Shakib v New Zealand Customs Service

Case

[2017] NZHC 1513

3 July 2017

No judgment structure available for this case.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2017-404-105 [2017] NZHC 1513

BETWEEN

AMAR RAOUF SHAKIB

Appellant

AND

NEW ZEALAND CUSTOMS SERVICE Respondent

Hearing: 3 July 2017

Appearances:

A Arman for the Appellant
T Hu for the Respondent

Judgment:

3 July 2017

ORAL JUDGMENT OF GORDON J

Solicitors:           Crown Solicitor, Auckland

Counsel:            A Arman, Greenlane, Auckland

SHAKIB v NEW ZEALAND CUSTOMS SERVICE [2017] NZHC 1513 [3 July 2017]

Introduction

[1]      Amar Shakib was found guilty following a Judge-alone trial in the District Court at Auckland of 41 charges comprising 12 charges of making an erroneous customs entry,1  12 charges of doing an act for the purpose of evading payment of duty,2  15 charges of using a document for pecuniary advantage,3  one representative

charge of false accounting4  and one representative charge of selling un-Customed

goods.5     He appeared for sentencing on 27 February 2017, at which time Judge Ronayne sentenced Mr Shakib to three years and four months’ imprisonment for his offences.6

[2]      Mr Shakib is the director and shareholder of Ormat Ltd, which was named as a co-defendant in the proceedings.   Ormat was found guilty following trial of one representative charge of doing an act for the purpose of evading payment of duty and one representative charge of selling un-Customed goods.  Judge Ronayne determined that Ormat should be convicted and discharged.   The Judge considered he had no jurisdiction under the Customs and Excise Act 1996 (the Act) to order that goods seized by Customs be restored to Ormat, which is the legal owner of the goods.

[3]      Mr Shakib appeals his sentence on the basis that the Judge erred in assessing the quantum of the fraud and that the sentence of three years and four months’ imprisonment was manifestly excessive.  Mr Shakib also appeals the Judge’s refusal to exercise his discretion to order restoration of the seized goods.

A preliminary point

[4]      The respondent in its submissions noted that the goods sought to be restored under s 236 legally belonged to Ormat, not to Mr Shakib personally, but that Ormat

is not a party to the present appeal.

1      Customs and Excise Act 1996, s 203(b).

2      Customs and Excise Act, s 211.

3      Crimes Act 1961, s 228.

4      Crimes Act, s 260.

5      Customs and Excise Act, s 213.

6      New Zealand Customs Service v Shakib [2017] NZDC 3891.

[5]      Section 236(2) of the Act provides:

Where the court imposes a sentence on any person on the conviction of that person for an offence to which subsection (1) applies, the court may, if it thinks fit, order the restoration of the goods forfeited to the person from whom  the  goods  were  seized  and,  where  such  an  order  is  made,  the conviction does not have effect as a condemnation of those goods.

[6]      The terms of s 236(2) suggest that the person who is convicted of an offence and the person from whom the goods were seized may be two separate individuals. That interpretation is consistent with other provisions in the Act, particularly those concerning the seizure of goods and applications for review of seizure.  Section 225 of the Act empowers Customs to forfeit any goods in respect of which an offence has been committed. A person who has an interest in those goods may apply for relief under s 231 of the Act.  However, there is nothing in the Act which requires relief to be granted only on the ground that the legal owner of the goods is a different person from the person alleged to have undertaken illegal activities.

[7]      If this interpretation of s 236(2) is correct, then there is a possibility that in some cases a Judge will be required to consider whether to exercise his or her discretion under s 236(2) in proceedings to which the legal owner of the goods is not a party.  In those circumstances, it would seem that the only person who has standing to appeal the decision is the person who was convicted and sentenced, even though that person is not the legal owner of the goods.

[8]      I am satisfied that the fact that Mr Shakib is not the legal owner of the goods

does not act as a bar to his appeal against that aspect of the Judge’s decision.

