ZHENG v R [2023] NZCA 551

ZHENG v R [2023] NZCA 551 [9 November 2023]NOTE: ORDER PROHIBITING PUBLICATION OF NAMES ORIDENTIFYING PARTICULARS OF C, H AND W PURSUANT TO S 200 OFTHE CRIMINAL PROCEDURE ACT 2011 REMAINS IN FORCE.IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA657/2022[2023] NZCA 551BETWEEN HENGJIA ZHENGAppellantAND THE KINGRespondentCA658/2022BETWEEN YIKUN ZHANGAppellantAND THE KINGRespondentCA659/2022BETWEEN SHIJIA ZHENGAppellantAND THE KINGRespondentHearing: 15–16 August 2023Court: French, Collins and Wylie JJCounsel: R L Thomson and A Y H Young for Appellant H ZhengR J Katz KC, B H Dickey and N J Small for Appellant Y ZhangP E Dacre KC and D Lye for Appellant S ZhengP F Wicks KC and K E Hogan for RespondentJudgment: 9 November 2023 at 9.00 amJUDGMENT OF THE COURTA Hengjia Zheng's appeal against his conviction in respect of charge 5 isallowed. The conviction is quashed. No retrial is ordered.Hengjia Zheng's appeal against his conviction in respect of charge 7 isdismissed. The sentence imposed in relation to his conviction for charge 7remains in place.B Yikun Zhang's appeal against his conviction in relation to charge 5 isallowed. The conviction is quashed. No retrial is ordered. Yikun Zhang'sappeal against sentence is dismissed.C Shijia Zheng's appeals against his convictions in relation to charges 3 and5 are allowed. The convictions are quashed. No retrial is ordered.____________________________________________________________________REASONS OF THE COURT(Given by Collins J)Introduction[1] Following a judge-alone trial the appellants were convicted of obtaining abenefit by deception contrary to s 240(1)(a) of the Crimes Act 1961.1 We explains 240 of the Crimes Act at [70] to [75]. Four other defendants were tried with theappellants. The charges against them were dismissed by Gault J.2[2] The convictions stemmed from the appellants' roles in a strategy that hid thetrue source of donations to the National Party in 2017 and 2018. Mr Hengjia (Joe)Zheng was also convicted of providing false or misleading information to the SeriousFraud Office (SFO), which is an offence under s 45 of the Serious Fraud Office Act1990 (the SFO Act).3 The appellants were sentenced by Gault J, the trial judge, tocommunity-based sentences.41 R v Zhang [2022] NZHC 2540 [Verdicts judgment] at [8].2 At [2] and [8].3 At [8].4 R v Zhang [2022] NZHC 3168 [Sentencing judgment] at [66], [81], and [98]–[99].[3] The appeal challenges all convictions and also the sentence imposed onYikun Zhang. In his sentence appeal, Mr Zhang argues he should have beendischarged without conviction. As we are allowing Mr Zhang's appeal againstconviction, it is not necessary for us to deal with his sentence appeal. Nor is itnecessary for us to consider the grounds of appeal challenging a pre-trial decisiondirecting that the appellants be tried by judge-alone.[4] Seven charges were set out in the Crown charge notice. Six of those chargesalleged various defendants breached s 240(1)(a) of the Crimes Act. The seventhcharge concerned Joe Zheng's breach of s 45 of the SFO Act.[5] The obtaining of a benefit by deception charges concerned three tranches ofdonations to political parties:(a) Charges 1 and 2 arose from donations made in March 2017 to theLabour Party. In addition to the appellants, C, H and W5 were chargedin relation to these donations. All defendants were found not guilty ofthe two Labour Party donations charges.6(b) Charges 3 and 4 arose from donations made to the National Party inJune 2017. Mr Zhang, Mr Shijia (Colin) Zheng and Mr Jami-Lee Rosswere charged in relation to these donations. Colin Zheng was foundguilty in relation to charge 3. No verdict was entered for Colin Zhengin relation to charge 4. Mr Zhang and Mr Ross were found not guiltyin relation to charges 3 and 4.7(c) Charges 5 and 6 arose from donations made to the National Party inJune 2018. Mr Zhang, Colin Zheng, Joe Zheng, and Mr Ross werecharged in relation to these donations. The three appellants wereconvicted in relation to charge five. Mr Ross was found not guilty ofcharge 5. Charge 6 was laid as an alternative to charge 5. No verdict5 The names of these defendants were permanently suppressed by the High Court pursuant to s 200of the Criminal Procedure Act 2011, see R v C [2023] NZHC 275.6 Verdicts judgment, above n 1, at [8].7 At [8].was entered in respect of the appellants in relation to charge 6. Mr Rosswas found not guilty in respect of charge 6.8[6] The principal question raised by the appeals concerning the convictions forbreaching s 240(1)(a) of the Crimes Act is whether the appellants could be convictedwhen it was accepted they did not receive, directly or indirectly, a benefit forthemselves from the donations. Instead, before us, the SFO argued the National Partywas the victim and correspondingly, the beneficiary of the same deceptive transaction.As we shall explain, at trial, the SFO alleged the National Party was the beneficiary ofthe transaction and the Electoral Commission and/or the National Party Secretary weredeceived.The appellantsMr Zhang[7] Mr Zhang first came to New Zealand from China in about 2000, and movedhere permanently with his family in 2011. He does not speak English, and hemaintains close connections with the Teochew community, which comprisesimmigrants from the eastern part of Guangdong Province in China. Mr Zhang was thefirst chairman of the Chao Shan Association in Auckland, which serves the Teochewcommunity.[8] Mr Zhang is a successful and wealthy businessman. Prior to his conviction, hewas a director of multiple companies,9 and he remains a shareholder in a number ofcompanies.Colin Zheng[9] Colin Zheng came to New Zealand as a secondary school student. He was alsoprohibited from managing companies following his conviction, but was granted leave8 At [8].9 Following his conviction, Mr Zhang was prohibited from managing companies pursuant to ss 151and 382 of the Companies Act 1993.by the High Court to be a director of several companies. He is a director andshareholder of multiple companies.[10] Colin Zheng has also been highly involved with the Chao Shan Association,including serving as the chairman in 2017.Joe Zheng[11] Joe Zheng is the twin brother of Colin Zheng. He also came to New Zealandas a student and has lived in this country for more than 20 years. He currently worksfor KCC Construction.10Electoral Act 1993[12] The Electoral Act is integral to New Zealand's constitutional arrangements.11In addition to regulating the way parliamentary elections are conducted theElectoral Act provides for the registration of electors and political parties. It alsogoverns, amongst other matters, the way donations can be lawfully made to politicalparties.[13] A cornerstone of the law governing donations to political parties is the processwhich enables the public to learn the identity of persons who make donations in excessof a specified statutory threshold, presently $5,000, to a political party in any oneyear.12 At the time of the donations in this case the threshold for public disclosure was$15,000.13[14] There are different timeframes for reporting donations above the $5000threshold to the Electoral Commission depending on the amount donated. When apolitical party receives in one year a donation greater than $5,000 from a single donor,the secretary of the party must inform the Electoral Commission of that donation in10 Colin Zheng is a director and shareholder of KCC Construction. Mr Zhang is a shareholder.11 See Philip A Joseph Joseph on Constitutional and Administrative Law (5th ed, Thomson Reuters,Wellington, 2021) at [2.4].12 Electoral Act 1993, s 210(1)(a).13 Section 210(1)(a) as at 1 January 2020.the party's annual return to the Commission. The return must identify the name andaddress of the donor and the amount of the donation or donations.14[15] When a political party receives a donation that exceeds $20,000 from a singledonor during the election year, the party's secretary must file a return with theElectoral Commission within 10 days of the donation being received. The return mustidentify, amongst other matters, the name and address of the donor (if known).15 Atthe relevant times, the single donation threshold was $30,000.16[16] The information provided by political parties about donors is able to be madepublicly available by the Electoral Commission, whether it is provided in an annualreport or a special report made under s 210C.17[17] A political party secretary who unwittingly fails to comply with the provisionswe have summarised at [14] and [15] commits an offence and is liable on convictionto a fine not exceeding $40,000.18 If a return is filed that is false in any materialparticular and the party secretary knew about it, then they may be liable on convictionto a fine not exceeding $100,000.19[18] Section 207E of the Electoral Act concerns the transmission of donations viaan intermediary. It provides:207E Identity of donor to be disclosed by transmitter, if known(1) When a transmitter transmits a donation to a candidate or partysecretary on behalf of the donor, the transmitter must disclose to thecandidate or party secretary—(a) the fact that the donation is transmitted on behalf of the donor;and(b) the name and address of the donor; and14 Section 210(1)(a) and (2).15 Section 210C(1), (4) and (6).16 Section 210C(1) as at 1 January 2020.17 Section 210F.18 Sections 210D(2)(b) and 224(2)(a).19 Sections 210D(2)(a) and 224(1)(b)(i).