BERGEN v MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT [2019] NZHC 1129

BERGEN v MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT [2019] NZHC 1129 [24 May2019]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECRI-2019-409-8[2019] NZHC 1129BETWEEN ALEX OLIVER BERGENAppellantAND MINISTRY OF BUSINESS, INNOVATIONAND EMPLOYMENTRespondentHearing: 23 May 2019Appearances: T H Aickin for AppellantH F McKenzie for RespondentJudgment: 24 May 2019JUDGMENT OF COOKE J[1] Alex Bergen was charged with three offences under the Companies Act 1993.He sought a sentence indication, which he accepted. On 18 October 2018, followinghis reasoning in the sentence indication, Judge Gilbert sentenced him to two years andthree months' imprisonment.1 The Judge refused name suppression on 19 December2018. While Mr Bergen originally indicated he wanted to appeal the suppressiondecision, he now appeals the sentence imposed. The prosecutor, the Ministry ofBusiness, Innovation and Employment, does not dispute the change in appeal directionbut submits the appeal should be dismissed.Facts[2] Mr Bergen has used numerous aliases. Born Wayne Jury Eaglesome, since2004 he has legally changed his name to Alexander Bollingbroke-De Villiers,1 Ministry of Business Innovation and Employment v Bergen [2018] NZDC 22068.Alexander Newman, Richard Mountjoy, Bernhardt Bentinck, George Von Rothschild,Alex Bergen and, since charges were laid, to Barnaby Gordon. He has informallygone by many other names. He was charged and sentenced here under the name ofAlex Bergen.[3] Mr Bergen's criminal history is extensive. On the prosecutor's count, he has261 previous relevant convictions in New Zealand between 1993 and 2013, and fiveprevious relevant convictions in the United States of America between 1996 and 2001.These are dishonesty-related convictions and have led to numerous sentences ofimprisonment. He also has convictions for sexual offending, obstructing the course ofjustice, and breaches of Court orders.[4] As a result of qualifying convictions, Mr Bergen was prohibited from being adirector or promoter of, or in any way, whether directly or indirectly, being concernedor taking part in the management of a company unless he first obtained the leave ofthe court. On the District Court's and prosecutor's understanding, the prohibition wasfor a period of five years between 24 January 2013 and 23 January 2018. Mr Bergennow disputes this.[5] Mr Bergen had not obtained leave of the Court to be a director or to be involvedin the management of a company. The Ministry of Business, Innovation andEmployment (MBIE) had written to Mr Bergen in relation to the prohibition on22 August 2016 and had spoken with him by phone on 30 June 2016. Mr Bergen sayshe did not receive the letter. He admits receiving the phone call but says the dates ofhis prohibition were not discussed.[6] Between 3 April 2017 and 7 July 2017, under the name Bernhardt Bentinck,Mr Bergen was both a director and took part in the management of the company UglyHouse Services Ltd (UHSL).[7] On 4 April 2017, Mr Bergen submitted to the Companies Office a Consent andcertificate of director or directors of proposed company form, providing that he wouldbe a director of UHSL. Companies Office records show that he has been a director ofUHSL since 4 April 2017. UHSL went into liquidation on or about 6 July 2017.Mr Bergen was charged with being a director of UHSL while prohibited to so unders 382(4) of the Companies Act.[8] Between 3 April 2017 and 7 July 2017, Mr Bergen was directly or indirectlyconcerned or took part in the management of UHSL in ways including dealing withthe Companies Office to lodge documents and incorporating UHSL, setting uprelations with 2degrees Ltd and acquiring something in the order of 50 mobile phones,being involved in the allocation and transfer of shares, and putting UHSL intoliquidation. Mr Bergen was charged with being concerned or taking part in themanagement of UHSL while prohibited to do so under s 382(4) of the Companies Act.[9] When UHSL was put into liquidation, it had an unpaid debt to 2degrees Ltd of$94,761.86. This sum is predominantly the cost of the mobile phones acquired, anumber of which were later found listed for sale on TradeMe.[10] Above Mr Bergen's signature on the Consent and certificate of director ordirectors of proposed company form, submitted on 4 April 2017, is the statement:Director's consentI consent to be a director of the above company and certify that I am notdisqualified from being appointed or holding office as a director of a company.[11] Mr Bergen was prohibited from being a director of a company at that time. Hewas charged with making a false or misleading statement under s 377(1) of theCompanies Act.