BARTON v R [2019] NZCA 644

BARTON v R [2019] NZCA 644 [13 December 2019]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA534/2018[2019] NZCA 644BETWEEN DAVID SIMON BARTONAppellantAND THE QUEENRespondentHearing: 24 September 2019Court: Cooper, Ellis and Peters JJCounsel: T D Clee for AppellantR K Thomson for RespondentJudgment: 13 December 2019 at 11.30 amJUDGMENT OF THE COURTA The application to adjourn the appeal is declined.B The appeal against sentence is dismissed.C The application to defer the commencement of sentence is declined.D Mr Barton is to surrender himself to the Registrar at the Auckland DistrictCourt (Criminal Counter, 65–69 Albert Street) before 10.00 am onWednesday 18 December 2019.____________________________________________________________________REASONS OF THE COURT(Given by Peters J)[1] Following a jury trial in December 2017 before Judge Glubb inthe District Court at Auckland, Mr Barton was convicted of 10 charges of knowinglyfailing to provide a tax return when required to do so, with the intention of evadingthe assessment or payment of tax.1 Each charge related to a tax year between31 March 2008 and 2017 inclusive.[2] In August 2018, the Judge sentenced Mr Barton to three years, two months andtwo weeks' imprisonment.2 Mr Barton appeals against sentence on the ground that itis manifestly excessive.3[3] At the conclusion of sentencing, the Judge declined both Mr Barton'sapplications for bail pending appeal4 and to defer the commencement of sentence forup to two months.5 Mr Barton appealed the refusal of bail, successfully, and he hasremained on bail since.6Tax debt and reparation[4] The Judge sentenced Mr Barton on the basis that he had defaulted inthe payment of core tax of $400,000, that is Mr Barton would have been assessed forthis sum had he filed his income tax returns when due (core tax).7 This assessmentwas favourable to Mr Barton. Mr Barton's accountants assessed the sum due as$410,702, and counsel themselves had agreed the sum was at least $436,000.[5] The Judge did not refer to the total due from Mr Barton including interest andpenalties but plainly it would have been substantial at the time of sentencing, andwould be even more so now.[6] By the time of sentencing, Mr Barton had paid $43,000 in reduction of the coretax, reducing the same to $357,000, and he promised to pay a further $37,000.8As appears below, the Judge reduced Mr Barton's sentence on account of both sumsalthough, as it turns out, Mr Barton did not pay the $37,000.1 Tax Administration Act 1994, ss 143B(1)(b) and (f), with each charge carrying a maximum termof imprisonment of five years.2 R v Barton [2018] NZDC 17502 at [46].3 Mr Barton abandoned his appeal against conviction on 5 March 2019.4 R v Barton [2018] NZDC 17494.5 R v Barton, above n 2, at [49]; and Sentencing Act 2002, s 100.6 Barton v R [2018] NZHC 2490.7 R v Barton, above n 2, at [3].8 At [3].[7] In the week before we heard the appeal, a further $122,000 was remitted, onMr Barton's behalf, to the Commissioner. This sum was advanced by third parties toMr Barton.[8] The Commissioner remitted the funds to the Official Assignee, as Mr Bartonis a bankrupt. Crown counsel, Ms Thomson, advised us the Official Assignee will beentitled to deduct any outstanding costs and an allowance for Mr Barton's livingexpenses, before paying the balance to the Commissioner, the Commissioner beingMr Barton's sole creditor. If the Commissioner receives most of the $122,000Mr Barton will have paid say $165,000, or 40 per cent, of the core tax, leaving$235,000 and whatever may be due in interest and penalties outstanding.Application for adjournment[9] By memorandum dated 18 September 2019, Mr Clee, counsel for Mr Bartonon appeal (but not at trial or on sentence), applied to adjourn the hearing of the appeal.This application was declined on the papers.[10] Mr Clee renewed the application for adjournment before us, on this occasionsupported by an affidavit from Mr Barton filed shortly, that is an hour or two, beforewe heard the appeal. The basis for the application was that, if the adjournment weregranted, Mr Barton would be able to repay the core tax in full.[11] We declined to adjourn the hearing of the appeal. Mr Barton was sentencedmore than a year ago, he has been on bail since, and we were not persuaded the reasonsadvanced warranted any further delay.Background[12] The Judge was satisfied that, although the IRD had requested the returnsrepeatedly, Mr Barton had made a deliberate decision not to file them but, rather, toapply the tax due to personal or family matters.9 The Judge characterised Mr Barton'soffending as planned, premediated, significant, deliberate and persistent.109 At [4].10 At [6].[13] The Judge:11(a) adopted a starting point of four years' imprisonment;(b) uplifted the starting point by six months for Mr Barton'scriminal history;(c) deducted 20 per cent for Mr Barton's recent filing of all outstandingreturns, for remorse, and for reparation, that is the $43,000 andthe promised $37,000; and(d) deducted a further eight per cent for Mr Barton's "selfless commitmentand contribution to [his] community", evidenced by many affidavitsfrom third parties.[14] The Judge did not order further reparation, as the Commissioner did not seeksuch an order.12 The Judge also remitted fines of more than $10,000.13Submissions[15] Mr Clee submitted the Judge's starting point and uplift for Mr Barton's priorcriminal history were excessive. Mr Clee also submitted we should increasethe Judge's 20 per cent discount, given the payment of the $122,000 referred to above.Lastly, but only in his reply submissions, Mr Clee made a further application for anorder deferring the commencement of sentence.Starting point[16] Mr Clee submitted the Judge's starting point should not have exceeded two anda half to three years' imprisonment. In support of this submission, Mr Clee relied onClemm v Commissioner of Inland Revenue as a case in which the Court had adoptedsuch a starting point in respect of similar offending.14 Clemm was one of the11 At [42]–[45].12 At [51].13 At [50].14 Clemm v Commissioner of Inland Revenue (2005) 22 NZTC 19,495 (HC).authorities to which the Judge himself referred in fixing Mr Barton's starting point offour years.