District Court judgment

[9]      Judge Ronayne summarised the offending as follows:

[3]       I turn to the facts.  After setting up your company, Ormat Limited, you commenced in business importing flavoured tobacco from the Middle East.   You operated a sophisticated system of double invoicing from the supplier.  The supplier would, at your request, send you a low value invoice and associated packing slip which you would use to dupe your Customs broker  into  filing  false  and  misleading  Customs  entries  with  the  New Zealand Customs Service.  At about the same time you would receive from your supplier an invoice and packing slip charging you for the full and

proper amount you were required to pay.  These documents you kept secret from Customs.  They were only found when search warrants were executed at your addresses.

[4]       I am quite satisfied that you had entered into some sort of criminal conspiracy  with  at  least  one  and  probably  more  than  one  individual associated with the supplier company.  Those individuals were working for you to produce the false documentation you used from Customs entries. Emails between you and your conspirators make the arrangement quite plain and  made  it  clear  that  you  were  setting  up  a  scheme  using  false documentation for the specific purpose of misleading Customs.  You made specific requests for low value invoices and packing slips so that Customs would impose considerably less duties and tax than would otherwise have been the case.   I am also satisfied that, while you started out with this dishonest scheme somewhat modestly by understating values, you soon realised that by grossly understating the weight of tobacco being imported you would save large amounts of duty.  A schedule produced as exhibit 12 makes this developing scheme quite apparent.

[10]     Additionally, you duped your accountant by deliberately supplying him with false details of your trading to continue your overall deception.  I am satisfied this was not done for the specific purpose of obtaining any financial advantage but rather to continue your overall deception.  It simply adds dimensions of deceit, sophistication and determination in your overall scheme.   Of course, you also on-sold goods that you knew were un- Customed.     This  gave  you  an  unfair  competitive  advantage  in  the marketplace.

[10]     Judge Ronayne set out the particulars relating to each offending importation. He concluded that in total, Mr Shakib had evaded or endeavoured to evade taxes and duties totalling approximately $313,000.   Mr Shakib had subsequently repaid the entire sum, after becoming aware of the Customs investigation against him.

[11]     In respect of factors relating to Mr Shakib personally, the Judge said:

[11]      You  have  no  previous  convictions;  however,  you  did  receive  a discharge without conviction in October 2014 for an offence you committed in 2013.  In March 2013 your driver licence was suspended for three months for the accumulation of demerit points for speeding.   Shortly prior to the expiry  of  the  suspension  you  were  caught  speeding  over  the Auckland harbour bridge.  You chose to give your brother’s details to the police rather than your own.   You pleaded guilty to driving whilst suspended and you were fined and disqualified from driving for six months.

[12]     On the offence of providing false information you unsuccessfully sought a discharge without conviction.  The presiding Justices of the Peace found the evidence you gave lacked credibility.  You appealed and the High Court discharged you without conviction on the basis that the effect on your business interests would be disproportionate to the gravity of what you had

done.  I mention all of that because you seemed to have been happy for the probation officer to be told, by you, that you have never attracted any prior convictions.   That is, as you well know, only part of the story.   It must therefore [be] the case that I have to take a  measured approach to any discount for good character later in this sentencing exercise given your admitted dishonesty to the police in an endeavour to avoid criminal responsibility and given the duration of this offending that I am dealing with covering, as it does, a period of four and a half years – that is, from March

2009 to September 2013.

[12]   The Judge then addressed the contents of the pre-sentence report.   He acknowledged that the report writer had classified Mr Shakib as being at low risk of re-offending and low risk of harm, but noted that this could be partially attributed to Mr Shakib’s failure to disclose his other offending.  The Judge acknowledged, but rejected, Mr Shakib’s claim that he had made a mistake and was remorseful for his actions, on the basis that the offending had continued for four and a half years.  The Judge considered that Mr Shakib’s expression of remorse was intended to minimise his offending and to avoid taking full responsibility.   This was consistent with a further statement in the “Attitudes” section of the pre-sentence report that Mr Shakib had attempted to shift the blame for some of his offending, stating that it was down to one particular supplier.