[12] Each of the three charges has a maximum penalty of five years' imprisonmentor a fine not exceeding $200,000.District Court decision[13] In the sentence indication on 1 August 2018, Judge Gilbert describedMr Bergen's "relentless dishonesty". He noted that any tailing off of offending inrecent years was only really during periods of imprisonment, and Mr Bergen's "defaultposition when [he is] in the community appears to be dishonesty". The Judgeconsidered the primary purposes of sentencing Mr Bergen were the need to hold himaccountable, to deter him and to protect the public. On the material before him, theJudge considered that Mr Bergen's culpability was higher because UHSL was "alwaysgoing to be a vehicle for incurring obligations that [Mr Bergen] had no real prospectof repaying", rather than a business operating legitimately but for a breach of a ban onbeing a director.[14] In those circumstances, in the sentencing indication the Judge decided thatMBIE's suggested starting point of 14 to 18 months' imprisonment was insufficient.He adopted a starting point of two years' imprisonment, which he considered to be"the bare minimum appropriate".[15] The Judge made an uplift of one year for Mr Bergen's prior convictions. Heacknowledged this would be higher than a normal uplift for prior convictions, but said: a person's prior history brings into sharp focus the need to protect the publicand unfortunately yours is a case more than virtually any other that I have seenwhere that particular purpose of sentencing is front and centre on the stage.[16] With a 25 per cent discount for guilty pleas, the indicated final sentence wastwo years and three months' imprisonment. The Judge noted that even if the sentencehad been lower than two years, "home detention would never be an option" forMr Bergen.[17] Mr Bergen accepted the sentence indication, pleaded guilty, and was sentencedby Judge Gilbert on 18 October 2018. Mr Bergen offered to make reparation of$30,000 to 2degrees Ltd, at $10,000 per year after he was released from prison. TheJudge declined to make such a reparation order as he considered it was unrealistic, anddeclined to give any credit for the willingness to make reparation. As indicated, theJudge sentenced Mr Bergen to two years and three months' imprisonment.Principles on appeal[18] Appeals against sentence are allowed as of right by s 244 of the CriminalProcedure Act 2011 and must be determined in accordance with s 250 of that Act. Anappeal against sentence may only be allowed by this Court if it is satisfied that therehas been an error in the imposition of the sentence and that a different sentence shouldbe imposed.2 As the Court of Appeal mentioned in Tutakangahau v R quoting thelower court's decision, a "court will not intervene where the sentence is within therange that can be properly be justified by accepted sentencing principles".3 It is onlyappropriate for this Court to intervene and substitute its own views if the sentencebeing appealed is "manifestly excessive" and not justified by the relevant sentencingprinciples.4Appellant's submissions[19] Ms Aickin, for Mr Bergen, submits that the end sentence of two years and threemonths' imprisonment was manifestly excessive, and that a relevant fact was not takeninto account, or alternatively an erroneous matter was taken into account in sentencing.[20] A key point in relation to the appeal is that Mr Bergen submits the convictiondate for the qualifying offences, triggering the prohibition period, was earlier than firstthought. This would mean that Mr Bergen's prohibition period actually ended in May2017, in the middle of Mr Bergen's three-month period running UHSL. This,Ms Aickin submits, would reduce Mr Bergen's culpability and justify a shortersentence.[21] Mr Bergen was charged with seven offences in 2012, six of which wererelevant dishonesty offences. They included four charges of using a document forpecuniary advantage, one charge of accessing a computer system for a dishonestpurpose, and one charge of obtaining by deception (over $1,000). Mr Bergen says heentered guilty pleas to these charges on 7 May 2012, and thus convictions would havebeen entered on that date, not when he was sentenced on 24 January 2013. As such,his five-year prohibition should have ended on 6 May 2017, not 23 January 2018. Hehas only now established this through contact with the Auckland District Court, aftersentencing for the instant offences.