The Queen v Marster

[2005] NZCA 273

IN THE COURT OF APPEAL OF NEW ZEALAND

CA223/05

THE QUEEN

v

DAVID LAWRENCE MARSTERS

Hearing:25 October 2005

Court:Chambers, Williams and Rodney Hansen JJ

Counsel:P J Kaye for Appellant

E M Thomas for Crown

Judgment:16 November 2005 

JUDGMENT OF THE COURT

LEAVE TO APPEAL IS GRANTED BUT THE APPEAL AGAINST SENTENCE IS DISMISSED.

___________________________________________________________________

REASONS

(Given by Williams J)

ISSUE

[1]       The appellant, Mr Marsters, faced 48 counts laid under the Crimes Act 1961 s 229A(b) of using a document with intent to defraud.  He pleaded guilty to all counts on 8 April 2005.  That would have been the first morning of trial though, since he had absconded, it was what would have been the fifth morning of the fixture.   He was apprehended during the course of the week.

[2]       On 13 May 2005 Simon France J sentenced him to concurrent terms of 3½ years imprisonment on each charge.

[3]       Mr Marsters now seeks leave to appeal to this Court out of time on the basis that the sentences are manifestly excessive and the Judge gave him insufficient credit for his guilty pleas.

Facts

[4]       The Judge sentenced Mr Marsters on a lengthy and detailed summary of facts covering each of the counts in the indictment.  It is unnecessary to canvass that summary extensively. 

[5]       In brief, the Inland Revenue Department commenced an investigation into Mr Marsters’ affairs in June 2001 but, shortly after the initial interview, Mr Marsters travelled to the USA and, despite the laying of a number of charges against him and a depositions hearing preparatory to extradition proceedings, did not return to this country until deported by United States officials on 16 March 2004 following an inquiry into his making false statements to them. 

[6]       The charges were based on Mr Marsters’ involvement in the management of a number of companies and the filing of GST returns on their behalf.  Some of the GST returns involved forged signatures.  Some involved claims by more than one company managed by Mr Marsters claiming GST refunds for the same transaction.  Some were simply incorrect claims for GST deductions in relation to claimed company transactions.  The GST refunds issued wrongly to Mr Marsters or associated entities or other persons totalled $341,143.09.

Remarks on sentencing

[7]       The Judge briefly reviewed the facts including noting Mr Marsters’ offending span of four years, summarised his personal circumstances and made clear that Mr Marsters' offer of reparation was “speculative and unrealistic”. 

[8]       He noted the Crown submission that the appropriate starting point was five years imprisonment having regard to the size of the loss, the benefits to Mr Marsters and the entities associated with him, the premeditation arising out of the period of offending and the appellant’s previous convictions.

[9]       The Judge reviewed the submissions of counsel then acting for the appellant that a starting point in the range of 3½ to 4 years was appropriate and that should then be discounted for the pleas.

[10]     The Judge stressed that accountability was a primary purpose in sentencing: “defrauding the Revenue is a criminal activity that affects ultimately the whole of society” and “this is straightforward theft from the community”: at [16]. He took the view aggravating features included the length of time of offending, the number of counts and the amount of GST wrongfully obtained, but held that Mr Marsters’ offending did not amount to abuse of a position of trust. His previous offending was, in the Judge’s view, absence of a mitigating feature. He made some allowance for the guilty pleas in saving the balance of what was expected to be a four week trial.

[11]     The Judge took a starting point of four years having regard to the decision of this Court in R v Hunter CA 36/02 31 May 2002 which he regarded as factually comparable, and reduced the sentence by six months for the pleas, an allowance he said “might no doubt appear excessive given the timing”: at [24].

Submissions

[12]     For the appellant, Mr Kaye dealt with Mr Marsters’ personal background. That was partly derived from the pre-sentence report in which he claimed to hold a degree in International Business Law from UCLA – contrary to an earlier pre-sentence report which made no mention of tertiary study – and to have been employed in the United States at a salary of about US$330,000 p.a.  The pre-sentence report recorded Mr Marsters’ assertions that his then partner, Ms H, was partly responsible for the matters in the indictment and that most of the charges were for genuine claims for GST input deductions but he lacked “documentation to prove his innocence”.  That led to an assertion that he was “forced to plead guilty”.  His admitted guilt only extended to not keeping accurate records.

[13]     Mr Kaye also pointed to assertions that alcohol played a major part in Mr Marsters’ offending.  There was no evidence of his living a lavish lifestyle.  He accepted Mr Marsters’ offer to pay reparation was unrealistic.

[14]     Mr Kaye submitted the starting point of four years was too high by comparison with Hunter where this Court did not disagree with a starting point of five years imprisonment adopted for six years of offending involving 422 charges of using a document fraudulently and loss to the IRD of just over $400,000. 

