Shepherd v Police
[2019] NZHC 3460
•20 December 2019
IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE
CRI-2019-488-31
[2019] NZHC 3460
BETWEEN TODDY SHEPHERD
Appellant
AND
NEW ZEALAND POLICE
Respondent
Hearing: 11 December 2019 Appearances:
R Samuel for the Appellant
JMM Johnson-Aufa’i for the Respondent
Judgment:
20 December 2019
JUDGMENT OF MUIR J
This judgment was delivered by me on Friday 20 December 2019 at 11.00 am.
Registrar/Deputy Registrar Date:…………………………
Counsel/Solicitors:
R Samuel, Barrister, Newmarket, Auckland
JMM Johnson-Aufa’i, Marsden Wood Inskip Smith, Whangarei
SHEPHERD v NEW ZEALAND POLICE [2019] NZHC 3460 [20 December 2019]
Introduction
[1] In a reserved decision of Judge D J Orchard (sitting as Judge alone) dated 6 June 2019, 1 Ms Shepherd was found guilty in respect of one charge of obtaining by deception2 and six representative charges of theft by a person in a special relationship.3
[2] She was sentenced to three years’ imprisonment and ordered to pay reparation of $111,577.67.4
[3]She appeals her conviction and sentence.
Background
[4] In 2012 Ms Shepherd was employed by CCS Disability Action (CCSDA) to act as a regional manager for the central North Island area.
[5] When appointed to the position, the defendant listed a Hastings address as her home and asked to be based in the Napier office. CCSDA was, however, aware that her family at that stage still resided in Kaitaia. Initially it was intended that the family would move to the Hawkes Bay but this did not eventuate and ultimately Ms Shepherd’s remuneration package was supplemented by additional amounts (increased annually) to allow her to return periodically to Kaitaia.
[6] Soon after commencing employment, she acquired a company credit card. It was alleged that she did so dishonestly, giving rise to the charge of obtaining by deception. It was further alleged that she misused the card for unauthorised personal expenditure between 2012 and 2015. This was the basis for the charges of theft by a person in a special relationship.
1 R v Shepherd [2019] NZDC 10606 [Conviction Decision].
2 Crimes Act 1961, ss 240(1)(a) and 241(a). Maximum penalty seven years’ imprisonment (Charge 1).
3 Crimes Act 1961, ss 220 and 223(a). Maximum penalty seven years’ imprisonment (Charges 2- 7).
4 R v Shepherd [2019] NZDC 19871 [Sentencing Decision].
The District Court decisions
Conviction
[7] Judge Orchard found that Ms Shepherd acquired the credit card by falsely representing to the ANZ Bank that CCSDA’s Chief Executive Officer, Mr David Matthews, had authorised her to have one.
[8] The Judge further found that, over the next three years, Ms Shepherd used the card extensively for both work and personal purposes, the latter being unauthorised and known by Ms Shepherd to be such. The unauthorised expenditure was identified as having occurred in six separate categories – accommodation, cash withdrawals, miscellaneous personal expenses, flights, rental car hire and petrol station charges. These categories formed the basis of the six representative charges of theft. The Judge accepted that the Serious Fraud Office’s Accountant, Ms Reed, had been “conservative” in isolating the transactions on which the prosecution was based.5
[9] Her Honour noted that the defence “largely failed to confront the specific transactions, the detail, relied upon by the prosecution”.6 Rather it focused on the credibility of CCSDA’s Chief Executive Officer, Mr Matthews, whom the defence said had a motive for making false allegations to deflect attention from CCSDA’s alleged failure to distribute government funds to support workers. The Judge rejected that allegation which, she said, failed to engage with the documentary evidence provided by Ms Reed. She also noted that Mr Matthews had no responsibility for the alleged non-distribution.
[10] The defence also argued that the Crown was unable to prove that Ms Shepherd had control over the card, that such control was in circumstances that required her to account or deal with the property in accordance with the requirements of another person, that she knew of those circumstances, or that she intentionally dealt with the property or intentionally failed to account for it otherwise than in accordance with those requirements.
5 Conviction Decision at [79].
6 Conviction Decision at [81].
[11] The Judge rejected all these arguments. She held that no senior manager such as Ms Shepherd could be unaware of an employee’s fundamental obligation not to use their employer’s funds for their own benefit and to keep accurate records.