(2) Where a transmitter does not disclose, or is unable to disclose, theinformation required by subsection (1), then the donation must betreated as an anonymous donation.[19] The failure of a transmitter to comply with s 207E with the intention ofconcealing the identity of the donor commits an offence and is liable on conviction toa fine not exceeding $40,000.20[20] The Electoral Act also regulates anonymous donations, but none of thedonations in this case were anonymous.21[21] The SFO concluded it was unable to charge any of the defendants withcommitting offences under the Electoral Act. The inability to charge the defendantswith offences under the Electoral Act exposes a significant weakness in the offenceprovisions of that Act.The donations[22] We now set out the facts underlying the charges. As we have explained at [5],the only convictions under s 240(1)(a) of the Crimes Act concern the donations madeto the National Party in June 2017 and June 2018. It is, however, helpful to completethe scene by briefly describing the allegations concerning the donations to the LabourParty.Labour Party donations — March 2017[23] Charges 1 and 2 arose from these donations.[24] In early 2017, Mr Zhang was preparing an application on behalf of theChao Shan Association to host a Teochew International Convention in Auckland.The convention was scheduled for 2019 and it was anticipated that it would attractapproximately 3,000 overseas visitors. The Chao Shan Association obtained a numberof letters of support from leading New Zealanders, including a number of politiciansfrom the Labour and National parties.20 Section 207F.21 Section 210(1)(c).[25] In addition to the three appellants, the following people were involved in the2017 Labour Party donations arrangement:22(a) C, an official in the Chao Shan Association who was assistingMr Zhang gain support for the bid to host the Teochew InternationalConvention;(b) H, who was a senior figure in the Labour Party; and(c) W, who worked closely with H during the relevant period.[26] In early 2017, Mr Zhang agreed with H and W to purchase artworks for$60,000 from the Labour Party in order to provide financial support to the party.Mr Zhang did not, however, want his name to be publicly associated with being adonor to the Labour Party.[27] On 14 March 2017, H purchased five paintings for $13,600 from an art galleryin Ōhope.23 At some point H swapped two of the paintings he purchased from theŌhope gallery with two paintings he and his wife already owned. He estimated oneof those paintings was worth $12,000 and the other $5,000.[28] On 15 March 2017, W sent Mr Zhang a message telling him that H had selectedsome paintings that would interest him and that she would send him the details of theartworks.[29] On 24 March 2017, H and W went to Mr Zhang's house to discuss the paintingsand support for the Teochew International Convention. Thereafter, W gaveColin Zheng details to enable money to be transferred into a Labour Party account.[30] Mr Zhang and Colin Zheng then arranged for the equivalent of $60,000 to betransferred from China into Joe Zheng's New Zealand bank account. Colin Zheng22 All three were found not guilty at trial, see Verdicts judgment, above n 1, at [8].23 We note that the relevant invoice is dated 15 March 2017.then gave details of the Labour Party bank account to enable money to be transferredto the Labour Party.[31] Mr Zhang received five paintings from H and W, which he hung on a wall inhis house.[32] Two days after the money was transferred into the Labour Party account,W sent Colin Zheng a message saying that five names needed to be provided aspurchasers of the paintings.[33] In due course, details were supplied to the Labour Party identifying five people,including Joe Zheng who had supposedly purchased the artworks for the followingsums:C $16,000Zhang David $ 8,000Tu The Cuong $12,000Chen Hongni $14,000Joe Zheng $10,000[34] On 5 April 2017, W forwarded the details of the five purported purchasers tothe Secretary of the Labour Party even though she knew that the paintings had in factbeen acquired by Mr Zhang.[35] On 7 April, H, together with some senior officers of the Labour Party, attendedMr Zhang's house for a dinner and were photographed in front of the paintings.[36] H took no steps to advise the Labour Party that Mr Zhang was the purchaser ofthe paintings and therefore the real donor of the difference between the price paid forthe paintings and their true value.Labour Party donations — September 2017[37] No charges arose from these particular donations. The SFO did, however, relyon these donations as propensity evidence.24[38] In August 2017, W and H organised a dinner that was to raise funds for theLabour Party. Mr Zhang and Colin Zheng were approached by W to attend a dinnerat which various items were to be sold by auction. The items included a Chineseimperial robe, a painting signed by the Rt Hon Helen Clark and a quantity of wine.The robe, which was donated to the Labour Party, was sold to Mr Zhang for $90,000.The other items were also purchased by Mr Zhang for $10,000.[39] Approximately $75,000 of the purchase money was sent from an account inChina to Colin Zheng's New Zealand account. Another approximately $25,000 waspaid into Colin Zheng's New Zealand account from a New Zealand account in thename of Shaona Zhang, Mr Zhang's sister. Arrangements were then made to transmitthe funds from Colin Zheng's account to the Labour Party via an account held by hismother.[40] The Labour Party returns for 2017 did not disclose any donations fromMr Zhang.National Party donations — June 2017[41] Charges 3 and 4 arose from these donations.[42] On 15 May 2017, Mr Zhang, Colin Zheng and Mr Ross, then the National PartyMP for the Botany electorate, met for dinner at an Auckland restaurant. During thedinner Mr Ross was told that Mr Zhang wished to donate $100,000 to the NationalParty. It was made clear, however, that Mr Zhang did not wish to be publicly identifiedas a political donor.[43] On 18 May 2017, $50,000 was transferred to Colin Zheng's bank account froma bank account held in China by Mr Zhang.24 Zhang v R [2022] NZHC 2541 [Reasons judgment] at [330] and [446][44] On 9 June 2017, approximately $100,000 was transferred from a bank accountowned by Mr Chunyat Cheng, the father of Colin and Joe Zheng. The money fromMr Cheng came from ANCO Construction Ltd. Mr Cheng owned 70 per cent of theshares in that company through his company, ANCO International Ltd.[45] On 25 May 2017, Mr Ross sent an email to Colin Zheng providing the bankaccount details for the National Party Botany branch. Mr Ross explained in that email"any donation from a donor above $15,000 in one year will be declared publicly. Anydonations above $30,000 will be declared within 10 working days". Colin Zhengreplied, "[t]hanks for your information, [w]e will all follow the law. :)".[46] Between 1 June 2017 and 9 June 2017, Colin Zheng transferred $100,000 fromhis bank account to seven people who were either members of his family or otherwiseassociated with him. The sums transferred from Colin Zheng's account were allslightly under $15,000. Each recipient was instructed to transfer the sum they receivedto the National Party Botany branch. The sums that Colin Zheng had transferred tohis family and associates were ultimately transferred to the National Party head officeby the Botany branch of the National Party.[47] Colin Zheng provided Mr Ross with the names of the seven transmitters.In turn, Mr Ross supplied those details to the National Party's Secretary. Mr Rossfailed to tell the National Party's Secretary the true identity of the donor.2018 National Party donation[48] Charges 5 and 6 arose from these donations.