The Queen v Ross Ronayne Reid

IN THE COURT OF APPEAL OF NEW ZEALAND

CA 264/00

THE QUEEN

ROSS RONAYNE REID

Hearing:	21 February 2001
Coram:	Gault J Robertson J Potter J
Appearances:	J F Mather for Appellant J C Pike and M Heron for Crown
Judgment:	5 March 2001

JUDGMENT OF THE COURT DELIVERED BY POTTER J

Ross Ronayne Reid appeals against conviction and sentence. He also applies for leave to adduce evidence on appeal.
Following a jury trial Mr Reid was convicted on 15 June 2000, of seven charges under s 211(a) of the Customs and Excise Act 1996 that he did an act for the purpose of evading payment of full duty on goods, namely caused an import entry to be made under the Act that he knew was erroneous or defective in a material particular; and five charges under s 203(4) of the Act that he made an import entry that he knew was erroneous or defective in a material particular, namely included a false or fictious name.
On 21 June 2000 he was fined $4000 on each of the offences under s 211(a) (total $28,000); $3000 on three of the offences under s 203(4) ($9000); and $1500 on two offences under s 203(4) ($3000); a total fine of $40,000.

Grounds of appeal

Mr Reid claims that documentary hearsay evidence was wrongly admitted by the District Court Judge at trial and that the jury’s verdict was against the weight of evidence. As to sentence, he claims the penalty was excessive, particularly given that he was bankrupt at the time of sentencing.

Issues

The issues for the Court are :

¨ in respect of the appeal against conviction, whether the District Court Judge wrongly exercised his discretion to admit the hearsay evidence complained of, resulting in a miscarriage of justice;

¨ in relation to sentence, whether the monetary penalty imposed is manifestly excessive or wrong in principle;

¨ in relation to the application to adduce evidence on appeal, whether the Court is satisfied that the evidence meets the tests that it is fresh in the sense that it could not have been made available at trial with reasonable diligence, that it is cogent and credible, and that in all the circumstances the Court should exercise its discretion under s 389(b) of the Crimes Act 1961 to admit the evidence on appeal.

The case against Mr Reid

In the period October 1994 to June 1997, Mr Reid arranged the importation from Japan of a number of motor vehicles. Following information received, the New Zealand Customs Service undertook an investigation which revealed a pattern of undervaluation of many of the imported vehicles. It also revealed that the appellant had imported a number of vehicles not in his own name but using names of other people. Mr Reid sourced the vehicles from Japan and paid for them by telegraphic transfer direct to the Japanese supplier. He arranged for a Customs broker in New Zealand to prepare Customs import entries for the vehicles on his behalf. He supplied information relating to the vehicles, including their values for duty purposes, upon which the broker acted in good faith. The vehicles were in fact undervalued, resulting in evasion of duty payable on the true value of the vehicles, calculated by Customs to be in excess of $60,000. Mr Reid sold or intended to sell the vehicles he imported for profit.
In some cases (those subject to the charges under s 203(4)) Mr Reid named as the importer persons who had no financial or other interest in the vehicles and whom he knew were not the importers of the vehicles. It appears that his purpose was to avoid difficulties he would encounter with the Licensed Motor Vehicle Dealers’ Institute if he sold more than six vehicles in a year, without a motor vehicle dealer’s licence.

Application for leave to adduce evidence

The appellant furnished affidavits from Raymond Messenger, Joanne Messenger and Janice Rouse, all of whom gave evidence at trial in relation to the charges under s 203(4). Mr Reid deposes that when they gave evidence “they would have felt under an unabated threat of prosecution by the Customs Department” which he considers relevant to credibility. However, except in the case of Joanne Messenger, whose draft affidavit refers to her being distressed when visited by Customs Officers, there is no evidence to support Mr Reid’s assertion.
The evidence is not fresh. It is rare for the Court to exercise its discretion to admit on appeal further evidence from a witness who gave evidence at trial. This is not such a situation. We note further the late filing of the application and the affidavit in support.
Counsel for the appellant did not pursue this application in his oral argument before this Court. It is without merit and is dismissed.
The appellant also sought to adduce further evidence in relation to a videotaped interview with him which was evidence in the trial. In an affidavit sworn 12 February 2001, Mr Reid gives an explanation as to why no objection to admissibility of the videotape was taken at trial. He claims he was not properly cautioned before giving the interview, but was not aware he could object to the evidence being admitted. The point was not pursued in oral submissions before this Court. It rests on an attempt to introduce further evidence on appeal and effectively advances radical error on the part of trial counsel in not taking objection prior to or at trial. We have insufficient information as to the circumstances in which the interview took place to interfere on appeal.