[13]     The Judge took the charges of using a document for pecuniary advantage as the lead offence.  He identified the aggravating features of Mr Shakib’s offending as being the size of the fraud  (although  the Judge acknowledged  that  it had  been repaid); the fact that Mr Shakib’s offending involved a sophisticated, highly premeditated and prolonged course of deceit; the vulnerability of the victim, in that New Zealand’s border control systems rely largely on the honesty of participants; and that Mr Shakib’s offending was motivated by greed.

[14]     The Judge noted that Mr Shakib had repaid what he stole.  However, Judge Ronayne did not consider this to be a mitigating factor, as Mr Shakib had simply fulfilled his legal obligations.  The Judge considered that Mr Shakib’s claimed remorse was largely remorse for his own situation and therefore found that little weight could be attached to it.  The Judge also noted that although Mr Shakib had received a number of character references, there was some doubt as to whether the

authors had understood the purpose of writing the letters and whether they were aware of the full situation.

[15]     Taking those factors into account, the Judge adopted a starting point of four years’ imprisonment on the lead charges which carry a maximum penalty of seven years’ imprisonment.  Although, the Judge then noted that that was a global starting point for all the charges except the two separate, although related charges, of selling un-Customed goods and false accounting.  The Judge uplifted the starting point by three months for these two latter offences.  The Judge then allowed a reduction of

15 per cent to reflect Mr Shakib’s repayment and a further three month reduction for remorse and lack of prior convictions, resulting in a total discount of 21.6 per cent. The final sentence was one of three years and four months’ imprisonment.

[16]     Judge Ronayne then considered whether to make an order restoring the seized goods  to  Mr  Shakib’s  company,  Ormat.    The  Judge  considered  it  would  be appropriate to convict and discharge the company.   Given that result, the Judge considered that he did not have jurisdiction to make an order restoring the seized goods.

Approach on appeal

[17]     A person who is convicted of an offence may appeal against the sentence imposed for that offence, unless the sentence is one fixed by law.  Section 250(2) of the Criminal Procedure Act 2011 states that the appellate court must allow the appeal if satisfied that:

(a)       for  any  reason,  there  is  an  error  in  the  sentence  imposed  on conviction; and

(b)      a different sentence should be imposed.

[18]     In any other case, the court must dismiss the appeal.7

7      Criminal Procedure Act 2011, s 250(3).

[19]     The Court of Appeal in Tutakangahau v R has confirmed that s 250(2) was not intended to change the previous approach taken by the courts under the Summary Proceedings Act  1957.8   Further,  despite  s  250  making  no  express  reference  to “manifestly excessive”, this principle is “well-engrained” in the court’s approach to sentence appeals.9

[20]     The approach taken under the former Summary Proceedings Act was set out in R v Shipton:10

(a)      There must be an error vitiating the lower Court’s original sentencing discretion: the appeal must proceed on an “error principle.”

(b)To establish an error in sentencing it must be shown that the Judge in the lower Court made an error whether intrinsically or as a result of additional material submitted to the appeal Court.

(c)      It is only if an error of that character is involved that the appeal Court should re-exercise the sentencing discretion.

[21]     The High Court will not intervene where the sentence is within the range that can properly be justified by accepted sentencing principles.  Whether a sentence is manifestly excessive is to be examined in terms of the sentence given, rather than the process by which the sentence is reached.11

Grounds of appeal

[22]     Mr Shakib appeals his sentence on the bases that:

(a)      The  starting  point  and  end  sentence  were  manifestly  excessive, especially when viewed in light of analogous offences, namely tax

evasion and benefit fraud.

8      Tutakangahau v R [2014] NZCA 279, [2014] 3 NZLR 482 at [26]-[27].

9      At [33], [35].

10     R v Shipton [2007] 2 NZLR 218 (CA) at [138]-[140].

11     Ripia v R [2011] NZCA 101 at [15].

(b)The discounts applied were not given sufficient weight, or were not applied at all.