[12] She found the total amount misappropriated to be $111,577.67 which aligned with the schedules prepared by Ms Reed.
Sentencing
[13] The Judge identified the relevant purposes of sentencing as being to hold Ms Shepherd accountable for the harm done to the complainant and the community, to promote in her a sense of responsibility and acknowledgement of that harm, to provide for the interests of the complainant, including reparation, and to denounce and deter such offending.7
[14] Her Honour adopted the normal sentencing process of taking a starting point for the offending based on its aggravating and mitigating features and then adjusting for personal aggravating and mitigating factors.8
[15] In terms of starting point, she identified the aggravating features as the quantum of loss, the length and systematic nature of the offending (occurring as it did over three years with 626 separate transactions), premeditation, breach of trust, and the effect on the complainant. The Judge also commented that Ms Shepherd had put Mr Matthews through significant stress because of her attack on his character, and had initially tried to lay the blame on others, causing them stress and anxiety also. She took a starting point of three years and six months, which she identified as being at the lower end of the available range.9
[16] In terms of personal mitigating circumstances, the Judge did not consider a discount for good character was available, given the length of time over which the offending had occurred and Ms Shepherd’s endeavours to deflect responsibility onto
7 Sentencing Act 2002, s 7.
8 R v Taueki [2005] 3 NZLR 372 (CA); and Hessel v R [2010] NZSC 135, [2011] 1 NZLR 607.
9 Having considered several cases, including Varjan v R CA97/03, 26 June 2003; McGregor v R [2015] NZCA 565; Harford v Police [2014] NZHC 1886; Kerwin v Police [2014] NZHC 3106; Hii v R CA99/05, 10 April 2006; and Ransom v R [2010] NZCA 390, (2010) 25 CRNZ 163.
other members of the organisation. Nor did she consider a discount for cultural circumstances was appropriate, as she found that the offending was motivated by “good old-fashioned greed, I’m afraid”.10 She was in that context broadly critical of the s 27 Cultural Report which the Court had received, stating that the report writer had allowed herself to become Ms Shepherd’s apologist “rather than really giving information which is based on a proper assessment of the background to this offending”.11 Neither did the Judge consider a discount for remorse was appropriate, because “sadly, that is simply not present in this case”.12
[17] The Judge did, however, allow a cumulative discount of six months on account of:
(a)An offer of restorative justice.
(b)An offer of reparation of $3,400 which was all that the defendant was then able to pay.
(c)The fact that Ms Shepherd had done good work in the past in the education area and was likewise regarded as a valued employee of the He Korowai Trust with which she was currently employed as Practice Manager. Although not specifically identified as such, the Judge clearly thought that Ms Shepherd had strong rehabilitative prospects.
[18] Accordingly, she sentenced Ms Shepherd to three years’ imprisonment and made a reparation order in the amount of $111,577.67 with $3,400 of that to be paid immediately.
10 Sentencing Decision at [58].
11 Sentencing Decision at [35].
12 Sentencing Decision at [55].
Conviction appeal
Law
[19] Section 229 of the Criminal Procedure Act 2011 sets out a person’s right to appeal against conviction. The appeal is by way of re-hearing.13 The Court must allow the appeal if it is satisfied that the Judge erred in his or her assessment of the evidence to such an extent that a miscarriage of justice occurred, or a miscarriage of justice has occurred for any reason.14
[20] A miscarriage of justice means any error, irregularity, or occurrence in or in relation to or affecting the trial that has created a real risk that the outcome of the trial was affected, or has resulted in an unfair trial, or a trial that was a nullity.15
[21] A “real risk” that the outcome was affected exists when “there is a reasonable possibility that a not guilty (or more favourable) verdict might have been delivered if nothing had gone wrong”.16 This standard means that an appellant does not have to establish a miscarriage in the sense that the verdict actually is unsafe, only that there is a real possibility the verdict would be unsafe.17
What the appellant alleges
[22] Although the appellant’s Notice of Appeal challenged the convictions on multiple grounds, Mr Samuel proceeded on two points only at the hearing.
[23] The first related exclusively to Charge 1 – namely that the defendant had by deception obtained possession of an employer credit card. Mr Samuel submitted there was no evidence that the alleged deception – advice to the Bank that Mr Matthews had given Ms Shepherd approval to apply for one – represented an operative inducement in terms of the Bank’s subsequent decision to issue it.
