R v Lester
[2025] NZHC 1272
•20 May 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CRI-2023-004-003491 [2025] NZHC 1272
THE KING
v
MARK ANDREW LESTER SEAN DAVID BRYAN
Hearing: 20 May 2025
Appearances: B Dickey/R Williams for Crown
S Kilian for Defendant Lester
M E Goodwin for Defendant Bryan
Sentenced: 20 May 2025
SENTENCING NOTES OF WILKINSON-SMITH J
Solicitors/Counsel:
Serious Fraud Office, Auckland Bankside Chambers, Auckland Kilian & Associates, Auckland M E Goodwin, Auckland
R v LESTER & ANOR [2025] NZHC 1272 [20 May 2025]
Introduction
[1] Mr Bryan, you appear for sentence today having pleaded guilty to a representative charge of giving of a gift to an agent without the principal’s consent in relation to conduct that occurred prior to 7 November 2015.1 You have also pleaded guilty to a further representative charge of giving a gift to an agent without the principal’s consent in relation to conduct that occurred after 7 November 2015.2
[2] Mr Lester, you appear for sentence having pleaded guilty to a representative charge of acceptance of a gift to an agent without the principal’s consent for conduct prior to 7 November 2015,3 and a further representative charge of acceptance of a gift to an agent without the principal’s consent in relation to conduct that took place after 7 November 2015.4
[3]The charges are laid under the Secret Commissions Act 1910.
[4] The maximum penalty for the offending was increased from two years’ imprisonment to seven years’ imprisonment on 7 November 2015. Your offending spanned the change in the maximum penalty.
Agreed summary of facts
[5] You have each agreed to a summary of facts and I have relied on the summaries of fact in setting out the facts for the purpose of sentencing.
[6] Mr Lester, at the time of the offending you were a contractor at Spark New Zealand Trading Ltd (Spark). You provided services to Spark in New Zealand through your company, Spud Consulting Ltd (Spud Consulting). You were the sole director, shareholder and employee.
1 Secret Commissions Act 1910, ss 3(1) and 13; maximum penalty two years’ imprisonment or
$1000 fine.
2 Secret Commissions Act, ss 3(1) and 13; maximum penalty seven years’ imprisonment.
3 Secret Commissions Act, ss 4(1) and 13; maximum penalty two years’ imprisonment or $1,000 fine.
4 Secret Commissions Act, ss 4(1) and 13; maximum penalty seven years’ imprisonment.
[7] Mr Bryan, you were also a contractor at Spark. You became a Spark contractor upon the recommendation of Mr Lester. You provided your services to Spark in New Zealand through your company Victory IT Ltd (Victory), of which you were the sole director and shareholder.
[8] You both knew each other outside of your work for Spark. You shared an interest in horse-racing and were joint owners of a number of racehorses in Australia. That relationship was not disclosed to Spark.
[9] In 2012, Spark began a major upgrade to its customer services IT platform, termed the Re-engineering Programme. Mr Lester, in 2013 you were recruited and contracted in the role of Test Director. On or about 29 August 2013, trading as Spud Consulting, you entered into a standard independent contractor agreement with Spark (Spud service contract).
[10] Under the Spud service contract, you agreed to provide test governance, and you were given responsibility for all testing required for the Re-engineering Programme. Over time, you were given greater responsibility, such as managing teams of testers.
[11] In January 2014, the Spud service contract was extended to 5 February 2016 and the scope of your responsibilities was expanded to cover all IT testing, testing tools and environments within Spark platform business units. This included projects additional to the Re-engineering Programme. Your title became Manager Testing Services. On 9 February 2016, the Spud service contract was extended for another two years, and you became part of the Spark leadership team as Head of Performance and Resolution Testing. I set this out because it shows the position of trust that you were in.
[12] In late 2013, you recommended that automated testing was needed to cope with the testing demands which were exceeding the testing team’s capacity, and you recommended the retention of Mr Bryan’s company, Victory.
[13] Following the initial work done by Victory, Spark entered into further agreements with Victory in 2014.
[14] In awarding Victory the initial contract, Spark relied on your favourable recommendation, Mr Lester. Spark relied on your expertise and judgement in engaging Victory’s services. For the initial contract, Spark did not run a formal “request for proposal” process, but instead went forward with your strong recommendation.
[15] Spark’s Procurement Department had limited involvement in the initial decision to engage Victory but did have involvement in negotiating Victory’s rates for the further service contracts under your guidance, Mr Lester. Spark’s internal process required the Procurement Department to take direct responsibility for negotiating and documenting terms of engagement. Your advice, Mr Lester, was that Victory provided specialist skills and testing which required premium prices. That may or may not have been correct, but you were the Subject Matter Expert — your advice on such issues was accepted and there was a lower level of scrutiny because of your involvement.
[16] At the conclusion of the negotiations, Mr Lester, you said that it was an “excellent outcome to reduce overall costs with the greatest savings with the most intensive use resources”. However, during the period of the agreement with Victory, some Spark personnel formed the view that Victory had higher rates compared with other contractors. Analysis conducted after the offending was discovered established that Victory did have a higher daily charge-out rate compared with other contractors; specifically, about 15–20 per cent higher than the daily charge-out rates of the two other potential contractors. Victory’s price was, however, significantly lower than that of the initially preferred provider and it may well be that the increased price could have been justified, but the problem is that the assurances you gave, Mr Lester, meant that the proper processes were not carried out.
