ANDERSON v NEW ZEALAND POLICE [2023] NZHC 2644

ANDERSON v NEW ZEALAND POLICE [2023] NZHC 2644 [21 September 2023]IN THE HIGH COURT OF NEW ZEALANDINVERCARGILL REGISTRYI TE KŌTI MATUA O AOTEAROAWAIHŌPAI ROHECRI-2023-425-16[2023] NZHC 2644BETWEEN MELANIE TYRELLE ANDERSONAppellantAND NEW ZEALAND POLICERespondentHearing: 20 September 2023 (By way of AVL)Appearances: S N McKenzie for AppellantJ A T Ross for RespondentJudgment: 21 September 2023JUDGMENT OF DUNNINGHAM JThis judgment was delivered by me on 21 September 2023 at 3 pm,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateIntroduction[1] On 16 June 2023, the appellant, Ms Anderson, was sentenced to nine months'home detention on five charges of theft by a person in a special relationship.1[2] She appeals her sentence on the single ground that there was insufficient creditallowed to recognise her efforts in paying reparation in full and her remorse.Facts of the offending[3] The offending arose in the context of Ms Anderson's employment withtwo Invercargill-based companies. In both roles, she was involved in theadministration of accounts and had the ability to pay accounts owed and wages. Sheembezzled funds from both companies in order to pay for personal expenses.[4] In respect of the first company, Ms Anderson was involved in payroll, dataentry, accounts receivable and payable, debit reconciliation, and other generaladministration. Between 2016 and 2019, she created fraudulent creditor payments tobusinesses that traded with the company and paid $19,245.40 directly into her personalaccount. She overpaid herself in the amount of $6,278.33. That offending came tolight in 2020, and a forensic account was engaged and fees of $6,614.63 were incurred.[5] Ms Anderson was employed at the second company from around August 2016.She took over a more substantial role in this company following an owner becomingseriously ill. She had extensive access to account information, and trust was reposedin her. On several occasions, Ms Anderson paid herself more than she was entitled tofor annual leave and sick leave. This totalled to $12,744.50. Ms Anderson also paidherself $24,138.78 after creating more than 40 false invoices ostensibly frombusinesses which traded with the company. In mid-2019, the company started tonotice unexplained cash flow issues and had to sell assets to keep the business afloat.Ms Anderson confided to the company's accountant in 2020 that she had been takingmoney from the business. The company incurred accounting fees totalling $7,139.381 R v Anderson [2023] NZDC 12119.investigating the payments. In November 2020, Ms Anderson paid back $7,000. InDecember she paid $20,000.[6] Reparation of $32,138.36 was sought on behalf of the first company, reflectingthe amounts wrongfully paid to Ms Anderson and accounting fees. Reparation of$17,022.66 was sought by the second company, reflecting the theft and the accountingfees but minus the amounts already repaid.Principles on appeal[7] Appeals against sentence are allowed as of right by s 244 Criminal ProcedureAct 2011 and must be determined in accordance with s 250 of that Act. An appealagainst sentence may be allowed by this Court only if it is satisfied there has been anerror in the imposition of the sentence and a different sentence should be imposed.2As the Court of Appeal identified in Tutakangahau v R (quoting the lower court'sdecision), a "court will not intervene where the sentence is within the range that canproperly be justified by accepted sentencing principles".3 It is appropriate for thisCourt to intervene and substitute its own views only if the sentence being appealed is"manifestly excessive" and not justified by the relevant sentencing principles.4District Court decision[8] At the sentencing indication, Judge Farnan adopted a starting point of30 months' imprisonment. A full guilty plea discount was considered appropriate, butonly five per cent was available for prior good character as the offending spannedseveral years. At the time of the sentencing indication, Ms Anderson had paid $27,000in reparations and further reparations were sought, both in respect of the money takenfrom the two companies and for the accounting fees they had incurred as noted above.