[49] On 20 April 2018, Mr Ross sent Colin Zheng a message telling him he wantedMr Zhang to meet the Hon Simon Bridges, the recently elected leader of the NationalParty. A dinner was held at Mr Zhang's house on 14 May 2018. At that dinner MrRoss told Mr Zhang and Colin Zheng that the National Party needed their financialsupport.[50] On 21 May 2018, Mr Bridges attended a function where he spoke to Mr Zhangand Colin Zheng. Later that evening, Mr Bridges telephoned Mr Ross and told himthat the National Party was to receive a donation of $100,000 from Mr Zhang and/orColin Zheng and that Mr Ross was to be responsible for collecting it.[51] The funds in question came from the sale of a quantity of wine owned by HLGHolding Ltd, a company which Mr Zhang and Colin Zheng were directors andshareholders of. The wine was sold by HLG in China for $108,463.23.[52] On 31 May 2018, $108,463.23 was transferred from a bank account in thename of Shaona Zhang to Joe Zheng's bank account in New Zealand. The sameevening, Colin Zheng sent Joe Zheng a copy of the National Party Botany branch bankdeposit slip.[53] Between 1 June 2018 and 8 June 2018, Joe Zheng transferred $98,000 from hisbank account to seven different people who were members of his family or peoplewith whom he was associated. Joe Zheng told the recipients to then transfer the moneythey received to the National Party Botany branch bank account. On 7 June 2018,Joe Zheng transferred a further $2,050 into that account.[54] On 8 June 2018, Joe Zheng created a list of the transmitters' names, addressesand bank account details and provided that list to Colin Zheng. Colin Zheng in turnprovided the list of the names and addresses of the transmitters to Mr Ross.[55] In August 2018, Mr Ross provided the names of the transmitters to theNational Party. The National Party was not informed that Mr Zhang was the real donorof the money it received or that the named transmitters were merely conduits used toensure Mr Zhang was not publicly identified as a significant donor to theNational Party.[56] The balance of the $108,463.23 sent to Joe Zheng's bank account was used byColin Zheng and Mr Zhang to purchase cognac.Joe Zheng's interviews with SFO[57] Following allegations made by Mr Ross that Mr Bridges had committedbreaches of the donation provisions of the Electoral Act, the SFO commencedinquiries into the donations we have summarised above. Joe Zheng was interviewedby the SFO on 3 December 2019 and 15 January 2020. In his first interview Joe Zhengwas asked about the source of the funds that formed the basis of the $100,050 donationto the National Party in June 2018.[58] The explanation given by Joe Zheng was that the money came fromShaona Zhang, and that the money was paid in May 2018 as a deposit on a house thatShaona Zhang wanted to have built at Weiti Bay on the North Shore byANCO Properties Development Ltd.25 Joe Zheng said a building contract wasexecuted between Shaona Zhang and ANCO Properties at about the time she paid thedeposit. Colin Zheng was one of the directors and shareholders of ANCO Propertiesand Joe Zheng worked for that company.[59] After the first interview with Joe Zheng, the SFO conducted further inquiriesabout the Weiti Bay property. The following information emerged:(a) The sum paid by Shaona Zhang to Joe Zheng on 31 May 2018 was$108,463.23. This was the same amount remitted to Joe Zheng, viaShaona Zhang from the sale of the wine by HLG in China.(b) A contract between Shaona Zhang and ANCO Property Developmentwas found to have been created on Joe Zheng's computer on 16 August2019.(c) The contract was backdated to May 2018 and the details of the contractwere copied from another contract relating to a development in SouthAuckland.(d) Mr Cong Ren, who at the time was a director and 30 per centshareholder of ANCO Properties was unaware of any contract betweenthe company and Shaona Zhang in 2018.25 There was some confusion as to whether the contract was with ANCO Properties or KCCConstruction, however Joe Zheng's evidence was that the companies were considered "nearly thesame" and work was often carried out jointly between the two.(e) The Weiti Bay property was not surveyed until 27 June 2019 and anarchitect for that building project was not engaged until July 2019.[60] In his second interview with the SFO, Joe Zheng:(a) reaffirmed his earlier explanation that on 31 May 2018 he received$108,463.23 from Shaona Zhang as a deposit for a house to beconstructed at Weiti Bay and that Shaona Zhang and ANCO signed thecontract in May 2018; and(b) when it was put to him that the contract was created in August 2019,said that the original contract had been lost so he just created anothercontract using the same amounts.[61] When Joe Zheng was asked by the SFO if the August 2019 contract was createdby himself, Colin Zheng and Shaona Zhang as a cover up, he said:I don't know. Because I just told everything – I just did everything Colin toldme to do it. Yeah.The charges[62] We shall now explain the charges in more detail.[63] The appeals concern convictions in relation to charges 3, 5 and 7. To recap:(a) Colin Zheng was convicted in relation to charge 3.(b) Mr Zhang, Colin and Joe Zheng were convicted in relation to charge 5.(c) Joe Zheng was convicted in relation to charge 7.[64] Charge 3 alleged:That JAMI-LEE MATENGA ROSS, YIKUN ZHANG and SHIJIAZHENG, between 14 May 2017 and 1 May 2018 at Auckland, by deceptionand without claim of right, directly or indirectly, obtained possession of, orcontrol over, any property, or any pecuniary advantage or benefit.Particulars of the deception:With intent to deceive the National Party Secretary and/or the ElectoralCommission, the defendants adopted a fraudulent device, trick, or stratagemwhereby a $100,000 donation made to the National Party between 1 June 2017and 9 June 2017 ("the 2017 Donation") was split into sums of money less than$15,000, and transferred into the bank accounts of seven different people,before being paid to, and retained by, the National Party.Particulars of the benefit:The National Party obtained possession of, or control over, property, namely,the 2017 Donation, in circumstances where the amount of the 2017 Donationand the identity of the true donor(s) was not disclosed in the National Party'sAnnual Return of Party Donations.[65] Charge 5 was almost identical to charge 3 and alleged:That JAMI-LEE MATENGA ROSS, YIKUN ZHANG, HENGJIAZHENG and SHIJIA ZHENG, between 13 May 2018 and 1 May 2019 atAuckland, by deception and without claim of right, directly or indirectly,obtained possession of, or control over, any property, or any pecuniaryadvantage or benefit.Particulars of the deception:With intent to deceive the National Party Secretary and/or theElectoral Commission, the defendants adopted a fraudulent device, trick, orstratagem whereby a $100,050 donation made to the National Party between1 June 2018 and 8 June 2018 ("the 2018 Donation") was split into sums ofmoney less than $15,000, and transferred into the bank accounts of eightdifferent people, before being paid to, and retained by, the National Party.Particulars of the benefit:The National Party obtained possession of, or control over, property, namely,the 2018 Donation, in circumstances where the amount of the 2018 Donationand the identity of the true donor was not disclosed in the National Party'sAnnual Return of Party Donations.[66] Charge 7 alleged:That HENGJIA ZHENG, between 2 December 2019 and 16 January 2020,in the course of complying with a requirement pursuant to s 9 of the SeriousFraud Office Act 1990, supplied information knowing that it was false ormisleading in a material particular.Particulars:During his interviews with the Serious Fraud Office on 3 December 2019and/or 15 January 2020, Hengjia Zheng advised:(a) That the money paid from Shaona Zhang's bank account into his bankaccount on 31 May 2018 was a deposit to [ANCO] PropertyDevelopment for building a house on the North Shore, when in fact,the money originated from Yijun Zhang and was intended to be usedto pay a $100,000 donation to the National Party through transmitters.(b) That around the time the money was transferred into his account, hedrafted a building quotation contract for [ANCO] PropertyDevelopment to build a house on Shaona Zhang's land("the Contract"), and that he and Shaona Zhang signed it, when infact:i. the Contract was only created and signed in August 2019;ii. the specifications on the Contract had been copied from anunrelated quote; andiii. the date of the signatures of the Contract were backdated to21 May 2018.