R v Price

[2009] NZCA 600

IN THE COURT OF APPEAL OF NEW ZEALAND

CA540/2009
[2009] NZCA 600

THE QUEEN

v

DENNIS ALAN PRICE

Hearing:26 November 2009

Court:Arnold, Potter and Heath JJ

Counsel:P B McMenamin for Appellant

T Epati for Crown

Judgment:16 December 2009 at 10.00 am 

JUDGMENT OF THE COURT

A            The appeal is allowed in part. 

B            The sentences imposed on counts 2, 6, 7, 8, 27 and 57 are quashed and concurrent sentences of three months imprisonment are substituted. 

CThe effective sentence of six months imprisonment imposed in the District Court remains.

REASONS OF THE COURT

(Given by Arnold J)

Introduction

[1]        The appellant entered guilty pleas to 60 charges of obtaining by deception.  Judge Farish sentenced him to six months imprisonment and ordered that he pay reparation of $40,039.80: DC CHCH CRI 2007-009-01796 3 September 2009.  The appellant appeals against his sentence on the basis that it is manifestly excessive, particularly in light of his personal circumstances.  He argues that a non-custodial sentence should have been imposed.

Background facts

[2]        The appellant was employed by a travel company as a travel consultant.  He was paid by way of commission.  The commission arrangement was that:

(a)The appellant would receive 40 per cent of the net profit on any customer files that he organised, with the remaining 60 per cent going to the company. 

(b)The appellant was to be liable for 100 per cent of the loss on any customer file which was in deficit, although there was no evidence that the company had ever enforced that aspect of the arrangement.  

Over a period of slightly more than two years, the appellant transferred money from customer accounts which were in profit to customer accounts in which there was a deficit.  By “smoothing” the customer accounts in this way, he avoided incurring any liability for losses.

[3]        These transfers were not effected by direct transfer from profit-making to loss-making customer accounts.  Rather, they were effected by numerous transfers for relatively small amounts, usually described in the company’s records as customer refunds.  Further, the transfers were not made directly from one customer account to another, but rather through bank accounts operated by the appellant or his then partner.  In particular, between 12 July 2004 and 31 July 2006 the appellant transferred $72,240 from customer accounts to his personal credit card account, by way of 55 fictitious transactions.  He also transferred $6,731 from customer accounts to his partner’s personal Visa card account.  Before the appellant left his employment, most of the $78,971 was repaid into the accounts of various other customers. 

[4]        The transactions were not discovered until after the appellant had left the company and started his own travel agency.  Owing to the complexity of the transactions, it took over 500 hours for another of the company’s employees to work out precisely what had happened. 

[5]        The appellant was originally charged with theft.  However, five days prior to trial, the Crown laid substituted charges of obtaining by deception (s 240 of the Crimes Act 1961), whereupon the appellant entered guilty pleas.  A disputed facts hearing was then held, principally to determine whether the appellant’s employer suffered any loss and the appellant’s motivation for the offending.

Sentencing

[6]        Section 241 of the Crimes Act provides:

241Punishment of obtaining by deception or causing loss by deception

Every one who is guilty of obtaining by deception or causing loss by deception is liable as follows:

(a)if the loss caused or the value of what is obtained or sought to be obtained exceeds $1,000, to imprisonment for a term not exceeding 7 years:

(b)if the loss or the value of what is obtained or sought to be obtained exceeds $500 but does not exceed $1,000, to imprisonment for a term not exceeding 1 year:

(c)if the loss caused or the value of what is obtained or sought to be obtained does not exceed $500, to imprisonment for a term not exceeding 3 months.

In the present case, 37 of the counts related to amounts falling within s 241(a), 17 to amounts falling within s 241(b) and six to amounts falling within s 241(c).

[7] In sentencing the appellant, Judge Farish began by noting that each of the 60 counts to which the appellant had pleaded guilty was punishable by a maximum term of imprisonment of seven years (ie, was covered by s 241(a)): at [1]. That was an error, however, presumably caused by the fact that the amended indictment referred only s 241(a), rather than to the other paragraphs as appropriate.

[8] The Judge then went through the background to the offending. In light of the evidence she had heard at the disputed facts hearing, the Judge found that there was a shortfall of $7,492 between the amounts taken by the appellant and the amounts returned: at [14]. The reparation order in favour of the company covered this shortfall and an additional $32,547.80 on account of the legal, accountancy and some of the internal costs incurred by the company in reconstructing what had happened: at [18].

[9] The Judge noted that the appellant attempted to justify what he had done by saying that he had a civil dispute with the company: at [20]. However the Judge concluded that the appellant, who was a substantial gambler, had used at least some of the funds for his gambling activities, before returning them by depositing them in the loss-making customer accounts: at [23].

[10]       The Judge then dealt with the submissions of counsel.  Defence counsel (not Mr McMenamin) had argued that the appellant should be discharged without conviction or at least given a non-custodial sentence.  The Crown, on the other hand, had argued for a sentence of imprisonment.

[11] The Judge noted that there was no relevant guideline judgment, and that, on the authorities, immediate repayment did not necessarily mean that no sentence of imprisonment would be imposed: at [26]. The Judge identified a number of aggravating features of the offending, which she summarised (at [33]):

Therefore the aggravating features are in summary, the length of time of the offending, the degree of premeditation and planning and sophistication, the extent of the loss and harm to victims and the significant abuse of trust.            