(c)       Judge Ronayne erred by misstating the quantum of the fraud.

[23]     Mr  Shakib  also  appeals  the  decision  of  the  Judge  not  to  exercise  his discretion under s 236(2) of the Act, arguing that the Judge did not give sufficient weight to the very high value of the goods in question, around $1.1 million.

Starting point

[24]     Although the alleged error in quantum was listed  as the third ground of appeal, it seems appropriate to consider this point first since my conclusion on this issue will affect the starting point.

[25]     Mr Arman, who appeared on behalf of Mr Shakib, submitted that Judge Ronayne erred when he stated the quantum of Mr Shakib’s fraud to be $313,000. This error was said to arise from two sources. The first was that the evasion total of

$313,000 included a total of $66,240.24 for GST collected on behalf of the Commissioner of Inland Revenue which could have been immediately claimed as an input tax credit by Ormat.   On that basis, Mr Arman argued that the figure of

$313,000  overstated  the  net  loss  to  the  New  Zealand  community  arising  from Mr Shakib’s offending.  Second, Mr Arman argued, the Judge erred in describing the amounts evaded on three of the charges, since the Judge referred only to the total duty that should have been paid, without giving any discount for the amounts that were actually declared.

[26]     These submissions can be addressed in relatively short order.  I do not accept that the quantum of GST that may have been claimed by Ormat is a matter which can be taken into account when determining the quantum of the fraud.   The fact that Ormat  may  have  missed  out  on  GST  input  credits  as  a  result  of  Mr  Shakib’s offending does not alter the facts of that offending.  As far as Mr Arman’s second submission  is  concerned,  I  accept  that  the  Judge  erred  when  he  described  the amounts that were evaded in respect of charges 17, 20 and 21.  However, the total

amount stated ($313,000) was correct, showing that these errors did not affect the outcome of the sentencing decision.

[27]     Mr Arman then submitted that the starting point of four years’ imprisonment was  manifestly  excessive.    He  submitted  that  the  starting  point  in  respect  of Mr Shakib’s  offending  should  be  assessed  by  analogy  to  other  cases  where individuals  seek  to  defraud  the  State,  namely  tax  evasion  and  benefit  fraud.12

Mr Arman referred me to a number of cases which, in his submission, demonstrated that  the  starting  point  should  have  been  something  in  the  region  of  between

18 months’ and three years’ imprisonment.13   I refer to three of those cases by way of

illustration.

[28]     In Bench v Commissioner of Inland Revenue the appellant sought to overturn an  end  sentence  of  19 months’  imprisonment  on  78  charges  under  the  Tax Administration Act 1994, the most serious of which carried a maximum sentence of five  years’ imprisonment.    The  offending  resulted  in  an  estimated  tax  loss  of

$399,827.09 and the appellant made reparation payments totalling $21,400.   The District Court Judge adopted a starting point of 28 months’ imprisonment, which was upheld on appeal.

[29]     The appellant in Mehmood v R had similarly pleaded guilty to three offences against the Tax Administration Act.  The three offences related to 144 false returns which  Mr Mehmood  had  filed over  a period  of five  and  a half  years  between

31 October 2005 and 4 November 2010.   The core tax evaded as a result of the

offending was in excess of $1 million, as well as statutory interest and penalties of

12     Citing Barron v Commissioner of Inland Revenue [2014] NZHC 2249, (2014) 26 NZTC 21-102 at [14].

13     Commissioner of Inland Revenue v Zhi DC Palmerston North CRI-2009-054-3070, 2 February

2010; R v Klintcharova [2013] NZHC 2778, (2013) 26 NZTC 21-046; Bench v Commissioner of Inland Revenue [2017] NZHC 355, (2017) 28 NZTC 23-005; Visser v New Zealand Police [2015]  NZHC  3275;  Mitha  v  New  Zealand  Police  HC  Auckland  CRI-2006-404-266,  28

