Vallily Richard James Molineux v The Queen
[2004] NZCA 268
•10 November 2004
IN THE COURT OF APPEAL OF NEW ZEALAND
CA251/04
THE QUEEN
v
RICHARD JAMES MOLINEUX VALLILY
Hearing:27 October 2004
Coram:William Young J
Randerson J
Heath JAppearances: W Lawson for Appellant
M A Woolford for Crown
Judgment:10 November 2004
JUDGMENT OF THE COURT DELIVERED BY HEATH J
The appeal
[1] Mr Vallily appeals against sentences imposed in the District Court at Rotorua on 1 April 2004 on five fraud charges. He appeals on grounds of manifest excess.
Background
[2] On 7 April 2003, Mr Vallily was sentenced in the District Court at Dunedin on one charge of attempting to defeat the course of justice and four charges of using a document with intent to obtain a pecuniary advantage. That offending took place in Dunedin. He was sentenced to a term of imprisonment of one year six months. His sentence was deferred while he applied to the Parole Board to serve his sentence on home detention. That application was subsequently declined.
[3] At the time of the Dunedin sentencing the Police were actively investigating other offending said to have occurred, also in Dunedin. However, Mr Vallily was not forthcoming to Police with information about the other offending, preferring to exercise his right to silence.
[4] Subsequently, while Mr Vallily was serving the sentence imposed in Dunedin, a further five charges were laid against Mr Vallily in the District Court at Taupo. Those charges related to other offending that occurred in Dunedin between October 1995 and December 2001. All involved offences of dishonesty. Three of the five charges were representative charges. Each charge alleged that Mr Vallily had used documents with intent to gain a pecuniary advantage for himself. All charges were laid indictably.
[5] Mr Vallily entered pleas of guilty, under s 153A of the Summary Proceedings Act 1957, on the first occasion he was brought before the Court at Taupo, on 28 November 2003. Mr Vallily was remanded in custody for sentencing, in Rotorua, on 30 January 2004.
[6] On 30 January, sentencing was adjourned for further information to be obtained. After he appeared in Court, Mr Vallily executed a share transfer form in favour of a person nominated by a victim of some of his frauds. He also signed a document authorising the Police to investigate his financial position.
[7] Ultimately, Mr Vallily was sentenced by Judge Weir on 1 April 2004. The Judge sentenced Mr Vallily to a term of imprisonment of four years three months, coupled with a reparation order in the sum of $87,000. The Judge ordered reparation to be paid at the rate of $100 per week to commence from the date of Mr Vallily’s release from prison.
Jurisdiction
[8] There is no jurisdiction for this Court to entertain Mr Vallily’s appeal. That is because the sentence imposed by the District Court Judge was less than five years imprisonment.
[9] From the point that pleas of guilty were entered under s 153A of the Act and sentencing adjourned (s 153A(6)(a)), jurisdiction was exercised by the District Court under s 28F of the District Courts Act 1947. Only if a sentence of imprisonment exceeding five years is imposed will a right of appeal exist to this Court under s 28F of that Act. In all other cases, sentence appeals go to the High Court: s 28H.
[10] However, there are circumstances in this case, notably the difficulty encountered by Mr Vallily in obtaining advice in relation to the appeal, that justify us taking the course of convening as Judges of the High Court to hear and determine this appeal. We propose to deal with the appeal as if it had been filed in the High Court.
[11] As we are sitting to determine the appeal as High Court Judges, our jurisdiction on appeal stems from s 121(3) of the Summary Proceedings Act, which provides:
121 High Court to hear and determine appeal
…
(3) In the case of an appeal against sentence, the High Court may—
(a) Confirm the sentence; or
(b) If the sentence (either in whole or in part) is one which the Court imposing it had no jurisdiction to impose, or is one which is clearly excessive or inadequate or inappropriate, or if the High Court is satisfied that substantial facts relating to the offence or to the offender's character or personal history were not before the Court imposing sentence, or that those facts were not substantially as placed before or found by that Court, either—
(i) Quash the sentence and either pass such other sentence warranted in law (whether more or less severe) in substitution therefor as the High Court thinks ought to have been passed or deal with the offender in any other way that the Court imposing sentence could have dealt with him on the conviction; or
(ii)Quash any invalid part of the sentence that is severable from the residue; or
(iii)Vary, within the limits warranted in law, the sentence or any part of it or any condition imposed in it.
