R v Christie
[2019] NZHC 1460
•25 June 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CRI-2018-004-7736
[2019] NZHC 1460
THE QUEEN v
CHRISTOPHER JOHN CHRISTIE SIU SHUN HO
Hearing: 25 June 2019 Appearances:
R M A McCoubrey for Crown
R M Mansfield for Defendant Christie
G J S R Foley & M G Beresford for Defendant HoSentence:
25 June 2019
SENTENCE OF PAUL DAVISON J
Solicitors:
Crown Solicitor, Auckland
R v CHRISTIE & HO[2019] NZHC 1460 [25 June 2019]
Introduction
[1] Siu Shun Ho and Christopher Christie you both appear for sentencing today having each pleaded guilty to two representative charges of dishonestly using a document. The charges are:
(a)that between 1 August 2016 and 31 July 2017, at Auckland, Siu Shun Ho and Christopher Christie dishonestly used a document with intent to obtain a pecuniary advantage (Charge 1);1 and
(b)that between 1 August 2017 and 30 October 2017, at Auckland Siu Shun Ho and Christopher Christie dishonestly used a document with intent to obtain a pecuniary advantage (Charge 2).2
[2] In each case the maximum penalty for the offence is seven years’ imprisonment.
[3] The victim in this matter is ANZ Bank New Zealand Ltd (ANZ). The total amount advanced by ANZ as a result of your dishonest use of the documents exceeds
$8 million. The particulars of Charge 1 state that the documents were used to secure payments totalling $7,335,892.95 from the Bank. The particulars of Charge 2 state that the documents you used were applications for trade loan finance totalling
$1,498,818.24.
[4] The ANZ, in its victim impact statement, says that the trade loan principal lost by the Bank as a result of your offending totals $1,854,338. The Bank also calculates an amount of interest it has lost as a result of your offending, being a sum of $402,077, the legal costs it has incurred of $42,550 and liquidator’s costs just exceeding $80,000.
In total a sum of $2,379,739.00
[5] The Crown submits as regards your relative culpability that it is not necessary or appropriate to distinguish between you. The Crown submits that an end sentence
1 Crimes Act 1961, s 228(1)(b) (maximum penalty: seven years’ imprisonment) CRN 18004010959 and 18004010960.
2 Crimes Act 1961, s 228(1)(b) (maximum penalty: seven years’ imprisonment).CRN18004011007 and 18004010961.
of around four years and six months’ imprisonment should be imposed for both of you with an additional, yet modest, reduction or discount being available for good character.
[6] Mr Ho, your counsel Mr Foley initially filed submissions for sentencing on 24 May 2019, and on 13 June 2019 he filed supplementary submissions relating to the likelihood of future reparation being made should the Official Assignee administering your bankruptcy realise assets that will enable those reductions to be made. Mr Foley submits that an end sentence of imprisonment of between two years and eight months, and two years and 10 months should be imposed. Mr Foley agrees with the Crown that it is unnecessary to distinguish between you and Mr Christie in terms of your culpability.
[7] Mr Christie, Mr Mansfield submits that an end sentence of two years and five months’ imprisonment should be imposed. He submits, Mr Christie, that the only benefit you obtained as a result of your offending is that you remained employed in your position of general manager, as did the other employees of the company. He submits that you were not the master mind of the offending in that you simply performed as you were instructed. He submits that there should be some distinction between you and Mr Ho to reflect your lesser culpability compared to that of Mr Ho.
Background
[8] The defendants’ offending relates to them obtaining finance for a company called International View Ltd (IVL) which was incorporated by Mr Ho in June 1990. IVL’s business involved importing computer parts from Asia for on-sale to clients and customers in New Zealand. IVL regularly financed purchases of stock using a trade loan facility.
[9] The way a trade loan facility operates is that a bank, in this case ANZ, provides funding for transactions. The bank will advance funds against specific invoices and makes payment directly to the supplier which is often located overseas. Upon receipt of the funds to pay for its goods the supplier will ship the goods to the bank’s borrower. The borrower, in this case IVL, then sells those goods to its customers and from the proceeds of those sales uses the funds to repay the Bank the funds it has advanced.
Mr Ho was the sole director and majority shareholder of IVL. Mr Christie was the general manager of IVL and responsible for its day-to-day management.
[10] The defendants accept the following facts as set out in the Crown Summary of Facts, as being correct.
[11] Between August and September 2016, Mr Ho submitted six trade loans to HSBC Bank requesting a loan of $1,720,450. Attached to those trade loans were invoices containing false information.
[12] In July 2016, Mr Ho and Mr Christie together approached ANZ seeking to refinance IVL with a $1.7 million trade facility from their incumbent bank HSBC New Zealand (HSBC). They also sought an overdraft facility to support and grow the business.