(c) That the Contract was lost, and when he discovered this inapproximately August 2019, he created, signed and backdated anothercontract on Colin Zheng's instructions, when in fact:i. the Contract was only created and signed in August 2019; andii. a contract for [ANCO] Property Development to build a houseon Shaona Zhang's land drafted around the time that ShaonaZhang paid the money into Joe Zheng's account never existed.[67] We also set out charge 6 which was the alternative to charge 5:That JAMI-LEE MATENGA ROSS, YIKUN ZHANG, HENGJIAZHENG and SHIJIA ZHENG, between 13 May 2018 and 1 May 2019 atAuckland, by deception and without claim of right, directly or indirectly,obtained possession of, or control over, any property, or any pecuniaryadvantage or benefit.Particulars of the deception:With intent to deceive the National Party Secretary and/or the ElectoralCommission, the defendants adopted a fraudulent device, trick, or stratagemwhereby a $100,050 donation made to the National Party between 1 June 2018and 8 June 2018 ("the 2018 Donation") was split into sums of money less than$15,000, and transferred into the bank accounts of eight different people,before being paid to, and retained by, the National Party.Particulars of the benefit:The true donor of the 2018 Donation obtained freedom from any publicscrutiny regarding the [2018] Donation, in circumstances where the amountof the [2018] Donation and the identity of the true donor should have beendisclosed in the National Party's Annual Return of Party Donations.Sections 240 and 241 of the Crimes Act[68] Sections 240 and 241 provide:240 Obtaining by deception or causing loss by deception(1) Every one is guilty of obtaining by deception or causing loss bydeception who, by any deception and without claim of right,—(a) obtains ownership or possession of, or control over, anyproperty, or any privilege, service, pecuniary advantage,benefit, or valuable consideration, directly or indirectly; or(b) in incurring any debt or liability, obtains credit; or(c) induces or causes any other person to deliver over, execute,make, accept, endorse, destroy, or alter any document or thingcapable of being used to derive a pecuniary advantage; or(d) causes loss to any other person.(2) In this section, deception means—(a) a false representation, whether oral, documentary, or byconduct, where the person making the representation intendsto deceive any other person and—(i) knows that it is false in a material particular; or(ii) is reckless as to whether it is false in a materialparticular; or(b) an omission to disclose a material particular, with intent todeceive any person, in circumstances where there is a duty todisclose it; or(c) a fraudulent device, trick, or stratagem used with intent todeceive any person.241 Punishment of obtaining by deception or causing loss bydeceptionEvery one who is guilty of obtaining by deception or causing loss bydeception is liable as follows:(a) if the loss caused or the value of what is obtained or sought tobe obtained exceeds $1,000, to imprisonment for a term notexceeding 7 years:(b) if the loss caused or the value of what is obtained or sought tobe obtained exceeds $500 but does not exceed $1,000, toimprisonment for a term not exceeding 1 year:(c) if the loss caused or the value of what is obtained or sought tobe obtained does not exceed $500, to imprisonment for a termnot exceeding 3 months.[69] "Obtain" is defined in s 217 of the Crimes Act in the following way:obtain, in relation to any person, means obtain or retain for himself or herselfor for any other person.[70] As is apparent from the Crown charge notice, the SFO relied on s 240(1)(a)and 240(2)(c) of the Crimes Act, namely:26(1) Everyone is guilty of obtaining by deception or causing loss bydeception who, by any deception and without claim of right,—(a) obtains ownership or possession of, or control over, any benefit directly or indirectly;[71] The alleged "deception" comprised:27(c) a fraudulent device, trick, or stratagem used with intent to deceive anyperson.[72] Section 240 was enacted in its present form with effect from 1 October 2003via s 15 of the Crimes Amendment Act 2003. Prior to then, the obtaining by falsepretence offence was set out in s 246 of the Crimes Act:28246. Obtaining by false pretence (1) Everyone is liable to imprisonment for a term not exceeding 7 yearswho, with intent to defraud or cause loss to any person by any false pretence,causes or induces any person to execute, make, accept, endorse, or destroy thewhole or any part of any valuable security, or to write, impress, or affix any26 Crimes Act 1961, s 240(1)(a).27 Section 240(2)(c).28 Morley v R [2009] NZCA 618, [2010] 2 NZLR 608 at [4].name or seal on any document in order that it may afterwards be made orconverted into or used or dealt with as a valuable security.(2) Everyone who, with intent to defraud by any false pretence, eitherdirectly or through the medium of any contract obtained by the false pretence,obtains possession of or title to anything capable of being stolen, or procuresanything capable of being stolen to be delivered to any person other thanhimself, is liable —(a) To imprisonment for a term not exceeding 7 years if the valueof the thing so obtained or procured exceeds the sum of $300:(b) To imprisonment for a term not exceeding one year if thevalue of the thing so obtained or procured exceeds the sum of$100 and does not exceed the sum of $300:(c) To imprisonment for a term not exceeding 3 months if thevalue of the thing so obtained or procured does not exceed thesum of $100.[73] Prior to 1 October 2003, the Crimes Act also contained specific offencesconcerning obtaining credit fraudulently (s 247) and conspiracy to defraud (s 257).Sections 246, 247 and 257 of the Crimes Act (as they were prior to 8 October 2003),could be traced to ss 252, 253 and 259 of the Crimes Act 1908.[74] The following three key points emerge from the authorities decided under theearlier iterations of the obtaining by false pretence provisions of the Crimes Acts:(a) The meaning of the verb "obtain", did not require the defendant to gainlegal title to the goods in issue. Physical possession would suffice.29(b) The offence required either:(i) intent to defraud; or(ii) intent to cause loss (earlier versions of the Crimes Act referredto causing injury rather than loss).29 R v Miller [1955] NZLR 1038 (CA) at 1047.(c) In R v Miller, this Court approved a summing up in which the trial judgesaid words to effect that the Crown need not prove:30 that the accused gained anything, or even that he stood to gainanything materially by what he did, but it was sufficient for the Crownto establish that the appellant made a representation which he knew tobe false, and that he made it with a fraudulent intent to induce theperson to whom it was made to act upon it [75] The Bill containing what is now s 240 of the Crimes Act was changed by aSupplementary Order Paper which added what is now s 240(1)(d), namely causing"loss to any other person".31 This amendment ensured the offence of causing "loss toany person by any false pretence" previously set out in s 246 of the Crimes Act wasnot inadvertently removed from the Crimes Act.Case law[76] It is helpful at this juncture to explain the leading cases since s 240 was enactedin its present form.Morley v R [2009] NZCA 618, [2010] 2 NZLR 608[77] Mr Morley was convicted of four counts of causing loss by deception unders 240(1)(d). The Crown case was that Mr Morley represented that he had the abilityto complete contracts for the purchase of four properties when he knew he did not.His convictions were quashed on appeal because the vendors did not suffer the lossrequired by s 240(1)(d). This Court said:32[15] There are at least two marked differences between the obtaining bydeception offences, on the one hand, and the offence of causing loss bydeception, on the other. The obtaining offences each specify a definedoutcome. The offender must either obtain ownership, possession or control ofsomething of value (s 240(1)(a)), or obtain credit (s 240(1)(b)), or induce orcause someone to perform a physical act in relation to a pecuniary document(s 240(1)(c)). By comparison, the offence of causing loss by deceptiondescribes an outcome but the nature of the loss is not defined.