Appeal against conviction

The District Court Judge gave an oral pre-trial ruling on 25 May 2000 in which, on an application by the Crown under s 344A Crimes Act 1961, he ruled admissible :
[a]car auction books from Japan together with associated documents, in particular exhibits 553 to 559 inclusive;
[b]a comparison graph of similar cars sold in Japan drawing a comparison between their respective prices being exhibits 560 to 566 inclusive.
He noted that the Crown did not pursue the application in respect of documents and correspondence between New Zealand Customs and Mr T Mizuno, of Autorec, being exhibits 480 to 509 inclusive, the Crown having indicated however that it would not object to the defence producing any of that correspondence. (However, it seems that in the course of trial the Crown did produce and rely on some documents (but not correspondence) obtained from Mr Mizuno and the Judge indicated that his ruling applied equally to those documents).
The Judge admitted the evidence under s 240 of the Act which provides :
In any proceeding under this Act (other than a prosecution for an indictable offence) the Court may admit in evidence as proof of any fact in issue a document made in a country outside New Zealand, whether the document is legally admissible as evidence in any other proceedings or not.
His Honour also held that the documentary evidence would not be admitted as business records pursuant to s 3 Evidence Amendment Act (No 2) 1980.
While in written submissions Mr Mather for the appellant challenged the ruling on the basis that the Judge was wrong in holding that this was not a prosecution of an indictable offence, he accepted before the Court that the Judge’s determination was correct in this respect. Therefore the essence of the appellant’s complaint was that the Judge incorrectly exercised his discretion to admit documentary hearsay in that the Judge failed to take into consideration the importance of the appellant’s right to cross-examine prosecution witnesses assured by s25(a) and (f) of the New Zealand Bill of Rights Act 1990 which are essential elements of the right to a fair trial.
At trial there was no dispute that Mr Reid had paid to Tsukasa Jidosha in Japan, identified sums of money, for cars purchased from Tsukasa, and that lesser sums in respect of the motor vehicles in question, were entered for Customs purposes. Mr Reid’s explanation was that pursuant to an agreement or arrangement with Mr Mike McCarthy who worked for Autorec, a company which Mr Reid agreed in evidence was associated with Tsukasa, he had agreed to pay 30% of the value of the vehicles to Mr McCarthy in return for Mr McCarthy sourcing cars for Mr Reid that represented “the pick of the bunch”. He said the amount remitted by him to Japan included that fee or commission even though it was not separately identified. It was common ground that if a service fee were paid to a third party wholly independent of the vendor that amount would not be dutiable. The Crown needed to exclude the reasonable possibility that Mr Reid believed that his remittances included fees payable to Mr McCarthy in those circumstances. That was the essential issue for the jury in respect of the charges under s 211(a).
Early in his summing up, the Judge put the matter to the jury this way :
I want you to bear in mind what could well be the central issue in this trial. And the central issue may well be, was there an agreement, an arrangement, between Mr Reid the accused and this man, Mike McCarthy in Japan; was there an arrangement between the two men that McCarthy would locate extremely marketable cars in Japan for which he would receive a fee, a commission, a reward. Was the arrangement between the two men that a sum of money would be paid by the accused to McCarthy for locating desirable marketable vehicles for importation into New Zealand.
There was no dispute that in relation to the relevant vehicles, the amount remitted by Mr Reid and the value entered for duty purposes differed. There was no dispute that Tsukasa and Autorec were related or associated companies and that Mike McCarthy was employed by Autorec. Mr Reid accepted these matters in evidence. The issue for the jury was, what was Mr Reid’s purpose in paying one amount and declaring a lesser amount and, as stated by the Judge, the question for the jury was whether they accepted as reasonably possible Mr Reid’s explanation of the premium arrangement he said he had with Mike McCarthy.
Mr McCarthy was not called to give evidence.
The focus of the appellant’s submissions as pursued before this Court, was that Mr T Mizuno was not called by the Crown and was therefore not available for cross-examination because the Judge exercised his discretion to admit to evidence documents sourced from Mr Mizuno, so the defence was excluded from examining him about those documents.
The evidence those documents provided was no more than Mr Reid himself conceded, namely, the amounts paid to Tsukasa for the cars, that the vendor of the cars was Tsukasa and a relationship between the various Japanese parties. Although Mr Mather in his closing address to the jury stated there were a number of things he would like to have put to Mr Mizuno, he accepted in answer to a question in this Court that the documentary evidence did no more than establish that the amounts paid by Mr Reid to Tsukasa were higher than the amounts declared – it did not include evidence about the disposition of those payments, nor provide any breakdown of the payments.
There was nothing in the documentary evidence sourced from Mr Mizuno about payments made or not made to Mr McCarthy. Mr Mather acknowledged that the line of questioning he would have wished to direct to Mr Mizuno was in relation to the disposition of the amounts paid by Mr Reid to Tsukasa. If that was the evidence the defence wished to put before the Court then they were at liberty to call it. There was nothing in the documentary evidence which the Judge admitted that was in any way detrimental or damaging to the appellant; it simply provided proof of details the appellant accepted. The absence of the opportunity to cross-examine on the evidence given (as distinct from what defence counsel might have wanted to investigate) was therefore not prejudicial.
Counsel for the appellant referred to the Law Commission’s Evidence Code and Commentary, s 19 :
In a criminal proceeding, those who are available to give evidence should normally do so in an open Court in the presence of the Judge, jury and defendant. It is expected, therefore, that the discretion (to admit hearsay evidence) will only be exercised to avoid unjustifiable delay or expense in proving a point that is not important to determining the proceeding and about which there is unlikely to be any real doubt.
Mr Mather contended that the evidence in issue was the crux of the case, ie, was there a premium scheme, was there a premium paid to McCarthy? That may be so, but the documentary evidence sourced from Mr Mizuno and admitted as evidence did not provide evidence on that crucial issue.
The appellant raised several other issues in relation to the documentary evidence, but they all turned on the same point.
In the exercise of the discretion under s240 of the Act factors to be taken into account are the nature of the evidence, what it tends to prove and the significance of that. Here the hearsay documentary evidence was not so much directed to proving the primary element of the offence – that Mr Reid intentionally provided undervalue amounts for customs purposes, which might be inferred from the disparate figures in the remittances and the customs documents – but to address an explanation advanced by Mr Reid for that disparity – a matter entirely within his own knowledge. That may be seen as a typical situation contemplated by the legislature in enacting s240 to meet difficulties in obtaining direct evidence of matters outside New Zealand in cases involving less serious offences.
In these circumstances the Judge was not wrong in the exercise of his discretion to admit the documentary hearsay evidence, and there was no miscarriage of justice.

