R v Hamilton - [2014] NZHC 1579

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2013-004-1722 [2014] NZHC 1579

THE QUEEN

v

HUGH EDWARD STAPLES HAMILTON

Charge: Theft by a person in a special relationship (14)

Plea:

Not guilty

Counsel:

NR Williams, KC Chang, AJH Senior for Crown
DG Young and JM McNamara for defendant

Sentenced:

4 July 2014

SENTENCING NOTES OF FAIRE J

Solicitors: Meredith Connell, Auckland
Hauraki Gulf Law, Auckland

R v Hamilton [2014] NZHC 1579 [4 July 2014]

Introduction

[1] Hugh Hamilton you appear for sentence on 14 charges under s 220 of the Crimes Act 1961 relating to theft by a person in a special relationship. I found you guilty of these charges on the 16 May 2014. Those offences carry a maximum sentence of 7 years imprisonment.

Background

[2] The offending occurred over a period of three years, between July 2005 and May 2008. They related to related party lending by Belgrave Finance Ltd. Belgrave carried on business as a finance company until the 28 May 2008 when it was placed into receivership. Its primary business was the advance of commercial loans for property investment and development from funds raised by the public through the offering of first ranked debenture stock. Belgrave had a Debenture Trust Deed that explicitly established that Belgrave was prevented from entering, without the Trustee’s consent, any related party transactions. The Trust Deed offered a measure of protection to investors.

[3] You were a partner of Davidson Armstrong Campbell (DAC Legal) at the time of the offending, and were the partner responsible for the firm’s trust account. Mr Schofield was a long term client of DAC Legal. During the time you were Mr Schofield’s solicitor.

[4] Mr Schofield approached the directors of Belgrave with the intention of purchasing the shares in 2005. His purpose was to obtain access to funds in order to finance his own initiatives and ventures. Following the negotiations you were instructed to create a clean trust with discretionary beneficiaries with no reference to Mr Schofield. This trust was to be the ultimate owner of Belgrave via ownership in a company IEL who would hold 100 per cent of the shares in Belgrave. The new trust was settled by Mr Schofield’s mother in law, Mrs Hughes. The beneficiaries included the husband of each of Mrs Hughes children, which included Mr Schofield. The shares were purchased and Messrs Smith and Buckley were made directors of Belgrave and of IEL. Over the course of the next three years Mr Schofield, exercised a controlling influence over the directors and organised 14 loans to Schofield related entities. You assisted in these loans by preparing the relevant

documentation, backdating documents, and by receiving a portion of the funds into

DAC Legal’s Trust Account.

[5] Belgrave was placed into receivership on 28 May 2008. The total distributions made to investors represent 9.8 cents per dollar invested by the debenture investors. The total loss attributable to the Schofield loans which you assisted in is $12,583,146.80, although the receiver of Belgrave, as…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading R v Hamilton

Details

AGLC: R v Hamilton [2014] NZHC 1579
Case: [2014] NZHC 1579
Decision Date: 4 July 2014

CaseChat Overview and Summary

Hugh Hamilton was found guilty of 14 charges of theft by a person in a special relationship under the Crimes Act 1961, relating to his conduct as a solicitor and partner of Davidson Armstrong Campbell (DAC Legal). The charges stemmed from related party lending by Belgrave Finance Ltd, which Hamilton assisted by preparing documentation, backdating documents, and receiving a portion of the funds into DAC Legal’s Trust Account. The offending occurred between July 2005 and May 2008 and resulted in significant loss to investors. The court needed to determine the appropriate sentence, considering the purposes and principles of sentencing, the culpability of Hamilton, and the sentences of co-offenders.

The court assessed the gravity of Hamilton's offending, noting the significant loss caused to 1,268 investors, predominantly retired individuals on fixed incomes. Hamilton's role, though instrumental in the fraudulent structure, was deemed less culpable than his co-offenders, who had a higher level of involvement and financial benefit. The court also considered mitigating factors such as Hamilton's lack of personal benefit, no involvement in the loan approval process, and good character references. However, the fact that Hamilton was struck off the roll of barristers and solicitors for unrelated misconduct and the prolonged nature of the offending diminished the weight of these mitigating factors. The court decided on a starting point of five years’ imprisonment, reflecting the seriousness of the offending, and applied a five per cent discount, resulting in a final sentence of four years’ and nine months’ imprisonment.

The court rejected the plea for a community-based sentence due to the length of the final sentence. The judge sentenced Hamilton to a term of imprisonment of four years and nine months to be served concurrently on counts 4-16 and 19.

Orders