[22] Ms Aickin acknowledges that this would not alter Mr Bergen's liability forsubmitting the Consent and certificate of director or directors of proposed company2 Criminal Procedure Act 2011, ss 250(2) and 250(3).3 Tutakangahau v R [2014] NZCA 279, [2014] 3 NZLR 482 at [36].4 Ripia v R [2011] NZCA 101 at [15].form on 4 April 2017, which resulted in the charge of making a false statement.However, the charges of being a director of UHSL and taking part in the managementof UHSL were based on a period of offending of three months, between 3 April 2017and 7 July 2017. Ms Aickin submits that it follows that if the offending could only besaid to have occurred over a one-month period immediately prior to the expiration ofhis prohibition period, his culpability for the offending must be greatly reduced.[23] Ms Aickin also submits that his sentence was manifestly excessive as the Judgedid not give credit for Mr Bergen's remorse. Mr Bergen was living overseas when hebecame aware of the charges and voluntarily returned to New Zealand to answer them.Ms Aickin submits that this factor, along with his cooperation with authorities, promptguilty pleas, and offer to pay reparation are relevant to his remorse and justify adiscrete discount additional to the discount for his guilty plea. Ms Aickin submits that"capacity to pay reparation is not the true issue, it is a defendant's willingness to doso, which should properly be taken into account".[24] Ms Aickin finally submits that the starting point and uplift for previousconvictions were manifestly excessive. She notes that the prosecutor proposed a muchlower starting point than eventually adopted by the Judge. Presuming the Courtaccepts the earlier date of conviction, the length of the period of offending is lesserthan the District Court Judge was aware and thus the offending can be seen as lessserious.[25] Ms Aickin notes that even a modest reduction in sentence would likely have areal impact on Mr Bergen's release date, as if the sentence drops below two years hecould avoid going before the Parole Board.Respondent's submissions[26] Ms McKenzie, for MBIE, notes that at the prosecution and sentencing stages,MBIE had relied on the Certified Extract of the Court Record, the Criminal and TrafficHistory print out, and MBIE's correspondence with Mr Bergen for the date ofconviction being 24 January 2013.[27] Ms McKenzie has also made enquiries with the Auckland District Court toestablish the correct dates that convictions were entered. The documents provided bythe District Court, attached to her submissions, appear to show that of the six chargesMr Bergen faced, on 7 May 2012 he only entered guilty pleas to five of them. Itappears he maintained a not guilty plea on one of the charges of using a document forpecuniary advantage until it was vacated and a guilty plea entered on 7 August 2012.There is no record of a conviction being entered on that date.[28] Ms McKenzie notes that s 376 of the Criminal Procedure Act 2011 deems aperson to be convicted if a court proceeds to sentence a defendant without formallymaking an order convicting them.[29] Using a document for pecuniary advantage is a qualifying offence for aprohibition under the Companies Act. Thus, Ms McKenzie submits that for the otherfive offences, the prohibition period began on 7 May 2012, but another prohibitionperiod was triggered by the later guilty plea. That prohibition period, she submits,began on 24 January 2018, when Mr Bergen was deemed to be convicted under s 376of the Criminal Procedure Act. Alternatively, it began on 7 August 2012, whenMr Bergen pleaded guilty. On that basis, Ms McKenzie submits Mr Bergen was stillsubject to a period of prohibition throughout the offending, whether the prohibitionperiod ended on 6 August 2017 or on 23 January 2018.[30] Ms McKenzie submits that the full 25 per cent discount Mr Bergen receivedfor his early guilty plea and acceptance of responsibility was sufficient to addressMr Bergen's return to New Zealand and cooperation with authorities. No furtherdiscount was required.[31] In terms of reparation, Ms McKenzie submits that Mr Bergen should not getcredit for making an offer to pay reparation which he would not be able to pay.Otherwise, "any offender could make unrealistic offers of reparation for a reductionin sentence, gain credit for this, but know they would never be able to pay". Further,she submits the refusal to make a reparation order benefits Mr Bergen, and thus heshould not be entitled to any additional discount. Ms McKenzie quotes Venning J inPrice v Police:5Importantly, in considering whether and to what extent reparation should betaken into account the Court is required to take into account whether the offeris genuine and significantly in this case, capable of fulfilment.[32] Ms McKenzie notes that it appears Mr Bergen acquired the 50 mobile phonesfrom 2degrees Ltd within one week of the company being set up. This supports thepoint made by the Judge that UHSL appeared to be set up for illegitimate purposes.[33] Ms McKenzie submits that an uplift of one year was not excessive in thecircumstances of Mr Bergen's prior offending and the need to protect the public fromhim.