[16] Secondly, the commission of the obtaining by deception offencesnecessarily contemplates an identifiable benefit obtained by the offender and30 At 1048.31 Supplementary Order Paper 2003 (84) Crimes Amendment Bill (No 6) 1999 (322-1) at 3.32 Morley v R, above n 28.a corresponding disadvantage to the victim. The offender will have obtainedsomething of value, or obtained credit or will have secured some physical actin relation to a pecuniary document. Typically, the benefit received and thedetriment suffered by the victim will be immediate, as where the offenderconsumes a meal and fails to pay for it. But the same cannot be said of thenew offence of causing loss by deception.[17] As the facts of the present case demonstrate, the appellant obtained noapparent benefit upon signing the agreements for sale and purchase.Ownership, possession and control of the properties was to remain with thevendors until the day of settlement. At no stage were the vendors deprived oftheir properties. Hence, they did not suffer an immediate detriment as dovictims of the offences of obtaining by deception. We consider thesedifferences are significant, particularly in defining a loss as contemplated bys 240(1)(d), an issue to which we shall return shortly.Li v R [2016] NZCA 237[78] Mr Li was convicted under s 240(1)(a) of obtaining a benefit by deception,namely a New Zealand Diploma in Business issued by NZQA to Mr Chen, who wasan investigative journalist inquiring into fraud in the foreign student education market.Mr Chen never intended to use the diploma he obtained. The deception Mr Li engagedin involved him arranging for an academy called NZAS to complete assignments andexaminations for Mr Chen to enable him to get a qualification from NZAS and then adiploma from NZQA. Mr Chen paid Mr Li $12,000 for his fraudulent services, ofwhich $3,000 was kept by Mr Li and the balance paid by Mr Li to NZAS.[79] One of the issues on appeal was whether Mr Li obtained a benefit for thepurposes of s 240(1)(a). It was argued that the "benefit" obtained was the NZQAbusiness diploma, but that because the diploma was issued directly to Mr Chen byNZQA, it was never "obtained" by Mr Li. This Court said that the definition ofobtained in s 217 of the Crimes Act was "sufficiently broad to cover the situationwhere the defendant obtained possession of the property or benefit for anotherperson",33 and that it would "suffice if the defendant causes some other person todeliver the property in question to someone other than the defendant".34[80] There is nothing controversial about the conclusions reached by the Court.It may also have been possible for Mr Li to have been convicted on the basis that he33 Li v R [2016] NZCA 237 at [16].34 At [16].obtained a benefit in the sum of $3,000 for agreeing to deceive authorities by "takingcare" of the assignments and examinations Mr Chen was meant to complete. Forreasons that are not clear from the judgment, however, Mr Li was not charged on thatbasis.35[81] Before us the SFO relied on the following paragraph from Li:36[28] The benefit obtained by the deceit will normally be matched by thedisadvantage suffered by the victim. The example given in Morley was wherethe offender consumes a meal and fails to pay for it. Even though acorresponding disadvantage may follow, s 240 does not require proof of it.In any event, we consider that the certified endorsement of NZQA that wasobtained by deception in this case carried with it a corresponding detriment ordisadvantage to NZQA. NZQA provided the certificate and confirmed that ithad endorsed the qualification on its database. It would not have beenprepared to take these steps if it had not been deceived and had been aware ofthe true position. It follows that NZQA acted to its detriment by providingthis endorsement in reliance on the dishonest representations, which wascontrary to its role of assuring and protecting the credibility of theNew Zealand qualifications it endorses.[82] The SFO acknowledged that in Morley this Court said the commission of anoffence under s 240(1)(a) necessarily "contemplates an identifiable benefit obtainedby the offender and a corresponding disadvantage to the victim".37 But, the SFO alsosubmitted, Li "expressly overruled Morley on this point".Benefit and value[83] Benefit is not defined in ss 217 or 240 of the Crimes Act. It is, however,defined in ss 237, 267 and 269, which deal with the offences of blackmail,intentionally causing damage by fire and intentionally causing damage "with intent toobtain any benefit". Benefit is defined in these sections to mean "any benefit,pecuniary advantage, privilege, property, service, or valuable consideration".[84] The terms benefit, privilege and service in s 240(1)(a) are broad concepts thatmay extend beyond things that have a direct financial value.38 It is, however,necessary to be able to place some value on what is obtained when dealing with an35 At [30].36 Footnotes omitted.37 Morley v R, above n 28, at [16].38 See Watchorn v R [2014] NZCA 493 at [72]–[73]; and Stollery v R [2020] NZCA 429 at [25].offence under s 240(1)(a), (b) or (c), or the loss caused when dealing with an offenceunder para (d). This is because s 241 creates three tiers of sentence that hinge uponthe value of the property obtained or the loss caused by the defendant's deception.[85] In Pure v Police, this Court noted that "'[v]alue' is a word of 'protean nature':its meaning is context dependent".39 The Court said that when it can be ascertained,market price will be evidence of value.40 Similarly, in O'Brien v R, this Court saidvalue must be determined at the time the thing in issue is obtained and that where thevalue of a privilege or licence cannot be ascertained by other means, the Court mayassess the value by reference to the costs involved in obtaining the privilege or licence(including any licence fee paid and legal costs incurred).41How were charges 3 and 5 prosecuted?[86] A question trail was prepared by Gault J in consultation with counsel.Seven questions were posed in relation to charges 3 and 5.[87] Question one in relation to charges 3 and 5 asked:Are you sure the National Party, directly or indirectly, obtained or retained abenefit, namely possession of or control over a donation of $100,000?[$100,050 in relation to charge 5][88] Question two asked if the appellants engaged in a "fraudulent device, trick, orstratagem"?. Question three asked if the appellants used the stratagem with intent todeceive the National Party Secretary and/or Electoral Commission. Question fourasked if the stratagem was the material cause of the benefit.[89] For present purposes it is not necessary to set out the balance of the questiontrails. Suffice to record that no part of the question trails asked if the appellantsobtained a benefit. Indeed, the prosecution was premised upon:(a) the National Party Secretary being the victim in the sense that theSecretary, and/or the Electoral Commission, was deceived by the39 Pure v Police [2020] NZCA 525, [2020] 3 NZLR 467 at [18] (footnote omitted).40 At [25]–[38].41 O'Brien v R [2019] NZCA 83 at [87].defendants when the defendants donated $100,000 and $100,050respectively of the defendants' money; and(b) simultaneously, the National Party obtained a benefit from thedonations.High Court judgment[90] Gault J reached the following conclusions when convicting Colin Zheng inrelation to charge 3:(a) "[T]he National Party obtained the benefit of a donation of $100,000between 1 and 12 June 2017".42(b) Colin Zheng engaged in a deceptive stratagem "whereby the $100,000donation was split into sums of money less than $15,000 by way oftransfer into the bank accounts of the seven transmitters, before beingpaid to, and retained by, the National Party. The transmitters' banktransfers concealed the true position from the National Party".43(c) Colin Zheng knowingly breached the Electoral Act and engaged in thestratagem with "an intention to deceive"44 and that "in the absence ofthe stratagem the donation would not have occurred".45[91] The Judge reached the following similar conclusions when convictingMr Zhang, Colin and Joe Zheng in relation to charge 5:46(a) The National Party obtained a benefit, namely a donation of $100,050which it received between 1 and 11 June 2018.42 Reasons judgment, above n 24, at [528].43 At [530].44 At [535].45 At [536].46 At [557]–[591].(b) The appellants were all involved in the deceptive stratagem, whichinvolved the sale of the wine by HLG in China for $108,463.23 and thetransfer of that money to Joe Zheng's bank account in New Zealand.The appellants were also involved in the splitting of the money intosums under $15,000 and the transfer of those sums to intermediarieswith instructions that the sums in question be transferred to theNational Party.