R v Hadfield

[2007] NZCA 414

IN THE COURT OF APPEAL OF NEW ZEALAND

CA287/06
[2007] NZCA 414

THE QUEEN

v

PAUL DOUGLAS HADFIELD

Hearing:19 July 2007

Court:Arnold, Potter and Venning JJ

Counsel:J R Rapley for Appellant

M A Woolford for Crown

Judgment:20 September 2007 at 3 pm

JUDGMENT OF THE COURT

The appeal is dismissed.

REASONS OF THE COURT

(Given by Arnold J)

Table of Contents

Para

Introduction  [1]
Background   [3]
Basis of appeal  [30]
Discussion – conviction appeal  [32]
(a)     Did the Judge err in allowing the amendment?  [33]

(i)     Jurisdiction  [36]

(ii)     Lateness and prejudice  [45]
(b)     Is the verdict unsustainable?  [63]

(i)     “Margin of error” argument  [64]

(ii)     Inadequacies of proof, particularly in relation to “use”                   [65]

(iii)    No proof of intent to defraud  [85]
Sentence appeal   [88]
Decision       [90]

Introduction

[1]       The appellant was convicted by Judge Crosbie, sitting as a Judge alone, on 81 counts of using a document for the purpose of obtaining a pecuniary advantage for himself, with intent to defraud, contrary to s 229A(b) of the Crimes Act 1961 (now repealed): DC CHCH CRI-2004-009-001854 29 March 2006.  Judge Crosbie sentenced him to three years imprisonment and ordered him to pay reparation of over $300,000: DC CHCH CRI-2004-009-001854 23 June 2006.

[2]       The appellant now appeals against his conviction and against the Judge’s refusal to hold a reparation hearing before fixing the amount of reparation to be paid.

Background

[3]       The appellant operated a company called Croptec Resources Limited (Croptec).  Croptec acted as an intermediary between growers and purchasers of crops suitable for silage.  Acting on behalf of Croptec, the appellant arranged for farmers to grow grass, cereal and maize and for other farmers to purchase the resulting crops for silage.  He also arranged for contractors to harvest, prepare and transport the crops. Preparation sometimes included the use of inoculants, which encouraged the growth of bacteria and made the silage more palatable.

[4]       Croptec paid growers a price per a kilogram of dry matter (DM) and charged purchasers on the same basis, albeit at a higher per kilogram price to allow for its margin.  Given that the various crops were “wet” at the time of harvest and supply, there had to be a process to determine the percentage of dry matter (DM%) in the particular crop.

[5]       The appellant would arrange for contractors to harvest the growers’ crops at the optimum time and transport them to the purchasers’ farms.  The contractors weighed the crops and supplied the resulting figures to the appellant.  They also took samples of the crop, which were sent to Lincoln University’s Animal and Food Sciences Division Analytical Services Unit  (Lincoln ASU) for analysis.  As a result of Lincoln ASU’s testing, a DM% would be identified and advised to the appellant. Contractors were paid for their work on a different basis to that applying to growers and purchasers.  The price they received was calculated by reference to the average DM%, the wet weight of the crop and the distance travelled.

[6]       These arrangements were reflected in the various agreements which Croptec entered into with its clients.  They followed a similar format.  The following provisions are typical of those appearing in purchase agreements.

1QUANTITY

1.1The Purchaser agrees to purchase from [Croptec] a minimum of 200 tonnes dry matter (DM).  To produce this DM [Croptec] has arranged for 600 wet tonnes to be grown on 11 ha. at Killinchey.

1.2The maximum wet tonnage to be delivered under this agreement shall not be exceeded by more than 15% of the wet tonnage detailed in 1.1 above.  Any quantity available above this will be at the Purchaser’s option.

2DELIVERY AND HARVEST

…

2.5The Purchser acknowledges that the time of harvest is at the sole discretion of [Croptec]. [Croptec] will endeavour to have the crop harvested with the DM content of the crop between 30 and 35 percent DM, however [Croptec] undertakes to liase with the Purchaser before harvest commences.

3DM SAMPLE

…

3.2The DM will be determined by sub sampling the sample(s) obtained in 3.1 to obtain a 1kg sample to represent each 60 wet tonnes delivered to the pit.  This sample will be submitted to the Lincoln University Animal and Food Sciences Analytical Services Unit for DM analysis.

4PURCHASE AND PAYMENT

4.1The Purchaser agrees to purchase the delivered crop on the following basis: A x B x C x 10 (1000/100) = purchase price in dollars ($) per tonne DM.

Where:

A is the net weight as determined in clause 2.4
B is the DM content as determined by clause 3.2
C is the price specified in clause 4.2

4.2The price for this purchase is 21c per kg DM (GST Exclusive) as determined in clause 3.2 above.

4.3Payment less the deposit paid as detailed in clause 6.1 of this agreement is to be made by the Purchaser and received by [Croptec] by the 20^th of the month following delivery.  Interest at the rate of 1.5% per month will be added to overdue accounts.

…

4.5Silage Inoculant can be applied and is at the Purchasers option and will be charged as detailed in 4.3.

…

[7]       As can be seen, the DM% notifications from Lincoln ASU and the wet weight notifications from the contractors enabled the appellant to calculate the amounts payable to and by the growers and purchasers respectively.  Once the appellant had received the figures for both the wet weight and the DM% he prepared a grower return for growers and a supply return for purchasers.  Croptec’s invoices to growers and purchasers were based on these returns.

[8]       In 2002 some of Croptec’s customers became concerned about the figures provided by Croptec and contacted Lincoln ASU.  As a consequence, a Lincoln ASU analyst, Mr Isherwood, prepared a spreadsheet comparing the DM%s reported by Lincoln ASU to Croptec with those reported by Croptec to its clients.  This revealed discrepancies, and the police were advised.

[9]       The police executed a search warrant at the appellant’s home.  They seized a large number of documents and a computer.  By examining the hard drive, the police were able to obtain copies of documents including Excel files.  They were also able to obtain images of documents which had been sent to print.