...
The facts
[12] Exchange Corporation Ltd (Exchange) was incorporated in 1997. It offered insurance, superannuation and investment products to members of the public.
[13] Mr Vallily was one of two directors of Exchange. He held 35% of the shares in the company. The other director (Mr Willis) held the remaining 65% of shares.
[14] Mr Vallily was responsible for administration of the day to day business of the company. His task included management of the company bank account and providing information to accountants, for the purpose of preparing annual financial statements.
[15] Both Mr Vallily and his co-director were signatories on the company cheque account in May 1998. Two signatories were required on cheques issued for Exchange’s account. A third signatory was added, but only for the purpose of co‑signing cheques when a shareholder was unavailable.
[16] The first charge, a representative charge, arose from a series of 51 cheques issued during the period between 1 April 1999 and 22 December 2001 by Mr Vallily. These cheques were issued on Exchange’s bank account without authority. The second signature on 42 of the 51 cheques was forged.
[17] A tracing exercise established that funds from 35 of the cheques were paid into accounts controlled by Mr Vallily; 14 were used to pay private expenditure incurred by him and two others were used to conceal other offending.
[18] The offending was compounded by Mr Vallily disguising the true nature of the payments and providing information to the company accountants suggesting the expenditure was legitimate. It was not possible to detect the nature of the transactions in financial statements prepared for the years ended 31 March 2000 and 31 March 2001.
[19] The second charge, also a representative charge, arose out of the acquisition, in about May 2000, of a Tower Insurance agency from another insurance broker. The benefits from acquisition of that agency were continuing renewal commissions, payable for so long as the clients held policies of insurance with Tower. That annual commission amounted to approximately $1,400 per annum.
[20] Six Exchange cheques were issued totalling $4,499.39. Those cheques were used to pay the purchase price of $4,500 for the agency. Mr Vallily’s co-director was unaware of the acquisition of the agency and did not authorise the transaction.
[21] While the agency was acquired through company funds, commissions were paid into a bank account in Mr Vallily’s name, to the detriment of Exchange.
[22] The third charge relates to a series of transactions which commenced in June 1999. It is also a representative charge.
[23] A friend of Mr Vallily formed a company called Exchange Insurance Brokers Ltd. Cheques were issued by Exchange to pay for the new company’s formation and initial running costs. That was done legitimately. Costs were reimbursed on a regular basis as the new company could afford to pay.
[24] However, in about July 2000, Mr Vallily went to the promoter of the new company (his friend) and told him the arrangement was being terminated and all moneys owing to Exchange were to be settled promptly.
[25] Due to cash flow difficulties two cheques were paid to settle the account; the first on 9 November 2001 for $3,000, the second on 24 November 2001 for $2,394.69. Both cheques were banked by Mr Vallily into an account in the name of Serval Holdings Ltd, of which he was the beneficial owner. Thus, the monies were misappropriated.
[26] The fourth charge related to an investment policy taken out in 1990 with Norwich Union Life Insurance Society. The complainant made monthly contributions to the policy by direct debit from his bank account. In 1995 Mr Vallily became the agent responsible for managing the policy.
[27] On or about 19 October 1995 Mr Vallily completed a surrender form without the complainant’s knowledge or instruction. He forged the complainant’s signature on the form.
[28] Norwich Union forwarded a cheque for $15,283.44 to a post office box number in accordance with the instructions on the surrender documents. Mr Vallily had access to that post office box. Ultimately that cheque was banked into a managed funds account opened by Mr Vallily in a false name.
[29] The Police ascertained that Mr Vallily had access to those funds over the period between 20 December 1995 and 1996 when the complainant went to Mr Vallily requesting $10,000 from his investment policy. Mr Vallily gave the complainant a cheque for $3,500 telling him Norwich Union would be making two payments. The $3,500 payment was made out of other misappropriated funds. A further cheque for $6,500 was paid later.
[30] By 1999 the complainant wanted to liquidate assets to go to Australia. He tried to withdraw from the policy. Two payments from Exchange were made to the complainant totalling $2,042 and $4,832.64 respectively on 14 April 1999 and 7 May 1999. One of those cheques had a forged second signature while the other had one signature only. Neither of those two payments was authorised by Mr Vallily’s co-director. By this transaction, Exchange was defrauded further.
