Tatana v The King
[2025] NZHC 634
•25 March 2025
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CRI-2025-409-28
CRI-2025-409-29 [2025] NZHC 634
BETWEEN MELANIE JILL TATANA
Appellant
AND
THE KING AND THE COMMISSIONER OF INLAND REVENUE
Respondents
Hearing: 17 March 2025 Appearances:
J Grainger for Appellant
B W D Alexander and P W Saunders for Respondent
Judgment:
25 March 2025
JUDGMENT OF MANDER J
This judgment was delivered by me on 25 March 2025 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules 2016
Registrar/Deputy Registrar Date: .
TATANA v R [2025] NZHC 634 [25 March 2025]
[1] Melanie Jill Tatana was sentenced in the Christchurch District Court to three years imprisonment1 on 63 charges of being a party to the withholding of PAYE deductions2 (the PAYE charges) and seven charges of failing to provide information, namely GST returns to the Commissioner of Inland Revenue (the Commissioner) with the intention of evading the assessment or payment of tax (the GST charges).3 Ms Tatana seeks leave to appeal this sentence out of time and to adduce fresh evidence in the form of a cultural report on the basis the sentence was manifestly excessive.
The offending
PAYE charges
[2] Ms Tatana was the sole director and 90 per cent shareholder in an asbestos removal company, Asia Pacific Group Limited (APG). Between 1 April 2019 and 23 September 2022, APG was required to file returns reporting the deductions it had made from its employees’ wages.4 Between August 2019 and September 2022, APG failed to pay the full amounts of the PAYE deductions to the Commissioner. The deductions not paid by the due date totalled $1,602,864.17. Late payments and transfers that were received reduced the amount of outstanding unpaid PAYE to $1,121,204.47.
[3] A large portion of these appropriated funds were spent by Ms Tatana. By reference to the Commissioner’s analysis of APG’s bank records, those details were set out in the District Court Judge’s sentencing remarks:
[10] …
(a) For the year 2020, amounts spent on personal spending, gambling, liquor, bars and ATM cash withdrawals were $219,687.95.
(b) For the 2021 year, $316,607.48. (c) For 2022, $281,518.52.
(d) For 2023, $64,686.86.
[11] This totals $882,500.81.
1 R v Tatana [2024] NZDC 26390.
2 Tax Administration Act 1994, s 148(1) and s 143A(1)(d); maximum penalty five years imprisonment or a fine not exceeding $50,000.
3 Tax Administration Act 1994, s 143B(1)(b) pursuant to s 143B(1)(f); maximum penalty five years’ imprisonment or a fine not exceeding $50,000 or both.
4 RD 22 of the Income Tax Act 2007.
[12] During the relevant period of offending amounts were received into Ms Tatana’s personal bank account from APG’s bank account over four years, totalling $194,680.21.
[13] During the relevant period of offending $166,020.29 was received from APG into [Ms Tatana’s] daughter’s bank account for relevant years.
[14] APG provided returns to the Commissioner which detailed wages paid from APG to [Ms Tatana] and [her] husband across the relevant period of offending in the four years totalling $531,528.44, made up of:
(a)Gross wages paid to [Ms Tatana], $271,306.95.
(b)To Michael Smith, $260,221.49.
[15] An analysis of APG’s bank records showed that of the 63 occasions where deductions were not fully paid to the Commissioner, there were funds available, firstly, to fully pay the deductions to the Commissioner by the relevant due date on 31 occasions and, secondly, to part pay the deductions to the Commissioner by the relevant due date on 32 occasions.
GST charges
[4] The GST charges relate to a period after 31 May 2023, when Ms Tatana was on bail on the PAYE charges. This offending concerns an associated company, The Asia Pacific Training Group Limited (APTG), that was incorporated on 10 January 2020, in respect of which Ms Tatana was the sole director and shareholder.
[5] Section 16 of the Goods and Services Tax Act 1985 requires persons that are registered for GST to return GST to the Commissioner. No GST returns were filed for the GST periods over the period ending 31 May 2023 to 31 May 2024.
[6] The Commissioner’s analysis of APTG’s bank statements revealed total sales by APTG of $145,090.45. GST collected amounted to $18,924.84. Although the GST liability was later assessed to be $15,139.87, only $3,784.87 was paid.