[10]     Detective Sergeant Harvey, the officer in charge of the investigation, interviewed the appellant.  The appellant acknowledged that he had altered DM% figures provided by Lincoln ASU and the wet weights notified by contractors.  The altered figures had been put in supplier and grower returns, deliberately and without the knowledge of those affected.  He acknowledged that he had made the alterations to make the crop yields better than they actually were, and that he made them for profit.  He said that he had made alterations only in the 2002 season, and on about half of the returns.  Asked how much extra money he had made as a consequence, he said, “$40,000-$50,000.  It may not even be that. I don’t know.”  He said that he had repaid some of the purchasers.

[11]     Further, in September 2002 the appellant sent a letter to some of his clients.  It read in part:

During the processing of supply returns for silage that you purchased from Croptec Resources Ltd during April/May 2002 I may have used wrong values for both wet weight and dry matter for the calculation of dry matter tonnes supplied to you and if so you would have been overcharged.

I totally accept responsibility for my actions and sincerely regret my lack of professional judgement and apologise to those of you who have been disadvantaged and overcharged because of my actions.  I acted alone, no other person, including family members working with Croptec Resources Ltd had any knowledge whatsoever of my actions.

None of the silage harvesting contractors I used for the 2002 harvest are involved with my use of wrong wet weights.  My understanding is that the data supplied by them to me was absolutely correct.

During the last four weeks I have been reviewing and working through the supply returns and correcting, advising where necessary and making refunds to those who have been overcharged.

Last Friday because of a complaint, officials took all the records and data required to continue the process of reviewing the transactions.  Therefore there will be some delay in carrying out the remainder of the review; however as soon as records are returned, urgency will be given to its completion.

….

[12]     Two informations were laid against the appellant, one under s 246(1) of the Crimes Act and the other under s 229A(b) (both now repealed).  Both charges were representative.  Given the importance of the wording of these provisions to the arguments raised before Judge Crosbie and before us, we set out the relevant parts of the sections.

[13]     Section 246(1) provided:

246Obtaining by false pretence

(1)       Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to defraud or cause loss to any person by any false pretence, causes or induces any person to execute, make, accept, endorse, or destroy the whole or any part of any valuable security, or to write, impress, or affix any name or seal on any document in order that it may afterwards be made or converted into or used or dealt with as a valuable security.

Section 2 defined “valuable security” as follows:

valuable security includes every document forming the title or evidence of the title to any property of any kind whatever; and also includes any negotiable instrument, bill of exchange, cheque, or promissory note.

[14]     Section 229A(b) provided:

229A   Taking or dealing with certain documents with intent to defraud

Everyone is liable to imprisonment for a term not exceeding 7 years who, with intent to defraud, -

….

(b)       Uses or attempts to use any such document for the purpose of obtaining, for himself or for any other person, any privilege, benefit, pecuniary advantage, or valuable consideration.

[15]     The appellant entered pleas of guilty in respect of each charge.  His counsel advised the Court that aspects of the summary of facts were not accepted, in particular the allegations as to the extent of the offending, which was relevant to the level of reparation to be ordered.  Accordingly, a two-week fixture was made for a contested reparation hearing.

[16]     The appellant then applied to withdraw his guilty pleas.  The Crown accepted that, if the appellant wished to contest his culpability in respect of some of the transactions, there was no practical course other than to give him leave to withdraw his pleas so that the police could lay a series of informations relating to the individual transactions encompassed in the representative charges.  Judge Holderness granted the appellant’s application: DC CHCH CRI-2002-009-640365 4 February 2004.

[17]     Ultimately, the appellant went to trial before Judge Crosbie on a total of 226 counts, 26 under s 229A and the remainder under s 246.  The s 229A charges related to grower returns and manipulation of DM weights and the s 246 charges to transactions involving purchasers.   Up until a month or so before his scheduled trial, senior counsel from Christchurch represented the appellant.  He had advised the Crown that the issue at trial would be whether the appellant had the requisite intention to defraud and said that all Crown witnesses would be required for cross-examination.

[18]     However, that counsel retired from practice and the appellant’s current counsel, Mr Rapley, was briefed.  Having considered the file, Mr Rapley reached the view that there were substantial defects in the Crown case.  Accordingly, he decided to require only a small number of the Crown witnesses for cross-examination.  The remainder of the Crown evidence would be presented by way of written briefs, admitted by consent.

[19]     When Ms Farish for the Crown opened, she advised the Judge that there was no issue as to the alteration of the documents by the appellant.  Rather, the essential issue in the case related to the appellant’s intention.  In essence the Crown case against the appellant was that the documents seized from the appellant’s home and from his computer showed that he deliberately altered wet weight data from contractors and the DM%s from Lincoln ASU in a way that meant that some purchasers paid more, and some growers received less, than they should have (ie, on the basis of the unaltered figures).

[20]     The Crown then presented its case, principally by submitting written witness briefs, which referred to a large number of exhibits.  A few witnesses were called to give evidence orally, and there was some cross-examination of them.  At the close of the Crown case, the defence elected not to call evidence.

[21]     In closing Ms Farish said that the focus of the trial had been on whether the appellant had a dishonest intent when he altered the documents.  She said that the Crown was surprised that the defence had not called evidence, and had become concerned that there might be a legal attack on the charges, particularly those laid under s 246(1).  She said that the Crown considered that all elements of the charges had been proved, but foreshadowed the possibility of an application to amend.  The Crown then undertook a detailed analysis of the charges in light of the evidence.

[22]     In his closing for the appellant, Mr Rapley argued that the Crown had not proved the offending beyond a reasonable doubt.  In relation to the s 246 charges, he argued that:

(a)There was no evidence that any “valuable security” was executed, as required by s 246.  His point was that there was no evidence that purchasers had paid their accounts with Croptec by cheque, as opposed to direct credit.

(b)There was no evidence that the DM% notified to the purchaser was false.  Mr Rapley’s point was that he had established in cross-examination that the Lincoln ASU testing methodology was subject to a margin of error (something in the order of plus or minus three per cent).  Accordingly, he said, if a return contained a DM% which the appellant had altered but was within the margin of error inherent in the testing methodology, the return could not be false or, putting it another way, it could not be shown that the altered figure was not “correct”.