Findings of the jury against the weight of evidence

Counsel for the appellant referred in general to his closing address to the jury and to references by the Crown in closing : “clever and a bit of a wily fox”, and to the “scheme” as “sophisticated”. He took exception to the Crown describing as fabricated or manufactured a letter (exhibit 154/1) purportedly written by the appellant to “Mike” which referred to “your retirement fund scheme” and stated “I go along with your retirement fund scheme – a 30% premium ... Well worth it if I get the pick of the bunch”.
The Crown claimed this letter was created by Mr Reid after Customs executed a search warrant of Mr Reid’s house. The defence argued that this item of evidence was not fairly balanced in the Crown’s closing address by reference to exhibits 69 and 73 which also referred to the “retirement fund” (though not the 30% premium), and were found in the house prior to execution of the search warrant, thus lending credibility to Mr Reid’s explanation of the 30% premium. Defence counsel was also critical of the Crown dismissing as “rubbish” exhibit 511, a letter from Mr McCarthy to Customs confirming the 30% “surcharge” to enable the best available vehicles to be sourced.
The evidence was before the jury; it was a matter for the jury and the weight to be attached to it in its overall assessment of the evidence.
The defence did not produce evidence in support of Mr Reid’s explanation of the 30% premium siphoned off to Mr McCarthy for his retirement fund. As was pointed out by the Crown in its closing address, the evidence was that while over the range of transactions the “premium” element approximated 30%, on a transaction by transaction basis there was no consistent “premium” of 30%; it was in some cases as high as 90% and in other cases much less than 30%.
The submissions by the Crown in closing were submissions about the evidence. The essential elements of the offences the Crown had to prove were explained to the jury by the Judge. There was certainly evidence upon which the jury, properly directed, could convict. The verdict was not unsupported by the evidence.

Sentence

The basis of the appeal against sentence is that the total fine of $40,000, given the forfeiture of three motor vehicles (having a value in the appellant’s estimate of $60,000) and the appellant’s financial position, is excessive and wrong in principle. Mr Reid was bankrupt at the time of sentencing. The bankruptcy has since been annulled on conditions which require payment by Mr and Mrs Reid of a judgment debt and costs arising out of a guarantee of a lease of premises in which their daughter operated a business. Counsel advised that the amount involved including costs, was approximately $190,000. We were referred to a statement of assets and liabilities filed by Mr Reid which refers to a half-share in the matrimonial home at 47 Vebena Road, Birkenhead, Auckland. The government valuation of this property is $720,000. In the pre-sentence report Mr Reid’s estimate was recorded as $200,000. Although there is no current market valuation of the property, it is clear the value is more likely in the vicinity of the government valuation, which may even be conservative.
We question the proportionality between the fines of $4000 imposed in respect of the s 211(a) charges, and $3000 on three and $1500 on two of the s 203(4) charges. The degree of culpability in respect of the latter charges is in our view considerably lower, which was perhaps reflected in the fines of $1500 for the two offences under s203(4) where vehicles were forfeited. However, as in other fields, forfeiture under the Act cannot carry significant weight in determining penalty and there is a need for deterrence in sentences where convictions are entered; the cost of detection and prosecution of offences of this kind is significant. Viewed overall and taking account of Mr Reid’s circumstances, we do not regard the penalty as manifestly excessive or wrong in principle. Mr Reid has been consistently extremely economical in the provision of all relevant material about his financial circumstances so cannot now complain at the impact of these fines on him.

Result

The application to adduce evidence on appeal is declined. The appeals against conviction and sentence are dismissed.

Solicitors:

Crown Law Office, Wellington

[2001] NZCA 45

5 March 2001