[9] The Judge indicated a discount for paying reparation was appropriate andindicated a credit of 10 per cent. The Judge also said, "further discounts for payingreparation and discounts for restorative justice, if it takes place, can be given at2 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].sentencing".5 The discounts afforded at that stage resulted in a sentence of 18 months'imprisonment, which the Judge indicated would be converted to nine months' homedetention. She added that the sentencing indication was "predicated on the basis thatreparation will be paid in full by sentencing, no further offending, and a suitableaddress for home detention".6[10] Judge Farnan's sentencing indication was adopted by Judge Walker when hesentenced Ms Anderson on 16 June 2023. He summarised the sentencing indicationas indicating a sentence of nine months' home detention "but only on the basis thatreparation was paid in full by sentencing, there was no further offending, and therewas a suitable address". There was no discussion of any further discounts, and heimposed the sentence of nine months' home detention.SubmissionsAppellant's submissions[11] Mr Ross, for Ms Anderson, advances a focused appeal. The only issue takenwith the sentence concerns discounts for reparations paid and remorse. Instead of the10 per cent discount given, he suggests the discount should have been between 20 and30 per cent.[12] In support of this submission, he explains that Ms Anderson has gone to someeffort to ensure the victims were repaid. She sold her family's vehicles to pay theinitial amount of $27,000 and borrowed a modest vehicle from a family member tocontinue to travel to work. To pay the remaining reparation, she borrowed fromtwo separate family members and is currently repaying the first of these loans at $500per week, after which she will have to pay off the second loan. In order to do this, sheis working up to six days a week at the local freezing works and is living a more frugallife.[13] In submitting that a higher discount should be available for paying fullreparations, Mr Ross notes that, at the sentence indication hearing, the Crown5 At [38].6 At [42].submitted she was entitled to "a discount of 15 per cent for partial reparation". Giventhat by the time she was sentenced, she had paid reparation in full, he says the Crownclearly anticipated a discount greater than 15 per cent would be available. In hissubmission, the authorities support a credit of 20 to 30 per cent in circumstances suchas this.[14] In R v Pian, a defendant repaid $630,000 which was obtained by deception,along with $30,000 in interest.7 This was reflected in a 20 per cent discount to thestarting point. The Judge also made a discrete allowance for remorse of five per centto reflect the payment of interest in addition to the full repayment.[15] In Zhang v R, a 20 per cent credit for payment of reparation was given forrepaying funds obtained through dishonesty.8 On appeal, the Court of Appealacknowledged there were cases where more significant discounts had been afforded,even where the reparation made was not for the full amount defrauded, although thecases did not persuade the Court that the adjustment of 20 per cent in this case wasinsufficient.[16] In Watene v R, Isac J was considering an appeal against sentence for anappellant who had burned down her ex-partner's uninsured home, causing a loss ofaround $150,000.9 She was paying $100 per week towards reparation and hadwithdrawn $5,000 from her Kiwisaver account, which was the maximum amountwhich could be released on a substantial hardship ground, to pay the victim.[17] In discussing what discounts should apply, Isac J said the following:[50] The authorities cited in Hall's Sentencing suggest that discounts of asmuch as 50 per cent have been made for offers of amends andreparation payments. As the Court of Appeal observed in R vClotworthy, the appropriate level of discount will depend on the factsof the case and a close assessment of the relevant sentencingconsiderations. The nature of the offer, the effect of the payment onthe offender, and whether the offer is voluntary will be relevant. Avoluntary payment (amends) is different to a payment ordered by theCourt (reparation) and may indicate remorse and a desire to atoneespecially if it is likely to cause hardship. The nature of the offending7 R v Pian [2020] NZHC 2724.8 Zhang v R [2022] NZCA 267.9 Watene v R [2023] NZHC 441.and the harm caused, the extent to which the offer of amends mitigatesthe victim's loss, and whether the victim accepts the offer, are alsofactors likely to be highly relevant. Whereas payments byperpetrators of, for instance, sexual offending have often been givenlittle weight. Payments in amends appear to have been affordedsignificantly more weight in offending that primarily involvesfinancial loss, such as by fraud or property damage. Overall, it is clearthat a highly fact-specific approach is necessary.