R v Ryan - [2013] NZHC 501

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2009-004-028345 [2013] NZHC 501

THE QUEEN

v

COLIN GREGORY RYAN ROBERT GORDON SUTHERLAND OWEN FRANCIS TALLENTIRE

Charges: Distributed a prospectus including an untrue statement x2
Distributed an advertisement including an untrue statement x1

Plea: Guilty

Appearances: N R W Davidson QC, N Williams and K Chang for Crown
D P H Jones QC, A M Callinan and A E Murray for Prisoners Ryan and Sutherland
N S Gedye, T P Mullins and S Ellis for Prisoner Tallentire

Sentenced: 15 March 2013
Ryan –7 months home detention and 300 hours community work; Sutherland – 6 months’ home detention, together with 300 hours community work.
Tallentire – 12 months’ imprisonment, cumulative on current sentence
SENTENCING NOTES OF VENNING J

Solicitors: Crown Solicitor, Auckland Simpson Grierson, Auckland Lee Salmon Long, Auckland

Copy to: D P H Jones QC, Auckland
N S Gedye, Auckland

R V RYAN & ORS HC AK CRI-2009-004-028345 [15 March 2013]

[1] Colin Gregory Ryan, Robert Gordon Sutherland and Owen Francis Tallentire, you have each pleaded guilty to two charges under s 58(3) of the Securities Act 1978 and one representative count under s 58(1) of that Act. The maximum penalty for the offending in each case is five years’ imprisonment.

[2] The charges to which you have pleaded guilty to arise out of your involvement as directors of Capital + Merchant Finance Ltd (CMF).

[3] CMF was a finance company. It funded its financing of property developments by inviting investments in debenture stock from members of the public under registered prospectuses and investment statements.

[4] The three of you, together with Mr Nicholls, were directors of CMF at all relevant times. Mr Douglas was also a director until February 2007. Mr Sutherland you were only appointed a director on 30 November 2006 and Mr Ryan on 19
December 2006.

[5] There were two registered prospectuses issued underlying the charges, one on issue between 20 December 2006 and 9 September 2007, the other on issue between
10 September 2007 and 23 November 2007. Both contained false and untrue statements. Also while you were directors CMF issued advertisements which included untrue statements.

[6] CMF was placed into receivership on 23 November 2007. As at the date of receivership it owed approximately 7,000 secured debenture holder investors approximately $167 million.

[7] Between 20 December 2006 and 9 September 2007, the period relating to the first count, approximately $56,800,000 was either invested or reinvested under that prospectus. With accrued interest as at the date of receivership the value of those investments was in excess of $72 million. From 10 September 2007 to the date of receivership approximately $32 and a half million was invested or re-invested. As at the date of receivership, including interest, those investments totalled in excess of
$33,100,000. During the period the false advertisements were before the public, in

excess of $23,400,000 was invested. As at the date of receivership the investments relating to that period with interest totalled in…

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 Ryan

Details

AGLC: R v Ryan [2013] NZHC 501
Case: [2013] NZHC 501
Decision Date: 15 March 2013

CaseChat Overview and Summary

Colin Gregory Ryan, Robert Gordon Sutherland and Owen Francis Tallentire pleaded guilty to charges under the Securities Act 1978. The charges stemmed from their involvement as directors of Capital + Merchant Finance Ltd (CMF), a finance company that issued prospectuses and advertisements containing false and misleading statements. The court had to decide appropriate sentences for the three defendants, taking into account the purposes and principles of the Sentencing Act 2002, including denunciation, deterrence, accountability, victim interests, and promoting a sense of responsibility.

The court found that Ryan and Sutherland's offending could be categorised as approaching gross negligence, particularly from mid-2007. Tallentire's culpability was considered higher due to his longer involvement as a director and personal involvement in the misleading transactions. The court took into account the mitigating factors for Ryan and Sutherland, such as their previous good character, remorse, cooperation with the authorities, and offers of reparation. For Tallentire, the mitigating factors were his previous good character and remorse.

The court imposed the following sentences:

- Ryan: Seven months' home detention and 300 hours of community work, along with a $100,000 reparation payment.
- Sutherland: Six months' home detention and 300 hours of community work, along with a $60,000 reparation payment.
- Tallentire: 12 months' imprisonment, cumulative on his current sentence.

Orders