[17] Mr Lester, you were dominant in determining and directing the flow of work to Victory. You were the team leader responsible for the testing programme, and you decided what resources were required. You were an insistent and strong advocate in defending the additional funding requests made for Victory personnel and statements
of work. You routinely advised on whether Victory’s proposed rates seemed appropriate, whether to continue negotiating or whether to accept them. Other forum members questioned you about the need for additional Victory resources and whether other providers should be used given that Victory contractors appeared to be more expensive than others in the market. You justified your recommendation to retain Victory on the basis that other providers did not have comparable technical capabilities, and Spark would save money in the long run given the efficiencies associated with automated testing. Of course, Mr Lester, you were in a completely conflicted situation because you were accepting money from Victory.
[18] Mr Bryan, it is not alleged that you were involved in the internal processes at Spark, but on Mr Lester’s recommendations, Spark entered into a number of variations and statements of work with Victory additional to the initial agreement. Over the period Victory was engaged, Spark paid Victory a total of $20,688,215.15.
[19] During the period from 5 June 2014 to 3 May 2017, when, Mr Lester, you were working full-time as a consultant for Spark, payments were made by Victory to Spud Consulting or to you, Mr Lester, personally.
[20] A total of 32 separate payments totalling $4,115,120 were made. The individual payments range in value from $10,500–$379,500. There does not appear to be any pattern to the payments.
[21] Mr Bryan, you made those payments in return for Mr Lester’s acts in promoting Victory’s interests, and/or showing favour, in respect of contracting between Spark and Victory.
[22] Mr Lester, you accepted the payments on the same basis. Neither of you disclosed the full extent of your relationship, or the payments made by Victory to Spud, to Spark.
Approach to sentencing
[23] Each of you faces two charges of the same kind, with one charge capturing the offending before 7 November 2015 when the applicable maximum penalty was increased, and the other covering your offending after that date.
[24] The total value of the payments made by Victory to Spud Consulting and Mr Lester before the change in maximum penalty was $2,049,720. The remaining payments totalled $2,065,400.
[25] For each of you, I will begin by setting a starting point for the offending after 7 November 2015, which carries a higher maximum penalty — I will effectively treat that as the lead offending. I have decided to structure it that way because the difference in the maximum sentence over the two periods is significant, and there is a danger of applying a higher penalty for the earlier offending than could have been imposed at the time unless I treat the two charges separately.
[26] In determining the appropriate sentence, I must have regard to the purposes and principles of sentencing set out in the Sentencing Act 2002. The purposes of sentencing that I consider to be particularly relevant are:
(a)to hold you accountable for the harm done, particularly to Spark;5
(b)to promote in you a sense of responsibility for, and an acknowledgement of, that harm;6
(c)to denounce the conduct that you were involved in; 7
(d)to deter you and others from committing similar offending; and8
(e)to assist in your rehabilitation and reintegration.9
5 Section 7(1)(a).
6 Section 7(1)(b).
7 Section 7(1)(e).
8 Section 7(1)(f).
9 Section 7(1)(h).
[27] I regard deterrence of this type of offending as being of particular importance. Others who are tempted to engage in this sort of behaviour should know that the courts will act to prevent and denounce corruption in business dealings in New Zealand.
[28] In sentencing you today, I must take into account the seriousness of the offending you have committed in comparison with other offending of this type.10 I must have regard to your personal background,11 and I must impose the least restrictive outcome that is appropriate in the circumstances.12
[29] I have also been provided with a victim impact statement on behalf of Spark, and I must and do take into account the information it contains as to the effect of your offending on Spark and those who worked for Spark.13
Victim impact statement
[30] The victim impact statement is provided by Spark’s IT Transformation Director and explains that Spark employees placed a high degree of trust in you, Mr Lester, as a senior member of the Re-engineering Programme team. This statement emphasises that the offending in this case has taken a personal toll on Spark’s employees, saying that the well-being of many current and former Spark employees has suffered as a result of continued involvement in the case against you both. Several employees were distressed by their involvement in the prosecution, which involved being cross- examined, interviewed by the Serious Fraud Office, and facing both the prospect of having to give evidence in the criminal trial and the ongoing threat of potential public commentary on the case.
[31] The victim impact statement expresses that Spark as a company has faced significant disruptions and financial costs as a result of your offending.
10 See Sentencing Act 2002, s 8(e).
11 Section 8(i).
12 Section 8(g).
13 Section 8(f).
[32] This sort of offending has an ongoing effect on businesses who must take steps to try to prevent it in the future. It increases their costs of doing business if they cannot place trust in people who are in senior and trusted positions.
Mr Bryan
Starting point
[33] Mr Bryan, I address your position first. The Crown submits that an overall starting point of six years’ imprisonment is appropriate to reflect your culpability in relation to both charges you face. Your counsel, Mr Goodwin, accepts that the case law supports that starting point.