District Court sentencing
[7] Judge Crosbie adopted the PAYE offending as the lead charges and fixed an overall starting point of four years and four months’ imprisonment. In deciding upon that starting point, the Judge took into account the extended period over which the offending had occurred; the large amount, $1,602,864.17, deducted from employee’s wages that was not directly passed on to Inland Revenue; and the remaining
outstanding unpaid PAYE that amounted to $1,000,204.47. It was noted that both figures are at the higher end of the spectrum for such offending when compared with other cases. Further aggravating features included Ms Tatana’s primary role in the offending, the breach of trust, the continuation of offending after receipt of formal warnings, and the high level of premeditation involved, having regard to the 63 occasions when deductions were not fully paid but used for personal expenditure, including on liquor, bars and ATM cash withdrawals.
[8] From that starting point, the Judge extended a five per cent credit for what was described as “efforts to resolve the matter which came to nought”, 10 per cent in relation to Ms Tatana’s personal health issues, and a 20 per cent credit in acknowledgement of the timing of her guilty pleas. This total deduction of 35 per cent (18 months) resulted in a sentence of 34 months’ imprisonment. However, that end figure was adjusted by the Judge in the following way:5
[58] I am then going to take into account the four months that the Commissioner has arrived at in relation to the other offending. Then, taking into account the timing of the plea and the totality, I am going to adopt Ms Bennett’s assessment and add on cumulatively two months, so that will be a total sentence of 36 months or three years’ imprisonment on all of the offending.
Extension of time to appeal
[9] Ms Tatana was sentenced on 30 October 2024. However, her appeal was not filed until 24 January this year, some 27 days late.6 Extensions of time to permit an appeal to proceed invariably reduce to considerations of the reasons for the delay and the merits of the proposed appeal.7
[10] In her affidavit in support of an extension of time, Ms Tatana advised she was not aware of the timeframe or the process by which to initiate an appeal. It was only while in custody following sentencing that she became aware of the timeframe for an appeal. It would appear her previous counsel did orally advise her, but this was not formalised in a letter. Relevantly, a written record of the Judge’s sentencing remarks
5 R v Tatana, above n 1.
6 Criminal Procedure Act 2011, ss 5 and 248(2).
7 Mikus v R [2011] NZCA 298 at [26], citing R v Slavich [2008] NZCA 116 at [14].
did not become available until 9 January 2025. The Crown accepts it was not prejudiced by the late filing of the appeal. In the circumstances, therefore, leave is granted.
The approach to a sentence appeal
[11] An appellant may appeal their sentence as of right.8 However, an appellate Court may allow an appeal against sentence only if satisfied there has been an error in the imposition of the sentence and that a different sentence should be imposed.9 This Court will not intervene where the sentence is found to be within the range that can properly be justified by accepted sentencing principles.10 The focus must be on the final sentence, rather than its component parts.11 The Court may intervene and substitute its own views only if the sentence is considered “manifestly excessive” and one that could not be justified on the application of relevant sentencing principles.12
The appeal
[12] Two grounds are put forward by Ms Tatana in support of her argument that errors by the sentencing Court resulted in a manifestly excessive sentence, namely:
(a)no sentence discount was applied for Ms Tatana’s previous good character; and
(b)that further credit should be extended for the content of a s 27 cultural report, in respect of which leave is sought to be adduced for the first time on the appeal.
[13] No criticism is advanced in relation to the starting point applied by the sentencing Court, nor in respect of any of the other aspects of the sentence.
8 Criminal Procedure Act 2011, s 244(1).
9 Section 250(2) and (3).
10 Tutakangahau v R [2014] NZCA 279, [2014] 3 NZLR 482 at [36].
11 Ripia v R [2011] NZCA 101 at [15].
12 Ripia v R above n 11 at [15].
[14] In response to the appeal, the Crown submits that 35 per cent extended to Ms Tatana for personal mitigating factors was generous in the circumstances. While she may be able to point to further mitigating factors on appeal, it is argued these should be viewed within the context of the overall sentence imposed, which the Crown argues was within the range available to the sentencing Judge.