[13] On 21 October 2016, Mr Christie emailed instructions to ANZ, requesting eight payments totalling $1,720,450 to be made to HSBC NZ to settle IVL’s trade loan. In support of that email, Mr Christie also attached the following documents:
(a)eight false HSBC transaction details documents;
(b)five false DHL Waybill shipping documents;
(c)three false purchase orders; and
(d)a false summary of IVL’s aged receivables and inventory.
[14] ANZ acted on those documents and made the requested payments, settling IVL’s debt to HSBC.
[15] On 31 October 2016, ANZ approved a trade loan facility for IVL with a limit of $2 million.
[16]Between November 2016 and July 2017, ANZ made 28 payments totalling
$5,615,442.95 to two false international suppliers. Those false suppliers were
EverRich Trading Ltd (in respect of which four drawdowns were made) and Media Station Ltd (in which respect of which 24 drawdowns were made).
[17] IVL used a transactional account they held with HSBC, to collect alleged debtor’s credit funds and then made lump sum transfers to ANZ to cover the maturing trade loans.
[18] In August 2017, ANZ communicated with Mr Christie to advise him that it required documentary evidence for their first annual review. The information it required included 12 months of IVL’s HSBC bank statements, an accounts receivable report, an accounts payable report, and shipping documentation.
[19] Despite multiple requests for the information, Mr Christie and Mr Ho delayed provision of that information until October 2017 when they provided the requested documents and reports which included falsified financial statements.
[20] On 24 October 2017, Mr Christie provided the ANZ Bank with a false HSBC transactional account statement for IVL to the ANZ Bank.
[21] Between August 2017 and October 2017, IVL submitted seven further trade loan finance applications to the ANZ Bank, six of which were signed by Mr Christie, and one which was signed by Mr Ho. The total value of those trade loan finance applications was $1,498,818.24. Those payments were purported to have been for trade related loans, but they were in fact made to Mr Christie’s other company, Painting Plus Ltd.
[22]Both defendants entered pleas of guilty on 17 April 2019.
[23] Following discussion with counsel at the hearing on 25 June 2019, it was clarified that Mr Christie does not operate a company called Painting Plus Ltd. Instead, he is the director of a company called Computerware Plus 2009 Ltd, of which he and his wife are the shareholders.
Submissions for the Crown
[24] As I noted at the outset, the Crown does not consider it appropriate to distinguish between the two defendants for the purposes of sentencing. The Crown says that both defendants were heavily involved in the offending and an attempt to separate out their roles on the basis of the summary of facts would be artificial.
[25] The Crown submits that as to the purposes and principles of sentence, deterrence is the primary consideration, as it is in all cases of substantial fraud.
[26] The Crown submits that a starting point in the region of six years’ imprisonment is appropriate in the present case. It submits that such a starting point is justified by reference to the authorities, in particular R v Varjan,3 Down v R,4 D’Villiers v R,5 and Watson v R.6
[27] The Crown says that the offending in the present case exhibits the aggravating features of a large fraud and large loss to the ANZ Bank; that it was premeditated, sophisticated and sustained over a considerable period of time; that the offending has ramifications for people beyond the ANZ Bank, including its customers; and that it involved payments being made to companies associated with the defendants.
[28] The Crown accepts that the defendants are entitled to the maximum discount for pleading guilty at an early stage in the proceedings. The Crown also submits that only a modest discount is available for the defendants’ previous good character, as it was their good character which in part enabled them to obtain financing from the ANZ Bank.
[29] The Crown submits that a minimum period of imprisonment of around half the end sentence should be imposed on both defendants.
3 R v Varjan CA97/03, 26 June 2003.
4 Down v R [2011] NZCA 138.
5 D’Villiers v R [2010] NZCA 85.
6 Watson v R [2012] NZCA 17.
Submissions for Mr Ho
[30] Mr Foley accepts that there is little to distinguish between the defendants for the purposes of sentencing.
[31] Mr Foley also accepts that deterrence is the central consideration for the Court when sentencing the defendants.
[32] Mr Foley submits that a starting point of five years’ imprisonment is appropriate in the present case. He says the Crown is correct to identify Varjan as the most relevant authority for sentencing in cases such as the present.
[33]Mr Foley submits that the nature of the offending was as follows:
(a)That the defendants used forged invoices to create the appearance of a legitimate business, to gain credit from the ANZ Bank. He says the arrangement was essentially a “money-go-round” and was comparatively straightforward and unsophisticated, compared with other cases.
(b)That the ANZ is a sophisticated commercial operator that will have insurance to cover the losses it has sustained, and that this case, as the Crown also noted, is not as serious offending as that which will have resulted in the loss of private funds or private pension funds, as is the case in other instances.