[34] The Crown identifies abuse of a position of trust or authority as an aggravating feature of your offending.14 The Crown submits that you abused your position of trust to gain personal financial advantage. Over the period your company was engaged, Spark paid your company over $20 million. But for the kickbacks you were paying to Mr Lester’s company, your company might not have received that work or might not have been paid for it at the same level.
[35] Mr Goodwin accepts that both you and your company were in a trusted position when delivering on your contract with Spark but submits that the abuse of trust factor is less significant in your case than in Mr Lester’s.
[36] Mr Goodwin emphasises that you were not directly employed by Spark and did not act in a decision-making role; you were not familiar with the internal discussions between Spark and Mr Lester, who initially recommended your company; and that it was Mr Lester who was influential in directing the flow of work to your company. That is all true, and in some ways Mr Lester’s breach of trust can be seen as more significant; but it takes two parties to be involved in a scheme such as this, and I do not think that a significant distinction is justified.
14 Sentencing Act, s 9(1)(f).
[37] The Crown points to premeditation as an aggravating feature of the offending,15 and says you acted in a deliberate and planned manner for a period of approximately three years — your offending was not impulsive, but involved repetitive, persistent and dishonest conduct. Mr Goodwin suggests that your decision-making was impaired by personal factors. That is a relevant consideration, but at the second stage of the sentencing exercise, not when setting the starting point.
[38] I consider that the aggravating factors that apply to the offending are the amount of money involved and the period of time the offending continued for. This was not an impulsive or one-off situation where you gave in to temptation. This was a sustained course of conduct for significant financial gain over a period of years. The breach of trust is aggravating but I acknowledge that such a breach of trust will usually be a feature of this sort of offending and to some extent is already reflected in the maximum sentence now available.
[39] I have been referred to a number of cases, some of which concern corruption-type offending of a different but analogous kind, to assist in determining the starting point for your offending. This is probably of little interest to you, but I am required to set it out to explain some of my reasoning for the sentencing level I reach in your case:
(a)R v George:16 Mr George pleaded guilty to two representative charges of corruption and bribery of an official under s 105 of the Crimes Act 1961. Each charge carried a maximum penalty of seven years’ imprisonment. While employed by Rodney District Council and subsequently by Auckland Transport in a division that oversaw roading contracts, Mr George received gifts with a total value of $103,580 from an independent roading contractor. There was no suggestion that this resulted in any preferential treatment by Mr George towards that contractor. The offending took place over seven years. It had the potential to tarnish New Zealand’s reputation as a place where public
15 Sentencing Act, s 9(1)(i).
16 R v George [2016] NZHC 2067; and R v George [2016] NZHC 1730 (sentence indication).
corruption is virtually non-existent. A starting point of three years and nine months’ imprisonment was adopted.
(b)R v Borlase:17 Mr Borlase was found guilty of eight charges of bribery and corruption of an official under s 105 of the Crimes Act. A co-offender, Mr Noone, was found guilty of six charges for the same offence. The maximum penalty was seven years’ imprisonment. The company was the roading contractor that provided services to Rodney District Council, and later Auckland Transport. Over a seven-year period, Mr Borlase corruptly provided more than $1.25 million in benefits to Mr Noone and Mr George, another employee. Neither the Rodney District Council nor Auckland Transport suffered direct financial loss and there was no suggestion that the benefits provided had any actual influence over the behaviour of the defendants. A starting point of five years and nine months’ imprisonment for Mr Borlase was taken, comprising a five-year starting point for the offending in relation to Mr Noone and a nine-month uplift for the offending in relation to Mr George. A starting point of five years and six months was adopted for Mr Noone.
(c)R v Goel:18 Mr Goel and Mr Singh were each found guilty of 14 charges of corruption and bribery of an official pursuant to s 105 of the Crimes Act (amongst other charges), which carried a maximum of seven years. Mr Goel was Group Manager, District Assets of Westland District Council. He received just over $70,000 in bribes from Mr Singh, whose company sought to provide services to the Council. As a result of these bribes, Mr Singh/his company obtained a commercial advantage in one of the Council’s tender processes (the contract sum being just over $100,000) and potential benefits that might have accrued as a subcontractor on a further contract that had a contract total of $459,000 but was never fulfilled due to the commencement of
17 R v Borlase [2017] NZHC 236.
18 R v Goel [2023] NZHC 585.
the Serious Fraud Office investigation. The starting point there was three years and six months’ imprisonment.
(d)I have been referred to Serious Fraud Office v Hossu19 and R v Motilal,20 both of which concerned charges under the Secret Commissions Act carrying a maximum penalty of seven years’ imprisonment. Mr Hossu obtained benefits with a total value of
$205,487.15 over a period of 15 months. The starting point for Mr Hossu was three years and nine months’ imprisonment. Mr Motilal made payments in the sum of approximately $119,000 in exchange for their employer continuing to engage Mr Motilal’s company for the provision of engineering supplies. Mr Motilal’s company earned a total of $583,490.78. The starting point was three years and three months’ imprisonment. The architect of those various schemes was Mr Koroheke. Through his actions, Auckland Council faced a direct loss of almost $1.5 million. Mr Koroheke faced deception charges which carried a starting point of six years’ imprisonment, uplifted by one year for the charges under the Secret Commissions Act.21
[40] Mr Bryan, your offending is more serious than that in Goel, given the higher quantum involved (over $4 million paid by you to Mr Lester) and the longer duration. It is more serious than that in George and Hossu and Motilal because of the amounts involved.