13 Sena v Police [2019] NZSC 55 at [32], such that the principles in Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103; [2008] 2 NZLR 141 apply.
14 Sections 232(2)(b)–(c).
15 Section 232(4).
16 R v Sungsuwan [2005] NZSC 57, [2006] 1 NZLR 730 at [110] per Tipping J.
17 At [110].
[24] Mr Samuel also advanced what he called a “fall back position” but which was in fact a submission potentially applicable to all charges. He said that justice had miscarried as a result of Ms Shepherd not having had the opportunity to be tried by a jury. He submitted the convictions should be set aside and a retrial ordered.
Charge 1
[25] The Judge found that all the elements of this charge had been proved beyond reasonable doubt. Specifically, she said that she was sure that:18
… acting with an intention to deceive, Ms Shepherd made a representation to an officer of the ANZ which was materially false i.e. that she had the authority of David Matthews to obtain a credit card in the name of CCS, that she knew of that falsity and that that false representation played a material part in her obtaining property, namely a credit card.
[26]She had earlier held that:19
I am sure that Ms Shepherd did not have Mr Matthews’ authority to obtain a credit card for CCS when she asserted that she did in her email to the ANZ at the beginning of the process of applying for a credit card. I am also sure that she knew she did not have Mr Matthews’ authority.
[27] Both passages in the judgment refer to an email to the ANZ Bank in which Ms Shepherd said:20
In addition to this, my Chief Executive, David Matthews, has given approval for me to apply for a “work” credit card. Can you please tell me what the process is for this?
[28] In response the Bank’s Assistant Business Manager, Ms Corrin, forwarded an application form. She advised:
… we can automatically approve a limit of $3,000 but if you require a higher limit we will require a copy of the financial accounts.
[29] On 12 June 2012 Ms Shepherd submitted a standard form ANZ credit card application. It was signed by her and co-signed by an authorised signatory (Ms Mills) on account suffix 00. The application nominated this account:
18 Conviction Decision at [85].
19 Conviction Decision at [79].
20 Undated on the copy supplied to me but sent in or around June 2012.
… to be debited monthly with total business card debt in terms of clause 11 of the Bank’s Facility Terms and Conditions.
[30] The application form did not contain any representation as to Ms Shepherd’s alleged authority from Mr Matthews to obtain the card.
[31] On 14 June the application was processed and approved by an ANZ Relationship Manager identified as Amerillis Farmer.
[32]The Crown did not call anyone from the Bank to give evidence.
[33] The charge which Ms Shepherd faced was under s 240 of the Crimes Act 1961 which relevantly provides:
Everyone is guilty of obtaining by deception or causing loss by deception who, by any deception and without colour of right, —
(a)obtains ownership or possession of, or control over, any property, or any privilege, service, pecuniary advantage, benefit, or valuable consideration, directly or indirectly.
[34] Since the benefit must be obtained “by deception” it is necessary that there be a link between the two. As Adams on Criminal Law notes,21 frequently the prosecution will produce direct evidence from the victim that it was the deception practised by the defendant which induced the victim to hand over the property in question. However, the learned authors also make the point that, as a matter of law, such evidence is not essential,22 and the fact finder may be invited to draw an inference of reliance where this is appropriate.23 To that end the House of Lords held in R v Lambie that:24
If the only reasonable explanation of the facts is that the victim relied on the false representation, then an inference of reliance can be drawn and direct evidence is not needed. Reliance may also be established by inference from documents produced as evidence.25
21 CA 240.05.
22 Citing R v Xu [2008] NZHC 779 at [65].
23 R v Sullivan (1945) 30 CR App R 132 (CCA).
24 R v Lambie (1981) 2 All ER 776 (HL).
25 R v Park (2010) ABCA 248, (2010) 259 CCC (3D) 50. (Reliance on false representations made by mortgage applicants established by documents establishing the policies and practices of the lender).
[35] In the present case the Judge found that the appellant’s representation to Ms Corrin, that she had the authority of Mr Matthews to obtain a credit card played a material part in her obtaining the card. In the absence of direct evidence from any Bank officer, that conclusion can only have been reached on the basis of an inference of reliance at the point the credit card was issued.