(c)Mr Foley also characterises the offending as involving the motivation for the offending as being to maintain the liquidity of IVL in order to retain long-term employees on the staff.
(d)He notes that the offending took place over the period of a year.
(e)That the offending did not involve a substantial breach of trust as the parties were arms-length commercial entities.
(f)Mr Foley says that the impact of the offending on the ANZ Bank is unlikely to lead to long term financial difficulties for the Bank.
[34]Mr Foley says that $7,114,261 was lent by the ANZ Bank to IVL. Of that sum
$5,615,442.95 was repaid. He accepts the final seven loans, with a combined value of
$1,498,818.24, were not repaid. He queries ANZ’s figure of $1.85 million in principal lost, as this is at odds with the figures that he says are set out in the summary of facts. He says the amount claimed in interest and legal costs appears high, and it is unclear what costs, if any, ANZ would have incurred in relation to the liquidation of IVL.
[35]Mr Foley says that the offending in the present case is less serious than that in
Mayer v R,7 and D’Villiers.
[36] Mr Foley says that Mr Ho is entitled to a discount in the order of 23 to 27 per cent for the mitigating factors personal to him. Those factors include: his co-operation with the investigation and with ANZ’s application for summary judgment against him in respect of the personal guarantees that he gave for IVL’s borrowing from the Bank; his previous good character and remorse, evidenced by his lack of any previous convictions and his letter written to the Court; and by the prospect of reparation that he submits is likely as a result of the actions being taken by the Official Assignee.
[37] A number of letters of support for Mr Ho have been provided to the Court. I have read each of them carefully. In summary, those letters say the following:
(a)Mrs Helena Ho, Mr Ho’s wife, says that following the family’s move from Hong Kong to New Zealand, Mr Ho has been a hardworking and dedicated person who has created work for the employees in his businesses. She says it is her belief that Mr Ho only did what he did to ensure the business continued running for the benefit of long serving staff members. She says that she and her husband may not have too many years left to live, and that Mr Ho in particular has diabetes, high cholesterol and has suffered in the past from a urinary tract infection.
7 Mayer v R [2015] NZCA 206.
(b)Mr Ho’s daughter, Ms Jennifer Ho, in her letter says that her father has set up two businesses since moving from Hong Kong to New Zealand and created more than 100 local jobs in the process of establishing those businesses. She says that he is well regarded by his peers and is never hesitant to share his knowledge and expertise with other entrepreneurs looking to achieve their own goals. She says that it is evident to her that her father deeply regrets his actions and was only driven to offend in the way in which he did to ensure that the employees of IVL kept their jobs.
(c)Mr Ho’s other daughter, Ms Jennifer Ho, says that her father is a family and community minded man who set up World TV Ltd as he wanted Asian immigrants to be able to connect to their home countries, and so that their children will not lose their traditional identity, language and culture. She reiterates the shared opinion of other members of her family that her father only did what he did to ensure the business continued running for the benefit of long serving staff members.
(d)Mr Franicevic, a partner of the firm Foley Hughes, has known Mr Ho for approximately 14 years in a professional capacity. He says that Mr Ho is hardworking, dedicated and highly regarded by his fellow directors at World TV Ltd. He says that he has never known Mr Ho to have lived an extravagant lifestyle and he is a very family orientated man, who clearly feels deeply ashamed for his family as well as a result of what has occurred. He says that, based on his own personal knowledge of Mr Ho, the offending is entirely out of character, as over the years he has developed great respect for Mr Ho and considers him a good person with numerous good qualities.
[38] As regards reparation, Mr Foley has filed supplementary submissions after receiving a valuation of Mr Ho’s shareholding in World TV Ltd, the largest Chinese language media organisation in New Zealand. Mr Foley says that Mr Ho’s shareholding in that company is worth between $750,000 and $965,000 approximately. He says that Mr Ho is owed about $304,000 by World TV Ltd. Mr
Ho voluntarily placed himself into bankruptcy before his arrest on the present charges. All his shareholdings and other financial interests have therefore vested in the Official Assignee, but Mr Foley says that Mr Ho hopes to be able to make a significant reparation by virtue of that process through his bankruptcy or at the end of his bankruptcy.
[39] As to remorse, Mr Ho has written a letter to the Court, saying that he feels bad and cannot forgive himself for what he has done. He says that he deeply regrets his actions. He says his actions were for the benefit of his company and his staff, who he did not want to see lose their jobs if the company were to fail. He says that for some two years or so he had been trying to sell assets to repay the ANZ Bank before declaring himself bankrupt. He says that he is actively assisting the Official Assignee to recover the maximum value for his assets to enable ANZ to be repaid to the maximum possible extent.
[40] Mr Foley also says that Mr Ho is entitled to the full 25 per cent discount for entering an early guilty plea.