[41] The Crown and Mr Goodwin submit that your offending is more comparable to Mr Borlase, where the quantum of corrupt payments amounted to around
$1.1 million; and there was a significant number of transactions, significant harm to a victim and a seven-year duration of offending.
19 Serious Fraud Office v Hossu [2022] NZDC 11114.
20 R v Motilal [2023] NZDC 16923; and R v Motilal DC Auckland CRI-2021-004-008551, 21 February 2023 (sentence indication).
.
21 R v Koroheke [2024] NZDC 31240.
[42] Mr Goodwin draws a distinction between your offending, Mr Bryan, and that in Borlase on the basis that your offending took place in the context of an “institutional and quasi-public setting” but did not involve officials in public governance positions. Mr Goodwin also submits, and I accept, that you provided genuine services to Spark for several years without issues as to quality; but it is accepted that there is a need for denunciation of your offending.
[43] I consider that the main factors influencing the starting point is the need for denunciation and deterrence. Cases involving corruption of public officials, loss of public money, large sums of money and a lengthy period of offending would attract a sentence at or near the maximum. Your case did not involve corruption of public officials, but it did involve a major and very well-known telecommunications company and the potential for damage to New Zealand’s reputation as a place to do business.
[44] I see the gravity of your offending with reference to the maximum penalty as sitting between the mid-point and the maximum. The maximum penalty is reserved for the most serious cases,22 and yours is not at that level — particularly in the absence of public corruption. But the sheer amount of money involved, the time the offending went on for, the profile of the victim company and the potential reputational damage that results means that it attracts a starting point in the top quartile.
[45] For the offending after the increase in the maximum, I apply a starting point of five years’ imprisonment.
[46] The offending which took place before the increase in the maximum penalty had a similar level of seriousness between the mid-point and maximum level. I consider that on a standalone basis, a starting point in the vicinity of 18 months’ imprisonment would be warranted in relation to the earlier offending. However, taking into account the totality considerations, I apply an uplift of one year’s imprisonment to reflect that charge.
22 Sentencing Act, s 8(c).
[47] This takes the overall adjusted starting point to that accepted by both Crown and your counsel of six years.
Personal aggravating factors
[48] There is no suggestion that there are any aggravating factors. There is nothing that warrants an uplift to that starting point.
Personal mitigating factors
[49] Mr Goodwin says that there are a range of personal mitigating factors that should all attract a discrete discount. I agree that there are personal mitigating factors, but I think there is overlap between the various personal factors. In addition, sentencing is not simply a mathematical exercise. The end sentence must reflect the principles and purposes of sentencing and must be within the appropriate range.
[50] There is a need to stand back and ensure that the sentence as a whole is appropriate and is neither manifestly excessive nor manifestly inadequate. I have been referred to McCaslin-Whitehead v R where the Court of Appeal said:23
[61] Davison J emphasised the need to stand back and to consider the overall effect where a range of discounts are identified. In this appeal, that approach was criticised. There was no basis for that criticism. There is clear authority for standing back and considering whether when added up discounts have led to a sentence that is not in proportion with the gravity of the offending.
[51] I acknowledge that the available discounts for personal factors could be structured in a number of ways. I think it is important to indicate if I have applied a discrete discount and what the level of that discount is. But sometimes considerations of parity, or of the appropriate overall discount, means that available discounts must be tempered.
23 McCaslin-Whitehead v R [2023] NZCA 259.
Remorse24
[52] Your pre-sentence report, Mr Bryan, records that you told the report writer you have taken responsibility for your poor decision-making. According to the report, you acknowledged that your offending gave you an unfair advantage that was profitable to your company. You told the report writer that you did not think what you were doing at the time was wrong, but you now realise it was “ludicrous and naïve”. You reported “embarrassment” for your behaviour, and told the report writer, “nothing I say is justifiable”. The report states that you showed insight into the impacts of your offending, and you acknowledged that it has “cost time and money” to pursue you.
[53] I do think that you have shown insight, Mr Bryan, and I do accept that you do now regret, and have remorse for, what happened. It seems to me that at the time you must have known that what you were doing was not right, but no doubt justified it to yourself on the basis that you would do a good job for Spark.
[54] Mr Goodwin provided a report prepared by a clinical psychologist, which records that you expressed “remorse, regret, shame and embarrassment” with regard to your offending, and you emphasised the impact on your wife and children.
[55] The Court has also been provided with a letter from you expressing deep remorse for your actions and accepting full responsibility.
[56]I apply a discrete discount of five per cent for remorse.
Prospects of rehabilitation
[57] Mr Goodwin also submits that a reduction of five to 10 per cent is warranted to account for your prospects of rehabilitation. Mr Goodwin outlines your efforts to address personal issues that may have contributed to your offending. Mr Goodwin again refers to your expressions of remorse documented in the pre-sentence report. Mr Goodwin’s submission is that these factors suggest you have been proactive in addressing the underlying drivers of your offending. He points to the fact that the pre-sentence report writer assesses you as presenting a low risk of reoffending.
