Rath v The King
[2024] NZHC 325
•27 February 2024
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CRI-2023-409-257
[2024] NZHC 325
BETWEEN COLIN DAVID RATH
Appellant
AND
THE KING
Respondent
Hearing: 22 February 2024 Appearances:
C M Ruane for Appellant
W J S Mohammed for Respondent
Judgment:
27 February 2024
JUDGMENT OF DUNNINGHAM J
This judgment was delivered by me on 27 February 2024 at 2 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
RATH v R [2024] NZHC 325 [27 February 2024]
Introduction
[1] Colin Rath pleaded guilty to obtaining by deception (over $1000),1 and using a forged document (x2).2 He was sentenced to nine months’ imprisonment by Judge Duggan on 22 November 2023.3 This sentence was cumulative on a sentence of imprisonment imposed by Judge Hix on 8 March 2023. Mr Rath appeals on the basis the sentence imposed by Judge Duggan was manifestly excessive.
Facts
[2] Mr Rath is an American citizen who emigrated to New Zealand with his family. He purchased a vineyard business in North Canterbury. However, the business was not successful and he got into financial difficulty. This led to him filing false GST returns and supplying false documents in support of those returns. He also filed 13 false documents to Immigration New Zealand in order to gain residency in New Zealand. This offending occurred between October 2018 and February 2021.
[3] On 8 March 2023 he was sentenced to three years and seven months’ imprisonment on those charges.4
[4] In December 2015, the appellant listed his sailing yacht on Trade Me. On 3 March 2016, he obtained a loan from the American based creditor, St Liberty LLC for USD 300,000, with the collateral for this loan being the vessel. In May 2016, the victim, a New Zealand citizen, contacted the appellant with a view to purchasing the vessel. The appellant initially informed the victim that the sale price was $780,000.
[5] The victim arranged for a sea test of the vessel and in November 2016, arranged to examine the vessel out of the water which revealed several significant issues, meaning she was not prepared to pay the now $600,000 price the appellant was asking for it.
1 Crimes Act 1961, ss 240(1)(a) and 241(a) – maximum penalty of seven years’ imprisonment.
2 Section 257(1)(a) – maximum penalty of 10 years’ imprisonment.
3 R v Rath [2023] NZDC 25971.
4 Inland Revenue Department v Rath [2023] NZDC 4367.
[6] In early September 2018, the appellant informed the victim that the vessel was now on sale for AUD 420,000. He also stated that the vessel was listed with an Australian broker, Mr Renouf of DBY Boat Sales.
[7] In early October 2018, the victim travelled to Australia to carry out another sea test. The same flaws were identified. She negotiated a purchase price of AUD 380,000. A sale and purchase agreement was signed on 2 October 2018. There was an addendum to the agreement whereby the victim would pay a further AUD 28,556 for repairs making the total payment AUD 408,556. The agreement stated that the vessel was to be free from any encumbrances or other interests. The appellant appeared before a Notary Public to produce a statutory declaration to this effect and also produced a Department of Homeland Security, US Coast Guard bill of sale which stated the same. The appellant sent these documents to Mr Renouf as well as a company resolution from Valhalla LLC (the appellant’s company) authorising the appellant to negotiate and finalise the sale.
[8] Mr Renouf requested details in respect of the appellant’s debt to St Liberty LLC and on 21 November 2018, the appellant instructed Mr Renouf to settle any debt with St Liberty. By 10 December 2018, the victim had completed all payments into the DBY Boat Sales trust account. On 11 December 2018, Mr Renouf made a payment of USD 11,278.86 to St Liberty LLC. Through various emails and documents, Mr Renouf had been led to believe that this payment would satisfy the mortgage; however it was merely the next loan payment owing. An encumbrance remained of approximately USD 309,000. The appellant provided Mr Renouf with a fraudulent Satisfaction of Mortgage document.
[9] On 4 February 2019, Mr Renouf received from the appellant a US Coast Guard deletion notice in respect of the vessel being removed from their registry. This was also fraudulent.
[10] Mr Rath was charged with the three charges in August 2023 and pleaded guilty shortly afterwards.