[41] The end sentence that Mr Foley says should be imposed is therefore between two years and eight months’ imprisonment and two years and ten months’ imprisonment.
[42] Mr Foley submits that a minimum period of imprisonment should not be imposed.
Submissions for Mr Christie
[43] Mr Mansfield says that Mr Christie was not the mastermind of the offending and other than through his continued employment at IVL, he did not stand to gain financially from it. He says that Mr Christie was merely the servant of Mr Ho and acted on his instructions.
[44] Mr Mansfield submits that a starting point of four years and six months is appropriate in the circumstances.
[45]Mr Mansfield submits that the nature of the offending was as follows:
(a)The offending primarily consisted of using legitimate documents, such as company invoices, with false details. This type of offending is only moderately sophisticated.
(b)The funding was for IVL’s benefit, and the motivation was to keep the company operating for the benefit of its employees, including Mr Christie as general manager.
(c)The offending covered a period of 14 months, from August 2016 to October 2017.
(d)The loss to ANZ is in the order of $1.85 million.8
[46] Mr Mansfield submits that the offending in this case is comparable to that in the case of Down, though since the loss in that case to the finance company was approximately $1 million less than is the case here, the starting point needs to be higher than that which was adopted in Down.
[47] Mr Mansfield submits that the offending in this case is significantly less serious than that in Watson. Mr Mansfield also submits that the offending in this case deserves a lower starting point than was adopted in Aryasomayajula v R,9 considering the difference in the amounts loaned on the basis of the false documents, and the difference in the amount that was ultimately recovered as well.
[48] Mr Mansfield submits that Mr Christie exhibits several personal mitigating factors which justify discounts from the starting point. First, Mr Mansfield says that Mr Christie has no prior convictions, has not previously appeared before the Court, and therefore he is entitled to a discount of six months to recognise his previous good character. Mr Mansfield submits that the numerous letters written on Mr Christie’s
8 Mr Mansfield also queries the value of the seven loans written by ANZ as totalling only $1.5 million approximately.
9 Aryasomayajula v R [2011] NZCA 633.
behalf by friends, family and business associates show that the offending was out of character for him. In summary, those letters say the following:
(a)Mr Checketts, who considers himself a good friend of Mr Christie, says that Mr Christie is a good man, who has been a loving and caring step- father to the children of his wife from a previous relationship.
(b)Mr Katsiouras, who is married to Mr Christie’s step-daughter, says that Mr Christie is an honest, upfront and loving man, who he is proud to call his father in law and friend. He says that Mr Christie is regretful and ashamed of his actions for both himself, his family and the employees of his own company who will all suffer the consequences of his actions.
(c)Mr Simmons, who has known Mr Christie for about five years through a business relationship whereby Mr Simmons provided him with business mentoring, says that Mr Christie is a quiet, introverted man, who avoids confrontation and is easily influenced. However, he says that Mr Christie is also a caring and generous person, and was a valued member of a business advisory board, whose contributions were valued by other business owners.
(d)Mr Tuita, who is an IT engineer working alongside Mr Christie and who also considers himself to be a friend of Mr Christie, says that he considers Mr Christie to be trustworthy and responsible and a good husband, father and grandfather.
(e)Mr Cooke, who is a former colleague, client and who remains a friend of Mr Christie, says that Mr Christie is a person of sound and stable character, honest, hardworking and dependable. He considers Mr Christie’s experience and integrity to be of the highest standard.
[49] Mr Mansfield says that a further reduction of six months is also warranted in recognition of other general mitigating factors, being family and community support,
Mr Christie’s age and health, his current employment situation, and the assistance he has given to investigators.
[50] Mr Mansfield says that Mr Christie has strong support from both his family and key members of the community. He says that Mr Christie’s wife, children and grandchildren are all standing by him, and their support is an integral aspect of his ongoing rehabilitation.
[51] Mr Mansfield says that Mr Christie is now aged 57 years’ old. He has ongoing health issues. He has previously been diagnosed with cancer, for which he received treatment, in respect of which he is currently in remission. He also has coronary heart disease for which he has had an operation to insert a stent.
[52] Mr Mansfield says that Mr Christie’s company, Computerware Plus, will be forced to close as a result of Mr Christie’s pending imprisonment. Prospects of future employment also appear limited as a result of his offending, as he will be required to take significantly lower paid positions.
[53] Mr Mansfield says that Mr Christie has been co-operative with the liquidators of IVL and has attempted to assist them in their inquiries.