24 Sentencing Act, s 9(2)(f).
[58] Prospects of rehabilitation overlap with both remorse and previous good character. I do not think in this case, given the competing need to ensure public deterrence, that your prospects of rehabilitation require a discrete discount. It is a factor underlying and justifying the credit for remorse, and it feeds into the credit for previous good character because your previous good character indicates that you are well able to live in society as a good and useful citizen.
Previous good character
[59] Mr Goodwin submits that a reduction is appropriate to account for previous good character because you are now in your 50s and you have no previous convictions.25 I note that the Court has also been provided with positive character references. A reduction of 10 per cent is sought for previous good character.
[60] I accept that previous good character should be acknowledged. You are a mature man with no history of offending, but your previous good character was lost when you began offending and then continued over a three-year period.
[61] I am prepared to apply a 10 per cent credit despite the ongoing nature of the offending, in part because of the matters set out in the psychological report and your prospects of rehabilitation that overlap with this factor. Your fall from grace was affected by matters that I accept made things harder for you than for others and which made you more vulnerable to offending behaviour, more likely to engage in risk taking behaviour and less likely to resist temptation.
Psychological assessments
[62] A further reduction of 15 per cent is sought for the psychological factors as a discrete credit. Psychological reports have been provided to the Court that provide further detail as to these factors. I will not detail them in open court, but your offending occurred in the context of difficulties, and I have taken that into account already in setting the reduction for previous good character. I do not apply a separate and discrete discount.
25 Sentencing Act, s 9(2)(g).
Factors increasing the impact of incarceration
[63] In sentencing you today, I am required to consider any personal circumstances that would mean that a sentence of imprisonment is disproportionately severe in your case.26
[64]The courts have acknowledged that:27
[22] The effects of dislocation from family and culture can add to the significant challenges faced by a foreign national serving a long-term sentence of imprisonment in this country and justify an adjustment to the sentence which might otherwise be imposed…
[65] Mr Goodwin seeks a reduction of 10 per cent for this factor. He says that you are currently a resident of Australia, living in Queensland with your wife and two sons. You do not have any family in New Zealand. Mr Goodwin submits that incarceration in New Zealand would separate you from your support mechanisms and isolate you. Further, it may exacerbate the psychological factors that form the background to your offending.
[66] There is also a health issue. You use a CPAP machine nightly as prescribed treatment for severe obstructive sleep apnoea.
[67] The effects of incarceration and dislocation from family and culture are not as great in situations where an offender is from Australia because of the similarities between the two cultures, and obviously we speak the same language; however, I accept that there is a dislocation from family and I also accept that you have health difficulties, both physical and your psychological difficulties, that are likely to make incarceration more difficult; and on top of that you will be incarcerated away from your home country and family.
[68]I apply a discount of 10 per cent to reflect those factors.
26 Sentencing Act, s 8(h).
27 Cheng v R [2021] NZCA 68 (footnotes omitted).
Guilty plea
[69] I must also take into account the fact that you entered guilty pleas.28 The Crown and Mr Goodwin suggest that a reduction of 20 per cent is appropriate to account for your guilty pleas. Mr Goodwin submits that your pleas saved the resources that would otherwise have been required for a three-week jury trial. You pleaded guilty to the two charges you currently face on 6 September 2024. That was only two months before your trial originally scheduled for 4 November 2024. However, your counsel has outlined the considerable background to that plea and the fact that you were indicating resolution at an early stage.
[70] I accept that there was certainly indication that you were prepared to take responsibility much earlier than in fact happened for various reasons. I will apply a 20 per cent credit for guilty plea.
[71] Before passing sentence officially, Mr Bryan, I am going to turn to Mr Lester and go through the same process in respect of him.
Mr Lester
[72] I now turn to consider your position, Mr Lester. The Crown submits that I should adopt an overall starting point for your offending of six years’ imprisonment. Your counsel, Mr Kilian, submits a starting point of five years’ imprisonment is appropriate.
[73] The Crown identifies abuse of a position of trust or authority as an aggravating feature of your offending,29 and says your actions constitute a gross breach of the significant trust and authority placed in you by Spark.
[74] Your counsel, Mr Kilian, acknowledges that you held a position of trust in relation to Spark but says there is little evidence to support the contention that you obtained personal financial gain through a corrupt scheme. Mr Kilian argues in written submissions that you only introduced Victory to Spark as a matter of necessity
28 Sentencing Act, s 9(2)(b).
29 Sentencing Act, s 9(1)(f).
to complete an urgent assignment; automation was a necessary “next step” in the Re-engineering Programme; another staff member requested that Victory create an automation testing programme; and Victory only began to make payments to you after it was initially engaged and onboarded by Spark. Mr Kilian says that you would have recommended and engaged Victory even if no payments had been made. He seeks to characterise the payments as a “gratuity amongst friends” that breached your obligation of trust to Spark, rather than as a result of a corrupt scheme.
[75] I reject that submission. The summary of facts which was agreed by you makes it clear that Mr Bryan made payments to you in return for your actions in promoting and showing favour to Victory. You accepted very significant payments in return for promoting Victory. To put it in more old-fashioned and colloquial terms, you accepted very large kickbacks which enriched you by millions of dollars.