[34] Finally, Ms McKenzie takes issue with Ms Aickin's submission relating toMr Bergen being able to avoid the Parole Board should his sentence drop below twoyears. Ms McKenzie quotes the Court of Appeal cautioning against sentence being"artificially tailored to achieve a desired outcome" and says this is an irrelevantconsideration.6Analysis[35] To some extent the appeal seems to me to raise a point of principle. Theappellant was sentenced in the District Court on a summary of facts in relation towhich guilty pleas were entered. This followed from a sentencing indication. Thatsummary of facts is now said to be wrong. It may be that the appeal Court in thosecircumstances should take a narrow view on the extent to which it can reopen mattersthat could have been contested in the District Court, similar to that employed with anappeal against a guilty plea.7[36] In the present case, however, even if I take a broad view, and engage in areassessment of the factual position in light of the dispute that is now raised about thefacts it seems to me that the sentence is not manifestly excessive.5 Price v Police [2017] NZHC 2523 at [25].6 R v Honan [2015] NZCA 94 at [34].7 R v Le Page [2005] 2 NZLR 845 (CA).[37] Mr Bergen was prohibited from being a director under s 382 of the CompaniesAct, which relevantly states that where a person has been convicted of a qualifyingoffence, that person shall not be a director or take part in the management of acompany without leave of the Court "during the period of 5 years after the convictionor the judgment". As such, the dates of the convictions for the qualifying offences areclearly relevant. But even if Mr Bergen was correct and his prohibition ended on6 May 2017, the key elements of each charge still stand. He still made a misleadingstatement, he still became a director of and took part in the management of a companywhile he was prohibited. That company was still, as the Judge considered, establishedfor illegitimate reasons. He was entering into contracts that created nearly $100,000of liabilities with, it appears, no intention of honouring within a week of establishingthe company, while he was still prohibited by any measure. Each of those threecharges could attract a sentence of five years' imprisonment. In those circumstances,Mr Bergen's offending is not significantly less serious so as to justify a lesser sentencethan the Judge imposed.[38] In any event Ms Aickin did not ultimately dispute Ms McKenzie's submissionsthat the entry of the guilty plea in relation to one of the charges on 7 August 2012, orthe entry of the sentence on that charge on 23 January 2013, would mean that theperiod of disqualification on that charge ran from one of those dates anyway. Giventhat, I do not think there is a material error in terms of the facts set out in the summaryof facts.[39] In terms of discounts, Mr Bergen received a full discount of 25 per cent for hisguilty plea. His voluntary return to New Zealand could justify some separate discount,but I do not accept that it has not been appropriately taken into account by the Judgein giving a full 25 per cent discount on the guilty plea.[40] I do not accept Mr Aickin's submissions in relation to a discount for awillingness to pay reparation. There is no financial evidence before the Court that hewould be able to fulfil such an order even if one had been made. Ms Aickin madereference to Mr Bergen having some ability to make reparation because of the skillsthat would allow him to be employed, and also through funds Mr Bergen may haveaccess to overseas (in particular cryptocurrency funds), but these seem highlyspeculative. As indicated in Price v Police, a defendant should not get credit for anoffer to pay reparation that they are not going to fulfil.8 That is particularly so inrelation to a person who engages in dishonesty offending of a repetitive kind.[41] There is also no reason to challenge the uplift for Mr Bergen's priorconvictions. He is, as the Judge described him in the suppression judgment, "aninveterate fraud". The protection of the community is a paramount consideration, andMr Bergen's only real periods without offending appear to be during his many periodsin prison.[42] Standing back and looking at the sentence overall, rather than the particularprocess by which it was reached, I also conclude that the sentence is not manifestlyexcessive. The repetitive nature of Mr Bergen's offending means that the Court ispresented with very little option but to impose more serious prison terms, especiallywhen the offending involves a failure to comply with the requirements arising fromprevious offending.[43] There is no basis for the appeal to be allowed, and it is dismissed.Cooke J8 Price v Police, above n 5.