[36] In my view, the case was not one where the only reasonable explanation of the facts was that the Bank had relied on such representation. I consider it equally, if not more likely that Ms Farmer’s approval of the credit card proceeded simply on the basis that the Bank had received a completed application, co-signed by Ms Mills, and which sought a credit limit at the level “automatically” approved. It follows, in my view, that the Court could not be “sure” of the necessary causal connection.
[37] Ms Johnson-Aufa’i says that, when the application was subsequently submitted, it amounted “effectively” to a repetition of the previous representation. That is not the basis upon which the Crown case was advanced at trial and, even if continuing representation could be considered implicit in the application (a proposition I do not necessarily accept), there was again no evidence that it was operative in respect of the Relationship Manager who processed it. Given that Ms Mills had co-signed the application and it was within the Bank’s “automatic approval limits” there is every reason to consider that it was not. Certainly, there was no evidence that Ms Corrin had communicated to Ms Farmer any of the advices received from the appellant such that Ms Farmer assumed authority from Mr Matthews. And the evidence also established that a card could have been legitimately issued without Mr Matthews’ imprimatur and on the basis of local branch authority. So, there was no reason why Ms Farmer would have been in any way exercised about Mr Matthews’ position, particularly having noted that the application was countersigned by an authorised signatory on the branch account.
[38] For these reasons I allow the appeal in relation to Charge 1 and quash the conviction. However, responsibly, Mr Samuel does not contend that such result would of itself materially affect the sentencing outcome.
Alleged miscarriage as a result of election
[39]It is necessary that I give some background to this submission.
[40] Ms Shepherd was initially represented by Mr Bioletti who, Mr Samuel says, was instructed to have the prosecution transferred from the Kaitaia District Court (where it had been initiated) to the Auckland District Court and to there enter guilty pleas. The reason for the change of venue was to spare Ms Shepherd embarrassment within her local community. That application was successful, and Mr Bioletti then appeared for Ms Shepherd in the Auckland District Court on 26 January 2018.
[41] Mr Samuel says, however, that when disclosure was made (apparently immediately prior to the mention in Auckland), Ms Shepherd changed her instructions to Mr Bioletti, directing him to enter not guilty pleas.
[42] The mention was before Judge Paul. Not guilty pleas were entered, and Mr Bioletti elected trial by Judge alone.26 In respect of each of the charges Judge Paul notated the file either “Elects Judge Alone Trial” or the equivalent acronym “EJAT”. At that point the prosecution was re-transferred to the Kaitaia Court.
[43] The matter was next called in Kaitaia on 29 March 2018 when Ms Shepherd was represented by duty solicitor, Mr Pirangi. The principal focus of that hearing was name suppression. It returned to the Court on 14 June 2018 when Mr Pirangi advised that Ms Shepherd sought leave to vacate her judge alone election and elect a trial by jury. Directions were given for timetabling the application.
[44] From that point Ms Shepherd was represented by Mr Samuel. In her affidavit in support of the application she said she did not “recall anything about the election” as she “just assumed her matter would be tried in front of a jury”. She alleged she did not receive any advice either from Mr Bioletti or Mr Pirangi about election “and just assumed it is what would happen”.
26 I note that there is in fact no requirement for a defendant to “elect” to be tried by a Judge. The only election decision is an election of jury trial. A defendant who does not elect a jury trial will be tried by a Judge. Nevertheless, in this case a positive judge alone “election” took place.
[45] The application to set aside the election came before Judge K B de Ridder on 2 August 2018. He delivered a reserved decision on 28 September 2018.27 The Judge recorded Mr Samuels’ submission that, when Ms Shepherd appeared in the Auckland District Court on 26 January 2018:28
The matter came before the Registrar … and no election was entered and so by default the matter proceeded on the Judge alone trial track.
[46] His Honour observed that this submission was clearly wrong because the Court file indicated that the hearing on 26 January 2018 was before Judge Paul where Ms Shepherd had been represented by Mr Bioletti. He described Mr Bioletti as a very experienced counsel, the obvious inference being that such a counsel would not make an election without advice and instruction. He appears to have discounted Ms Shepherd’s affidavit evidence that neither Mr Bioletti or Mr Pirangi gave her advice about election on the basis that she was clearly confused about how the election had occurred and when – in her own words not recalling “anything about” it.
[47] He further noted that the application before him was not one advanced on the grounds of “change of circumstances” in terms of s 51(2) of the Criminal Procedure Act 2011. He said that:29
In this case there is in fact no change in circumstance between the time the election of trial mode was made and the date of the application to vacate the election.