(c)There was no evidence that any of the purchasers were “induced” by the false representations in the supply returns, or even in some cases that they were received by the purchaser. 

(d)There was no evidence of intent to defraud.  The point being made here was that if the altered DM% was within the margin of error inherent in the Lincoln testing methodology, it could not be false and there cannot have been an intention to defraud.

[23]     In relation to the s 229A charges, Mr Rapley argued:

(a)There was no evidence that the documents which were the subject of the charges had been “used”.  Mr Rapley said that the evidence went no further than establishing that someone had created the relevant documents and that they were stored on the appellant’s computer or that there was a printed copy of the return at the appellant’s address.

(b)There was no evidence that Croptec had obtained a pecuniary advantage to which it was not entitled in respect at least of some of these charges. 

(c)There was no evidence of intent to defraud in relation to those charges which relied solely on the alteration of the DM% (as opposed to alterations to the “wet” weight of the loads harvested).

[24]     Having heard the closing for the appellant, the Crown, while maintaining that it had proved offences against s 246, applied to amend the s 246 charges to charges under s 229A against the possibility that the Court did not accept that it had proved the former.  The Judge dealt with this application as follows:

[2]       Mr Rapley in his closing submissions launched an attack on all aspects of the Crown’s case including an attack on fundamental issues of proof in relation to the ingredients of the counts laid under [ss 246 and 299A].

[3]       At the conclusion of those submissions I asked the Crown whether in fact it was applying to file an amended indictment or applying to amend the s246 charges to those laid under 229A(b).  Ms Farish for the Crown considered the matter and came back and said that the Crown did make such an application and this morning the Court has before it an amended indictment, the upshot of which Ms Farish submits is what the Court would be left with if it concluded that charges were not made out under s246 but could be established under s229A(b).

[4]       I have heard argument and submissions from counsel this morning under the s 335 process, that process being a process the Court regularly encounters in its trial jurisdiction in relation to a limited number of counts.  This matter is significantly more complicated by the sheer number of counts, particulars, complainants and amounts claimed to be involved.  It is not a matter where the Court has a simple factual basis to refer to in the exercise of its discretion under s335 as is usually the case.

[5]       Counsel have invited me to rule on the amendment prior to the defence considering, as it has been invited to do, whether it wishes to call evidence or apply for the Crown to re-call witnesses.  That of course is slightly irregular but in accordance with the rules and certainly in accordance with the provisions of s335 and expedient given the late nature of the application and the point this trial has reached.  I should hasten to add this trial was originally set down for five weeks.  It has concluded with significantly less sitting days than first envisaged and it is sitting without the need to inconvenience a jury.  Of course the primary considerations are the interests of justice and in relation to s335 I must consider inter alia whether the accused has been misled or prejudiced.

[6]       I have listened carefully to submissions and considered a number of decisions including appellate decisions of the Court of Appeal that have been referred to me.  Having heard those submissions and the evidence I am of the view that the application should be allowed.  Detailed reasons will follow but essentially I am satisfied that the amendment as sought might have the result of the elements of the offences being proved if the evidence is accepted.  Accordingly the proposed amendment is allowed.

For ease of reference we will refer to this as “the ruling”.

[25]     The amended indictment alleged 94 counts of using a document for pecuniary advantage with intention to defraud contrary to s 229A(b).  The 26 counts under s 229A in the original indictment remained.  In many instances the “new” s 229A counts covered multiple s 246 counts, and removed duplications, errors and such like.  The defence decided that it did not wish to take up the Judge’s offer to call evidence or to apply to have Crown witnesses recalled, and Mr Rapley made a short closing addressing s 229A issues in respect of the amended counts.  The Judge then took time for consideration. 

[26]     On 29 March 2006 the Judge delivered a lengthy judgment in which he convicted the appellant on 81 counts, and acquitted or discharged him on 13.  We will refer to this as “the verdicts judgment”.  The Judge gave his reasons for allowing the amendment and set out at some length his reasoning in relation to the convictions.  The Judge later sentenced the appellant to a term of imprisonment of three years and ordered him to pay reparation.

[27]     We will not set out the Judge’s reasoning in detail at this point.  Rather, we will deal with it in the context of the submissions made on the appeal.  We will, however, describe the structure of the verdicts judgment.

[28]     The verdicts judgment runs to 223 paragraphs and has in addition two lengthy appendices.  The second, Appendix B, runs to over 120 pages.  In the body of the judgment, the Judge:

(a)       Sets out the background facts;

(b)Summarises the arguments of each side on the Crown’s application to amend;

(c)       Gives the Judge’s reasons for allowing the amendment;

(d)       Sets out the ingredients of an offence under s 229A(b);

(e)       Canvasses the evidence in relation to the s 229A(b) charges;

(f)Records the submissions of the parties in relation to the s 229A(b) charges;

(g)Sets out the relevant principles in relation to matters such as the burden of proof and the drawing of inference as well as setting out, in a general way, the Judge’s reasoning on elements of the ingredients of the offence.

[29]     Appendix A sets out the charges and the verdict in respect of each.  Appendix B summarises the Judge’s analysis of the evidence in relation to each of the charges.

Basis of appeal

[30]     In relation to his convictions, the appellant argues that the verdict should be set aside on the ground that:

(a)The Judge was wrong to allow the Crown to amend the s 246 counts to s 229A counts;

(b)The verdict is unreasonable and cannot be supported having regard to the evidence.  In particular, there was no evidence that each document which is the subject of a s 229A(b) charge was “used”.

[31]     In relation to sentence, the appellant argues that there was a miscarriage of justice because the Judge refused the appellant’s request for a reparation hearing, so that the reparation order was too high.  The appellant accepted that the sentence of imprisonment was not manifestly excessive.

Discussion - conviction appeal

[32]     We deal with each aspect of the conviction appeal in turn.

(a)      Did the Judge err in allowing the amendment?