[76] The Crown says you acted in a deliberate and planned manner for approximately three years, and your offending was not impulsive, but was repetitive, persistent and dishonest.30 I agree with that.
[77] Mr Kilian submits that Victory was introduced to meet Spark’s time-driven and financial needs, and your offending was not significantly premeditated because you were not aware of those needs when you were onboarded as a contractor to Spark.
[78] I can accept that you did not begin working for Spark with an intention to become corrupt but Mr Kilian appears to suggest that the payments by Victory to you and your company were innocent gifts rather than payments in exchange for preferential treatment, and effectively says, or at least said in written submissions, that your offending was limited to a breach of obligations not to receive the gifts and to declare them. If you really think that, Mr Lester, then it is extremely misguided.
[79] Mr Kilian says your offending was opportunistic rather than premeditated. That is simply contrary to the agreed summary of facts which explicitly sets out that the gifts had a corrupt purpose and went on for over three years.
30 Sentencing Act, s 9(1)(i).
[80] By way of mitigation, Mr Kilian also submits that the use of Victory and the work carried out by Victory were key factors in the success of the Re-engineering Programme. He submits that the other two potential contractors that were present when Victory was introduced to Spark were unable to complete the work Victory performed, such that Victory’s engagement did not exclude other suitable contractors. I do not accept that characterisation of the offending either. I regard it as minimising what was ongoing corruption. It may well be that Victory was the best person for the job, but your involvement prevented scrutiny of the rate that Victory was charging, and it prevented any real scrutiny of whether Victory was the correct person for the job.
[81] To guide the determination of your starting point, the Crown referred me to the same cases as that provided in respect of Mr Bryan and that I set out earlier and I will not repeat them.31
[82] Mr Kilian seeks to distinguish your offending from the cases cited by the Crown on the basis that all of these cases involved corrupt behaviour by, or involving, parties related to public authorities; whereas your offending occurred in relation to a publicly listed company. Mr Kilian submits that, contrary to the Crown’s submission, your offending would not lead to a perception that corrupt practice is permitted within New Zealand businesses but would instead indicate that Spark failed to implement robust policies and procedures to prevent such offending. He submits that the real damage caused by your offending would be to shareholders. Mr Kilian submitted, contrary to the agreed summary of facts, that the payments you received from Victory were not intended to bring about preferential treatment by you towards Victory.
[83] Again, I have difficulty accepting that submission and I do not accept it. Although cases involving corruption of public officials involve an additional element of aggravation not present in your case, this case certainly has the potential to affect New Zealand’s reputation as a place where business can be carried on without corruption.
31 At [39] above.
[84] I see little reason to distinguish between you and Mr Bryan in terms of starting point. If anything, your breach of trust was greater; but you were friends, you knew each other, and I think that you decided to undertake this scheme together and so I do not distinguish between you. I think it takes, as I said before, two parties for this sort of corrupt scheme to work.
[85] As with Mr Bryan, I take a starting point sentence of five years for the offending after 7 November 2015. That five-year starting point acknowledges the distinction between your case and those cases that involve corruption of public officials. The amount of money involved and the period of offending coupled with the need to deter of this sort of corruption means that five years is the least restrictive sentence available for the offending after the increase in penalty.
[86] The offending before the increase in penalty was equally serious and, as I said to Mr Bryan, would on its own attract a starting point of around 18 months’ imprisonment. I take the same approach as I did with Mr Bryan and having regard to the totality principle, I uplift the starting point by one year to account for the charge covering the earlier offending.
[87]The overall adjusted starting point is six years’ imprisonment.
Personal aggravating factors
[88] As with Mr Bryan, there are no personal aggravating factors raised that would require an uplift in sentence.
Personal mitigating factors
Previous good character
[89] You also managed to reach a mature age in your late forties without coming to the attention of the courts and leading a functional and productive life.
[90] Mr Kilian submits that you are entitled to a reduction of 10 per cent to reflect your previous good character.32 You are now in your mid-50s; as I said, you have no prior convictions; and you have otherwise been a law-abiding citizen. The Crown submits a reduction of five per cent is appropriate for this factor.
[91] Again, I think it is important to bear parity in mind. There is not a lot to distinguish between you and Mr Bryan in terms of previous good character. I apply 10 per cent as I did in Mr Bryan’s case to reflect your previous good character.
Addiction
[92] Mr Kilian submits that your addictions to both methamphetamine and gambling was a driver of your offending and seeks a reduction of 15 per cent. Mr Kilian relies on your pre-sentence report, which records that you told the report writer that while experiencing a high-pressure lifestyle, you began gambling and developed a regular methamphetamine habit as a means of coping. Mr Kilian suggests that you failed to declare some of the payments you received to Spark because you were using them to fund your addictions and to send to your family in Australia. He submits that your addiction compromised your ability to engage in rational decision-making.