[48] Rather, he said the argument was that the election was one “on which the defendant was not properly advised, and in relation to which a considered decision was not made.”30 He rejected that argument. He said that the only logical conclusion was that the defendant, through counsel, had clearly elected a judge alone trial. He noted that there was no affidavit from Mr Bioletti supporting the defendant’s contentions.
27 New Zealand Police v Shepherd [2018] NZDC 2037.
28 At [13].
29 At [17].
30 At [17].
[49] Judge de Ridder’s decision was one from which an appeal by leave to the High Court was available on a question of law.31 No such appeal was brought. It was also open to Ms Shepherd to bring a further application alleging a change of circumstances, as for example if late disclosure materially changed the landscape of the trial.32 But no such application was made either. Instead the matter simply tracked to the scheduled Judge alone trial on 19 November 2018. The matter was then heard over the five-day period 19-23 November 2018.
[50] Mr Samuel refers me to a number of authorities emphasising that the right to a jury trial is one of the most fundamental rights in our criminal law.33 I take no issue with that principle.
[51] However, the distinguishing feature of this case is that there was a pre-trial application to vacate the election. In that respect the case is similar to that of Parfoot v R.34 There Mr Parfoot had initially selected trial by jury. However, after advice from his counsel, a senior trial lawyer, he made an application to change his election to Judge alone. This was granted. Counsel then had to withdraw for health reasons. Mr Parfoot’s new counsel applied to re-instate the initial jury trial election. The application was made on the basis that Mr Parfoot had not in fact ever given instructions to change his election in the first instance. The Judge declined the application because there had been no change of circumstances and found as a matter of fact that Mr Parfoot had indeed issued such instructions. The trial proceeded, and Mr Parfoot was convicted. He appealed his conviction on the basis, among others, that denial of a jury trial amounted to a miscarriage of justice.
[52] Katz J found that there was no such miscarriage. She was not persuaded that the Judge had erred in finding that senior counsel had acted under instructions and that there was no material change of circumstances.
31 Criminal Procedure Act 2011, s 296; Anderson v R [2015] NZCA 518, [2016] 2 NZLR 321 at [58].
32 Mr Samuel says there was late disclosure which simplified the trial to a point where although “traditionally a case of this nature is better heard by a judge alone” it became suitable to be heard by a jury.
33 Stoves v Police HC Christchurch, CRI-2003-409-067, 28 October 2003 at [19]; cited with approval in Kumar v Police [2018] NZHC 3202 at [22]; Siemer v Solicitor-General [2010] NZSC 54, [2010] 3 NZLR 767; Niuia-Tofa v New Zealand Police [2019] NZHC 1003.
34 Parfoot v R [2018] NZHC 2702.
[53]Significantly in the context of this case, she also held:
[35] Finally, Mr Parfoot had an opportunity to appeal the pre-trial ruling before the trial commenced.35 He did not do so. It must therefore be shown on this appeal that a miscarriage of justice has resulted from the mode of trial. I have not been persuaded that it has.
[54] I am similarly not persuaded that a miscarriage of justice has occurred here as a result of trial mode. Focusing as I now do on Charges 2-7, the position at trial was, as indicated, that the detail of the specific transactions on which the Crown relied was largely unaddressed. For example, of approximately 120 identified cash withdrawals ranging between $20 and $1,200 (several of which were from overseas ATM’s and for none of which was there any or adequate documentary support), the defence position was that at least some of the withdrawals had been used for koha. But as the Judge noted:
… the only significant sum [of koha] referred to in cross-examination was
$1,500 which it was suggested was paid to Naide Glowish. That this payment was made was not proved but based on an assertion that Ms Paito said was made to her by Ms Shepherd. Ms Paito did not witness any such transaction. I attach no weight to that evidence.
[55] Likewise, in the context of this appeal, none of the Judge’s specific findings are attacked, whether on account of her assessment of the evidence, the sufficiency of the evidence or otherwise. Mr Samuel’s submissions therefore proceed, somewhat paradoxically, on the premise that, although the verdicts are not in that sense unsafe, nevertheless if given the opportunity for a jury trial, credibility assessments may have been different. That is not a realistic submission in the circumstances of this case. Taking the alleged koha payments as an example, the jury would inevitably have been directed to ignore Ms Paito’s “evidence” and since it related to only one of dozens of withdrawals it cannot in an event be said that any injustice resulted.