(footnotes omitted)[18] In Watene, Isac J concluded that a credit of 30 per cent was appropriate toreflect both the reparation payments and the appellant's remorse. Although Isac Jquashed the $150,000 reparation order and instead imposed an order of $30,000, heplaced weight on the means of the person making amends, and the fact that her effortswould have a significant impact on her own financial wellbeing and the quality of herretirement, in setting the level of discount.[19] In Richards v Police, the appellant defrauded his employer of approximately$50,000.10 The appellant, at the time of sentencing, had only been able to offer torepay $150 to $200 per week, and a two month credit on the 20 month starting pointwas afforded. On appeal, the situation had changed. He had been able to pay a lumpsum of $10,000 towards reparation and withdraw $38,000 from his Kiwisaver accountto repay the $50,000 in full. Collins J considered it was appropriate to apply a discountof six months to the prison sentence to reflect the full reparation paid. That amountedto a 30 per cent discount on the 20 month starting point.[20] In summary, Mr Ross says that allowing only a 10 per cent credit for the fullrepayment of over $70,000 prior to sentencing, and with no additional credit forremorse, was clearly inadequate. Had a 20 to 30 per cent discount been afforded forreparation and remorse, a home detention sentence of between six and seven and ahalf months should have been imposed.10 Richards v Police [2018] NZHC 2288. This was the only amount which could be demonstratedon the businesses records which went back one year, and was not necessarily the full amount ofthe offending.Respondent's submissions[21] The respondent's position is that the overall discount of 40 per cent cannot becriticised, and the end sentence of nine months' home detention is not manifestlyexcessive. First, Ms McKenzie notes Ms Anderson received a full 25 per cent discountfor her guilty plea. She notes that while guilty pleas to two charges were entered early,the plea to the remaining three was only entered following the sentencing indication,some 11 months after the charges were first called.[22] In support of the submission that the guilty plea discount was generous, shenotes the following observation by Brewer J in Harnett v Ministry of SocialDevelopment:11[30] I consider the discount of 25 per cent for the pleas of guilty to begenerous. I acknowledge it has become almost automatic for someJudges to give the full discount, so long as pleas are not entered justbefore trial. But that is not the law.The Supreme Court in Hessell v R,rejected an approach which would mean that where a plea is enteredpromptly, even in the face of a very strong prosecution case, themaximum discount must be given.12 What is required is a properevaluation of all the circumstances in which the plea is entered. InMr Harnett's case, his offending, once discovered, was ineluctable.[23] In the circumstances, a 25 per cent guilty plea was generous and a lesserdiscount could have been given.[24] In terms of the discount for reparation, Ms McKenzie considers the sentencingindication made it clear that a discount of 10 per cent would be available on paymentof full reparation. She also submits that any discount for reparation necessarily takesinto account remorse. Ms McKenzie accepts that 10 per cent on its own would be atthe lower end of the available range. However, she considers that in conjunction withthe five per cent discount for previous good character and the full 25 per cent discountfor guilty plea, the end sentence cannot be described as manifestly excessive.11 Harnett v Ministry of Social Development [2018] NZHC 1160.12 Hessell v R [2010] NZSC 135, [2011] 1 NZLR 607 at [51].Discussion[25] I begin by considering whether the discount for the reparations paid wasappropriate. First, I observe that Judge Farnan was affording a 10 per cent discountfor the reparations paid to date and signalled, at [38] of her sentencing indication, thatfurther discounts would be available if further reparation was paid. Similarly, theCrown's submissions supported a 15 per cent discount for "partial reparation",indicating a higher discount was available for full repayment. However, those viewsare not determinative. The ultimate question is what level of discount is appropriatefor the reparations paid in this case.