[54] Mr Mansfield submits that a five per cent deduction for genuine remorse on Mr Christie’s part is also warranted. He says that Mr Christie is deeply ashamed of his actions, is aware of the error of his ways and is accepting of the consequences. Mr Christie wrote a letter to the Court detailing his remorse. He says that since his offending was exposed he has felt relieved. He says that he had been living in fear for a long time and was finally able to talk openly about it with his wife once the matter was discovered. He says that his physical health suffered as a result of all of the lies he was telling, as did his mental health. He pledges to never appear before the Court again and says that he deeply regrets his actions.
[55] Finally, Mr Mansfield submits that a 25 per cent discount for Mr Christie’s guilty plea is warranted in the circumstances.
[56] Mr Mansfield also says that a minimum period of imprisonment is not appropriate in this case.
Discussion
[57] I consider that the purposes of sentencing of particular relevance in the present case are to hold the offenders accountable; to promote in the offenders a sense of responsibility; to denounce the conduct of the offenders; and to deter the offenders and other persons from committing similar offences.
[58] I consider that the principles of sentencing of particular relevance in the present case are the gravity of the offending; the general desirability of consistency in sentencing; and reparations that the Court is satisfied are likely to occur in the present case.
[59] I agree with the Crown, and the concessions responsibly made by counsel for Mr Ho, that it is not possible to separate out the individual roles each defendant played in the offending. For the purposes of sentencing, I consider that they should be treated as having the same level of culpability. The offending extended over a period of some 14 months and involved the preparation of a number of false documents, which were then submitted to the ANZ Bank in order to mislead it. Both defendants clearly acted in concert with full knowledge that the information being provided to the Bank was false. As general manager, Mr Christie was obviously directly involved and it is no excuse whatsoever for him to say that he was only acting on the instructions of or as directed by Mr Ho.
[60] I disagree with Mr Mansfield that Mr Christie should be treated as less culpable. The summary of facts records that certain payments were made to Mr Christie’s company, Computerware Plus, that was erroneously referred to in the summary facts as Painting Plus. Mr Christie is the director and shareholder of that company. He therefore benefitted personally to some extent from the offending, in a manner not dissimilar to that of Mr Ho, who benefitted as a shareholder and director of IVL. Moreover, as Mr Christie was the general manager of IVL, he was receiving a salary which would have been at the highest level of remuneration being paid to the
employees of the company and he had a clear benefit and interest in maintaining his employment at that level.
Authorities
[61] The culpability of offenders in cases such as the present is to be assessed by reference to the matters outlined in Varjan where Court of Appeal said:10
[21] It was said in Rose that there was no established benchmark. That is still the position. The circumstances of, and culpability in, offences of dishonesty vary widely. They must be assessed in light of the guidance to be found in previous decisions. Helpful in this respect are Rose and Cole v Police [2001] 2 NZLR 139.
[22] Culpability is to be assessed by reference to the circumstances and such factors as the nature of the offending, its magnitude and sophistication; the type, circumstances and number of the victims; the motivation for the offending; the amounts involved; the losses; the period over which the offending occurred; the seriousness of breaches of trust involved; and the impact on victims.
[23] It is in the assessment of culpability that comparison with other cases is to be undertaken. Matters of mitigation such as reparation, co-operation with investigators, plea, remorse and personal circumstances necessarily must be assessed in each particular case.
…
[25] The authorities clearly indicate that in cases of major defalcations, misappropriations, schemes dishonestly to obtain money or property or where recidivism indicates the need to protect the community, imprisonment is appropriate.
[62] Various other cases were referred to by counsel as being relevant to sentencing in the present case. The first is Down v R, a decision of the Court of Appeal.11 The offender was convicted there on four counts of dishonestly using a document with intent to obtain a pecuniary advantage. Loans were obtained by a company, of which Mr Down was the sole director, by the use of false invoices. A total of $1.16 million was advanced and approximately $300,000 was repaid, leaving the victim with a financial loss of $850,000. In that case a starting point of three years and six months’ imprisonment was upheld on appeal.
10 R v Varjan CA97/03, 26 June 2003.
11 Down v R [2011] NZCA 138.
[63] In D’Villiers v R, the offender pleaded guilty to 21 counts of dishonestly using a document with intent to obtain a pecuniary advantage and one charge of using a forged document (which carries a maximum penalty of 10 years’ imprisonment).12 The offending was characterised as mortgage fraud and involved the offender presenting applications for mortgages on behalf of purchasers of residential property, whereby he would exaggerate the purchase price of the properties while also representing that deposits had been made directly to the vendors, when they had not. This would result in the lenders advancing more than they otherwise would have, sometimes over 100 per cent of the value of those properties. A total of $4.65 million was advanced. Mr D’Villiers personally benefitted from the offending in the magnitude of somewhere just less than $400,000. Several purchasers lost their homes at mortgagee sales when they were unable to pay back the inflated mortgages and some lenders suffered losses when they were unable to recoup the entirety of the mortgage payments advanced. A starting point of four years and six months’ imprisonment was adopted by the District Court Judge and not challenged in the Court of Appeal where the appeal against the imposition of a minimum period of imprisonment was dismissed.