(c) The appellants knowingly breached the Electoral Act when theyengaged in the stratagem which was designed to hide the real sourcesof the donation to the National Party and that the stratagem played amaterial part in the acquisition of the benefit obtained by theNational Party.Grounds of appeal: charges 3 and 5[92] Mr Dickey argued this part of the appeal for Mr Zhang. Counsel for the Zhengbrothers adopted Mr Dickey's submissions.[93] The principal submission advanced by Mr Dickey was that an error was madein the High Court when the Judge and counsel proceeded on the basis that it was notnecessary to demonstrate the defendants obtained either directly or indirectly, abenefit. Mr Dickey submitted that in the present case the SFO had wrongly arguedthat the requirements of s 240(1)(a) were satisfied if the National Party obtained abenefit, even though it was alleged that the National Party Secretary and/or theElectoral Commission were victims of the same transaction.[94] A second argument advanced by Mr Dickey was that there was insufficientevidence to establish Mr Zhang benefitted directly or indirectly from the donations inissue.Analysis[95] The appellants were charged under s 240(1)(a), which requires the prosecutionto prove that the appellants obtained a benefit through their own deceptive conduct.[96] There is no doubt that the National Party Secretary and/or the ElectoralCommission were deceived by the appellants. The only issue in relation to charges 3and 5 is whether the appellants obtained a benefit directly or indirectly, bearing inmind the definition of "obtained" in s 217 of the Crimes Act.[97] The SFO did not attempt to argue before us that the appellants obtained abenefit. Instead, the SFO continued to argue that it was sufficient for theNational Party to obtain the benefit, and simultaneously suffer a detriment in relationto the same transaction. It is not surprising the SFO was unable to point to anyauthority to support this proposition, other than its interpretation of Li.[98] The authors of Adams on Criminal Law properly explain Morley and Li.They say in relation to Morley:47It was held, at [15]–[16], the section as enacted in 2003 created two differentkinds of offences. First there are, in subss (1)(a), (1)(b) and (1)(c), threesimilar offences involving the obtaining of property, credit or the executionetc of a document. Obtaining in these contexts bears its extended meaninggiven by s 217 Secondly, there is the significantly different offence in subs(1)(d) of causing loss by deception. The first three require proof of a definedoutcome, in that the offender must either obtain ownership, possession orcontrol of something of value (subs (1)(a)), or obtain credit (subs (1)(b)), orinduce or cause someone to perform a physical act in relation to a pecuniarydocument (subs (1)(c)).[99] When explaining para [28] of Li, they state:48The requirement that the defendant must obtain a benefit does not requireproof of any corresponding detriment to another person: Li v R at [28]. Bycontrast, there is no requirement of the conferment of any benefit in subs (1)(d)offences, but the victim must suffer loss. There is no definition of the natureof the kinds of loss required.[100] We agree that where it is established a defendant obtained a benefit, there is norequirement to prove that any person suffered a corresponding detriment. In any case,it is not controversial that the appellants' deceptions caused the National Partydetriment in that it was not able to comply with its reporting obligations under theElectoral Act.47 Mathew Downs (ed) Adams on Criminal Law – Offences and Defences (online ed, ThomsonReuters) at [CA240.01].48 At [CA240.01].[101] The SFO's argument that it is sufficient that the National Party obtained abenefit does not gain traction for two reasons.[102] First, the approach taken by the SFO conflates the deception with the benefitand it fails to acknowledge the law, under which it is clear that for an offence to becommitted under s 240(1)(a), the defendant must obtain, either directly or indirectly,a benefit or some other asset of value through deception. Even where the extendeddefinition of "obtained" in s 217 of the Crimes Act is engaged, the benefit must beobtained or retained by the defendant for themself or for another person.[103] The SFO relied on Li for this aspect of their submission that it was sufficientthat the National Party obtained a benefit as a result of the appellants' deception.As discussed earlier, in Li the defendant's deceptive conduct in Li resulted in a thirdparty obtaining a diploma.[104] In our view, we consider that Li does not go so far as to support the proposition,as advanced by the SFO, that the requirements of s 240(1)(a) will be met where thedefendant has not obtained any benefit for themself. To the extent that Li suggestsotherwise, we consider that it should be confined to its own facts.[105] The intention of s 240(1)(a) is clear: there must be a benefit obtained by thedefendant. Li stands for the proposition that a defendant can obtain a benefit bycausing an intermediary "to deliver the [benefit] in question to someone other than thedefendant".49 It does not suggest that the requirement for the defendant to obtain abenefit can be fulfilled by a third party obtaining a benefit.[106] Second, because the money paid to the National Party through deception was,in effect the appellants' own money, it was not possible for the appellants to personallyobtain directly or indirectly any benefit. The appellants were divesting themselves ofany benefit in this case.49 Li v R, above n 33, at [16].[107] We do not accept that s 240(1)(a) can apply where A donates his money to Bthereby conferring a benefit on B without providing any benefit to A or his nominee,even where the donation involves A engaging in deceptive conduct.[108] Absent evidence of the appellants obtaining directly or indirectly a benefit, ordirecting that benefit to someone other than the victim, no conviction was possible inrelation to charges 3 and 5.The alternative charge[109] Unlike charge 5, charge 6 alleged the appellants obtained a benefit, namely notbeing identified as the true donors to the National Party. The SFO argued thatanonymity was important to the appellants and in particular, Mr Zhang.[110] Charge 2 alleged a similar benefit; namely, freedom from public scrutiny.That charge alleged the appellants and three other defendants arranged for a paymentof $34,840 to be made to the Labour Party via five transmitters paying sums less than$15,000. The $34,840 was the net proceeds of the sale of five paintings to Mr Zhang.[111] When discussing whether or not being free from public scrutiny was a benefitfor the purposes of s 240(1)(a), the Judge recorded the parties' respective argumentsin the following way:50[470] Mr Katz submitted that freedom from public scrutiny is not tangibleand is not capable of monetary valuation. The Crown says that freedom frompublic scrutiny is valuable and in excess of $1,000. It says that the true donorwould have obtained anonymity with a donation under the $15,000 thresholdso that the value of the additional anonymity is over the $1,000 threshold, thatis it can be valued at the donation amount minus $15,000.[112] The Judge fully recognised the maximum penalty for an offence under s 240 isdetermined by reference to the value of the loss or benefit in the value bands in s 241.5150 Reasons judgment, above n 1.51 At [468]–[469].[113] The Judge said he "doubt[ed]" the value of freedom from public scrutiny couldsimply be equated with the amount of the donation.52 The Judge also said:53[471] I am not saying that freedom from public scrutiny can never havevalue. Here, however, apart from the donation amount which I have notaccepted, the Crown simply points to the extensive steps it says the defendantswent to in order to obtain the benefit. Such a submission may answer achallenge to a valuation, but it is not itself evidence of the value of the freedomfrom public scrutiny. In this context, I cannot accept the submission that thebenefit essentially proves itself – res ipsa loquitur – with the rhetoricalquestion why would the deception have been practised by the true donor if itwas not of value to him? In these circumstances, having concluded that adonation was not proved, I cannot be sure that Mr Zhang obtained a benefit ofany value.