[33]     Mr Rapley argued that the Judge should not have made the amendment as the Crown sought it at a late stage (after the defence had closed), having failed to prove an essential element of the s 246 counts.  He said that the appellant had been prejudiced by the late amendment.  Further, he said, the Judge did not have jurisdiction to make the amendment, because he followed the wrong process.

[34]     We begin by saying that the history of this matter is unfortunate.  In particular, it is clear that the Crown, based on the advice given by the appellant’s former counsel, thought that the key issues in the case related to the accused’s intention and the extent of the offending.  No doubt, its case was presented against that background.  The Crown did not become aware of the true nature of the defence case until Mr Rapley’s closing, and it was this that prompted the application to amend.

[35]     That said, we agree with Mr Rapley that the Crown case was not as well presented as it should have been.  There were various errors, inaccuracies and duplications in the formulation of the charges and in the briefs of evidence.  Whether they lead to the result that Mr Rapley urges upon us is another matter, however.

(i)       Jurisdiction

[36]     The jurisdiction to amend is contained in s 335 of the Crimes Act.  The relevant parts of the section read:

335Variance and amendment

(1)If on the trial of an indictment there appears to be a variance between the proof and the charge in any count of the indictment either as filed or as amended, or as it would have been if amended in conformity with any such further particulars, the Court before which the case is tried, or the Court of Appeal, may amend the indictment, or any count in it, so as to make it conformable with the proof.

(2)If the Court is of opinion that the accused has not been misled or prejudiced in his defence by such variance it shall make the amendment.

(3)….

(4)In any such case the trial or the appeal may then proceed in all respects as if the indictment or count had been originally framed as amended.

(5)If the Court is of opinion that the accused has been misled or prejudiced in his defence by any such variance, error, omission, or defective statement as aforesaid, but that the effect of his being misled or prejudiced might be removed by adjourning or postponing the trial, the Court may in its discretion make the amendment and adjourn the trial to a future day in the same sittings, or discharge the jury and postpone the trial to the next sittings of the Court, on such terms as it thinks just.

(6)…..

(7)In determining whether the accused has been misled or prejudiced in his defence, the Court that has to determine the question shall consider the contents of the depositions, as well as the other circumstances of the case.

(8)The propriety of making or refusing to make such amendment shall be deemed a question for the Court, and the decision of the Court upon it may be reserved for the Court of Appeal, or may be brought on appeal before the Court of Appeal, in the same manner as any other decision on a point of law.

[37]     Mr Rapley argued that the Judge had no jurisdiction to amend as, at the time he made the amendment, he could not be satisfied that the requirements of s 335(1) were met.  In particular, he said, the Judge could not be satisfied that there was “a variance between the proof and the [s 246] charge[s]”, nor could he be satisfied that the amended charges under s 229A were “conformable with the proof”.  This was because the Judge had yet to work through the evidence in relation to all the charges, most of which was in documentary form.

[38]     Section 335(1) confers a discretionary power to amend where “there appears to be a variance between the proof and the charge”.  “Proof” in this context refers to the state of the evidence at the time the application is made: R v Bovey [1964] NZLR 865 (CA), per North P at 872. The use of the word “appears” is significant. It reflects the fact that applications to amend are generally made prior to verdict, so that judges are required to make an assessment on the basis of the evidence available at the time. The process is an evaluative one, undertaken before the factfinder has determined the facts.

[39]     In the present case, the Judge allowed the amendment because he was satisfied “that the amendment as sought might have the result of the elements of the offences being proved if the evidence is accepted” (at [6] of the ruling). Given the way in which the trial developed, with relatively little viva voce evidence, the Judge had to read through many witness statements and extensive documentary evidence to form a final view as to whether the Crown had proved its case beyond reasonable doubt.  Clearly, however, on the basis of the evidence which he had seen to that point, he considered that there was an issue as to proof in relation to the s 246 charges, but that liability under s 229A might be established, depending upon what factual findings he made.  In a trial of this type, we consider that the Judge’s approach is consistent with the requirements of s 335.

[40]     In any event, the Judge dealt with the application at more length in his verdicts judgment, where he set out the arguments of the parties on the application, referred to the leading authorities and gave his reasons for allowing the amendment.  By that time the Judge had, of course, considered the evidence in detail.  On the basis of his analysis he had clearly reached the view that there was a variance between the proof and the s 246(1) charges and that the evidence was consistent with the ingredients of s 229A(b).  So even if Mr Rapley was correct that the Judge was premature in allowing the amendment in the ruling, he was clearly in a position to do so when he delivered the verdicts judgment.  This being so, it is difficult to see any practical significance in relation to this aspect of the appeal.  It cannot be said to have resulted in a miscarriage of justice.

[41]     We should, however, note that we do not agree with the reason which the Judge gave for his finding that the evidence did not conform to the proof in relation to the s 246(1) charges.  A typical s 246(1) count charged that the appellant:

[W]ith intent to defraud by a false pretence namely by falsely representing in a supply return number 1510 for Croptec Resources Limited addressed to I & J Minson that an analysis of the silage sampled by Lincoln University Animal and Food Services Division had identified a dry matter percentage result of 36.70% when the correct dry matter percentage was 34.00% thereby induced I & J Minson to make a valuable security which increased the contracted payment to Croptec Resources Limited.

[42]     The Judge said:

[54]     In my view the Crown case in relation to s. 246 was flawed.  Applying the decision of the Court of Appeal in R v Simon [CA 230/04 14 October 2004] I do not consider that the supply returns or grower returns sent by the accused to [purchasers] and growers constituted a “valuable security” as that term is defined in s. 2 Crimes Act 1961: ….

[43]     However, as we understood the Crown case, the “valuable security” referred to in the charges was the cheque or other instrument which Croptec’s clients used to effect payment to Croptec, not the supply return that formed the basis of Croptec’s invoicing. 

[44]     Neither party has sought to make anything of this point, however, so we take it no further.

(ii)       Lateness and prejudice

[45]     As we see it, in this case Mr Rapley’s submissions concerning the lateness of the application merge into those relating to the question of prejudice.  It is clear that, in principle, there is jurisdiction under s 335 to amend during or after trial.  The real question is whether the amendment will cause prejudice.  The later the stage at which the amendment is sought, the greater the likelihood that there will be prejudice.

