R v Smith - [2013] NZHC 1341

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2011-004-17096 [2013] NZHC 1341

THE QUEEN

v

STEPHEN CHARLES WILLIAM SMITH

Hearing: 7 June 2013

Appearances: JC Gordon QC, NR Williams and K Chang for Crown
S Bonnar for Prisoner

Judgment: 7 June 2013

SENTENCING NOTES OF TOOGOOD J

R v STEPHEN CHARLES WILLIAM SMITH [2013] NZHC 1341 [7 June 2013]

[1] Stephen Charles William Smith: you appear for sentence having pleaded guilty on 25 May 2013 to four charges under the Crimes Act 1961 of making a false statement by a promoter; one representative charge under the Securities Act of making an untrue statement in an advertisement; 19 charges under the Crimes Act of theft by a person in a special relationship; and one representative charge under the Companies Act for making a false statement to a trustee.

[2] Your offending occurred over a period of just under three years while you were engaged as a senior manager and director of Belgrave Finance Limited (“Belgrave”) between July 2005 and May 2008 when the company went into receivership. Belgrave, which had been incorporated some five years earlier, was a commercial lender for property investment and development, the investment funds being obtained from members of the public through the offering of first ranked secured debenture stock. This means of investment involved the company entering into a debenture trust deed, the terms of which offered a measure of protection to investors, with compliance being monitored by a trustee company.

[3] Your offending, carried out in collusion with at least two co-offenders, fell into three distinct but related categories. It is particularly notable, in my view, that the first offence to which you pleaded guilty occurred at the very beginning of your involvement with Belgrave in July 2005 and that your offending continued until April 2008, only one month before the company was placed in receivership.

[4] The Crimes Act charges of making false statements as a promoter and the count under the Securities Act of making an untrue statement in an advertisement represent the means by which you and your co-offenders dishonestly procured investment funds from members of the public. The 19 counts of theft in a special relationship represent the dishonest means by which you abused the position of trust you held on behalf of investors in using the funds provided to you in a manner which you knew was unlawful. Principally, the dishonesty lay in making loans to related parties in circumstances which created obvious conflicts of interest and which you knew to be in breach of Belgrave’s obligations under the trust deed.

[5] The third category of offending, being the representative count of making a false statement to the trustee, represents the dishonest means by which you concealed the theft and the other dishonest dealings from the trustee whose role it was to provide protection for those who had entrusted you with their investments.

[6] The prolonged dishonesty involved in procuring funds from the public, misusing them and deliberately concealing…

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 Smith

Details

AGLC: R v Smith [2013] NZHC 1341
Case: [2013] NZHC 1341
Decision Date: 7 June 2013

CaseChat Overview and Summary

Stephen Charles William Smith, a former senior manager and director of Belgrave Finance Limited, appeared before the High Court of New Zealand for sentencing after pleading guilty to multiple charges including making false statements, theft by a person in a special relationship, and making a false statement to a trustee. His offending, which spanned nearly three years, involved the dishonest procurement of investment funds, misuse of those funds, and concealment of the breaches from the trustee. The court found that Smith’s actions, along with those of his co-offenders, led to significant financial losses for investors, predominantly retirees who had invested their life savings. The court acknowledged the serious consequences of Smith's actions, emphasizing the need for accountability and deterrence. In sentencing, the court considered the nature and duration of the offending, the significant losses incurred, and the need for consistency with sentences imposed on co-offenders. After applying mitigating factors such as Smith's early guilty plea and cooperation with authorities, the court imposed concurrent sentences totaling four years’ imprisonment. The decision highlighted the importance of integrity in financial disclosures and the need to protect investors from dishonest practices.

Orders