R v Y

Case [2023] NZHC 3101 3 November 2023

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INTERIM ORDER SUPPRESSING NAME AND IDENTIFYING PARTICULARS OF THE DEFENDANT AND CONNECTED PERSONS, R, F AND S UNTIL FURTHER ORDER OF THE COURT. PERMANENT ORDER SUPPRESSING DETAILS OF THE DEFENDANT’S SON’S ILLNESS.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI2022-004-645

[2023] NZHC 3101

THE KING

v

Y

Hearing: 3 November 2023

Appearances:

B H Dickey and A D Luck for the Crown

JCL Dixon KC, HMZ Lanham and H Smith for the Defendant

Judgment:

3 November 2023

SENTENCE OF GAULT J

Solicitors / Counsel:
Mr B H Dickey, Barrister, Auckland
Mr A D Luck, Meredith Connell, Office of the Crown Solicitor, Auckland Ms C F Brooke, Financial Markets Authority, Auckland
Mr JCL Dixon KC and Ms HMZ Lanham, Barristers, Auckland
Mr S Holden, Mr H Smith and Ms S Patel (defendant’s instructing solicitor), Chapman Tripp, Auckland

R v Y [2023] NZHC 3101 [3 November 2023]

[1] Y, you appear today for sentence after being found guilty by a jury on one charge of insider conduct – advising or encouraging another person to sell shares – an offence under the Financial Markets Conduct Act 2013.1

[2] I did not enter a conviction at the end of your trial pending a possible application at sentencing. It is now accepted that a conviction should be entered, and I do so.

[3] I will begin by setting out the facts of your offending before explaining the approach I am required to take in sentencing. I will then select a starting point for your offending, and finally adjust that starting point based on your personal circumstances to determine the end sentence.

Facts of the offending

[4] The facts of your offending arise out of your involvement with Pushpay Holdings Limited (Pushpay). Pushpay specialises in electronic donation technology for church organisations with significant business in the United States and was, at the relevant time, a listed company on the NZX and ASX.

[5] You were involved with Pushpay from an early stage. At the relevant time in 2018, you were the [REDACTED]. Your family’s investment entities held a [REDACTED] shareholding in Pushpay. You were [REDACTED] regularly attended Pushpay Board meetings. You enjoyed the confidence and trust of the Board and senior executives, particularly on financial markets matters. [REDACTED]

[6] In April 2018, Pushpay’s co-founder and director, Mr Eliot Crowther, told a small number of Pushpay directors and senior executives, including you, that he intended to resign from his roles at Pushpay and would in that event sell shares in Pushpay (I will refer to this as “the Information”). Mr Crowther held just over a nine per cent shareholding in Pushpay, the sale of which Pushpay considered should be managed through a company led confidential process.

1 Financial Markets Conduct Act 2013, ss 243(1)(a) and 244. The maximum penalty is a term of imprisonment not exceeding five years and/or a fine not exceeding $500,000.

[7] At that time, your sister’s family trust, the F B Y…

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 Y

Details

AGLC: R v Y [2023] NZHC 3101
Case: [2023] NZHC 3101
Decision Date: 3 November 2023

CaseChat Overview and Summary

The case of R v Y involved sentencing for insider conduct under the Financial Markets Conduct Act 2013. Y, a former insider of Pushpay Holdings Limited, was found guilty of advising or encouraging the sale of Pushpay shares based on material, non-public information. The court considered the nature and circumstances of the offence, including the breach of trust, the substantial amount involved, and the harm caused to the market's integrity. The court determined a starting point of 18 months' imprisonment, adjusted for personal mitigating factors such as the defendant's young family and a compassionate reduction for the health condition of the youngest child. Despite the need for deterrence, the court opted for a sentence of six months' community detention with a curfew and a fine of $100,000, considering it appropriate given Y's personal circumstances and the purposes of sentencing. Additionally, the court made an order to suppress details of the defendant's son's illness.

Orders