[114] Before us, the SFO argued that the value of the benefit obtained by theappellants in relation to charge 6 was easier to ascertain than the alleged value of thebenefit they obtained in relation to charge 2. Underpinning the SFO's case howeverwas the proposition that the value was to be determined by deducting $15,000 fromthe amount of the donation.[115] Like the Judge, we would not want to suggest that freedom from publicscrutiny can never have a value. We are, however, not persuaded that the value of thebenefit for the purposes of s 241 of the Crimes Act can be calculated simply bydeducting $15,000 from the amount of the donation. The value of the donation andthe value of an individual's privacy are two different concepts that should not beconflated. To do otherwise creates strange results. For example, under the SFO'ssubmission, undisclosed donor A who donates $100,000 through a number oftransmitters is treated as having their privacy valued at $85,000. Undisclosed donorB who donates $20,000 through two transmitters is treated as having their privacyvalued at $5,000. These scenarios show that valuing a donor's privacy simply byreference to the value of their donation confuses the value of privacy with the value ofthe donations.[116] It may have been possible in this case to have charged the appellants unders 240(1)(d) for causing loss by deception. Such an approach would have required52 At [470].53 Emphasis in original.evidence about the National Party either returning the donation,54 or relinquishing itto the Electoral Commission pursuant to s 207I of the Electoral Act. It would alsohave required evidence about the costs incurred by the National Party in investigatingthe appellants' conduct (including any audit and legal fees, etc). Such an approachwould have been entirely consistent with Morley and O'Brien. We cannot, however,find any evidence from the trial that directly addresses this issue.[117] We conclude in relation to the alternative charge that there is insufficientevidence to demonstrate the value of the alleged benefit obtained by the appellants.Substituted charges[118] We gave consideration to substituting the s 240 Crimes Act offences withcharges under the Electoral Act. However, Ms Hogan made clear the SFO was notasking us to substitute convictions pursuant to s 234 of the Criminal Procedure Act2011, and in any event, the SFO candidly acknowledged that it was vexed by the lackof connection between the conduct in this case and the offence provisions in theElectoral Act.Charge 7High Court judgment[119] Gault J was in no doubt that Joe Zheng lied to the SFO about the buildingcontract and the purpose of the funds he received in his bank account on 31 May 2018.The Judge's reasons for finding charge 7 proven are succinctly contained in thefollowing two paragraphs of his judgment:55[629] Even allowing for possible confusion at times during the interviewsbetween when the money was received in May 2018 and when the contractwas signed in August 2019, I am sure that, against the background of Mr JoeZheng's earlier statement that the money paid from [Shaona] Zhang's bankaccount into his bank account on 31 May 2018 was a deposit to ANCOProperties for building a house on the North Shore rather than money for theNational Party donation, he maintained in his second interview that there wasa contract in May 2018 and the August 2019 contract was a replacement.54 Electoral Act, ss 207C(4) and (5).55 Reasons judgment, above n 24 (footnotes omitted).[630] I am sure Mr Joe Zheng must have known that was false, evenaccepting that he followed his brother's instructions and allowing for memorylapse. Taking the following facts together, I am sure there was no earliercontract. There were no communications or documents relating to preparatorywork for building on [Shaona] Zhang's property on the North Shore until mid-2019, which was consistent with the contract document created and signed inAugust 2019. No contract document created in May 2018 was identifieddespite the SFO's extensive review of electronic devices. The 2019 contractdocument was backdated. There was no good reason to do so.The specifications in the 2019 contract were copied from another contractonly created in July 2019. The deposit amount of $108,463.23 in the August2019 contract document exactly matched the NZD amount of the wineproceeds, even though the original contract was said to be dated 21 May 2018;10 days before the wine proceeds were transferred into that NZD amount on31 May 2018. Thus, even if there had been an original contract document, itwould not have contained the same deposit amount to explain the transfer 10days later. A house deposit to ANCO Properties should not be paid into apersonal bank account. The wine proceeds were used for the National Partydonation, and I do not accept the exact same amount of $108,463.23 wasinserted as the deposit amount in the August 2019 contract by mistake.Finally, the surplus was used to buy cognac.Grounds of appeal[120] There were two parts to Joe Zheng's appeal in relation to his conviction forcharge 7.[121] The first part comprised submissions which were advanced on behalf of otherappellants and Joe Zheng. In essence, it was argued that the Judge erred by failing toassess the evidence through the appellant's Chinese socio-cultural world view. Wewill refer to these submissions as the "cultural" submissions.[122] The second part of Joe Zheng's appeal focused upon the adequacy of theevidence adduced by the SFO in relation to charge 7.Cultural submissions[123] This part of the appellant's case was presented by Mr Lye, junior counsel forColin Zheng. Joe Zheng adopted Mr Lye's submissions.[124] Mr Lye submitted that Gault J erred by failing to apply observations made bythe Supreme Court in Deng v Zheng.56 That case concerned civil litigation between56 Deng v Zheng [2022] NZSC 76, [2022] 1 NZLR 151.two Chinese businessmen in Auckland. The crucial question was whether theirbusiness relationship had been governed by a partnership. The High Court held therewas no partnership but that finding was overturned by this Court. An appeal wasdismissed by the Supreme Court. In concluding that there had in fact been apartnership, the Supreme Court:(a) warned of the need to exercise caution when assessing evidence incases in which one or more of the parties have a cultural backgroundthat differs from that of the Judge;57 and(b) said "[i]t is critical that judges and counsel maintain a sense ofproportionality and recognise that many, perhaps most, cases, in whichthe parties operate within a social and cultural framework that differsfrom that of the judge" can be dealt with by examining "consistency ofa narrative over time with other evidence (particularlycontemporaneous documents) and general plausibility".58[125] Mr Lye argued that Gault J examined the evidence through a "pākehā lens" andfailed to heed the cautions expressed in Deng v Zheng.[126] Mr Lye also relied upon articles and publications to explain the socio-culturalcontext in which the appellants were functioning. Those articles and publications referto a number of Teochew Chinese cultural concepts, which included:(a) functioning in a context that was highly relational and contextual.This was underpinned by guānxi, which refers to individuals havingstrong relationships with each other that are underpinned by trust andmutual moral obligations;(b) rénqíng, which loosely means doing someone a favour. Mr Lyesubmitted that "[t]he intersection of guānxi with the moral, emotionaland ethical aspect of rénqíng is what distinguishes guānxi practices57 At [78(a) and (b)].58 At [78(d)].from impersonal, instrumental and transactional money and briberelations"; and(c) familial ties, which were extremely important in this case, as was theconcept of loyalty.[127] The SFO challenged the way in which Mr Lye sought to rely on publicationsthat explained Teochew cultural values. It was contended that the material relied uponby Mr Lye should have been the subject of an application to adduce fresh evidenceand that in any event, the material in issue was neither fresh nor cogent. For reasonswhich will become clear, we do not need to rule on the admissibility of the "fresh"evidence.Adequacy of the evidence[128] Ms Thomson, senior counsel for Joe Zheng, challenged the High Court'sfindings that the evidence demonstrated Joe Zheng breached s 45 of the SFO Actduring his two compulsory interviews. Ms Thomson's submissions can be distilled tothe following 10 succinct points.