[56] Likewise, although Mr Matthews’ credibility was challenged by the defence and it was suggested that he had authorised at least some of the payments or withdrawals, that submission was not and could not be advanced in relation to all the challenged transactions. Indeed, when, immediately before her resignation, several specific irregularities were drawn to Ms Shepherd’s attention she neither suggested
35 Criminal Procedure Act 2011, s 296; Anderson v R [2015] NZCA 518, [2016] 2 NZLR 321 at [58].
the transactions were authorised nor proffered any innocent explanation. Her two-line written response simply invited deduction against her final pay.
[57] So even allowing for the fact that credibility is a quintessential jury issue, this was not a case where credibility informed ultimate outcome, except possibly at the margins in respect of a small number of multiple dishonest transactions.
[58] It cannot therefore be said that there was a material risk of a miscarriage of justice arising out of mode of trial. I therefore dismiss the appeal against conviction in respect of Charges 2 – 7.
Sentence appeal
[59] The appellant does not take issue with the Judge’s starting point of three and a half years’ imprisonment. Mr Samuel concedes it was within range, albeit (and I agree) “stern”.
[60] The sentence appeal focused therefore on the Judge’s discounts from starting point. As indicated, she allowed six months. Mr Samuel says:
(a)The Judge should have been more selective in her approach to the s 27 report. Although it was open to her to consider the writer had been insufficiently objective in her assessment, nevertheless there was uncontentious material in the report indicating a high level of support for Ms Shepherd and the high prospect therefore of her successful rehabilitation.
(b)If CCSDA had followed relevant employment protocols it would, by the time Ms Shepherd’s employment came to an end, have identified all challenged expenses rather than the few in the letter which precipitated her resignation and that, if this had been the case, an “enhanced offer of reparation” could have been made at the time.
(c)The way in which the matter was prosecuted, involving representative charges covering six categories with schedules identifying challenged
expenses in each category, again frustrated meaningful reparation for the reason that in each category there were one or more expenses which were claimed as legitimate.
(d)This Court cannot discount the possibility that, in sentencing Ms Shepherd, her Honour was influenced by a belief that she had destroyed documents when that was not the case.
(e)On appeal I should take into account an enhanced reparation payment now possible on account of an advance payment made by Ms Shepherd’s current employer against her future earnings. In any event, the combination of “stern” starting point and an order for full reparation was manifestly excessive.
[61]I can address all but the last of these issues briefly.
[62] I am not persuaded by Mr Samuel’s submissions. It is unrealistic to suggest that an enhanced reparation offer could or would have been made if either the full extent of Ms Shepherd’s defalcation had been advised to her at or before termination of her employment or if the matter had not been prosecuted by way of representative charges. The position at sentencing was that she was able to offer $3,400 reparation only. There was at that point no offer, in the nature now tabled, of an advance of salary from her new employer.
[63] A statement of assets and liabilities provided in the context of the appeal confirms that, apart from the salary advance now offered, she had no ability to make immediate reparation beyond the $3,400 indicated.
[64] In relation to the Cultural Report, I agree with the sentencing Judge that the writer must have proceeded without proper reference to the schedules prepared by Ms Reed. Otherwise it would not have been possible for her to have responsibly promoted the proposition that the offending was a reflection of the appellant’s “strong sense of manaakitanga” and desires to uphold “tikanga”. This was simply not a plausible analysis, at least in relation to the majority of the offending.
[65] Nor did the Judge overlook references in the report to the support Ms Shepherd enjoyed from her current employer. Indeed, the Judge noted extensive representations by Mr Houghton, a representative of the He Korowai Trust (the Trust) and stated that she accepted him as being “quite genuine in his assessment of you, which is very favourable”.
[66] I accept that in her reserved decision, in a section of the judgment described as summarising the evidence of the witnesses, the Judge said:
[35] On the night of 22, 23 October 2015, after the office had closed and before it was opened the next day some records disappeared from the Napier office. These documents included some of the financial documents required by the auditors. Their disappearance has never been explained.
[67] Mr Samuel says that the last sentence carries with it an implication that the Judge considered Ms Shepherd responsible for the disappearance. That goes further than the statement warrants. There is no such finding. But in any event, the issue does not feature at all in the Judge’s Sentencing Decision and the submission that, in the context of sentencing, the Judge took an adverse view of the defendant on account of her possible but unproved involvement is unsustainable.