Previous good character
[15] Ms Tatana presented to the Court as a first offender with no previous convictions. Ordinarily, that is a feature that will attract recognition as part of the sentencing process.13 However, such credit may be limited in the absence of evidence of a positive contribution having been made to the community,14 and the merits of a deduction for good character may be qualified when regard is had to the period of time over which the offending took place.15
[16] The Judge in the present case noted that Ms Tatana’s offending occurred over a significant period of time and involved a great deal of money. It was further observed that the offending continued notwithstanding Ms Tatana having been formally warned by the Commissioner and that, after the PAYE charges had been laid, Ms Tatana engaged in further offending while on bail. Nevertheless, Mr Grainger, on behalf of Ms Tatana, submitted that even in cases that can be categorised as “white collar crime” that involve large scale fraud, character discounts for previous good character have been provided.16
[17] In support of Ms Tatana’s submission that she receive credit for her previous good character, reference was made to a number of letters filed in the District Court from persons who vouched for the positive contributions she had made to a number of people’s lives. It was argued, by reference to the case law, that notwithstanding the reasons put forward by the sentencing Judge in explanation of why he declined to extend any credit for this aspect of Ms Tatana’s background, a discount in the range of between 5–10 per cent would have been appropriate. It was emphasised that
13 R v Howe [1982] 1 NZLR 618 (CA) at 630; R v Hockley [2009] NZCA 74 at [30].
14 Britow v R [2017] NZCA 229 at [11].
15 R v Howe, above n 13 at [31].
16 R v Graham [2012] NZHC 575, R v Findlay [2007] NZCA 553.
Ms Tatana is not just someone with no previous convictions but is a person who has contributed positively to her community in the past.
[18] In the context of tax fraud, it appears, because of the nature of the offending, a more constrained approach has been taken to credit for prior good character or the absence of previous convictions. Discounts in the range of between 5–10 per cent and as high as 15 per cent have often been granted,17 although notably, the Court of Appeal in one case where the appellant, who had no convictions but was described as having displayed a “spectacular lack of remorse” was held not to have been entitled to any discount for previous good character, or at least not more than a nominal amount.18
[19] Ms Tatana is 51 years of age and, as noted, has no previous convictions. To the extent Ms Tatana relies on a number of positive references from former employees who Ms Tatana employed during the period of her offending, only limited weight can be placed on them given she was committing theft during this time. Ms Tatana’s objectives in setting up APTG deserve recognition. She contracted with the Department of Corrections to move men and women newly released from prison through training courses, kit them out with gear and have them engage in work. However, again, these activities occurred against a background of contemporaneous tax fraud.
[20] It has not been suggested the sentencing Judge erred when taking into account the nature and duration of the offending as a relevant consideration when assessing Ms Tatana’s past character. While there was some criticism of the change in the Judge’s stance since his sentence indication (which was not accepted and therefore was non-binding) when some allowance indicated for prior good character, it appears Ms Tatana’s further failure to account for GST while on bail caused the Court to reassess the merits of allowing a discount for good character. It is also notable there was, to some degree, an absence of remorse. This is a factor previously accepted by the Court of Appeal as bearing on a discount for previous good character.19
17 Foley v R [2023] NZCA 456; Pome’e v Inland Revenue Department [2022] NZHC 2354; R v Smith
CA275/2008; Williams v Commissioner of Inland Revenue [2020] NZHC 2931.
18 Mehmood v R [2015] NZCA 338 at [33].
19 Mehmood v R, above n 18.
[21] Two of the most recent sentencing cases in this area likely provide the most appropriate guidance in the circumstances of this case. In Pomee’e v Inland Revenue Department, the offender was sentenced on 66 charges of evading or attempting to evade payment of PAYE and other deductions. The total outstanding amount at the date of sentencing was $1,148,756.99. A discount of five per cent for good character was described as generous by this Court.20 In Foley v R, the Court of Appeal observed that the appellant’s offence-free life up until middle age, his positive references, and objectives in setting up and running his companies that were largely altruistic, deserved recognition. However, as in the present case, weighing against those considerations were various factors that were said to aggravate the offending. It was held that a discount of 15 per cent was plainly not available, although a five per cent credit was considered justified.21
[22] Having reassessed the issue of whether some allowance should have been provided for the absence of previous convictions and Ms Tatana’s prior good character, I consider a small deduction would have been warranted in the circumstances. No more than five per cent would have been justified.