[12] The Judge said that she did not view the appellant’s culpability as being at the lowest point, nor did she regard it as being at the highest point. She did, however, view the offending as “significant and serious and grave” and considered that the appellant had gained personal benefit from it: at [32].

[13]       As to mitigating features in relation to the offending, the Judge identified the fact that the money had largely been repaid when the appellant left the company.

[14]       The Judge said that there were no personal aggravating features.  In relation to personal mitigating features, the Judge identified the appellant’s guilty plea, for which she said a discount of 20 per cent was appropriate.  The Judge also identified several other mitigating factors, in particular the appellant’s previous good character and the fact that he could no longer operate as a director or shareholder in his travel business.  She noted that the Travel Agents’ Association of New Zealand (TAANZ) had, the previous evening, passed a motion that no-one with a criminal conviction could work for a TAANZ accredited travel agency.

[15] Judge Farish rejected defence counsel’s submission that the appellant should be discharged without conviction or given a non-custodial sentence. As a practical matter, home detention was not available as the appellant suffers from severe psoriasis, which means that he is unable to wear an electronic bracelet. His counsel had argued for a community-based sentence, involving a combination of community work, a fine and reparation. However the Judge concluded that a sentence of imprisonment was necessary to reflect the gravity of the offending, the appellant’s lack of insight into his wrongdoing and the need to denounce and deter the offending: at [49].

[16]       In the result, the Judge adopted a starting point of two years imprisonment for all the offending.  She reduced that by 20 per cent to take account of the guilty plea, then by six months to take account of personal mitigating factors and then by a further six months to take account of the fact that she had made a reparation order, reflecting the totality principle.  This produced an end sentence of eight months imprisonment, which the Judge further reduced by two months to reflect the fact that, as a result of the TAANZ decision, the appellant would no longer be able to work in the travel industry.  Accordingly, the end sentence was six months imprisonment.

Discussion

[17]       Mr McMenamin submitted that the Judge was wrong to impose a sentence of imprisonment and should have imposed a community-based sentence.  He challenged the Judge’s assessment of the offending as serious, and noted the Judge’s error in describing all the counts as being subject to the seven year maximum term.  He said that the Judge had taken into account matters that she should not have, for example, her assessment that the appellant had used some of the funds for gambling.  He submitted that the appellant should have been given a greater discount for his guilty plea given the late amendment of the charges by the Crown.

[18]       In our view, there is nothing in these submissions.  The Judge’s decision was not only one that was open to her – it was, in our view, inevitable.

[19]       We accept that the appellant was a capable and well-respected member of the travel industry.  It is clear that his colleagues and customers placed a good deal of trust in him.  Further, the convictions have effectively ended the appellant’s career as a travel agent, so that he has paid a high price for his wrongdoing.  We also accept that the appellant was a knowledgeable and successful gambler who ultimately returned most of the funds that he had taken to the company.

[20]       But by acting as he did, the appellant betrayed the trust that his employer, his colleagues and his customers had placed in him.  The Judge gave weight to this, as she was entitled to do.  She was also entitled to give weight to the other aggravating factors which she identified, namely the length of time over which the appellant’s offending occurred (two years), the obvious planning and sophistication of his scheme (many small transactions, effected in different ways and identified as customer refunds) and the fact that he tended to minimise the significance of what he had done (by saying that, because he had returned the money, he did not really think that he had committed any offence).

[21]       Mr McMenamin made much of the fact that the obtaining by deception charges did not involve one ingredient of the theft charges that they replaced, namely an intention permanently to deprive the owner.  While that is true, the punishment for theft in s 223 of the Crimes Act is structured in much the same way as the punishment for obtaining by deception.  This indicates that Parliament regarded the offences as being of similar gravity.

[22]       We consider that the Judge was entitled to conclude that the appellant had used at least some of the funds for gambling before returning them to the company.  This was at issue in the disputed facts hearing, and there was a proper evidentiary basis for the Judge’s conclusion.  Furthermore, as Ms Epati submitted for the Crown, the Judge’s error in identifying the applicable maxima had no practical impact on the end sentence of six months overall, although we do need to correct the sentences in relation to counts 2, 6, 7, 8, 27 and 57 given that they carried a maximum sentence of three months imprisonment.

[23]       In light of these various considerations the Judge was well entitled to conclude that a sentence of imprisonment was necessary to mark the seriousness of the appellant’s conduct and to deter others.  The appellant was in a position of special responsibility in relation to the customer accounts to which he had access and abused that position in a carefully planned and sophisticated way.

[24]       As to Mr McMenamin’s complaint that the Judge should have given a greater discount for the appellant’s guilty pleas, there was no suggestion that the appellant had indicated a willingness to plead guilty to the charges he eventually faced at an earlier point.  Although the plea was entered prior to the delivery of this Court’s judgment in R v Hessell [2009] NZCA 450, the principles stated in that case in relation to delayed guilty pleas at [43] – [44] are relevant. In any event, the Judge gave the appellant the benefit of other generous discounts, so that when the sentence is considered overall, it cannot sensibly be said that it is manifestly excessive.

Decision

[25]       The appeal is allowed in part.  The sentences of six months imprisonment imposed in respect of counts 2, 6, 7, 8, 27, and 57 are quashed and sentences of three months are substituted.  These are to be served concurrently, so that the present end sentence of six months imprisonment remains.

Solicitors:

K J McMenamin & Sons, Christchurch for Appellant

Crown Law Office, Wellington