The Queen v Fatu - [2007] NZCA 430

IN THE COURT OF APPEAL OF NEW ZEALAND
CA187/07
[2007] NZCA 430
THE QUEEN
v
ARDEN ERIC FATU
Hearing:19 September 2007

Court:Ellen France, John Hansen and Wild JJ
Counsel:J P Temm for Appellant

R L Mann for Crown

Judgment:4 October 2007 at 3 pm

JUDGMENT OF THE COURT

Extension of time to appeal is granted but the appeal is dismissed.
REASONS OF THE COURT
(Given by John Hansen J)
[1]       Following the appellant’s plea of guilty to four counts of using a document with intent to defraud, Heath J sentenced him on 28 May 2007 to four years on each count concurrently. He seeks an extension of time to appeal against that sentence on the ground it is manifestly excessive.
[2]       As a consequence of a police operation called Allsorts, a number of individuals were charged with deliberate and complex fraud in the Waikato and Bay of Plenty regions over a significant period of time. The three types of fraud employed were succinctly described by this Court in the sentence appeal of a co‑offender, Mr Stirling (R v Stirling [2007] NZCA 106):
[3]       … The first was described by the Judge as “price hydraulic fraud”. The appellant would identify land likely to be sold by mortgagee sale. He would then enter an agreement with the owner to buy it at a price in the vicinity of the market value. The appellant would then enter a back to back agreement to on-sell the land at a higher price to a related third party. The on-sale would be supported by an unrealistic valuation obtained from a compliant valuer. The appellant would then borrow from a lending institution to settle the purchase. The effect of the scheme was to induce a lending institution to lend more money than it would otherwise have been prepared to advance.
[4]       The second type of fraudulent activity was described as “equity fraud”. The appellant would identify property owners in financial difficulty and in danger of losing their homes. The owners would be induced to transfer their assets to a trust. The trustees would then seek a loan from a financial institution but at a greater amount than that required to settle the obligations under the mortgage. The home owner was referred to a compliant solicitor who would arrange for the owners to sign authorities in favour of the solicitor for disbursement of funds at the solicitor’s direction. A variation of the scheme involved the preparation of a fictitious sale and purchase agreement. Money would then be drawn down from the financier and paid to the solicitor. After paying the debt the surplus funds were disbursed to the appellant and his associates rather than the home owners. In reality the owner became no more than a tenant in their own home, their equity in the property having been extinguished by the transaction. Within a short period of time the banks and lending institutions took steps to realise the land and evict the people from their homes.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading The Queen v Fatu

Details

AGLC: The Queen v Fatu [2007] NZCA 430
Case: [2007] NZCA 430
Decision Date: 4 October 2007

CaseChat Overview and Summary

Arden Eric Fatu appealed against a sentence imposed by Heath J, arguing it was manifestly excessive. Fatu was convicted on four counts of using a document with intent to defraud and was sentenced to four years on each count concurrently. The frauds Fatu was involved in were part of a larger operation targeting individuals in the Waikato and Bay of Plenty regions. These schemes included "price hydraulic fraud," "equity fraud," and "equity fraud through security realisation," which exploited vulnerable individuals and resulted in significant financial and emotional harm to the victims.

The legal issues before the court were whether the sentence imposed was manifestly excessive and if the sentencing judge appropriately assessed Fatu's culpability in the context of the larger operation. Fatu's counsel argued that the sentence was disproportionate compared to other offenders in the Allsorts operation and to other fraud offenders generally. Additionally, counsel contended that the sentencing judge had placed undue emphasis on Fatu's physical characteristics and had sentenced Fatu based on a perceived role rather than his actual offending. Furthermore, it was argued that the financial benefit of $129,493.36 did not warrant such a lengthy sentence.

The Court of Appeal disagreed with Fatu's arguments, affirming that Heath J had appropriately assessed Fatu's culpability based on the nature, sophistication, and impact of the offending, as well as the type, circumstances, and number of victims. The court found that the sentencing judge was in the best position to assess the relevant culpability of the offenders, and had done so by comparing the culpability of various offenders at different levels of the fraud operation. The court also noted that this approach had been previously approved and applied in other cases related to the Allsorts operation. Therefore, the appeal against sentence was dismissed, but an extension of time to appeal was granted.

Orders