Sahib v Police

[2012] NZHC 3324

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2012-404-000271 [2012] NZHC 3324

MOHAMMED RAFIQ SAHIB

Appellant

v

NEW ZEALAND POLICE

Respondent

Hearing:         4 December 2012

Counsel:         RA McKelvin for Appellant

K Snelgar for Respondent

Judgment:      10 December 2012

JUDGMENT OF ASHER J

This judgment was delivered by me on Monday, 10 December 2012 at 3.30pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Berman & Burton, DX CP 34009, Auckland.

Email: [email protected] and  [email protected]

Crown Solicitor, DX CP24063, Auckland 1140. Email:  [email protected]

SAHIB V NZ POLICE HC AK CRI-2012-404-000271 [10 December 2012]

Introduction

[1]      Mohammed Rafiq Sahib appeals a sentence of three years and four months’ imprisonment  imposed  upon  him  by  Judge C S Blackie  at  the  District  Court  at Manukau on 13 July 2012.   He had pleaded guilty to counts of theft in a special relationship, and of altering documents with intent to deceive. There were six counts in total.

[2]      Mr Sahib was a trustee and secretary of the East Auckland Islamic Trust (“the Trust”).  In 2003 the Trust purchased a property in Pakuranga with the intention of converting the building into a mosque.  The offending took place over three years. The original offending took place on 11 April 2007 when the appellant obtained

$60,000 from the Trust claiming that it was to finalise plans for the mosque.  That money was instead used to support the appellant’s business.  Then over the following two years Mr Sahib obtained $222,364 through the use of the Trust’s Mastercard, and $42,562 through using Trust cheques deposited into accounts that he controlled. He  then  sought  to  obtain  a  mortgage  to  pay  back  the  money by the  use  of  a fraudulent  document.   That  mortgage  has  been  repaid  in  full.    He then  altered documents  on  two  occasions  to  obtain  home loans  and  then on  a further  three occasions  to  obtain  a  further  home  loan  from  the  BNZ.    Finally,  he  altered documents with intent to deceive on four occasions against the ANZ.

[3]      The net effect of this offending was that Mr Sahib dishonestly received a total sum of $1,339,176.  The actual losses were somewhat less than this because he was, to an extent, borrowing to repay those who he owed as a consequence of his wrongdoing.  The family home has been sold and the net monies received applied to repay the debts.

[4]      The net amount taken from the Trust came to $324,926, of which the amount outstanding after repayments is $6,417.79.  In relation to a home loan fraudulently obtained from the ANZ bank, that has been repaid in full.  In relation to a home loan sought from Kiwibank, the amount sought was $1,568,000 but the application was declined.  The real loss lies in the BNZ home loan where the amount borrowed was

$814,250 and the amount outstanding is $266,113.15.  It can therefore be said that

the net result of Mr Sahib’s frauds is that the amount of approximately $272,000 has been lost, most of which is a loss to the BNZ, but including around $6,000 of which was in the end lost by the Trust.

The decision

[5]      The Judge noted the totality of the offending:[1]

All told the totality of your offending amounted to $1,339,176 which by

anybody’s standards is a considerable amount to misappropriate.

[1] R v Sahib DC Manukau CRI-2011-092-15217, 13 July 2012 at [5].

[6]      The Judge noted the aggravating factors of breach of trust and premeditation given the period of offending over a number of years.   He referred to the victim impact statement and how the reputation of the Trust has been tarnished and how the frauds had delayed the completion of the mosque to the great inconvenience of the congregation.

[7]      The   Judge   referred   to   a   number   of   cases   including   R   v   Varjan,[2]

Singh v Serious Fraud Office[3]  and Mitha v Police.[4]    He noted the disgrace in his community now visited on Mr Sahib, and his efforts to repay the money taken, and an offer to pay at $1,100 a month.  He also pointed out that Mr Sahib had been free “really” from previous offending of this sort.  He fixed a starting point of five years’ imprisonment.  He reduced the sentence from the starting point by four months for personal factors.  He then applied 25 per cent discount for the guilty plea, reaching the end sentence of three years and four months’ imprisonment.  He did not make any specific orders about reparation, noting that there may well be civil proceedings.

[2] R v Varjan CA97/03, 26 June 2003.

[3] Singh v Serious Fraud Office HC Auckland CRI-2008-404-361, 4 March 2009.

[4] Mitha v Police HC Auckland CRI-2006-404-266, 28 September 2006.

[8]      Mr McKelvin who appeared for Mr Sahib submitted that the starting point was just too high on an assessment of culpability and the comparable cases.   He made the point that Mr Sahib had done a lot for the Muslim community before he turned to fraud and that he had not frittered the money away on self-indulgent

pursuits.   He used the money to assist his wife’s struggling business, and to help

them buy a house.  He emphasised the amount of the ultimate net loss.  He referred to a number of comparable authorities and submitted that a starting point of three years’ imprisonment was appropriate, rather than five years.

[9]      Mr Snelgar for the Crown accepted that the sentence was severe, however he submitted that it was not clearly excessive and in line with comparable authorities.

Discussion

[10]     The maximum penalty for the altering a document charge was 10 years’ imprisonment.   The maximum penalty for the charges of theft by a person in a special relationship was seven years’ imprisonment.  However, given the scale of the offending and the number of charges these maximums are of limited assistance. Sentencing exercises of this type often involve a number of charges.  The Court is always concerned to establish the gains enjoyed by a defendant at the time of the frauds, and then the net loss to victims at the time of the sentencing of the defendant. Future reparation will also be a factor.  An accurate understanding of the amounts arguably taken and the net amounts lost are important in assessing culpability.  The net amount of loss and the net gain to the offender is central to the assessment of culpability, as that is a measure of the harm to the victims and the community.