[68] The substantive issue in relation to the sentence appeal is what if any further discount should this Court give in respect of the enhanced offer of reparation made at the hearing of the appeal (and which it is now confirmed as having been paid). A related issue is whether the overall combination of a three year custodial sentence and full reparation was manifestly excessive.
[69] For the Crown, Ms Johnson-Aufa’i confirmed that the Crown regarded the enhanced offer as new information appropriately taken into account by me in relation to the appeal. She submitted that an additional discount of up to a further six months would be appropriate, making for an end sentence of two and a half years’ imprisonment.
[70] In reality the enhanced offer, when analysed as a matter of principle, amounts simply to an acceleration of the reparation order already made by the District Court. And since this has been facilitated by an allowance against future earnings from
Ms Shepherd’s new employer (which seeks repayment from salary in priority to any other creditor), meaningful additional reparation, by way of weekly payments administered through the Registrar, will likely have to await such repayment. Nevertheless, the acceleration is of material value to the complainant which, to the extent of the total payments now recorded is insulated from, for example, a loss of employment by Mrs Shepherd, her transition to a benefit and a greatly attenuated repayment schedule which may not even be fully satisfied at death.
[71] Voluntary reparation has long been accepted as appropriately recognised in mitigation of penalty. Indeed s 10(1)(e) of the Sentencing Act 2002 requires the Court to take into account:
Any remedial action taken or proposed to be taken by the offender in relation to the circumstances of the offending.
[72]In R v Patterson it was noted that:36
… all other things being equal, a fraud where stolen money is recovered is less serious than a fraud where it is not. Generally speaking, however, “the credit” in the former case is given in circumstances where the offender has, by way of reparation or through contrition, done his or her best effort to effect a full or partial recompense of the victims.
[73] Although an order for reparation amounts to “no more than refunding complainants what has been wrongfully taken from them” and is in that sense “not an additional punishment”,37 a number of cases recognise the inappropriateness of maintaining, without significant adjustment, a “stern” starting point where full reparation has also been ordered. As Pankhurst J observed in Olliver v New Zealand Police:38
In terms of the Sentencing Act the imposition of a deterrent sentence may need to bend on those occasions when it is appropriate for a reparation order to be made. Otherwise offenders who are the subject of such orders may have a justifiable sense of grievance that they are paying both in terms of their liberty and from their pocket.
36 R v Patterson [2008] NZCA 75 at [21].
37 R v Marsters [2005] 22 NZTC 19, 649 at [19] (CA).
38 Olliver v New Zealand Police CRI-2004-409-000227 at [16].
[74] Underpinning the credit for reparation are the dual considerations that reparation reinforces remorse and contrition and that it either partly or wholly remedies the harm caused. The cases also indicate howeve, a requirement for caution, that deductions for reparation do not create a two-tier sentencing approach whereby the affluent, who can afford reparation, receive lower sentences than those who cannot
– a problem which in Clemm v IRD Williams J described as “stick[ing] in the public craw”.39
[75] As to the quantum of discount which might be available, the cases establish that there is “no magic formula for assessing the impact of reparation upon a sentence of imprisonment.40
[76] In general, however, the greater the offer of reparation the greater the discount which has been allowed. For example, an offer to make full reparation of $141,000 in R v Wale resulted in a six month discount which was upheld on appeal.41
[77] Jackson v Police was a case which, like the present, involved an enhanced offer at the appeal stage.42 At the time of sentence, the offender was only in a position to offer reparation of $500 in respect of the $15,000 stolen by her, with the balance payable in weekly instalments. By the time of the appeal, full reparation had been paid. A sentence of 300 hours community work was substituted for that of six months’ imprisonment.
[78] I accept the Crown’s submission that, had an offer of reparation at the level now made occurred prior to sentencing, a total discount in excess of the six months allowed would have been given. It would have emphasised to the Judge (who was otherwise either unpersuaded or at least sceptical)43 that there was significant remorse for the offending and it would have meant that there was a meaningful contribution towards immediate remediation of harm rather than the token on offer at the time.