[93] The Courts have accepted that addiction can be a mitigating factor relevant to the sentencing exercise.33 However, some causative link between the addiction and the offending must be established that is more than speculative.34
[94] I accept that your addiction issues likely increased both the temptation and motivation for your offending and affected your ability to think rationally and resist temptation, but the fact that you managed to avoid offending in your life generally, other than admitted drug use, was recognised in the 10 per cent discount for good
32 Sentencing Act, s 9(2)(g).
33 See, for example, Matthews v R [2019] NZCA 208 at [7].
34 See Matthews v R, above n 33, at [7]. See also Zhang v R [2019] NZCA 507, [2019] 3 NZLR 648, a case which addressed the relevance of addiction as a mitigating factor in the context of methamphetamine-related offending and provided for reductions of up to 30 per cent for this factor, in which the Court stated that addiction that is not causative of the offending will be “of little mitigatory relevance”.
character. I think this issue overlaps to the extent that I am not prepared to provide a further discrete discount for addiction.
Personal factors and remorse
[95] Mr Kilian submits that a reduction is warranted to account for both your remorse,35 and various personal factors raised in your pre-sentence report.
[96] In terms of remorse, the pre-sentence report records that you did not attempt to offer excuses for your offending, but instead expressed regret for your actions and accepted that you must face punishment. The pre-sentence report records that you are bankrupt and have limited means to pay reparation; however, if you are able to obtain or retain new employment after sentencing, you may be able to pay reparation in the future.
[97] Mr Kilian contends that your remorse and the personal factors outlined in the pre-sentence report warrant a reduction of five per cent.
[98] As you will have heard, I was and am concerned about minimisation in the submissions that I received, but the PAC report, which is from you directly and not from your counsel, does show some insight and remorse and I apply the same discount as I applied to Mr Bryan, which is five per cent, to acknowledge remorse.
[99] In addition to personal factors outlined in the pre-sentence report, Mr Kilian advises that you assist your current partner in the care of her 10-year-old daughter who resides with you 50 per cent of the time. Further, you have a 24-year-old daughter born with a medical condition which means that she requires significant support. You share care of your daughter with your ex-wife. Mr Killian submitted that the role you play in your daughter’s life and the consequences of your absence for her warrant an additional reduction of five to 10 per cent.
[100] The Crown makes the point that shared care is not exactly as the picture is painted in the submissions. You have your daughter on weekends at times.
35 Sentencing Act, s 9(2)(f).
[101] I acknowledge that the Court of Appeal has said that the effect of imprisonment on an offender’s children may be taken into account.36 That is usually done where the children are younger, but I accept that your daughter’s difficulties make that a factor in this case. I think, however, that the family difficulties overlap with the difficulties that you will have serving a sentence in New Zealand; and for that reason I consider it together with the next factor.
Further consequences of offending/factors increasing hardship of imprisonment
[102] Apart from the effect on your family of your sentencing in New Zealand, there are further consequences for you and Mr Kilian seeks further reduction. He refers to the extensive legal proceedings you have been engaged in since 2017, including arbitration and bankruptcy proceedings — although not seeking a discrete reduction for that, he submits that they have taken a significant toll on you. Mr Kilian also advises that your marriage broke down during the offending due to your demanding work schedule, and says you are no longer able to work in the IT industry. He says a reduction of five to 10 per cent is warranted in relation to these factors.
[103] Many of the factors raised are simply a natural consequence of your offending. The effect on your daughter and the difficulty your family face as a result of your offending warrants some acknowledgement, but as I have said you are not the primary caregiver of your adult disabled daughter.
[104] There are other factors that increase the hardship that you face in a sentence of imprisonment, and I am required to take into account any circumstances specific to you that would mean a sentence of imprisonment would be disproportionately severe.37 The most compelling is your health issues.
[105] Mr Kilian advises that you have had severe asthma for more than 20 years. You suffer from severe asthma attacks which have resulted in regular hospitalisation, including stays in the intensive care unit. Mr Kilian says that following an attack in 2023, you began receiving treatment via an injectable medication, Dupilumab, on an
36 Campbell v R [2020] NZCA 356 at [41].
37 Sentencing Act, s 8(h).
extended medical trial in Australia. This medication has significantly improved your symptoms. Mr Kilian says that the medication is funded in Australia but is not funded or available for use in New Zealand. Further medical evidence provided supports Mr Kilian’s submission that your asthma is triggered by factors such as stress and cold. Mr Kilian says those factors would be exacerbated in a prison environment, especially if you lose access to your medication. He submits that if you receive a sentence of imprisonment and are deprived of access to and funding for your medication, your asthma will again become uncontrolled, and the risks may be severe or potentially life-threatening. Mr Kilian says that any reaction would require immediate care, and a failure to deal with it appropriately would likely have significant adverse consequences. He contends that you would suffer special hardship in a prison environment and therefore seeks a reduction of 15–20 per cent in relation to this factor.
[106] The Crown says that managing your medical conditions is a matter that would have to be dealt with within the New Zealand prison system, which will be responsible for it. Whether you are sentenced to imprisonment or home detention, the sentence will have to be served in New Zealand. Your lawyer says your access to Australian-funded medication will be more possible on home detention. I accept that incarceration will be more difficult for you as a result of your health needs and as a result of the fact that you will have to serve your sentence in New Zealand, and I will apply a discount to recognise that.