September 2006; R v Duncan DC Christchurch CRI-2006-009-2932, 2 October 2009; Mehmood v R [2015] NZCA 338, (2015) 27 NZTC 22-020; Clemm v Commissioner of Inland Revenue (2005) 22 NZTC 19,495; R v Smith [2008] NZCA 371, (2009) 24 NZTC 23,004; Zaheed v R [2010] NZCA 573, (2011) 25 NZTC 20-018; Wang v R [2016] NZCA 56, (2016) 27 NZTC 22-

043; Walker v Ministry of Social Development [2014] NZHC 1386; Steer v New Zealand Police [2016] NZHC 877; Lee v Ministry of Social Development [2014] NZHC 3199; Brownlow v Ministry of Social Development [2013] NZHC 3538.

around $3.4 million.  The Court of Appeal upheld the starting point of four years’

imprisonment that had been adopted by the District Court Judge.

[30]     In  Clemm  v  Commissioner  of  Inland  Revenue,  the  appellant  sought  to

overturn a sentence of two and half  years’ imprisonment imposed in respect of

25 charges of using documents with intent to defraud, carrying a maximum sentence of 10 years’ imprisonment.  Eighteen of those charges related to under-payment of income tax and ACC levies from her practice, which resulted in liability for tax of

$197,630.37 and an understatement of GST of $74,065.70 before the imposition of penalties.  The remaining charges concerned funds stolen by Ms Clemm, a lawyer, from her clients over a period of four years.  Ms Clemm had repaid the money owed to her clients and had paid a sum of $415,000 to the Commissioner for unpaid core tax, GST and use of money interest.   The District Court Judge adopted a starting point of four years’ imprisonment on all charges, which was upheld by the High Court on appeal.

[31]    The respondent referred to a number of cases which, in its submission, demonstrated that the starting point of four years’ imprisonment was justified.  One of  those  cases  is  particularly  relevant  to  the  present  appeal.    The  appellant  in Eade v Police   pleaded   guilty  to   14   charges   of  tax   evasion   under   the  Tax Administration Act and four charges of fraud under the Crimes Act 1961.  The latter charges carried a maximum penalty of 10 years’ imprisonment.  The tax offending occurred over the course of approximately four years and demonstrated a degree of sophistication and planning.  The District Court Judge took a starting point of three and a half years’ imprisonment in respect of the tax offending, which was endorsed on appeal.

[32]     Each of the parties, but particularly the Crown, also referred me to cases in which the offender had  perpetrated a fraud  against a private party, typically an employer.   The sentences that were imposed in those cases were generally higher than those imposed in cases of fraud perpetrated against the State.   I agree with Mr Arman that cases falling in the latter category are more analogous to the present offending.   I note, however, that the offences of tax evasion, in particular, carry a maximum penalty of five years’ imprisonment, whereas the charges in this case of

dishonestly using a document carry a maximum penalty of seven years’ imprisonment. That difference must also be reflected in the starting point imposed in the present case.

[33]     Mr Shakib’s offending was deliberate and persistent, involving 15 separate importations over four and a half years.  The offending itself was sophisticated and the amount of the fraud was substantial.  Having regard to the cases which counsel referred to me, I am satisfied that a starting point of four years’ imprisonment was open to Judge Ronayne as was the uplift of three months for the two separate although related charges.

Adjusting the starting point

[34]     Mr Arman submitted that the Judge erred when adjusting the starting point. Specifically, Mr Arman said, the Judge gave insufficient weight to Mr Shakib’s previous  good  character,  remorse,  reparation  and  his  personal  circumstances. Further, the Judge erred by failing to give an additional reduction in sentence to recognise an unlawful seizure of Mr Shakib’s laptop during a search of his home by police.   Mr Arman did not refer me to any cases specifically in support of these submissions.

