agencies and such other organisations due to their own protocols.

59.Should my plea for a discharge without conviction be granted, I feel that I will be able to explain to potential customers and or suppliers the details of my offending and or the circumstances as to why I had been charged in the first place.

[26]   I accept that a conviction is likely to have some impact on Mr Chand but it will clearly not prevent him from working in his chosen field as is often the case where a conviction prevents an offender from obtaining future employment. Furthermore, I do not understand why customers who wish to purchase office and printing products from Mr Chand will be concerned about the present conviction. Logic suggests their primary concerns will be the quality and price of the products and services he provides.

[27]   I therefore consider Mr Chand is exaggerating the likely consequences for his continued ability to trade in the future. I assess the likely consequences of a conviction as being low.

Result

[28]   I have assessed both the gravity of Mr Chand’s offending and the likely consequences of a conviction as being low. It follows that the consequences of a conviction will not be out of all proportion to the gravity of the offending. As a result, Mr Chand has not established the necessary threshold to provide jurisdiction for the Court to grant a discharge without conviction.

Lang J