[64] In Watson v R, the offender pleaded guilty to two counts of theft, including one count of theft in a special relationship.13 Mr Watson stole $5.5 million from a group of companies of which he was the general manager and financial controller, over a period of 10 years. That money was used for gambling and the purchase of luxury goods and real estate. A starting point of eight years’ imprisonment was upheld on appeal.
[65] In Mayer v R, the offender was convicted of 16 charges of dishonestly using a document with intent to obtain a pecuniary advantage, and 10 charges of using a forged document.14 The offending was mortgage fraud. Mr Mayer would use fictitious entities, and forged documents to obtain finance on various properties. The amounts advanced equalled or exceeded the actual price of the properties. In total $47 million was advanced. The victim’s losses were $19.146 million approximately. A starting
12 D’Villiers v R [2010] NZCA 85.
13 Watson v R [2012] NZCA 17.
14 Mayer v R [2015] NZCA 206.
point of seven years was not challenged on appeal and was regarded by the Court of Appeal as “generous” and “could have been higher.”15
[66] In Bell v R, the offender pleaded guilty to seven counts of fraud, involving the fraudulent obtaining of investments in his company and falsely claiming an insurance pay-out.16 Mr Bell was the CEO of a software development company. When that company was in need of capital injections, Mr Bell sent emails and documents to his fellow directors that were intended to induce those directors to invest in the company. In particular, he falsified emails from government agencies that suggested the company’s software had official approval and that payments totalling $700,000 were forthcoming for the supply of software services. The directors advanced $690,000 on the basis of those documents, of which they recovered $300,000, leaving them with a loss of $390,000. He also fraudulently obtained an insurance pay-out of $700,000 on the basis of forged contracts. A global starting point of four years’ imprisonment was adopted and not disturbed on appeal.
[67] In Aryasomayajula v R, the offender was convicted at trial on two counts of dishonestly using a document, involving the enlistment of associates to apply to banks for mortgages to purchase various properties at overvalues, with other false details including the applicant’s income being inflated. The banks advanced approximately
$13.5 million and sustained losses of $4 million. There the Judge adopted a starting point of five years’ imprisonment and the offender was sentenced to four years and six months’ imprisonment. That sentence was upheld on appeal.
Starting point
[68] With reference to the offending features identified in R v Varjan, I consider that the following features of the defendants’ conduct are evident and relevant to determining their culpability:
(a)ANZ said that it has suffered a principal loss of $1.85 million. Mr Foley says that $5,615,442 was repaid, which left an outstanding amount of
15 At [62].
16 Bell v R [2014] NZCA 210.
$1,498,818. There is nothing in the summary of facts that explicitly says the entirety of the amount of $5,615,442 was repaid, although I have read it to be the case. Therefore, I accept the principal loss to the ANZ Bank was $1.85 million, although that figure may be reduced by reference to the other information provided by Mr Foley. Whichever figure is adopted, the level of offending is significant and the difference is not material. It is the difference between the figure as determined and presented by the ANZ Bank and the calculation Mr Foley has presented. I do not however take into account the Bank’s interest, legal costs or liquidator’s costs in this context, that is setting the starting point.
(b)The offending was in my view, moderately sophisticated. It involved the creation of a number of different false documents and false entities. It was sufficiently sophisticated to mislead the ANZ Bank. The offending took place over a period of a year or more and involved payments totalling over $8 million being made for the benefit of the defendants and IVL.
(c)I consider that in this case the ANZ Bank is the only victim and the flow on effects to its customers, who are now under increased scrutiny, are not material for the purposes of sentencing although they are affected.
(d)Mr Foley said that the payments were for the purposes of ensuring the liquidity of IVL, and Mr Mansfield said that Mr Christie did not benefit personally from those payments, however, the summary of facts explicitly states that some of those payments were in fact paid to Mr Christie’s associate company which as I have said is Computerware Plus, a company run by Mr Christie. I consider that both defendants have therefore had their own personal financial interests advanced as a result of their offending, Mr Ho in relation to the benefit he derived from the company, Mr Christie as general manager, and who continued employment in that position. He was in all likelihood benefitting more than any other person from the offending in terms of the receipt of his
continued salary, which was likely to have been, as general manager, the highest salary being paid to any of the IVL employees. Mr Ho was a director and shareholder of IVL and it was in his own financial interests that the company stay afloat. Therefore, while I do not entirely disregard the explanation proffered by both defendants for their offending, that it was for the purposes of maintaining employment positions for long term staff members, nevertheless both of them personally benefitted as a result of their offending.