[46]     To some extent, Mr Rapley’s submissions on this aspect were general in nature, assertive in tone and somewhat exaggerated.  For example, he submitted:

The fact that this was a serious and complex fraud case was recognised by the Judge.  It necessitated an adjournment of four days to give the Crown enough time to go through the very difficult task of filing a new indictment for consideration.  The fact that the amendment was allowed after the closing caused significant problems.  The defence did not have the opportunity to answer each and every new charge.

(Footnotes omitted.)

[47]     The adjournment referred to occurred on the afternoon of Thursday 10 November 2005 following the completion of closing addresses, when the Crown sought leave to amend.  The Judge said that he would not rule on the application without seeing the proposed amendments.  Accordingly he adjourned the matter.  The amended indictment was presented on the morning of Monday 14 November 2005.  Friday 11 November 2005 was a public holiday in Canterbury, and, of course, the weekend followed.  So, contrary to Mr Rapley’s suggestion, the amended indictment was presented promptly.

[48]     In essence, Mr Rapley’s submission as to prejudice was that the appellant’s case had been run in a particular way (ie, he was pursuing a particular theory of the case), and it might have been run differently if the amendment had been made earlier.  Mr Rapley said that he had proceeded on the basis that the Crown had not proved its case under s 246(1) in certain respects and that he had not focussed on the issue of the appellant’s intention. 

[49]     This argument had been put to Judge Crosbie.  He said in the verdicts judgment:

[59]     I cannot accept that, given the presence of the existing s. 229A charges, the defence questioned Crown witnesses in a strategically narrow way.  It is wrong for counsel to argue that he focussed on strong arguments and effectively ignored the s. 229A(b) charges.  The charges were there, as was the evidence to support them which I will refer to later in this verdict.  The modus operandi employed in respect of the DM% as between purchasers and growers DM% figures was the same.  The allegations in the amended indictment therefore cannot in any way be said to be new, nor would they necessarily have been approached by the defence in a different manner, given the approach taken to all of the original charges.

[60]     I am satisfied that there is variance between the proof and the s 246 charges. I am of the view that the accused suffers no prejudice amending the indictment in the manner already stated.  Even if there were prejudice, this could have been remedied by adjourning the trial and allowing the accused the opportunity to recall any Crown witnesses for cross-examination and for the defence to give evidence.  There was ample available time for this to occur.  The accused elected not to take that course.

[50]     We consider that the Judge was correct in his assessment.

[51]     We agree that an accused may be prejudiced by an amendment if counsel has prepared and presented the case in accordance with a theory of the case which is no longer appropriate, and counsel cannot recast the case to meet the new charge(s): R v Johnston [1974] 2 NZLR 660 at 664 (CA). Obviously, counsel’s theory of the case is likely to have been carried through in the cross-examination of Crown witnesses. However, we also note that a court has power to adjourn the trial to cure any prejudice (s 335(5)). Here the Judge did offer an adjournment, but it was refused.

[52]      In the present case, Mr Rapley described the “key question” in relation to the s 246(1) charges as follows:

Was it established that the DM% for the particular crop which was advised to purchasers by the appellant [was] actually incorrect or false?  The Judge worked on the basis that the DM% reported to the complainants was different but that does not mean the same as incorrect or false.

[53] As we say at [22](b) above, Mr Rapley’s point was that he had established by cross-examination that the Lincoln ASU figures had a margin of error of plus or minus three per cent. If any alteration the appellant made to the figures was within that margin of error, the altered figure may well have been the “correct” figure, with the result that the Crown could not prove an important element of the s 246(1) charges.

[54]     In our view, this line of argument is fundamentally misconceived.  The “correct” figure for the purpose of the charges (see [41] above for a typical charge) was not the true figure in an absolute sense as the argument assumes, but the figure determined by the agreed process, that is, Lincoln ASU’s testing. 

[55] The parties to the agreements referred to at [6] above had committed themselves to an independent process which would produce figures on the basis of which the amount they received or paid would be calculated. It is unlikely that anyone involved thought that this process would produce a figure that was 100% accurate. Rather, the important point about the process was, as the witnesses confirmed, that it was independent of the contracting parties. Accordingly we do not consider that the appellant suffered any prejudice in this respect.

[56]     Mr Rapley also said that, had the amendment been made earlier, he would have cross-examined Crown witnesses who were purchasers as to whether they were happy with the quality of the silage provided by Croptec and whether it “physically presented as reported by the appellant”.  He also said that he would have cross-examined Croptec’s customers generally as to whether they thought that the appellant genuinely believed that his changing of the DM% figure produced a more accurate result.  These lines of cross-examination were, Mr Rapley said, relevant to the question whether the appellant had the necessary intention to defraud.

[57]     We do not accept that there was prejudice in relation to the lines of cross‑examination identified.  We do not see how cross-examination along any of the suggested lines could be relevant to the appellant’s intention at the time he altered the figures.  The silage may well have been adequate for its purpose and may have “physically presented as reported”.  But the important point concerns the price, which was not calculated in accordance with the agreed process as a result of the appellant’s alteration of the figures, and the appellant’s intention at the relevant time.   The appellant faced particular difficulties in this area given that he had admitted in his interview with the police that he had made alterations to the returns and had done so for profit, and given also the terms of the letter which he wrote to clients in September 2002.  Further, we do not see how what others thought might have been in the appellant’s mind at the time can assist in the assessment of what was in his mind, in the circumstances of this case.  As a result, we cannot see that there was any prejudice to the appellant from the amendment in this respect.

[58]     Mr Rapley also said that he had very little opportunity to address the Court on s 229A and its requirements in his brief further closing after the amendments were made.  We make two points about this submission.  First, the appellant faced 26 charges under s 229A from the outset.  Plainly he had to address those charges in his defence at trial, and Mr Rapley did so. 