[17] Mrs Clemm, a solicitor, was for sentence having pleaded guilty to 25 chargesof using a document with intent to defraud. Eighteen charges arose from Mrs Clemm'sunderpayment of tax (and ACC levies) over six years, leaving Mrs Clemm liable forcore tax and GST of $197,630.37 and $74,065.70 respectively.15 The interest inclusive(but net of penalties) sum for which Mrs Clemm was liable was approximately$415,000.16[18] The remaining seven charges arose from Mrs Clemm's theft of $46,456.09from several clients over four years.17[19] In sentencing Mrs Clemm, the District Court Judge adopted a starting point offour years' imprisonment, saying this was to reflect the aggravating features ofMrs Clemm's breach of her clients' trust, the substantial sums involved and thesustained period of her offending.18 The Judge then reduced the starting point forMrs Clemm's reparation, prior good record and her guilty pleas.[20] On appeal, counsel for Mrs Clemm contended the starting point was excessive.The High Court Judge referred to a then prevailing uncertainty as to precisely whatwas encompassed in a "starting point".19 The Judge considered the sentencing Judge'sstarting point should be treated as two and a half to three years' imprisonment ifexclusive of the aggravating features of the offending, and three and a half tofour years' imprisonment if inclusive.20[21] Given that current sentencing methodology anticipates a starting point willinclude aggravating features of offending, we are satisfied the four-year starting pointimposed and upheld in Clemm is equivalent to the four years the Judge adopted in thiscase.15 At [1].16 At [11].17 At [1].18 At [15].19 At [18].20 At [19].[22] Finally on Clemm, although Mrs Clemm's breach of her clients' trustdistinguishes her offending from Mr Barton's, Mr Barton's offending occurred over alonger period and the core tax he sought to avoid exceeded the $270,000 or thereaboutsapplying in Mrs Clemm's case.[23] Mr Clee did not refer to any other authorities in support of his submission thestarting point was excessive. As it is, when reference is made to the relevant cases, itis clear the starting point he adopted was within the appropriate range. R v Marstersand R v O'Connor are the most pertinent of these authorities.21[24] In Marsters, the High Court Judge adopted a starting point of four years'imprisonment in respect of 48 charges of use of a document with intent to defraud.22Mr Marsters had defrauded the Commissioner of Inland Revenue of $341,143.09, bywrongly obtaining GST refunds.23 On appeal, this Court assessed the four-yearstarting point as "within range", having regard to the duration, scale, and deliberateand repetitive nature of the offending.24[25] In O'Connor, the Court adopted a starting point of four years, six months'imprisonment for Dr O'Connor's deliberate and determined evasion of tax ofapproximately $360,000, over eight years.25[26] Having regard to these authorities, the Judge's starting point in this case offour years' imprisonment was within range.Uplift for prior offending[27] Mr Clee also submitted that the Judge's uplift for Mr Barton's criminal historywas excessive and should have been no more than two months.21 R v Marsters (2005) 22 NZTC 19,649 (CA); and R v O'Connor [2013] NZHC 2393.22 R v Marsters, above n 21, at [11].23 The maximum term of imprisonment for the offending was seven years, so more than in the presentcase.24 At [22].25 R v O'Connor, above n 21, at [11].[28] Leaving aside the present offending, Mr Barton's criminal history runs to15 pages. As the Judge said, Mr Barton has numerous convictions for dishonestyoffending. Mr Clee submitted the convictions were largely historic. We do not acceptthis. Mr Barton had convictions for 80 dishonesty offences committed between 1993and 1999, and for which he was sentenced to three years' imprisonment.He committed another six such offences in the course of 2004 and 2005, and hecommenced this most recent offending when he failed to file his income tax returnwhen due for the year ended 31 March 2008.[29] Given this history, a six-month uplift was not excessive.Reparation[30] Mr Clee acknowledged the Judge's 20 per cent discount for the matters referredto in [13(c)] above was substantial. However, he asked us to make an additionalreduction on account of the further reparation of $122,000 to which we have referred.[31] The circumstances of this case do not warrant any further indulgence toMr Barton.[32] First, the Judge's generous 20 per cent discount assumed receipt of thepromised but unpaid $37,000. Secondly, although on occasion this Court will takeaccount of events, including reparation, that occur post-sentence,26 a very substantialpart of Mr Barton's core tax (let alone interest and penalties) remains outstanding,even allowing for the payment of the $122,000.Deferral of sentence[33] Finally, and as we have said, Mr Clee renewed Mr Barton's application for adeferral of the commencement of sentence. We declined that application too, no goodreason having been advanced.26 Monk v R [2013] NZCA 564 at [33]; and Orchard v R [2019] NZCA 529 at [24].Result[34] We decline the application to adjourn the hearing of this appeal.[35] We dismiss the appeal against sentence.[36] We decline the application to defer the commencement of sentence.[37] Mr Barton is to surrender himself to the Registrar at the Auckland DistrictCourt (Criminal Counter, 65–69 Albert Street) before 10.00 am on Wednesday18 December 2019.Solicitors:Crown Law Office, Wellington for Respondent