Personal background
[23] Ms Tatana seeks to adduce for the first time a cultural report that was completed for the purposes of her appeal. No explanation was proffered as to why such a report was not obtained in the District Court. While the report’s content can be accepted as sufficiently credible, it obviously does not constitute fresh evidence because such information was available at the time of Ms Tatana’s sentencing. Mr Grainger acknowledged the general principle that such reports should not be produced for the first time on appeal.22 However, the overriding consideration is the interests of justice, and the Supreme Court has previously, in similar circumstances, accepted such reports for the purposes of an appeal.23 The Crown does not oppose the information being received and leave is granted.
20 Pomee’e v Inland Revenue Department, above n 17, at [43].
21 Foley v R, above n 17, at [38].
22 Carroll v R [2019] NZCA 172 at [8].
23 Berkland v R [2022] NZSC 143 at [175].
[24] Mr Grainger acknowledged that at first blush it may be difficult to assess a link between the tax offending and Ms Tatana’s background, but it was argued that a more in-depth analysis establishes the required degree of connection. It is not necessary to set out in detail the content of the report which is obviously very personal in nature. Mr Grainger highlighted a background of abuse in Ms Tatana’s upbringing, including abuse from her father which isolated her and drove her into a violent relationship that resulted in entrenched trauma. Reference was made to Ms Tatana’s maladaptive involvement in gambling that developed into an addiction, her difficult health issues that included cancer, and that her relationship with her husband became a significant cause of stress to her.
[25] It was observed that, while Ms Tatana identified as Māori, she was disconnected from te ao Māori and that she and her siblings were “culturally severed” from the importance of whakapapa and tikanga Māori. Ms Tatana’s own explanation for her offending refers to her spending being out of control. She speaks to loaning money to others, putting on lunches for staff, and spending money on gifts, which was said to reflect her history of childhood trauma that had led her to be a “rescuer”, and a difficulty in her being able to say “no” to others in order to avoid disappointing people.
[26] Mr Grainger submitted this background had “some explanatory force” in regard to the offending which, while not as strong as in some cases, was linked with her offending. Counsel argued a 10 per cent discount would have been appropriate in recognition of the contribution Ms Tatana’s background made to her offending which was partially driven by addiction to gambling.
[27] When assessing the extent to which an offender’s background should mitigate their offending it is necessary that there be some degree of connection with that offending. Background factors need not be an “operative or proximate cause” of the offending in order to attract a discount. However, it is necessary to establish some “causative contribution”,24 stemming from factors that provide “rational explanations
24 Berkland v R, above n 23, at [109].
for why an offender has come to offend”.25 Potential reasons for Ms Tatana’s offending were discussed by the sentencing Judge, notably, he remarked that:26
[36] … The probation report tells me that at the time of the offending there was a lot happening in your life. You were suffering from breast cancer. There were health issues for two of your sons. There was a death in the family and then the effects of COVID. At this time your company grew quickly. You say that you were financially unprepared and crushed by the amount of employment you had agreed to.
[37] You say you found yourself making moral choices to keep others employed by providing “pastoral” care instead of complying with legal obligations to pay taxes.
[38] It may be that you thought you had some sort of moral obligation or duty of others, but if we apply that approach to everyone who operates companies and has obligations to account for PAYE (because that is what you are doing, accounting for and paying those deductions to the IRD) then [our] economy would be in a state of chaos.
[39] The burden on the IRD in investigating these types of events means that when offending of this scale does come before the Court, the Court does need to take a stern approach to underscore both the difficulty of detecting and the difficulty of prosecuting.
[40] So, you may well have thought that diversion was necessary for other reasons, but that does not excuse your offending nor explain aspects of greed. It enables me to understand the offending, but it certainly does not excuse it.
[41] Other matters that I am referred to in a little more detail today are the difficult diagnoses that you have in relation to your health for which Ms Bennett seeks a discrete discount. The Commissioner is not opposed to that.
[28] A 10 per cent reduction was extended to Ms Tatana for her health issues. Insofar as that aspect of her life may have made her more vulnerable to the commission of such offending, that feature was adequately provided for in the sentence imposed. Ms Tatana was initially resistant to acknowledging a gambling problem, but there does not seem to be any dispute that this played some part in her offending, although, given its nature and extent, this aspect must be considered as only partially contributing to Ms Tatana’s conduct.