[59]     Second, in relation to the s 246(1) charges which were amended to s 229A(b) charges, Mr Rapley addressed the Judge extensively on the requirements of s 246.  Accordingly, the question is whether, in the factual context of this case, the requirements of the two sections differ significantly.

[60]     In our view, they do not.  Mr Rapley argued that there were inadequacies of proof in relation to the s 246 charges. The points which Mr Rapley emphasised were:

(a)Prosecution witnesses did not adequately identify the documents upon which particular charges were based.

(b)There was no evidence that purchasers had been induced by any false representations to part with a valuable security.

(c)There was no evidence as to the form of the payments, ie, whether they had been made by cheque or other valuable security.

(d)There was in some instances confusion as to precisely the amount of the over-payment that purchasers had made to Croptec.

[61]     Apart from the “valuable security” point, these same arguments were open to the appellant, and were made in this Court, in relation to the s 229A charges.  In particular, the “no inducement” argument under s 246(1) became the “no use” argument under s 229A(b).  We will deal with the particular arguments in detail later in this judgment.  It is sufficient for present purposes to say that, like Judge Crosbie, we do not consider that there was any prejudice to the appellant given the ingredients of the offences, the way in which the Crown said that they were met in the present case and the nature of the arguments raised by the appellant by way of defence.

[62]     In this context we note, as the Judge below did, that this Court in R v Simon CA230/04 14 October 2004 at [18] considered that convictions under s 229A could have been substituted for convictions under s 246 on the facts of that case.  Similarly, in R v Thompson [2005] 3 NZLR 577 the Supreme Court amended an indictment and substituted verdicts of guilty under s 246 in a case where the appellant had originally been charged and convicted of offences under s 229A. The point is that amendments as between ss 229A and 246 have been considered to be legitimate at the appeal stage, in particular factual contexts. We consider that the amendment was properly allowed in this instance, even though it occurred at the conclusion of the hearing.

(b)      Is the verdict unsustainable?

[63]     The arguments advanced by Mr Rapley in support of his submission that the guilty verdicts in respect of the s 229A(b) charges could not be sustained were essentially the same as those which he put to Judge Crosbie.  We propose to deal with them under three heads - the “margin of error” argument, inadequacies of proof, particularly in relation to “use” and no intention to defraud.

(i)       “Margin of error” argument

[64] We have already addressed the margin of error argument at [51] - [55] above. As we said there, we do not consider that it had merit in the context of the s 246(1) charges. Nor does it in respect of the s 229A(b) charges.

(ii)       Inadequacies of proof, particularly in relation to “use”

[65]     Mr Rapley submitted that the Crown had failed to establish that the documents containing the altered figures had been “used” within the meaning of s 229A.  Citing R v Baxter [1998] 3 NZLR 144 (CA), Mr Rapley said that to be used a document must be received by the complainant. Accordingly there needed to be evidence that the document was sent and received.

[66]     About the issue of “use” the Judge said:

[211]    In my view, the use was the creating and sending of a grower or supply return to a grower or purchaser.  I have in respect of each count considered whether a document was “used”.  I have taken into account and in relation to all three elements what each grower or purchaser has said in relation to their belief as to the testing process, how they were to be paid or invoiced, whether they were paid or did pay, the contractual provisions and the intent and expectations of the complainants.

[212]    I have also examined the documents and records found at the accused’s address.  I have considered the way the documents were kept and the use and appearance of the documents.  This extends to many documents being marked with “file copy”.  I have not provided in Appendix “B” a commentary on every document.  I have, in relation to each count, considered whether the documents (combined with all of the other evidence and matters I have accepted) support an inference that the accused altered DM% and wet weight figures and intended to use the grower or supply returns to obtain a pecuniary advantage.  I have adopted the same approach to conclude or infer whether a document was “used” i.e. sent.

[213]    In addition to the matters I accepted, the complainants’ evidence and the documents, I have considered the accused’s statement to Police and his letters to clients.

[67] In order to charge Croptec’s purchaser clients or to pay Croptec’s grower clients, the appellant prepared supply or grower returns. These returns should have reflected the DM% figures provided by Lincoln ASU and the weights advised by the contractors. In fact many contained figures altered by the appellant. In the returns the appellant calculated the prices payable by or to Croptec’s purchaser or grower clients on the basis of the altered figures. The appellant then used the returns to prepare the relevant invoices or payment advices to clients. These referred to the relevant returns by number, and the returns were generally supplied to the relevant clients. (We illustrate this in more detail at [82] below by reference to particular purchaser transactions.) In these circumstances, we consider that the appellant did “use” the altered returns for the purposes of s 229A(b).

[68]     However, that does not dispose of Mr Rapley’s criticism of the Judge’s findings.  He submitted that the Judge took a global approach to use, in the sense that he did not spell out, in relation to every document which was the subject of a charge, exactly how it was used in the particular circumstances. 

[69]     We observe at this point that Mr Rapley took a global approach himself, in the sense that he did not provide us with a comprehensive analysis of all the charges on which the Judge convicted in which he attempted to demonstrate that the Judge was wrong to conclude that “use” had been established.  Rather, he pointed to what he said were deficiencies in several specific instances, and invited us to conclude that all the charges were similarly deficient.  There are obvious difficulties with such an approach.  For our part, we have not endeavoured to examine the evidence going to every charge on which the Judge convicted.  Rather, we have addressed the issues in the same way as they were presented to us by Mr Rapley.

[70]     The Judge addressed the “global approach” point to some extent in [212] of the verdicts judgment (see [66] above), when he said that although he had considered all the relevant documents, he had not provided a commentary in Appendix B on each one.  Given the extent of the evidence, that approach cannot fairly be criticised.

[71]     Further, the Judge recorded the following at the beginning of Appendix B:

1.There was no dispute over the production of documents that are referred to in this document – all were produced by consent.  Each count in the indictment is referenced in this appendix to a corresponding number and to the relevant [supply return] or [grower return].  This appendix forms part of the verdict.

….