[31] The final charge arose from another situation in which Mr Vallily was the insurance agent for a complainant.
[32] Life insurance and superannuation policies had been taken out with Norwich Union. Mr Vallily, on instructions from the complainant, approached Norwich Union in 1996 to see if some funds could be withdrawn. Norwich Union accepted the obligation but the complainant was never advised. Instead Mr Vallily completed, on about 4 July 1996 a cash withdrawal request form on which he forged the complainant’s signature. A cheque for $3,500 was made out which was used to pay that sum to the other complainant.
Additional background information
[33] When charged, Mr Vallily was aged 51 years. He has a history of offences of dishonesty.
[34] On 20 March 1989 Mr Vallily was convicted in the District Court at Queenstown on five charges of theft by failing to account and four charges of using a document with intent to obtain a pecuniary advantage. He was sentenced to concurrent terms of imprisonment on each of one year six months. The offending caused pecuniary losses in excess of $130,000 to a number of complainants.
[35] On 7 April 2003 Mr Vallily was sentenced, in the District Court at Dunedin, on the charges to which we referred in para [2] above. The four fraud charges related to a company called Networth.com Ltd.
[36] While the information we have about the Dunedin offending is sketchy, it is reasonably clear that the amount of money involved in those frauds was in the vicinity of $23,000. Reparation was ordered but has not yet been paid.
[37] While questions of loss, arising from the offending in this case, was a matter of some dispute in the District Court, Mr Lawson and Mr Woolford now agree that the loss suffered by various complainants can be treated as $75,615.44. That excludes from consideration various costs and expenses which were included in the reparation schedule placed before the District Court Judge and the subject of dispute by Mr Vallily.
Sentencing in the District Court
[38] Judge Weir noted that the charges encompassed approximately 67 separate offences. He described the “major victim” as Exchange but regarded Mr Vallily’s co-shareholder and director, Mr Willis, as a person on whom the offending had had “a significant impact”.
[39] The Judge referred to the emotional impact of the offending, particularly on Mr Willis. He also referred to (and to some extent at least, relied upon) a letter written by the Officer in Charge of the investigation to the Crown Solicitor about attempts to ascertain whether undisclosed assets existed from which reparation could be made. The Judge noted that approximately $23,000 was held in a solicitor’s trust account in Dunedin in relation to the Networth fraud which might at some point be paid back to the company that suffered loss.
[40] The Judge took the view that Mr Vallily had failed to co-operate adequately with the Police about the offending on which he was sentencing him. The Judge referred, in particular, to the letter to the Crown Solicitor from the Officer in Charge in reaching that view. Judge Weir said:
[10] The Sergeant also has, in the short time available, made further investigations in relation to a timeshare investment in Fiji, bank accounts in Fiji, bonus bonds, various bank accounts and is unable to get to the bottom of your financial dealings. What the report does disclose is that there were huge numbers of transfers going in and out of the various accounts over an extended period of time, and he has been unable to, in the time available, run all of those transactions to ground.
[11] This is of particular significance because in the summary of facts he referred to the fact that he wanted to speak to you earlier on in the course of his investigation, but you declined to be interviewed or to provide any explanation. As a result of that, the investigation took over a year and involved that investigating officer having to go to Australia to track down some of your financial transactions.
[41] The Judge declined to accept an explanation proffered through Mr Vallily’s counsel to the effect that lack of early co-operation was explained through Mr Vallily being prescribed anti-depressants at the time. The Judge was also told that Mr Vallily declined to make a statement because he thought he might later be charged. The Judge said:
… At that time, you knew full well the extent of your frauds. You knew how complicated the transactions were. Your refusal to assist the investigating officer whilst you were a serving prisoner, in my view, gives you no credit whatsoever. For that reason, the proposal that I should in some way take into account your existing sentence that you are serving is not appropriate in my view. You had the opportunity to clear that matter up. Indeed, the submission by the Crown is that the investigating officer was prepared to effectively do some plea bargaining in order to run all of these matters to ground, but you elected not to do that or co-operate with him, and for that reason this offending must be dealt with in isolation. (para [12])
[42] The Judge saw the following features as aggravating factors:
a)Breach of trust, both in relation to the company and as an agent for others.
b)Repetitive and prolonged offending.
c)Premeditation.
d)Effect of the offending on victims.
e)Offending carried out for personal gain.