District Court decision
[11] After briefly summarising the facts, Judge Duggan referred to the reparation schedule which sets out the loss suffered. The victim essentially had to repurchase the yacht, costing her $202,000. There were also arrest expenses and investigation fees of $186,000 and other costs related to the US attorney expenses of $6,549. The Judge noted that it would not be realistic to make a reparation order for this amount given that Mr Rath did not have any assets and was currently a sentenced prisoner.
[12]Instead of making a reparation order for this amount, the Judge ordered a
$5,000 emotional harm payment.
[13] When sentencing the appellant, Judge Duggan acknowledged that the offending took place during the same period as the offending addressed in the 8 March 2023 sentencing. She therefore acknowledged she had to approach sentencing on the basis of what additional sentence would have been imposed had these three further charges been before Judge Hix at that sentencing.5
[14] In deciding on the appropriate uplift the Judge identified the aggravating features of the offending. The first of these was the quantum of the loss. Further, the Judge accepted that this was premediated offending. There were no mitigating factors. On a totality basis, a 12 month uplift was considered appropriate. A 20 per cent credit for the appellant’s guilty plea was appropriate. There was also a five per cent credit for good character.
[15] The final sentence was nine months’ imprisonment as well as the $5,000 emotional harm payment.
Principles on appeal
[16] Appeals against sentence are allowed as of right by s 244 Criminal Procedure Act 2011 and must be determined in accordance with s 250. An appeal against sentence will be successful only if the appeal Court is satisfied there has been an error
5 Inland Revenue Department v Rath, above n 4, at [20].
in the imposition of the sentence and that a different sentence should be imposed.6 A court will not intervene if the ultimate sentence imposed is within the available range and is one that can properly be justified on the application of relevant sentencing principles.7 When assessing whether the sentence being appealed is “manifestly excessive” the focus must be on whether the sentence actually imposed is within range, rather than the process by which that sentence was reached, or its constituent elements.8
Submissions
Appellant’s submissions
[17] Mr Ruane, counsel for Mr Rath, observes it would have been preferable to sentence for all matters at once. He notes that the offending occurred at or about the same time as the IRD/Immigration offending. The motivation for both sets of offending was the same and there was no obvious reason why the prosecution was delayed until after Mr Rath had been sentenced on the IRD matters. That said, he acknowledges that the Judge identified the appropriate approach to sentencing at [20] of her sentencing remarks.
[18] Counsel accepts that the present offences would justify a cumulative sentence. The real issue is whether the starting point of 12 months’ imprisonment is manifestly excessive. Counsel submits that the uplift of 12 months’ imprisonment was disproportionate when compared to the uplift proposed by Judge Hix in his sentencing indication of six months in respect of the immigration forgeries. It is submitted that an uplift for the present offending of no more than six months would be justified.
[19] In allowing a credit of 20 per cent for the guilty plea, counsel submits that this does not recognise the very prompt pleas of guilty entered on the appellant’s second appearance.
6 Criminal Procedure Act 2011, s 250(2) and (3).
7 Tutakangahau v R [2014] NZCA 279, [2014] 3 NZLR 482 at [36]; Ripia v R [2011] NZCA 101 at [15].
8 Islam v R [2020] NZCA 140 at [32]; and Bowring v Police [2021] NZCA 325 at [12].
[20] Counsel submits that the same credit for good character applied by Judge Hix of 10 per cent should be applied instead of Judge Duggan only allowing for five per cent.
[21] Counsel concludes by noting Mr Rath is subject to deportation and will be deported immediately upon his release from prison. He therefore will contribute nothing to New Zealand upon his release and, other than denunciation and potentially deterrence, a sentence of imprisonment will not meet the purposes of sentencing.
Respondent’s submissions
[22] Ms Fiennes, for the respondent, submits that a starting point of 12 months’ imprisonment was entirely within range. Firstly, if the matter was sentenced in isolation, a starting point of three years could have been adopted.9 Further, the offending was different and more serious than the immigration offending involving filing false documents with Immigration New Zealand where a six-month uplift was imposed. That offending did not involve financial loss, the consequence was an unfair immigration benefit and there was no direct negative impact on any victim.
[23] The motivation for the deception and submission of false documentation was financial. In Calder v Police, a starting point of 17 months’ imprisonment was imposed for two charges of using a document for a pecuniary advantage.10 The victims in that case experienced a loss of $17,200. Here, the offending involved a loss of
$202,000.