[69] Bearing those features of the defendant’s offending in mind, and in light of the authorities which I have referred to above, I consider that a starting point of four years and six months’ imprisonment is appropriate in this case.
[70] I do not consider that the offending in this case is more serious than the offending in D’Villiers, which adopted the same starting point. In that case there were numerous victims who were considerably more vulnerable than the finance institutions who lent the funds. Those victims included individual purchasers whose homes were sold at mortgagee sales. Here the only victim is a single corporate lender, the ANZ Bank. While not wishing to minimise the effect of the defendants’ offending, here the ANZ Bank is in a position to deal with the effects of the defendants’ offending better than the individuals who lost their homes, as was the case in D’Villiers. I recognise that the sums involved in the present case were larger, and the amounts lost are most likely larger (bearing in mind that the Court was unable to quantify with any certainty the amounts actually lost in that other case), but I consider that the number of victims and the extent of their personal losses in D’Villiers means that the two cases are otherwise broadly comparable.
[71] The starting point is also broadly consistent with Aryasomayajula where a starting point of five years was adopted, for offending which resulted in $13.5 million being advanced by the bank, which sustained approximately $4 million in losses. Though the offending in that case is similar to that of D’Villiers in that it involved properties being bought and sold at inflated values, and innocent third parties being enlisted for the purposes of furthering that course of offending, there is no mention in the judgment of the losses falling on anyone other than the bank.
[72] The offending in this case is quite clearly nowhere near as serious as that in Watson or Mayer, and I disregard those two cases for the purposes of the comparative exercise I am undertaking.
[73] The offending in this case is also more serious than that in Down and Bell, but not to such a degree that I consider those cases to be unhelpful. In Down the starting point adopted was three years and six months where the amount obtained was $1.16 million and the victim suffered a loss of $850,000. I consider that a difference in starting point of one year is sufficient to recognise the large amount of money obtained from the Bank, and crucially, the larger loss the Bank has suffered as a result of the defendants’ offending.
[74] In Bell the starting point was four years’ imprisonment. The amounts advanced in that case were of a lower magnitude, and the losses were also smaller than in this case. However, that case had the added dimension of a significant breach of trust as Mr Bell had managed to obtain loans from fellow directors in their personal capacities, which had a significant emotional and financial impact upon them. Considering those factors, a difference in the starting point of six months seems to me to be appropriate.
Mitigating factors – Mr Ho
[75] Firstly I do not consider that payments that may be made by the Official Assignee to reduce the indebtedness of Mr Ho to ANZ on the basis of personal guarantees made by him, are to be taken into consideration as reparations in the same way as would be the case where reparation is made voluntarily from a person’s funds which they are controlling. Mr Ho had a contractual obligation to make those payments under his guarantee and the terms of the administration by the Official Assignee, if they result in payments being made, are the result of the operation of law rather than voluntary payments being arranged or made by Mr Ho personally.
[76] Having read the letters in support of Mr Ho, and recognising that he has not appeared before a Court before, prior to his involvement in the present offending coming to light, some discount is to be granted for his previous good character. Those letters show that he was well regarded in his community, and that he was in some part devoted to his community, establishing World TV Ltd as his daughter says, to assist
Asian citizens and residents here in New Zealand to retain connection to their home countries and cultures. Moreover, Mr Ho has not previously been convicted of any offence either here in New Zealand or elsewhere and I accept however the Crown’s argument that a small discount only should be granted for previous good character, as it was the good character of Mr Ho which in part enabled him to obtain finance from the ANZ Bank in the first place.
[77] I also consider that the offending over a period of some 14 months is inconsistent with the proposition of good character because during that 14 months there was time, and time again, to review the correctness of what was being done and that does not sit consistently with a person claiming to be someone of good character. So I apply those matters in assessing a discount for good character.
[78] I do not consider that any discount should be granted for assisting with the prosecution in this case, as I consider there is overlap between the inculpatory interview given by Mr Ho to the Police, admitting his role in the offending, and the justification for a guilty plea, being to avoid the necessity of a trial.
[79] I consider that some discount should be granted for Mr Ho’s remorse. For the purposes of considering the extent of such a discount, I take into account Mr Ho’s letter to the Court expressing remorse, the letters written by his family members and his decision not to defend the summary judgment application brought by the ANZ Bank against him for the purposes of enforcing their debt. That last point suggests, and indicates in fact, that Mr Ho did accept and has accepted responsibility for his actions and did not wish to put the victim, the Bank, to any further trouble.
[80] As I intend to do the same as regards Mr Christie, I also consider that a discount for factors personal to Mr Ho is warranted in the circumstances. Those factors include Mr Ho’s age and poor health, which indicates that prison will be a more onerous or difficult experience for him than it would for most other people. I also note the strong family support Mr Ho enjoys, which I consider reduces the risk of further offending on his behalf.