[29] Counsel’s contention there is a link between matters discussed in the s 27 report and Ms Tatana’s offending through an explanation of her acting as a “rescuer” is a
25 Berkland v R, above n 23 at [109].
26 R v Tatana, above n 1.
thesis not dissimilar to matters considered by the Court of Appeal in Foley v R.27 The appellant in that case sought a reduction in his sentence on the basis of a s 27 report that described Mr Foley’s desire to assist others as a result of perceived cultural obligations that mitigated his offending.28 That approach was rejected by the Court of Appeal. While it was accepted there may be genuine cultural drivers (for example, whanaungatanga for discharging obligations to care and support others within a community), it was noted there was also a duty to discharge obligations to others, including the wider public.29 Such observations were echoed by the sentencing Judge, as referred to at [27], when assessing Ms Tatana’s personal circumstances and how she had come to offend.
[30] I consider that had the s 27 report been before the District Court at the time of sentencing it may have potentially resulted in Ms Tatana being afforded some further discrete discount. However, in my assessment any such deduction would have been minimal and, when regard is had to the mitigating factors the Judge did take into account, it would not have amounted to any more than a five per cent adjustment.
Decision
[31] The Crown acknowledged the grounds raised by Ms Tatana on her appeal are not without some merit. However, it focussed on the overall end sentence imposed after the District Court had applied a 35 per cent discount for mitigating factors, which it submitted was generous in the circumstances. It noted the ample 20 per cent credit provided to Ms Tatana for her guilty pleas that were entered after the provision of a rejected sentence indication and an initial dispute regarding the facts of the offending. The latter had required the Commissioner to prepare for a disputed facts hearing, albeit one that was ultimately not required. I have already discussed the 10 per cent reduction extended for Ms Tatana’s past health issues that did not disproportionately impact upon Ms Tatana’s ability to serve a sentence of imprisonment.
[32] The Crown further noted that the five per cent reduction provided for what was described as efforts to “resolve the matter which came to nought” was also generous
27 Foley v R, above n 17.
28 At [30].
29 At [33].
and amounted to no more than an expressed intention to make some form of reparation payment which, having regard to Ms Tatana’s financial position, was always unrealistic.
[33] I accept there is force in the Crown’s submission that the ultimate sentence imposed was one that was available to the sentencing Judge. I acknowledge Mr Grainger’s submission that where errors are identified in a sentence, adjustments should not necessarily be avoided by categorising such changes as mere “tinkering” and that, if the appeal Court considers greater credit should have been applied, it logically follows the original sentence was faulty and should be amended.30 However, the statutory test for a successful appeal against sentence requires an appeal Court to be satisfied a different sentence should be imposed. That assessment must be gauged by reference to the range of sentence properly available to a sentencing Court in the exercise of its discretion taking into account the circumstances of the offending and the individual involved.
[34] Reassessing the matters of personal mitigation that arise in regard to Ms Tatana, I consider the 10 per cent credit extended for Ms Tatana’s past health difficulty was particularly generous. That factor, together with the other considerations that attach to the matters of personal mitigation raised on the appeal which I have discussed, leads me to conclude that a combined 15 per cent discount would have been appropriate for the features personal to Ms Tatana. Taken together with the five per cent deduction for efforts to “resolve matters” which, in the circumstances, would also have to be considered generous, I am satisfied that an overall 20 per cent credit accurately reflects all relevant matters of personal mitigation. The 20 per cent deduction for the guilty pleas remains unadjusted.
[35] Applying the two-step sentencing process set out in Moses v R to a starting point of 56 months’ imprisonment,31 a 40 per cent deduction would have resulted in a reduced sentence of 34 months’ imprisonment.32 Having arrived at that figure, it
30 See Terekira v R [2024] NZHC 3437 at [24]–[25].
31 I include the four-month uplift for the GST offending in this global starting point. See [8] of this judgment.
32 Moses v R [2020] 3 NZLR 583.
becomes apparent the three-year sentence imposed by the District Court could not be viewed as being manifestly excessive. The appeal must accordingly be declined.
Result
[36]Leave to appeal out of time is granted.
[37]The appeal against sentence is dismissed.
Solicitors:
Crown Solicitor, Christchurch
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