Guilty plea
[107] I must consider what reduction is available for your guilty plea.38 Mr Kilian submits that you pleaded guilty at the earliest opportunity following a resolution. He seeks a guilty plea reduction of 20 per cent. The Crown accepts that a 20 per cent reduction for guilty plea is appropriate although the reasons for the late plea in your case are not as explicable as in Mr Bryan’s case.
[108] On 30 October 2024, you pleaded guilty to charges in a Crown charge notice dated 25 October 2024. Your guilty pleas were entered five days before trial scheduled for 4 November 2024. Several other charges were withdrawn. Some of that reflects
38 Sentencing Act, s 9(2)(b).
the fact that discrete charges were consolidated into representative charges, but I accept that there have been negotiations behind the scenes and the Crown does not suggest that I move from the suggested 20 per cent.
[109] Your guilty pleas were not entered at the first available opportunity and the lateness does rather undermine your expressions of remorse, which were also somewhat undermined by what I saw as an attempt to go behind the plea and agreed facts to an extent in the submissions — but I will apply the discount of 20 per cent as sought.
[110] The credits and discounts that I have applied in respect of both of you could be constituted in a different way; but it is important to stand back and consider the overall credits, the need for parity between the two of you and the level of end sentence reached to ensure that it is not manifestly inadequate.
Result
[111] Mr Lester from the starting point of six years’ imprisonment, I apply the following credits:
(a)previous good character: 10 per cent;
(b)remorse: five per cent;
(c)health needs and difficulty with incarceration, including effect on your family in New Zealand: 15 per cent;39 and
(d)guilty plea: 20 per cent.
[112] That brings the total credits from the start point to 50 per cent and brings your end sentence to one of three years’ imprisonment. There is no ability to consider home detention as the end sentence is over two years.
39 I incorrectly read this as 10 per cent in Court and the overall discount as 45 per cent when in fact the end sentence of three years from a starting point of six years is a discount of 50 per cent. See addendum.
[113] On the charge of giving a gift to an agent without the principal’s consent relating to conduct after 7 November 2015, you are sentenced to three years’ imprisonment.
[114] On the charge of giving a gift to an agent without the principal’s consent relating to conduct before 7 November 2015, you are sentenced to one year’s imprisonment.
[115] These sentences are to be served concurrently. That means the total term you will serve is three years’ imprisonment.
[116] Mr Bryan, from the starting point of six years’ imprisonment I apply the following credits:
(a)five per cent credit for remorse;
(b)10 per cent credit for previous good character;
(c)10 per cent for factors in the psychological report coupled with the difficulties of serving a sentence in New Zealand; and
(d)20 per cent for guilty plea
[117] That will take your end credits to 45 per cent,40 which is less than those credits applied in Mr Lester’s case.
[118] When I stand back and look at the sentence that results, I consider that it offends against parity considerations because I consider that your offending is certainly not more serious than Mr Lester’s, and in some ways it is less, simply because of the difference in the level of trust.
[119] I also consider that you have shown, to some extent, a more immediate expression of remorse. Your health issues are not the same or to the same extent as
40 In Court, I said the total discounts were 40 per cent which was incorrect as they add up to 45 per cent. See addendum.
Mr Lester’s, but you also have health issues. So, from the credits that I have spoken about, I apply another five per cent for parity considerations, which takes you to the same level of sentence as Mr Lester — and I do that intentionally because I think there is a need for parity between the two of you.
[120] On the charge of giving a gift to an agent without the principal’s consent relating to conduct after 7 November 2015, you are sentenced to three years’ imprisonment.
[121] On the charge of giving a gift to an agent without the principal’s consent relating to conduct before 7 November 2015, you are sentenced to one year’s imprisonment.41
[122] These sentences are to be served concurrently. That means the total term you will serve is three years’ imprisonment.
Wilkinson-Smith J
Addendum
[123] At the end of the sentencing hearing, I advised counsel that I might need to make changes to the final sentencing notes to reflect the intended end sentence for each offender, which was three years’ imprisonment on the lead charge and one year’s imprisonment concurrent on the second charge. That was because I had adjusted my prepared sentence in response to matters raised in Court by counsel, and I was concerned my sentencing remarks might contain errors in the calculations.
[124] The starting point for both defendants was six years’ imprisonment. The total discounts applied for each defendant amounted to 50 per cent. The end sentence on each offender’s lead charge was three years’ imprisonment.
41 See addendum.
[125] Upon reviewing the sentencing notes prepared from the recording, I find that I made the following errors, which I have corrected to reflect the end sentence and discounts actually applied:
(a)At [111](c), I referred to a discount of 10 per cent, when I intended to apply 15 per cent.
(b)At [112], I referred to the total discounts for Mr Lester adding up to 45 per cent. This was incorrect as they added up to 50 per cent.
(c)At [117], I referred to the total discounts for Mr Bryan adding up to 40 per cent. This is incorrect as they added up to 45 per cent. An additional five per cent was later applied for parity.
[126] Additionally, when announcing the concurrent sentence for Mr Bryan, I incorrectly said that the sentence was one year and six months’ imprisonment. The intended concurrent sentence was one year’s imprisonment, consistent with that imposed on Mr Lester.
[127] I will recall and reissue the warrant of detention in respect of that charge so that it reflects these corrected sentencing notes.
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