[43] After taking account of aggravating factors, the Judge chose five years’ imprisonment as an appropriate starting point. He was prepared to allow “some credit” for the plea of guilty and made an order for reparation totalling $87,000 to be paid at the rate of $100 per week on his release from imprisonment.
[44] The credit given for the early plea of guilty and for the imposition of reparation (respectively) was not articulated by the Judge. The Judge said that he was making a reparation order in that form both because that was a figure offered by Mr Vallily and “because of the suspicion that there are funds, and at some stage it may be possible to source those funds”.
[45] The Judge gave a credit of nine months for all mitigating factors, resulting in a sentence of four years three months imprisonment.
[46] In addition the Judge made an order that an item of furniture (not specifically described) in storage in Rotorua be returned to Mr Willis.
[47] From our discussions with counsel, that “item” seems, in fact, to represent two articles of joinery that Mr Vallily arranged to have made and paid for through unauthorised cheques issued by Exchange. The Judge’s source of information on that topic appears to be the letter from the Officer in Charge to the Crown Solicitor, to which we have referred. The precise source of jurisdiction for this “forfeiture” order is unclear.
Grounds of appeal
[48] Mr Lawson submits that the effective sentence imposed was manifestly excessive. That submission is advanced from the following combination of factors:
a)The starting point for sentence was too high.
b)The credit for an early guilty plea was inadequate.
c)The alleged failure to co-operate ought not to have been treated as an aggravating factor.
d)The Judge took account of inappropriate material contained in Victim Impact Statements, the pre-sentence report and a letter from the Officer in Charge to the Crown Solicitor.
e)The Judge failed to take adequate account of remorse and offers to make amends.
f)The reparation order was inappropriate in the form in which it was made.
[49] Mr Woolford, for the Crown, accepted that the sentence was towards the top of the permissible range. He accepted that, depending upon our view of the weight to be given to certain factors advanced by Mr Lawson, a lower sentence might well be appropriate.
Ought we to interfere?
[50] The first step is to ascertain an appropriate starting point for sentence. The Judge chose a starting point of five years imprisonment. Plainly, in so doing he included aggravating features. We consider that approach was correct. An appropriate starting point could only be ascertained by reference to aggravating features. Deductions could then be made from that starting point for mitigating factors.
[51] In our view, a starting point of five years imprisonment was within the range available to the Judge for offending of this type. That starting point can be justified by reference to the discussion of cases (all involving offences of dishonesty) by the Court of Appeal in R v S (CA336/02, 13 March 2003, Blanchard, Baragwanath and Goddard JJ). We refer to paras [19] - [23] of R v S.
[52] We regard Matika v Police (High Court, Hamilton, A105/99, 17 December 1999, Penlington and Hammond JJ) as an appropriate comparator. In Matika a starting point of five years was endorsed. An end sentence of three years imprisonment imposed was upheld on appeal, having regard to guilty pleas.
[53] We note that:
a)The number of offences involved in that case were greater than those on which Mr Vallily appeared for sentence before Judge Weir, but the value of the misappropriations was greater in Mr Vallily’s case.
b)The period over which the offending took place in Matika was much less, from 8 April 1998 to 21 February 1999.
c)The loss to victims was also much less.
d)The previous convictions of the offender were greater than those of Mr Vallily. The offender in Matika was described by Penlington J (at para [23] of his judgment) as having “a most formidable list of previous convictions going back to 1982” for offences of dishonesty.
[54] Having agreed with the starting point adopted by the Judge, we consider the approach of the Judge to sentencing. Four points assume significance:
a)First, the Judge did not articulate the allowance made for individual mitigating factors. This meant that the credit for early guilty pleas was not expressed transparently. It also meant that no indication was given of the length of sentence that would have been imposed had no reparation order been made.
b)Second, the Judge placed weight on information contained in the letter from the Officer in Charge to the Crown Solicitor. That information had not been tested. Neither, to be fair to the Officer in Charge, is it likely that he expected that material to be put before the Court for the purpose of providing reliable information on which a Judge could sentence Mr Vallily.
c)Third, the Judge failed to consider, after completing his sentencing exercise, whether the term imposed fairly reflected the totality of offending that had occurred as at the date on which Mr Vallily was sentenced in the District Court at Dunedin. All offending to which Mr Vallily pleaded guilty in Taupo took place before the date of his conviction and sentence in Dunedin. While the Judge treated that issue as discretionary (see para [12] of his remarks set out in para [41] above) in our view, it was necessary to consider the application of the totality principle.
d)Fourth, the Judge was told that Mr Vallily agreed to pay reparation at the rate of $100 per week. We were told by Mr Lawson that that did not represent the true proposal made by Mr Vallily. The true offer, $40,000 over five years was put to us by Mr Lawson.