39 Clemm v IRD [2005] 22 NZTC 19,495 (HC) at [27] and [28].
40 Halls Sentencing at 12.2(d).
41 R v Wale [2013] NZCA 67. The discount also reflected previous good character.
42 Jackson v Police HC Invercargill CRI-2005-425-2, 22 March 2006.
43 Sentencing Decision at [43] and [59].
[79] In my view cumulative discounts of one year (approximately 33 per cent) are now justified, taking into account not only the matters relied on by the Judge but the enhanced reparation position. It is clear, and the Judge fully accepted, that Ms Shepherd has strong rehabilitative prospects having regard to the level of support she enjoyed from her whanau and her employer. This together with her long history of contribution to the community and the offer of restorative justice could have themselves justified a discount in the order of 15 per cent. A further discount in the order of 15 – 18 per cent on account of the significant cash sum now available and the ongoing obligation to make full reparation would, in my view, be both consistent with the authorities and recognise the importance of Ms Shepherd returning as quickly as possible to the workforce. There she can use her skills and obvious abilities not only to assist her employer but to ensure she is in a position to meet her ongoing financial responsibilities to the complainant.
[80] I intend, therefore, to substitute for the sentence of three years imprisonment a sentence of two years, six months’ imprisonment in respect of each of the charges of theft in a special relationship, such sentences to be served concurrently.
[81] Mr Samuel now also challenges the quantum of the reparation order made by the Judge. As indicated this was in the full amount reflected in Ms Reed’s evidence being $111,577.67.
[82] A Court must not impose a reparation order if it would result in “undue hardship for the offender or the dependents of the offender or that any other special circumstances would make it inappropriate”.44 The onus in that respect is on the defendant, although there is no particular standard of proof and the Court is simply required to make up its mind on reasonable grounds.45
[83] In supplementary written submissions, Mr Samuel says that the reparation order was “manifestly excessive” having regard to Ms Shepherd’s uncertain future on release from prison and the prospect that she will even be on a benefit. He submits
44 Sentencing Act 2002 s 12(1).
45 R v White [1988] 1 NZLR 264 (CA); R v Leitch [1998] 1 NZLR 420 (CA); (1997) 15 CRNZ 321 (CA).
that realistically she will, without some concession on the amount ordered, still be making periodic payments in advanced old age.
[84] It is not clear from the Judge’s sentencing notes what precise information (if any) was before her in terms of the appellant’s financial circumstances. In any event, the position requires to be assessed in the light of the enhanced reparation position which now applies. Repayment of her salary advance is required by the Trust to be made at the rate of $358.97 per week. Mr Houghton also advises that Ms Shepherd’s total income, prior to commencement of her custodial sentence was net $945 per week. He identifies other expenses of $442 per week and outstanding debts for legal costs and child support, themselves attracting weekly repayment commitments of $114.15.
[85] Although my approach is premised on Ms Shepherd being re-employed by the Trust and on her not becoming a beneficiary,46 I nevertheless accept that, at least until her wages advance is repaid, her ability to undertake reparation will be significantly constrained. That repayment period will be in the order of 18 months at the rate advised by Mr Houghton. Assuming that Ms Shepherd continued to remain in employment with the Trust (or in equivalent employment) and was able to maintain reparation at the level of approximately $300 per week, then the balance of the existing order would be repaid in a further approximately five years by which time Ms Shepherd would be in her mid-50s. I can see nothing in such arrangements which could be said to impose undue, in the sense of excessive, hardship. Should Ms Shepherd’s circumstances change and, for example, she finds herself without employment, then it is always open to her to apply for cancellation of the reparation order under s 38A of the Sentencing Act 2002. No reservation of leave from this Court is necessary for that to occur.
Result
[86] I allow the appeal in respect of Charge 1 (ss 240(1)(a) and s 241(a) of the Crimes Act 1961) and quash the conviction in respect of that charge.
46 A conclusion reached as a result of the Trusts’ willingness to make an advance on her salary despite a clear indication from me during submissions that this could not result in an assumed sentenced reduction.
[87] I dismiss the appeal against conviction in respect of Charges 2 – 7 (ss 220 and 223(a) of the Crimes Act 1961).
[88] I substitute for the sentence of three years’ imprisonment a sentence of two years and six months’ imprisonment, such sentence to be imposed in respect of each of Charges 2-7 and to be served concurrently.
[89]I dismiss the appeal from the reparation order imposed by the District Court.
Muir J
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