[35]     Counsel for the respondent, Ms Hu, referred me to a number of cases in which a reduction had been granted for various mitigating factors including the payment of reparation.  In R v Davis, the Court of Appeal upheld a discount of 25 per cent to reflect the appellant’s guilty plea, her health and personal circumstances, her lack of previous conviction and reparations made, which were approximately one

third of the total amount stolen.14     In Thomas v Police, the High Court upheld a

reduction of 37.5 per cent from the starting point to reflect early guilty pleas, ill health and a reparation payment totalling 50 per cent of the amount taken.15   Finally, in Jooste v Police, the High Court upheld a reduction of 35 per cent to reflect the appellant’s  lack  of  previous  convictions,  previous  good  character,  low  risk  of

reoffending, guilty pleas, cooperation and reparation of $100,000.16

14     R v Davis [2009] NZCA 26.

15     Thomas v Police HC Auckland CRI-2008-404-343, 9 February 2009.

16     Jooste v Police HC Auckland CRI-2010-404-315, 16 November 2010.

[36]     Judge Ronayne in his decision gave a total reduction of 21.6 per cent, which was said to reflect Mr Shakib’s previous good character, his remorse and reparations paid.  This is lower than the discounts given in the cases I have described above. However the discounts in those cases incorporated a reduction to reflect the appellants’ guilty pleas, which would normally attract a discount of up to 25 per cent. Mr Shakib does not have the benefit of a guilty plea discount.  His conduct in the course of the investigation and the subsequent trial also left much to be desired, and would tend to undermine his claims of remorse.  On the other hand, Mr Shakib made full reparation of the defrauded amount.  That deserves recognition.  However, the fact remains that Mr Arman was never entitled to that money at all.

[37]     I do not consider that Judge Ronayne erred in failing to make any additional reduction to reflect the admission of illegally obtained evidence.  Mr Arman did not provide any authority in support of his submissions on this point, which appear to be in direct conflict with existing authority in the Supreme Court and Court of Appeal.17

Restoration of seized goods

[38]     Finally, Mr Arman submitted that Judge Ronayne erred in failing to exercise his discretion under s 236(2) of the Act to order restoration of the seized goods.  In particular, he submitted that the Judge erred in finding that he did not have jurisdiction to make an order of that nature.   If this Court accepted that there was jurisdiction to make an order, Mr Arman said, then it would be appropriate for the Court to exercise its jurisdiction on appeal to make an order, taking into account the high value of the goods condemned and the fact that Mr Shakib had paid all customs duties in full prior to his trial.  Refusing to make an order, Mr Arman said, would result in the situation where Mr Shakib had effectively paid a significant amount of duties for goods that he would never receive.

[39]     Mr Arman also submits that, taking into account both the sentence imposed and the refusal to order restoration has resulted in an overly severe penalty.

17     Hamed v R [2011] NZSC 101, [2012] 2 NZLR 305; R v Shaheed [2002] 2 NZLR 377 (CA).

[40] For the reasons set out at [4] - [8] above, I am satisfied that Judge Ronayne erred when he found that he did not have jurisdiction to make an order under s 236(2). In my view, s 236(2) permits the sentencing court to make an order under that subsection when any person is sentenced for the relevant offending; it is not necessary that the person being sentenced is the legal owner of the goods. That being the case, it is necessary to consider whether to exercise my discretion under s 236(2) in the present case to order restoration of the seized goods.

[41]     Section 236 provides:

236     Condemnation of seized goods on conviction

(1)      Subject to subsection (2), where this Act provides that on the commission of any offence any goods are forfeited, the conviction of any person for that offence has effect as a condemnation, without suit or judgment, of any goods that have been seized in accordance with this Act and—

(a)      in respect of which the offence was committed; or

(b)      which were forfeited under any of subsection (3), (4) or (5)

of section 225.

(2)       Where the court imposes a sentence on any person on the conviction of that person for an offence to which subsection (1) applies, the court may, if it thinks fit, order the restoration of the goods forfeited to the person from whom the goods were seized and, where such an order is made, the conviction does not have effect as a condemnation of those goods.

(3)       In making an order pursuant to subsection (2) the court may impose such conditions as it thinks fit.