[55] Having regard to those matters we regard this case as one in which the sentencing process has miscarried. Accordingly, we propose to determine an appropriate sentence afresh, rather than to consider whether the sentence imposed by the Judge was clearly excessive. That is consistent with the approach adopted in R v Finau (2003) 20 CRNZ 333 (CA) at 337, para [17].
[56] We commence by adopting the starting point of five years imprisonment used by the Judge. While there is no established benchmark for offending of dishonesty (R v Rose [1990] 2 NZLR 552 (CA)), sentencing goals such as denunciation and deterrence are particularly important for so called “white collar crime”. Section 16 of the Sentencing Act 2002 also tells us that imprisonment, if considered necessary, ought to be kept as short as is consonant with promoting the safety of the community, a concept reinforced by s 8(g) of the Sentencing Act which requires a Court to impose the least restrictive outcome appropriate in the circumstances. In addition to ss 8(g) and 16 of the Sentencing Act we refer to Rose at 556.
[57] The credit is normally given for an early guilty plea can range between 25% and 33% depending on the circumstances. In Rose, the Court of Appeal noted that an early guilty plea would normally attract a credit of something in the order of two years; 25% on the basis of an eight years’ starting point: at 557. To similar effect, Heron ACJ and Ellis J, in Cole v Police [2001] 2 NZLR 139 regarded a 25% credit as “a significant or palpable reduction in sentence [to] be made for guilty pleas and assistance to the Police”: at 114, para [13].
[58] The next step is to identify other mitigating factors that ought properly to be taken into account. Potential mitigating factors are:
a)Co-operation with the prosecution authorities from about the time charges were laid in the District Court at Taupo.
b)The extent of any reparation order that might be made.
c)An offer to make amends, to the extent that that is not captured within any reparation order.
[59] Contrary to the Judge’s view we take the view that Mr Vallily was entitled to some credit for co-operation, albeit of a limited nature. First, we were told that there were discussions before the charges were laid which enabled certain offending to be dealt with by representative charges. Second, from 30 January 2004 full authority was given by Mr Vallily for the Police to investigate his financial position. We refer in that regard to a letter signed by Mr Vallily following the adjourned sentencing hearing on 30 January 2004. In that letter Mr Vallily stated:
To whom it may concern
I, Richard James Vallily authorize my accountant Andrew Bosworth of Bosworth & Co., McBride Street, Dunedin and my solicitor Gerard De Courcy of Downie Stewart, Barristers & Solicitors, Dunedin to divulge any financial information about my affairs to the Crown or its duly authorised agent.
I declare that I wish to give my former partner Eion Willis, my 35% share in Exchange Corporation Ltd. And waive any claim for approximately $30,000 that I earned in commission from 1997 onwards.
I was a director of the following companies, but have now resigned:
Serval Holdings Ltd
Networth.com Ltd
Exchange Corporation Ltd
Monex Ltd.I have received a letter from the Companies Office stating that I am now excluded from being a director of any company for 5 years from the 7th April 2003 which was the date of my last convictions.
I am a shareholder in the following companies:
Serval Holdings Ltd
Exchange Corporation LtdMy son Ryan James Vallily aged 16 years is a shareholder in Serval Holding Ltd and a beneficiary of the Richardson Trust.
I am a trustee and beneficiary of the Richardson Trust.
I have no other interests in any trusts or companies.
I will cooperate with the Crown or its duly authorised agent to answer any question or provide any information they require.
I declare that this statement is true and correct. …
[60] The next potential mitigating factor concerns the duel effect of reparation and any offer to make amends not falling within any reparation order.
