R v Sanson
[2001] NZCA 428
•26 July 2001
| IN THE COURT OF APPEAL OF NEW ZEALAND | CA178/01 |
THE QUEEN
V
CHRIS ALEXANDER SANSON
| Hearing: | 25 July 2001 |
| Coram: | McGrath J Robertson J Randerson J |
| Appearances: | The Appellant in person K Raftery for the Respondent |
| Judgment: | 26 July 2001 |
| JUDGMENT OF THE COURT DELIVERED BY ROBERTSON J |
Following a jury trial in the District Court at Auckland in May 2001, the appellant Mr Sanson was convicted on one count namely that between the 16th of January 1999 and the 24th of June 1999 at Auckland he took part in the management of a company namely Sanson Investments Limited without leave of the High Court. On 8 June 2001 he was sentenced to undertake 150 hours community service.
Mr Sanson was represented by counsel in the District Court trial but filed his own notice of appeal. He has prosecuted the appeal in person. His original documentation indicated an appeal against both sentence and conviction. He abandoned the conviction appeal and the sole issue now is the sentence imposed.
On 25 August 1995 the appellant was convicted in the High Court at Auckland on a charge of using a document for pecuniary advantage and sentenced to a period of 2 years imprisonment. As a consequence he became a person prohibited from being involved in company management or operation for a period of five years.
In January 1999 Mr Sanson was arrested and charged with an offence under Section 382(1)(b) of the Companies Act in respect of his acting as a director of Sanson Investments Limited during that 5 year period.
382 Persons prohibited from managing companies –
(1) Where
[a]A person has been convicted on indictment of any offence in connection with the promotion, formation, or management of a company; or
[b]A person has been convicted of an offence under any of sections 377 to 380 of this Act or of any crime involving dishonesty as defined in section 2(1) of the Crimes Act 1961; or
[c]A judgment has been obtained in an action under Part I of the Securities Amendment Act 1988 against a person as an insider (within the meaning of that Part of that Act),
That person shall not, during the period of 5 years after the conviction or the judgment, be a director or promoter of, or in any way, whether directly or indirectly, be concerned or take part in the management of, a company, unless that person first obtains the leave of the Court which may be given on such terms and condition as the Court thinks fit.
At the time of his arrest by a Constable SF Scott it is common ground that Mr Sanson was given a copy of the provision of the Companies Act setting out the prohibition.
In September 1999 Mr Sanson successfully made an application for a Section 347 discharge in respect of the charge. Before the end of 1999 the Crown had lodged an application for judicial review of that Section 347 discharge. Further, on the 2nd of November 1999 the charge currently before the Court was laid. That charge relates to the period from January 1999 (when he was arrested on the first count) until June when there was a further change of the director of Sanson Investments Limited. In other words it was the period when a Mr Davidson had been the director of the company.
On 4 May 2000 the judicial review application (which related to the first charge) was granted on the basis that ignorance could not be a defence.
On 17th of November 2000 Mr Sanson pleaded guilty to the original charge. He was convicted and discharged. In terms of Section 382 of the Companies Act 1993 he was prohibited from being a director or promoter of, or in any way, whether directly or indirectly, being concerned or taking part in the management of the company, without the leave of the Court, for a further 5 years.
At the trial in May 2001 of the present count, during the hearing a Section 369 admission was made by Mr Sanson that:
[a]he was prohibited from being a director or acting in the management of the company without the permission of the Court;
[b] that he did not obtain or apply for leave of the High Court; and
[c] that he was aware of his obligations.
The case was run on the basis that he had not in fact been involved in management. The jury found otherwise. The issue is now not alive before this Court except on the basis of the factual assessment which is to apply in determining the appropriate level of sentencing.
Mr Sanson argues that what he had done was at the very lowest level of culpability. He submits that the purpose of Section 382 of the Companies Act is to keep fraudsters out of companies not out of commerce.
The appellant submits that there was no question of his placing an unsuspecting public at risk and that what was done was at most a technical matter and that no-one suffered as a result. He contended that he was no threat to society and had no intention to break the law. Mr Sanson submitted that all he was doing was trying as best he could as against his background to make a new life and get on with the way forward.
He referred to an appeal decision in the High Court in Ramsay v Sumich [1989] 3 NZLR 628 where a fine was introduced which had not been imposed at first instance. Mr Sanson submitted that the comparison between the two demonstrated how his sentence was grossly excessive and inappropriate.
Nowhere in the sentencing notes does the Judge avert to the fact that as a result of this further conviction yet another five year prohibition period would begin to run again. It is not even clear that he had turned his mind to the further 5 year prohibition period which had begun in November 2000.
In respect of the original criminal conviction Mr Sanson was a prohibited person in company activities until August 2000. There was a period from then until November 2000, when he pleaded guilty and was convicted and discharged on the first charge, when there was no impediment. Thereafter a further 5 year period began. In respect of the second charge the period in which he is prohibited will run through until May 2006.
Although it is clear that Parliament has created both an offence in respect of which the maximum penalty is a fine of $200,000 and/or 5 years imprisonment, and a consequential 5 years prohibition on company involvement, the latter cannot be ignored in our assessment of the former.
In this case the Judge said:
You were then convicted in November 2000 for breaching the Companies Act in the same way as has been alleged on this occasion. For what it may be worth I take on board the fact that the conviction was entered in November 2000 and this offending occurred before the entry of that conviction, that is to say, between January and June 1999. But whatever the position it cannot be said that you were ignorant of your obligations to stay away from, certainly, the directorship of any company and I do think, with respect, that it is taking matters too far to suggest that you were completely unaware of your inability to take part in the management of a company. However, I am inclined to accept counsel’s submission that you were attempting to do everything by the book – as has been referred to on a number of occasions by the witnesses in this trial.
The plain fact of the matter is, however, that you were a person who was prohibited from managing a company. There are sound reasons for imposing that prohibition. Clearly, the public is entitled to be protected from people operating companies with your sort of record and the public was, in this instance, put at risk. I hasten to say, however, that there is no evidence before me that anybody suffered any significant or real financial loss as a result of dealing with you. If that had been the case then my view of your culpability would have been very different.
Considering the extraordinarily unusual circumstances of the conduct of these two cases through the Court system, we are of the view that the Judge’s approach to sentence failed sufficiently to take them into account.
Protection of the public is the starting point but it is clear that no actual loss was occasioned to anybody as a result of either of Mr Sanson’s breaches. The appellant now faces the long term consequences of his breaches as far as what he can do. Although he saw the relevant section of the Companies Act in January 1999 there is no evidence that the appellant wilfully flouted his obligations or thumbed his nose at the system thereafter.
As the Judge in the District Court warned, if Mr Sanson offends further the consequences could be dire.
We are of the view that the sentence of 150 hours community service failed sufficiently to recognise what had happened in this case with its most unusual circumstances and failed to have regard to the extension of the prohibition under Section 382 by a period of six months as a result of the conviction now under appeal.
The appeal is allowed. The sentence of 150 hours community service is quashed. Mr Sanson is convicted and ordered to come up for sentence if called upon within 12 months. The five year prohibition under Section 382 will apply until May 2006.
Solicitors
Crown Solicitor, Auckland
0
0
0