4.Where I have referred to “a bundle” or a “number” of documents, this refers to documents located together at the accused’s address.  No issue was taken with those documents being so located.  I have taken into account that documents so located include tax invoices and Supply and Grower returns with “File Copy” marked on them.  Such bundles are indicative of a file record being retained, including of what has been sent to a grower or purchaser.  I do not, however, refer to all documents or always refer to documents as originals, copies or file copies.  I have, however, worked through all of the documents and paid close attention to them to enable me to draw conclusions or inferences from them.

….

7.There was no issue taken, or cross examination of witnesses, on the amounts said to be under paid or overcharged, or of the amounts advised by the Police to the complainants as being overcharged or underpaid.

[72]     Mr Rapley said that the documents were not produced by consent, as stated by the Judge in point 1 above.  Rather, the individual witnesses, most of whose briefs were admitted by consent, produced them.  In a technical sense, that is correct.  But the Judge appears to have adopted the view which the Crown urged upon us.  Mr Woolford argued that because the documents came in through witnesses whose briefs of evidence were admitted by consent, the Judge was entitled to say that there was no issue as to source, and to draw inferences concerning use from the business arrangements which Croptec had with its clients, at least in the absence of any relevant cross-examination.  We agree, for the reasons developed below.

[73]     The key exhibits such as the returns and invoices had exhibit labels, on which there were various notations.  We will use an example to which Mr Rapley referred, namely N P and N A Barnett, who were growers.  Exhibit 16.3 is a “BUYER CREATED TAX INVOICE” on Croptec letterhead, which reflects the fact that it relates to a payment to be made by Croptec to a grower.  The invoice is numbered 100045, is dated 20 February 2002 and is addressed to N P & N A Barnett at their postal address.  It is marked “file copy”.  The exhibit label on the invoice contains the following:

Description: Crop Tech Resources Ltd client file in name M P & N A Barnett

Located: Hadfield’s address, Greenpark

It was attached to a number of other documents.  That tax invoice refers to grower return number 810023.  That grower return was exhibit 16.1.  It was marked:

Description: Crop Tech Resources Ltd Grower return dated 22.01.02 in name M P & N A Barnett

Located: Computer

Both exhibits were produced by Detective Sergeant Harvey.  He gave evidence that he had executed a search warrant at the appellant’s address and had detailed one of the police officers who assisted him, Detective Whiteside, to be the exhibits officer and to take custody of the documents found there.  He said that Detective Whiteside subsequently provided the documents to him for analysis.  Detective Sergeant Harvey said that he had also obtained documents from various people who were called as witnesses, and had undertaken an analysis of all the documents. 

[74]     In his evidence Detective Whiteside described his role in the search.  In particular, he said a computer drive was discovered and seized at the appellant’s house.  That was sent to the Dunedin Electronic Crime Laboratory for cloning.  A member of the Laboratory, Mr Ramsay, gave evidence of the work he performed on the computer.  He said that “a CD-ROM was created containing copies of the Word documents, Excel files (spreadsheets) and deleted documents found on the exhibit hard drive.  This CD-ROM was then sent to Detective Sgt Harvey”.  He produced the CD-ROM as exhibit G54.  The exhibit label says: “Description: Cloned disk retrieved from Hadfield’s computer.  Located: Hadfield’s computer, Greenpark”.  Mr Ramsay went on to say that he recovered several spool files from the hard drive.  These contained images of what had been sent to the printer.  He produced a printout of eleven recovered spool files as exhibit G53.  The exhibit note to the printout says: “Located: Computer seized from Hadfield’s address Greenpark”.

[75]     Mr Rapley said that the notation “Located: Computer” on many of the exhibits was not sufficient to establish beyond a reasonable doubt that the relevant document had come from the appellant’s computer.  We consider that, in the light of the police and forensic evidence, that notation led inevitably to the inference that the document was located on the appellant’s computer. 

[76]     Further, remaining with the Barnetts’ case as an example, a file copy of invoice 100045 was found on the appellant’s file at his home.  It referred to grower return 810023 dated 22 January 2002 and recorded the dollar amount from that grower return.  The grower return, which was exhibit 16.1 and was marked “Located: Computer”, coincided exactly with the identifying details referred to in the file copy of the invoice.  There can be no doubt that the grower return came from the appellant’s computer and that it was used as the basis for preparing the invoice.

[77]     Mr Rapley then complained that some of Croptec’s clients, in their evidence, did not sufficiently particularise what had occurred.  Taking Mr Barnett, whose evidence was admitted by consent, as an example, he said that he first dealt with the appellant in the 2002 season and grew wheat for him in that season.  He said that he signed a contract with the appellant, and produced it (a copy of this document was attached to the grower return and other documents found in the relevant client file in the appellant’s home).  He said that he had received a cheque and a grower return from Croptec which stated the DM% and the contractor’s weights, but he did not identify either document.  He said that he had not calculated the amount of the underpayment from Croptec but said that he had received an invoice for about $3,000 or $4,000.  He said police records identified a figure of $3,425.39.

[78]     Mr Rapley said that there was “no evidence that the appellant actually used it or in other words that he sent it and that Mr Barnett received it”.

[79]     That complaint needs to be assessed against the background of Detective Sergeant Harvey’s evidence.  He gave evidence that grower return number 810023 contained altered figures.  The grower return contained a calculation of the price payable by Croptec to the Barnetts on the basis of the altered figures and noted at its foot “Payment by 28/02/2002”.  The “buyer created tax invoice” referred to “Grower Agreement Number 2001/31”.  This was the grower agreement relating to the Barnetts, which was produced by Mr Barnett at trial and found in the Barnetts’ client file at the appellant’s home. The invoice, which it must be remembered was marked “file copy”, set out the amount payable to the Barnetts by reference to “Grower Return Number 810023”, and concluded:

Please Find Cheque Attached For:-     $40,322.25

and:

Cheque Number 500413

(the cheque number being written in by hand).

[80]     Mr Rapley’s argument was that this evidence did not amount to proof beyond a reasonable doubt, as the Judge could not be sure that grower return 810023 was the grower return Mr Barnett was referring to, or that the cheque he received was for the amount referred to in the invoice.