[81] For those factors I consider a composite discount of approximately 15 per cent, or eight months, is warranted in the circumstances. That brings me to a starting point of three years and 10 months’ imprisonment.
[82] To that I apply the full guilty plea reduction or discount of 25 per cent, which equates to 11 and a half months, which I shall round up to 12 months. That results in an end sentence of two years and 10 months’ imprisonment.
Mitigating factors – Mr Christie
[83] I accept that a discount for previous good character is justified in the circumstances, as Mr Christie does not have any prior convictions, and the letters written on his behalf tend to suggest that the offending was out of character. But again, as the Crown has submitted, that discount must be informed by Mr Christie’s history in relation to the offending as it was his good character, which in part at least enabled him to assist the company to obtain finance from the Bank and, as I have just remarked as regards Mr Ho, his offending over a period of some 14 months provided many opportunities for him to review the propriety of what he was doing and yet, despite any misgivings, he continued to produce false documents and provide a misleading picture to the Bank. That sort of conduct is wholly inconsistent with an assertion of good character and that being the case, I apply that factor and take that into account when I assess a discount for his previous record and good character. In my view the discount of six months that Mr Mansfield contends for in relation to that factor is too high.
[84] I also accept that a discount for remorse is warranted in Mr Christie’s circumstances. The letters on behalf of Mr Christie and the letter written by Mr Christie himself personally, demonstrate genuine remorse on his part. I consider that Mr Christie’s assistance with the liquidators of IVL is also relevant evidence of his genuine remorse and shows his wish to do what he can to right his past wrongs. However, I do not consider that that assistance justifies an allowance of a separate discount.
[85] I also consider that a discount should be granted to recognise Mr Christie’s poor health and in particular the hardship he will face while in prison, as well as the
effect that a period of imprisonment will have on Mr Christie’s company, Computerware Plus, which he says will be forced to close its doors as a result of his offending and the outcome of this case. I have not been provided with any evidence to support Mr Christie’s assertion as regards the future of Computerware Plus, but the Court can infer the effects on it will be disadvantageous, if not terminal. A discount should also be granted to recognise the strong family and community support Mr Christie enjoys, and the low risk of him reoffending as a result of these matters that I have just addressed.
[86] In the circumstances, I consider that, as was the case with Mr Ho, a discount of 15 per cent, or eight months, is warranted. That produces a revised starting point of three years and 10 months’ imprisonment.
[87] To that is applied the full guilty plea discount of 25 per cent, or 11 and a half months, which I again will round up to 12 months, resulting in an end sentence for Mr Christie of two years and 10 months’ imprisonment.
Minimum period of imprisonment
[88] The Court may impose a minimum period of imprisonment if it considers that the applicable non-parole period, which in this case is one-third of the end sentence,17 is insufficient to: hold the offender accountable for the harm done to the victim or community; denounce the conduct in which the offender was involved; deter the offender or others from similar offending; or protecting the community from the offender.18 The minimum period of imprisonment imposed shall not exceed the lesser of two-thirds of the full term of the sentence or ten years.19
[89] In both of your cases, I consider that a minimum period of imprisonment is necessary to hold you accountable for the harm done to the victim of your offending, but particularly to denounce your offending and to operate as a deterrent to others. Your offending was carried out over a lengthy period and involved numerous and repeated acts of deception of the Bank. You were responsible for the composition of
17 Parole Act 2002, s 84(1).
18 Sentencing Act 2000, s86(1)
19 Sentencing Act 2000, s 86(4)
fraudulent documents and their presentation to the Bank in order to deceive the Bank into believing that the invoices and trade loan documents contained genuine information. When the ANZ Bank asked you for information at the first 12 month review, you concocted another series of false information in an attempt to perpetuate your deception and to avoid detection. This was in my view serious and sustained fraudulent offending, and I do not consider that a non-parole period of one-third of the sentence I shall shortly impose, would be sufficient to meet the sentencing objectives I have just mentioned.
[90] I consider that a minimum period of imprisonment is required in both of your cases, and I shall impose a minimum period of imprisonment of half or 50 per cent of the sentences I impose on you in each case.
Sentence
Mr Ho
[91] I sentence you to imprisonment to a term of two years and 10 months on both charges.20
[92] Pursuant to s 86(1) of the Sentencing Act I impose a minimum period of imprisonment of half of that sentence.
Mr Christie.
[93] I also sentence you to a term of imprisonment of two years and 10 months on both charges.21
[94] Pursuant to s 86(1) of the Sentencing Act I impose a minimum period of imprisonment of half of that sentence.
[95]You may both now stand down.
Paul Davison J
20 Sentences to be served concurrently.
21 Sentences to be served concurrently.
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