(4)       Subsection (2) does not apply where the goods have, before the conviction, been sold, or restored to the person from whom they were seized, or otherwise disposed of by the chief executive under any other provision of this Act.

[42]     It is clear from the terms of s 236 that restoration of the seized goods is considered to be the exception, rather than the rule.  This is reflected in the leading decision regarding the application of s 236(2), New Zealand Customs v Brereton, in which Wild J held:18

[50]     The s 236(2) discretion to restore goods is a qualification on the default  position  that  goods  in  respect  of  which  an  offence  has  been

18     New Zealand Customs Service v Brereton HC Nelson CRI-2006-442-18, 23 November 2007.

committed should be condemned.   The default position provides the conceptual starting point for the exercise of the discretion.   The factors marshalled in support of the restoration of the goods must be sufficient to overcome the default position. The Judge ordering restoration of goods must be satisfied that the circumstances or factors favouring restoration outweigh the legislative policy that conviction for an offence should result in the condemnation of the related goods.

[51]     It follows that the “just and equitable” test adopted by the Judge is liable to mislead the Court in the exercise of its discretion.  It suggests the Court’s role is to weigh all the factors equally and order a result equitable in the circumstances.   But the proper approach is surely to measure the sufficiency of the factors favouring restoration against the policy favouring condemnation.     The  nature  of  the  discretion  is  such  that  there  is  a presumption in favour of the condemnation of goods seized in connection with criminal offending, a presumption not lightly to be disturbed.

[57]     For  the  future,  I  summarise  what  I  consider  to  be  the  correct approach:

(a)       There is a presumption that goods in respect of which an offence has been committed should be forfeited and condemned.    That  presumption  exists,  in  part,  to  deter evasion of Customs and Excise duty and assist in the enforcement of the Customs legislation.

(b)       Before ordering restoration, the Judge must be satisfied that the circumstances or factors favouring restoration outweigh the presumption that a conviction should result in the condemnation of the goods in question.   This means the counter-considerations must be compelling to justify restoration.

(c)      Without  attempting  exhaustively  to  list  them,  the circumstances or factors that may support restoration include disproportionate hardship to the offender and/or harm to innocent third parties.   Depending on the circumstances of the case and the nature of the forfeiture, it may also  be possible to argue that the goods in question were only of limited or indirect significance to the offending, or that the offender had a legitimate purpose for part of the goods.

(d)       The issue of forfeiture and restoration should not be allowed to skew the sentencing exercise.   The scheme of the Act expressly contemplates both the imposition of penalties and the forfeiture and condemnation of goods.

[43]     I adopt that approach in the present case.

[44]     I am not satisfied that  the circumstances or factors favouring restoration outweigh the presumption that a conviction should result in the condemnation of the

seized goods.  I acknowledge that the goods have a high value and that Mr Shakib has now made reparation to the respondent.     However, I am not satisfied that condemnation will result in disproportionate hardship to Mr Shakib.  He engaged in a deliberate and prolonged course of deceit, knowing his conduct to be illegal.  The seizure of the goods involved in that course of deceit is unfortunate for Mr Shakib, but was an entirely predictable outcome of his offending.  Nor is there any harm to innocent third parties.   The owner of the seized goods is Ormat, which was also convicted for its role in the offending.

[45]     As Wild J makes clear in [57(d)] outlined above, the issue of forfeiture and restoration should not be allowed to skew the sentencing exercise.  That effectively answers Mr Arman’s submission set out in [39] above.

[46]     Finally, as far as the payment of reparation is concerned, Mr Shakib made that payment voluntarily, knowing that he would not be entitled to receive the seized goods.  He has received credit for that payment in the sentencing exercise and should not be heard to complain that he has been hard done by.

[47]     There will be no order for restoration of the seized goods.

Result

[48]     The appeal is dismissed.

Gordon J

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Statutory Material Cited

0

Tutakangahau v R [2014] NZCA 279
Ripia v R [2011] NZCA 101