[24] With regards to the discount for guilty plea, the respondent submits that a 20 per cent discount was well within range considering the strong prosecution evidence.
[25] Judge Duggan allowed a five per cent discount for previous good character and the appellant submits this should have been 10 per cent. The respondent submits that it would have been open to the Judge to not give any discount for good character. The offending occurred over many years, was calculated and resulted in immense loss.
9 Proctor v Police [2016] NZHC 2656.
10 Calder v Police [2017] NZHC 1430.
Further, the respondent submits that there should be no discount for remorse, noting there has been no tangible acceptance of responsibility for his conduct.
Analysis
Starting point
[26] There is no tariff decision for cases involving fraud. As the Court of Appeal has confirmed, culpability for dishonesty offending is not measured solely, or even primarily, by the amount of money taken. Other aggravating factors are also relevant.11
[27] When considering other sentencing decisions, I am satisfied the starting point of 12 months’ imprisonment is within range. In R v Rose, Mr Rose was found guilty of obtaining by deception.12 He was convicted in relation to 174 payments totalling around $2,200,000. The Crown submitted that the total loss suffered was in the range of $200,000 to $800,000 albeit this was considered a conservative estimate. The starting point in that case was three years, eight months.
[28] In Murray v Police, Mr Murray was convicted of five representative charges of using a document for a dishonest purpose and one charge of carrying on a business fraudulently.13 This involved the fraudulent use of credit cards, not paying invoices, cheques and not paying charities. The shortfall was $116,000 after some funds were able to be recovered. The starting point there was two and a half years.
[29] In Rapana v R, Mr Rapana pleaded guilty to two charges of fraudulently using a document for a pecuniary advantage and six charges of obtaining a pecuniary benefit by deception as well as some other dishonesty offences.14 In total, Mr Rapana obtained just over $100,000 by means of his fraudulent conduct. The starting point there was three years six months’ imprisonment. In that case, there was repeated offending and a clear breach of trust. The Judge noted that it could be argued that a higher starting point could be justified.
11 Rako v R [2015] NZCA 463 at [10].
12 R v Rose [2016] NZHC 1109.
13 Murray v Police [2015] NZHC 1771.
14 Rapana v R [2018] NZHC 1829.
[30] In the case of Mr Rath, the total loss was over $200,000. The offending took place over several years, involved quite elaborate deception and has caused significant financial harm to the victim. I accept the respondent’s submissions that the 12 month uplift was well within range and if anything, was towards the lower end of what could have been appropriate in the circumstances.
Guilty Plea
[31] The appellant submits that the discount for guilty plea should have been 25 per cent instead of 20 per cent. The credit that is given for a guilty plea must reflect all the circumstances of the plea, including its timing, the strength of the prosecution case, and any other relevant circumstances.15 Twenty five per cent is the maximum credit that can be given. While I accept the appellant entered very prompt pleas of guilty, I agree that the strength of the prosecution case was high. The 20 per cent discount recognises the early guilty plea but also factors in the strength of the prosecution case. I am not satisfied that the 20 per cent discount which was imposed was outside the available range.
Good character and remorse
[32] The appellant focused on the discrepancy between the discounts afforded at each sentencing. For good character, Judge Hix allowed 10 per cent and Judge Duggan five per cent, and for remorse/reparation, Judge Hix allowed five per cent whereas no discount was given for this by Judge Duggan.
[33] I observe that the Judge was not bound by the discounts given in the previous sentence. Sentencing involves judgment and reasonable judges can come to different views on the same facts without falling into error. Here, the Judge learned that Mr Rath’s dishonesty offending commenced in 2015, not 2018 as Judge Hix understood. Furthermore, Judge Hix noted that given the nature of the charges there was an argument that prior good character should have minimal weight. Given the additional offending Judge Duggan was aware of, it was open to her to decide a lesser discount for prior good character was warranted.
15 Hessell v R [2010] NZSC 135, [2011] 1 NZLR 607.
[34] She was also not satisfied there was genuine remorse and there was no offer to pay reparation (which had been a live possibility before Judge Hix) so she was entitled to decline a credit for remorse.
Conclusion
[35]I am satisfied the sentence imposed was within range. The appeal is dismissed.
Solicitors:
Crown Solicitor, Christchurch
Copy to:
C M Ruane, Barrister, Christchurch
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