[11]     There is no scale and in this respect an analysis of comparable sentences is the only way in which some type of framework for sentencing can be established. The leading decision in the area is the Court of Appeal decision in R v Varjan.  It was stated there at [22] and [23]:

Culpability is to be assessed by reference to the circumstances and such factors as the nature of the offending, its magnitude and sophistication; the type, circumstances and number of the victims; the motivation for the offending; the amounts involved; the losses; the period over which the offending occurred; the seriousness of breaches of trust involved; and the impact on victims.

It is in the assessment of culpability that comparison with other cases is to be undertaken.   Matters of mitigation such as reparation,  co-operation with investigators, plea, remorse and personal circumstances necessarily must be assessed in each particular case.

[12]     In  R  v  Varjan  the  total  end  losses  to  various  financial  institutions  was

$546,000.    However,  there  was  a  co-offender  who  benefitted  to  the  extent  of

$1.2 million while Mr Varjan only benefitted by approximately $5,000.   The co- offender had been motivated by greed while, it was noted, Mr Varjan had offended because he felt under pressure to meet performance targets and was facing financial difficulties  in  supporting his  family.   The offending by Mr Varjan  had  been  in assisting a fraudulent co-offender mortgage broker in sourcing clients and then organising false documentation for them by which they met the lending criteria of banks.   The fraudulent loan applications were processed and the funds, at least in part, misappropriated.

[13]     For this offending it was stated that the appropriate starting point was three years’ imprisonment.  That offending was less serious than that of Mr Sahib because of the much smaller net benefit to the defendant.  Nevertheless, the amount of the initial fraudulent taking, and the net loss to the victims, were at similar levels.

[14]     In another Court of Appeal case, R v Davis[5]  there had been over $277,000 misappropriated from Ms Davis’ employer over the course of 142 dishonest transactions  over  five  years.     She  further  overpaid  herself  around  $14,000. Following the Police investigation, Ms Davis repaid around $88,000.   The audit investigation following Ms Davis’ detection cost the company around $30,000.  A starting point of four years’ imprisonment was held to be within the range.

[5] R v Davis [2009] NZCA 26.

[15]     In Mitha v Police the defendant was a company’s financial controller and systematically  stole  almost  $350,000  by  generating  42  fictitious  invoices.    The period was over approximately seven months.  Panckhurst J noted that the case was unique and that the sum stolen by Mr Mitha had been retained and not spent so that immediate reparation was possible.  He fixed a starting point of three years on appeal and allowed 14 months for mitigating factors.  Leave was granted to apply for home detention.

[16]     Finally I refer to Singh v Serious Fraud Office which reviewed a range of

starting points from three years’ imprisonment in R v Varjan to a number of cases

where seven years’ imprisonment was imposed.  The sentences where six and seven year starting points were reached typically involved net losses in the millions of dollars, some over $2 million.   In that case Ms Singh had manipulated Fonterra’s accounting software 84 times to generate payments to herself.  This caused a loss to Fonterra of $1.3 million.  At the same time she wrongfully claimed and received a domestic purposes benefit.  The amount involved was $100,000.  A starting point of six years’ imprisonment was considered appropriate.

[17]     These cases provide a framework for the assessment of a correct starting point in this case.   It is to be noted that in terms of culpability, the offending was over the lengthy period of three years, and it involved numerous different attempts to defraud in different ways (although this was driven by attempts to repay the original amount fraudulently taken).  There were numerous victims, although fortunately the loss to the beneficiaries of the Trust has turned out to be limited as the Trust was largely  repaid,  and  they  now  have  their  mosque.    There  was  nevertheless  a significant impact on them in not having a suitable place for worship for some time. Most importantly there was the extent of the net loss of approximately $272,000, largely suffered by the BNZ.

[18]     On the basis of these comparable cases the sentencing Judge’s starting point was too high.  The question of the net loss, which was a lot less than the amount taken, was not referred to by the Judge on sentence.  Nor did he refer to the fact that the Trust had been largely repaid.  The culpability is, for instance, at a considerably lower level than in Singh v Serious Fraud Office where the starting point was six years’ imprisonment.  The case was closer to R v Davis, where four years was held to be within range.

[19]     I conclude that the starting point here should have been no more than four

years’ imprisonment.

[20]     I consider the Judge’s deductions of four months for the disgrace suffered by Mr Sahib and his efforts at reparation to be generous.  There are quite a number of references  supporting  Mr Sahib  who  clearly still  has  support  from  some  of  the persons in his community, and from his family.   He had convictions for using a

document for pecuniary advantage.  These were in 1992–1993 and he was sentenced to community service.  These were not treated as a personal aggravating factor.  He was given the full discount for a guilty plea of 25 per cent.  There is no basis for interfering with these sentencing assessments.

Result

[21]     The  starting  point  was  too  high.     It  should  have  been  four  years’ imprisonment and not five years. The appeal is allowed. The sentence of three years and four months’ imprisonment is quashed and, applying the sentencing Judge’s approach to the other deductions, replaced by a sentence of two years and nine months’ imprisonment.  The differential is less than expected as in the District Court presumably by error, the end sentence reflected a 29 per cent guilty plea discount, rather than 25 per cent.

……………………………..

Asher J