[15]     Mr Kaye also submitted the six month reduction for the guilty pleas was insufficient.  He referred in particular to the decision of this Court in R v Lynn CA 90/01 20 June 2001 where a sentence of 3 years 8 months on some 61 charges including 25 forgeries, 12 thefts and 24 of using a document for pecuniary advantage involving over $260,000 was reduced to three years’ imprisonment on the forgeries and theft and two years on the using a document charges.

[16]     Mr Kaye also referred us to a number of other decisions including R v McKelvey [1990] 2 NZLR 558, R v Nandan CA 136/98 2 September 1998 and, for comparison purposes, the High Court decision from which that appeal came:  R v Nandan, Johnston and Sivanantham HC WN T50/97 24 April 1998 and 1 May 1998).

[17]     For the Crown, Mr Thomas supported the sentences, relying particularly on the length of time of the offending, the number of counts and the extent of the loss.  He submitted the sentence imposed was in line with Hunter and Lynn and pointed out that in Hunter this Court made the point that the critical inquiry in cases such as this is to the overall culpability of the offender. Deterrence is paramount: at [18], [22]. He accepted that in Lynn this Court held that the discount for the pleas was insufficient, it being observed in relation to cases of this kind that:

26.      … distinct and significant credit should be given for a timely guilty plea which avoids the cost of trial.  There were several different indictments and the hearings were expected to occupy some weeks.  Given the large number of charges and the extensive documentary exhibits which would undoubtedly have been required, the cost saving to the Crown must have been a major factor.  Just as important, the large number of complainants involved were freed from the stress and anxiety of attending Court to give evidence.  In complex cases of this kind, there must be a real incentive for an accused to plead guilty.

[18]     Mr Thomas submitted both that Hunter and Lynn supported the four year starting point adopted by Simon France J and the discount given for the pleas.  He made the point that in Mr Marsters case, unlike Lynn, there was no large number of complainants who were freed from having to give evidence. 

Discussion

[19]     Dealing first with the starting point selected by the Judge, we affirm the observation in cases such as Hunter and Lynn that with offending under s 229A and cognate offences, deterrence and accountability are the most significant aspects of sentencing.  Offending of that type is often prolonged, difficult to detect, frequently involves many innocent victims plus substantial sums and breaches of trust and is committed in circumstances where reparation is only occasionally available.  Where it is, it amounts to no more than refunding complainants what has been wrongfully taken from them.  It is not an additional punishment:  Clemm v IRD HC AK CRI 2005-404-246 and 247, 31 August 2005 at [27]-[31].

[20]     In our view it matters not that the single victim in this case was the Inland Revenue Department.  In a very real sense the Judge was right to say that Mr Marsters’ offending was “straightforward theft from the community”. 

[21]     Because of the widely varying circumstances giving rise to offending such as this, simple comparisons of the numbers of charges and complainants, length of offending and amounts at issue in other cases give no more than a broad indication of the appropriate sentence to be imposed to reflect culpability.

[22]     Seen in that light, we take the view the Judge’s starting point of four years imprisonment in the appellant’s case was well within range. 

[23]     The remaining question is whether the reduction of six months for the guilty pleas was inadequate. 

[24]     As this Court said in Lynn, persons facing charges such as those Mr Marsters faced should have a real incentive to acknowledge their guilt in appropriate cases.  Freeing complainants from the necessity to give evidence of the offending against them and their consequent loss should be marked in cases such as this in much the same way as freeing witnesses in other cases.

[25]     In addition, again as this Court said in Lynn, pleas of guilty in cases of this sort result in significant saving in State resources, a factor which should be reflected in sentence reductions.

[26]     However, in Mr Marsters’ case, virtually all the prosecution witnesses would have been Crown employees and, while some saving in resources was effected by the pleas, they occurred only on what was expected to be the fifth day of trial.  They were thus so late that the saving of resources must have been significantly less than would have resulted from timeous pleas.

[27]     While another Judge may have allowed a moderately greater discount for the pleas, we are unpersuaded that the Judge’s allowance in the appellant’s case is inadequate.  The discount was 12.5%.  It is noteworthy that under the New South Wales guideline judgment on guilty pleas, R v Thomson (2000) 49 NSWLR 383, and under Britain’s Sentencing Guidelines Council’s edict on the same topic, a guilty plea so late in the piece would have merited a discount of no more than 10%.

[28]     Standing back and assessing Mr Marsters culpability overall, we are similarly unpersuaded that sentences of 3½ years imprisonment were manifestly excessive for his offending.

Result

[29]     In the result, leave to appeal is granted but the appeal against sentence is dismissed.  

Solicitors:
Crown Law Office, Wellington