[129] First, the Judge erred by pointing to a lack of documents and communicationsconcerning the building of Shaona Zhang's house until mid-2019 to support his findingthat no earlier contract existed. Ms Thomson said this was entirely consistent with JoeZheng's statements to the SFO that Shaona Zhang was continuing to think about theproject through to the middle of 2019.[130] Second, Ms Thomson said it was wrong of the Judge to rely on the absence ofany evidence of a building contract prior to the one created in August 2019.She submitted this was explained by Joe Zheng when he told the SFO that the originalcontract was lost and a new one was therefore required.[131] Third, Ms Thomson said the Judge made a mistake when he said there was nogood reason to backdate the August 2019 version of the contract. It was submittedthat the contract was backdated because it was replacing the one that was lost.[132] Fourth, Ms Thomson focused on the Judge's comments about the August 2019version of the contract having been copied from a contract for a different property. Itwas explained by Joe Zheng in his SFO interviews that he always used ANCO standardcontracts as a template.[133] Fifth, Ms Thomson said the Judge placed too much emphasis on the fact thedeposit paid to Joe Zheng by Shaona Zhang matched the amount received from thesale of wine in China by HLG in May 2018. Joe Zheng told the SFO that he createdthe quotation for Shaona Zhang at about the time the funds were transferred to himand that he was relying on his memory when he was interviewed.[134] Sixth, the Judge placed too much emphasis on the fact the money in questionwas paid into Joe Zheng's personal account. Ms Thomson said nothing hinged uponthis as Shaona Zhang had not been asked to pay money directly to ANCO and, as themoney would not be needed for some time, it was appropriately paid into Joe Zheng'saccount.[135] Seventh, the Judge erred when he concluded that the $108,468.23 was probablynot inserted by mistake into the August 2019 version of the contract. Ms Thomsonsaid this was not right as the funds in question were the deposit for Shaona Zhang'sbuilding contract.[136] Eighth, Ms Thomson submitted the Judge failed to recognise the evidence thatthe Chinese government placed controls over the transfer of funds out of China torestrict Chinese investment into real estate overseas and that the transfer of the fundsto Joe Zheng's bank account was consistent with these restrictions.[137] Ninth, Ms Thomson argued that the evidence did not demonstrate Joe Zhengknew the information he was providing to the SFO was false or misleading or that hewas otherwise reckless as to whether the information he gave the SFO was false ormisleading.[138] Finally, Ms Thomson reiterated part of the submissions made by Mr Lye, whenshe emphasised the informal and unstructured approach to the arrangements betweenShaona Zhang, Colin and Joe Zheng reflected their cultural relational ties.Analysis: charge 7[139] We appreciate that the appellants are respected leaders of the Chinese Teochewcommunity in Auckland and that Mr Zhang is deeply influenced by Teochew culturalvalues. Colin and Joe Zheng came to New Zealand to attend secondary school andhave lived, studied and worked in this country for many years. While theyundoubtedly value and regularly live by Teochew cultural principles, they will also befamiliar with New Zealand cultural norms.[140] Even if we were to grant some allowance for Joe Zheng's cultural background,such leniency would fall well short of providing a basis for allowing his appeal.[141] Joe Zheng's cultural argument was that his loyalty to his brother compelledhim to follow Colin Zheng's instructions. It was also argued that the absence ofrecords of any contract in May 2018 between Shaona Zhang and ANCO reflected thehigh level of trust that characterised the relationship between Shaona Zhang and theZheng brothers.[142] We do not accept that these considerations relieve Joe Zheng from culpability.There are three fundamental reasons why this is so:(a) Sections 5 and 9 of the Crimes Act 1961 make clear that all offencescommitted in New Zealand are to be tried in accordance with the lawof this country. By way of example, the courts have rejectedsuggestions that Māori may be tried by a separate criminal justicesystem, or on the basis of different laws to those which apply to allother persons in New Zealand.5959 Mason v R [2013] NZCA 310, (2013) 26 CRNZ 464 at [23]–[26] and [35]; and Wallace v R [2011]NZSC 10 at [2] in which the Supreme Court said when dismissing an application for leave toappeal that arguments to the effect the High Court lacked jurisdiction to try Māori were "plainlyunsound legally".(b) The logical consequence of Joe Zheng's submission is that culturalfactors meant he was obliged to deliberately mislead the SFO out ofrespect for or obligation to his brother and/or Shaona Zhang, and thatthis could act as a complete defence to the charge. None of the materialrelied upon by Mr Lye goes so far as to suggest that Teochew culturalconcepts justify lying to law enforcement authorities.(c) Cultural considerations may play an important role in our criminaljustice system when assessing the appropriate sentence or penalty thatshould be imposed upon an offender.60 In this context however, thecriminal law draws a clear line between culpability and punishment.[143] We are satisfied that the evidence clearly demonstrated Joe Zheng lied to theSFO in three general ways, namely:(a) When providing his explanations as to why he received $108,463.23from Shaona Zhang.(b) When explaining why, on 16 August 2019 he created the buildingcontract between Shaona Zhang and ANCO.(c) When explaining why he backdated the building contract to May 2018.[144] We have summarised at [57]–[61] the evidence concerning these lies.That evidence was carefully assessed by Gault J, who also had the advantage ofwatching video recordings of Joe Zheng's SFO compulsory interviews. The Judge'sreasons for concluding that Joe Zheng deliberately set out to mislead the SFO areunimpeachable.Judge-alone trial[145] The appellants challenged a pre-trial ruling that the trial be conducted by ajudge sitting without a jury. We have concluded that the appeals against conviction60 Sentencing Act 2002, s 27.succeed. The challenge to the judge-alone trial ruling therefore disappears. This isbecause the only conviction which survives the appeal concerns charge 7.The maximum penalty that can be imposed for that offence is a fine of $40,000 ifcommitted by a corporation or 12 months' imprisonment if committed by anindividual, which is well below the two-year imprisonment threshold for trial by juryset out in the New Zealand Bill of Rights Act 1990.61Joe Zheng's sentence[146] Joe and Colin Zheng abandoned their sentence appeals before the appeals wereheard. We make the following comments for completeness.[147] When sentencing Joe Zheng, Gault J imposed two sentences. In relation to thecharge of obtaining by deception, Joe Zheng was sentenced to two months' communitydetention with a daily curfew from 10:00 pm to 6:00 am and 100 hours' communitywork.62[148] On the charge of providing false or misleading information to the SFO,Joe Zheng was sentenced to one month's community detention with a daily curfewfrom 10.00 pm to 6.00 am and 50 hours' community work, to be served cumulatively.63[149] In view of the abandonment of Joe Zheng's sentence appeal, the sentenceimposed by the High Court in relation to Joe Zheng's conviction for providing falseor misleading information under s 45 of the SFO Act remains in place.Result[150] Hengjia Zheng's appeal against his conviction in respect of charge 5 is allowed.The conviction is quashed. No retrial is ordered. Hengjia Zheng's appeal against hisconviction in respect of charge 7 is dismissed. The sentence imposed in relation to hisconviction for charge 7 remains in place.61 New Zealand Bill of Rights Act 1990, s 24(e); and Criminal Procedure Act 2011 ss 6(1) and 50.62 Sentencing judgment, above n 4, at [98].63 At [99].[151] Yikun Zhang's appeal against his conviction in relation to charge 5 is allowed.The conviction is quashed. No retrial is ordered. Yikun Zhang's appeal againstsentence is dismissed.[152] Shijia Zheng's appeals against his convictions in relation to charges 3 and 5are allowed. The convictions are quashed. No retrial is ordered.Solicitors:Pidgeon Judd, Auckland for First and Third Appellants H Zheng and S ZhengCourtney & Co, Auckland for Second Appellant Y ZhangCrown Law Office | Te Tari Ture o te Karauna, Wellington for Respondent