[61] In contrast to what was put to the Judge by Mr Vallily’s then counsel, Mr Lawson told us that Mr Vallily was prepared to pay, by way of reparation, a sum of $40,000. Mr Vallily’s offer was to pay that sum at the rate of $5,000 per annum from the date of his release from prison. On that basis, it would take approximately eight years for the debt to be paid. In addition to the offer of reparation relayed to us by Mr Lawson, Mr Vallily had agreed to transfer to Mr Willis’ nominee his 35% share in Exchange and had waived a claim for approximately $30,000 earned in commission from 1997. A copy of the share transfer was made available to us.
[62] Clearly, if an order for reparation were made that would impact on the length of the sentence of imprisonment to be imposed. On the other hand, there is little social purpose in ordering reparation if a fresh start is unavailable to an offender, on release from prison, because of a requirement that he or she pay excessive reparation, whether as to time, amount or both.
[63] The provisions of the Sentencing Act that deal with reparation can be found in ss 12, 14 and 32 - 38. Enforcement of an order for reparation is dealt with by s 145 of that Act.
[64] Section 12 of the Act provides:
12 Reparation
(1) If a court is lawfully entitled under Part 2 to impose a sentence of reparation, it must impose it unless it is satisfied that the sentence would result in undue hardship for the offender or the dependants of the offender, or that any other special circumstances would make it inappropriate.
(2) A sentence of reparation may be imposed, in relation to any particular offence, on its own or in addition to any other sentence.
(3) If a court does not impose a sentence of reparation in a case where it is lawfully entitled to do so, it must give reasons for not doing so.
[65] Section 14 of the Act provides:
14 Reparation, fines, and financial capacity of offender
(1) Even if it would be appropriate in accordance with section 13 to impose a fine, a court may nevertheless decide not to impose a fine if it is satisfied that the offender does not or will not have the means to pay it.
(2) If a court considers that it would otherwise be appropriate to impose a sentence of reparation and a sentence of a fine, but it appears to the court that the offender has or will have the means to pay a fine or make reparation, but not both, the court must sentence the offender to make reparation.
[66] Section 32 of the Act enables a Court to impose a sentence of reparation if an offender has, through or by means of an offence of which he or she is convicted, caused someone to suffer loss of, or damage to, property or emotional harm or loss or damage consequential on emotional or physical harm or loss of or damage to property: s 32(1). Any person in whose favour an order for reparation is made must be a “victim” as defined in s 4(1) of the Act.
[67] In this case, a reparation report was ordered under s 33 of the Act.
[68] Sections 35 and 36 of the Act provide:
35 Taking into account financial capacity of offender
(1) If the offender has insufficient means to pay the total value of the loss, damage, or harm, the court may sentence the offender to make—
(a)reparation for any amount that is less than the value of the loss, damage, or harm; or
(b)payment by instalments in respect of the loss, damage, or harm; or
(c) both (a) and (b).
(2) If the court imposes on an offender a sentence of reparation and a sentence of a fine, any payments received from the offender must be applied first in satisfaction of the amount due under the sentence of reparation.
36 Conditions of sentence of reparation
(1) If a court sentences an offender to make reparation, the court must determine the conditions of the sentence in respect of the following matters:
(a) the total amount of reparation to be paid by the offender:
(b)whether the amount is to be paid in 1 lump sum or in instalments:
(c) if the amount is to be paid in 1 lump sum, whether it is to be paid immediately or at some specified future date:
(d)if the amount is to be paid in instalments, the frequency and amounts of the instalments.
(2) The court may not impose a condition that an amount to be paid in 1 lump sum must be paid immediately unless the court is satisfied that the offender has sufficient means to pay it immediately.
(3) If the court imposes a condition on a sentence of reparation that it must be paid immediately in 1 lump sum, section 83(2) of the Summary Proceedings Act 1957 applies as if the condition were an order under section 83(1) of that Act.
[69] The question is whether a sentence of reparation is appropriate in this case. Certainly an offer to pay reparation has been made by Mr Vallily. Indeed, his offer, as relayed to us by Mr Lawson (who did not appear in the District Court) is at a greater level than that ordered by the Judge. If an offer to pay reparation is made but no order is made the offer must, nevertheless, be taken into account in determining an appropriate sentence: see s 10 of the Sentencing Act.