[81]     We do not accept that submission.  The fact that the invoice was marked as a file copy, that it was the only such invoice in the appellant’s client file and that it contained a hand-written reference to a cheque number support the drawing of an inference that the invoice and the cheque were sent to the Barnetts.  Indeed, the inference was inevitable.  We were not referred to any other invoice that Mr Barnett could have been referring to, nor was there any evidence that he was referring to a cheque other than the one identified in the invoice.  We agree with Mr Rapley that it would have been desirable for Mr Barnett’s brief to have set matters out more clearly; but that does not mean that the Judge could not properly draw the inferences that he did from the material before him, given the absence of any viable challenge to its authenticity.

[82]     Furthermore, in relation to the purchasers there was clear evidence that they had paid on Croptec’s invoices.  First, they said in evidence that they did.  Second, in many instances the appellant’s file copies of invoices are marked to indicate that payment was received by Croptec (eg, they contain hand-written notes such as “Direct Credited 20/11/01”, “Paid by cheque 22/11/01”, “Direct Credit 28/11/01”, “Paid by direct credit 20/2/02” and “DC 20/5/02 $48,146.74”), or, more commonly, they had a remittance advice attached.  To give three specific examples:

(a)Count 19 of the amended indictment, on which the appellant was convicted, charged that he had, with intent to defraud, used supply return number 21035 addressed to Lincoln University Dairy Farm to obtain for Croptec a pecuniary advantage.  The appellant’s relevant client file contained a file copy of invoice 210172 addressed to Lincoln University Dairy Farm in the amount of $31,238.10 (plus GST).  The invoice noted that this figure was taken from supply return 21035.  The figure of $31,238.10 in that supply return was calculated on the basis of altered figures.  The appellant’s file copy of the invoice attaches a “Direct Credit Advice” from Lincoln University, indicating that the invoice was paid.

(b)Count 62, on which the appellant was also convicted, charged that he had, with intent to defraud, used supply return number 21051 addressed to G & R Tait Limited to obtain for Croptec a pecuniary advantage.  The appellant’s relevant client file contained a copy of invoice number 210188 addressed to G W & R Tait Limited.  That invoice contained the following entry: “Per Supply Return 21051 $41,509.93”.  The invoice then allowed for a credit and added GST to produce a final figure.  The amount set out in supply return 21051 was calculated using altered figures.  The appellant’s file copy of the invoice attaches a payment advice from a firm of accountants indicating that they had paid the invoice on behalf of G W & R Tait Limited. 

(c)Count 70, on which the appellant was also convicted, charged that he had, with intent to defraud, used supply return number 21073 addressed to Clover Nook Farm to obtain for Croptec a pecuniary advantage.  The appellant’s relevant client file contained a file copy of invoice 210212 addressed to Clover Nook Farm Limited for $41,747.10 (plus GST).  That figure was derived from supply return 21073 ($48,072.10) less a deposit ($6,325.00).  The figure in the supply return was calculated on the basis of altered figures.  The appellant’s file copy of Croptec’s statement to Clover Nook Farm Limited of 20 May 2002 contains a hand-written note recording that invoice 210212 was paid by direct credit on 21 May 2002.

[83]     To summarise, Croptec’s invoices to purchasers were based on supply returns. The supply returns contained a calculation of the price payable in accordance with the pricing formula in the supply agreements.  They concluded with the words “Do not pay on this supply return.  An invoice will be issued for this return”.  When the appellant prepared and issued invoices on the basis of supply returns containing altered figures, he “used” the supply returns.  The material in the appellant’s files establishes that particular purchasers acted on the returns by paying the relevant invoices.

[84]     Accordingly, we do not consider that Mr Rapley has demonstrated that, on the evidence before him, the Judge must have been left with a reasonable doubt concerning those charges in respect of which he entered convictions.  It is clear that the Judge took a discriminating approach to the charges, as is reflected in the fact that, having examined the relevant documents, he entered convictions on some charges, dismissed others and acquitted the appellant on yet others.  Plainly the Judge assessed each charge individually, on its merits.  Further, we consider that the Judge directed himself appropriately in relation to the relevant issues.

(iii)No proof of intent to defraud

[85]     Finally, Mr Rapley argued that intention to defraud had not been proved.  He said that the Judge took a global approach, rather than carefully working through the evidence in relation to each charge, determining whether there was an intention to defraud in relation to that charge and, where he concluded that there was, explaining his reasons for so concluding.

[86]     We consider that this argument is hopeless.  The appellant admitted both to the police and to his clients that he had altered the Lincoln ASU figures and the weights provided by contractors.  He admitted to the police that he did so for profit.  There was no question of inadvertent error or honest mistake.  The appellant said that he had acted alone.  Accordingly, the substantial issue was whether or not alterations had been made in particular cases.  If it was established that alterations had been made which had the effect of increasing the amounts that purchasers had to pay Croptec, or reducing the amounts that Croptec had to pay growers, the inference that the appellant had made the alterations with intent to defraud was inevitable. 

[87]     In the result, then, we reject all of the grounds raised.

Sentence appeal

[88]     As we have said, the only issue here is whether the Judge should have held a reparation hearing before fixing the amount of reparation to be paid.  In the circumstances, we consider that he was entitled to fix reparation without holding a reparation hearing. 

[89]     It must be remembered that originally, after the appellant had entered pleas of guilty to the representative charges, there was to be a two week reparation hearing.  This was because, although the appellant had admitted guilt, he disputed the extent of the offending.  Ultimately, the District Court allowed the appellant to vacate his guilty pleas and required the Crown to lay charges dealing with each individual incident, effectively to allow the appellant to contest the extent of his offending.  Given that background, and the nature of the evidence before the Court dealing with each incident, a further hearing as to the amount of reparation to be ordered was unnecessary.  We note also, as Mr Woolford submitted, that the appellant’s stance in relation to reparation was obstructive, in the sense that he was not forthcoming about his financial position.  This was despite the fact that there were numerous efforts to obtain from him accurate information as to the state of his affairs.

Decision

[90]     The appeal is dismissed.

Solicitors:

Crown Law Office, Wellington