[26] In that regard, I start by considering how the payment of voluntary reparationsmeets the purposes of sentencing. It clearly holds the offender accountable for theharm done to the victim. It also promotes in the offender a sense of responsibility forand an acknowledgement of the harm caused. It provides for the interests of the victimof the offence, and it provides reparation for the harm done by the offending. Thus,the payment of full reparation for the harm done meets a number of important purposesof sentencing, and that must be fairly reflected in sentencing.[27] In the present case, Ms Anderson has met not just repayment of what she took,but also repayment of the accounting costs incurred by both victims. She did that, notas the result of a Court order, but, voluntarily, in advance of sentencing. It also wasdone at some sacrifice to the appellant. She did not have the funds readily availableand has had to materially modify her standard of living in order to meet the costs ofpaying reparation.[28] I also note that reparation was important to the victims. The owners ofGracetek Ltd speaks of the cost of employing accountants to prove the extent of heroffending and says her offending has "cost us money we simply didn't have". Theowner of Eden Haulage Ltd was critical of Ms Anderson for not showing remorse orpaying reparation. While the payment of reparation will not remedy all the harm ofher offending, it clearly addresses a significant aspect of it.[29] In my view, victims of offending which has caused them financial loss want tosee defendants incentivised to repay that loss in full. That can be achieved by grantingmeaningful discounts when payment in full is made, particularly where that is done inadvance of sentencing so that there is no uncertainty about when or if payment will bemade.[30] In my view, a 25 per cent discount is appropriate in this case to reflect the factthat repayment was made in full of both the money taken and the accounting feesincurred, and this was done prior to sentencing and at considerable cost to theappellant.[31] However, I do not consider, in this case, that any further discount is requiredto reflect remorse. While I acknowledge that Ms Anderson has written letters ofapology and has offered to go to restorative justice, the victim impact statementssuggest that if there was remorse, it was belated. The owners of Gracetek Ltd say thatMs Anderson left them feeling like they were the ones in the wrong as she "arguedevery dollar she stole from us". Similarly, the owners of Eden Haulage Ltd say her"disputing our accountants figures" and entering not guilty pleas were "an absolutekick in the guts".[32] However, I would not disturb the other discounts provided by the Judge. Guiltypleas were entered promptly to the charges where the evidence was strongest and tothe balance of the charges, reasonably far in advance of trial, and following paymentof full reparation. I see no reason to disturb the guilty plea discount.[33] I also would not disturb the good character discount. Good character is amandatory consideration under s 9(2)(g) of the Sentencing Act. Good character isseen as mitigating for two primary reasons as noted by the Court of Appeal in Taylorv R:13First, a defendant without prior convictions (and otherwise generally of goodcharacter) deserves some leniency for an offence that represents an isolatedlapse from grace. Indeed, that singular fall is a punishment in itself. Secondly,a greater capacity for rehabilitation (and reduced probability of reoffending)may be inferred from good character (positive community engagement andthe absence of prior convictions).(footnotes omitted)13 Taylor v R [2017] NZCA 574 at [24].[34] Here, Ms Anderson was in her forties before this offending began, she hadnever offended before, and the modest good character discount was not inappropriate.Conclusion[35] For the reasons set out above, I consider the discount afforded for payment offull reparation was too low. I would adjust it to 25 per cent. When the total discountsare subtracted from the starting point, an end sentence of 13 and a half months'imprisonment results. I am satisfied that should be converted to a home detentionsentence of seven months.[36] Accordingly, the appeal is allowed. The sentence of nine months' homedetention is quashed, and in its place a sentence of seven months' home detention isimposed. In all other respects, the sentence in the District Court is confirmed.Solicitors:Crown Solicitor, InvercargillCopy to:J A T Ross, Barrister, Invercargill