[70] The reparation order as made by the Judge seems to have been premised on the suspicion that funds may have been hidden by Mr Vallily which could come to light at some later stage and on an offer from Mr Vallily conveyed by his then counsel. We do not regard the former an appropriate basis to order reparation. There was no proof of hidden funds. The issue is whether, on present information, there are sufficient means for reparation to be ordered and, if so, whether that should be done on terms.
[71] The reparation report disclosed debts of $70,800. Those debts were separate from debts arising out of the offending on which he was being sentenced. Mr Vallily declared no disposable income and the reparation report stated that his only assets were a 50% share (unspecified) in a family trust.
[72] Mr Lawson explained to us that Mr Vallily intended, on his release, to take up work as a “fencer”. From that prospective employment he intended to pay reparation.
[73] In our view the reparation order made by the Judge was inappropriate because the period over which payments were required was too long. Equally, the periodic payments ordered were relatively small. They are unlikely to provide any significant benefit to those defrauded by Mr Vallily.
[74] Before us, counsel for Mr Vallily and the Crown agreed that it was appropriate for a reparation order to be made on the basis proposed by Mr Vallily, namely on the basis set out in para [61] above.
[75] We have reservations as to whether an order of that type is appropriate. First, we are concerned about the possibility of, unwittingly, creating a disincentive for Mr Vallily to rehabilitate himself after release from prison. Our concern is that he might go back to his dishonest ways to meet the reparation order. Second, we are concerned about the length of time it would take to pay reparation. We also have real concerns as to whether it is likely that the reparation will be paid, particularly having regard to the fact that there remains a sum of $23,000 held in the trust account of a solicitor in Dunedin (on the basis of unspecified disputes) which, we understand, was intended to be used to meet reparation for the earlier Dunedin offending.
[76] Notwithstanding our reservations, we do not think it appropriate, given the emphasis placed on the sentence of reparation by Parliament, to ignore an agreed proposal for reparation to be paid. Accordingly, we propose to make an order for reparation and to make some allowance for that in determining the length of the term of imprisonment to be served. In so holding, we have had regard to s 145 of the Sentencing Act 2002 and to the provisions for enforcement of reparation orders to which s 145(2) refers. In our view, should any of the reparation not be paid Mr Vallily will be at real risk of being required to serve a period of imprisonment for non-payment.
[77] Additionally, there is an issue about the furniture “forfeited” by order of the Judge. Mr Lawson confirmed his client’s authority for the Police to sell the furniture forfeited and to be used to pay funds to the victims. We are prepared to make an additional reparation order to deal with that particular aspect. While we have no evidence of the value of those items, Mr Lawson informed us from the Bar (based on instructions from Mr Vallily) that it was estimated to be worth between $5,000 and $6,000.
[78] It is not possible to be mathematically precise about the various allowances to be given for mitigating factors. The exercise is, ultimately, one of judgment rather than arithmetic. Having regard to the ordinary credit given for an early guilty plea and the additional factors to which we have referred, we take the view that an adequate credit is one year six months imprisonment. That results in an effective sentence of three years six months imprisonment on each of the charges before the Court.
[79] The final question is to assess whether the sentence we propose to impose is a sentence that reflects the totality of offending had Mr Vallily been brought before the District Court in Dunedin on all outstanding issues when he was sentenced in that Court in April 2003. We think that the sentence we intend to impose would have fairly reflected the totality of the offending.
Conclusion
[80] The appeal against sentence is allowed. The sentence imposed in the District Court is quashed. In lieu thereof we impose the following sentence:
a)Mr Vallily is sentenced, on each charge, to a term of imprisonment of three years six months, those terms to be served concurrently.
b)We make an order that Mr Vallily pay reparation of $40,000. That sum shall be paid to each victim (as defined by s 4(1) of the Sentencing Act 2002) on a pro rata basis. We direct that that sum shall be paid at the rate of $5,000 per annum. The first payment shall be made on the first anniversary of Mr Vallily’s release from prison under the sentence now imposed. Thereafter, it shall be paid in quarterly rests of $1,250 until payment is completed.
c)As Mr Lawson confirmed that Mr Vallily authorised the Police to sell the furniture in its custody, we make an order requiring the net proceeds of sale to be distributed to Mr Willis (he being the victim affected by that fraud) as additional reparation.
Solicitors:
Lance & Lawson, Rotorua for Appellant
Crown Solicitor, Auckland
0
0
0