MURDOCH v POLICE [2019] NZHC 3446

MURDOCH v POLICE [2019] NZHC 3446 [19 December 2019]IN THE HIGH COURT OF NEW ZEALANDINVERCARGILL REGISTRYI TE KŌTI MATUA O AOTEAROAWAIHŌPAI ROHECRI-2019-425-000028[2019] NZHC 3446BETWEEN SANDRA GAY MURDOCHAppellantAND NEW ZEALAND POLICERespondentHearing: 16 December 2019Appearances: J A T Ross for the AppellantS N McKenzie for the RespondentJudgment: 19 December 2019JUDGMENT OF NATION JIntroduction[1] On 24 July 2019 Judge Callaghan sentenced Sandra Murdoch to six months'community detention on two charges of receiving monies. She appeals her sentence.[2] The appeal was filed out of time by a modest margin. The delay has beenexplained by her present counsel, who was not her counsel at the time of sentencing.The Crown has responded to the appeal on the merits. Leave is accordingly granted.Facts[3] On 11 September 2017, the first victim, a 54 year old man unknown to MsMurdoch, received an invoice for $7,319.75. He believed it to be legitimate.However, the invoice had been intercepted by persons unknown and had been alteredto show Ms Murdoch's bank account number as the account to make payment to. On12 September 2017, the first victim paid the amount in full to the account advised. On13 September 2017, Ms Murdoch withdrew $5,511.50 from her bank account and thentransferred $5,300 to Malaysia via Western Union. On 14 September 2017, shewithdrew $2,871.50 from her bank account and transferred $2,750 to Malaysia viaWestern Union.[4] On 9 October 2017, the second victim, Pukerua Racing Ltd, asked a horseowner to email his account details to it so he could be paid. That email was interceptedby persons unknown and had been altered to show another of Ms Murdoch's bankaccounts as the account to make payment to. The second victim paid $5,000 to thataccount that day. On 10 October 2017, Ms Murdoch withdrew $4,500 from that bankaccount and transferred $4,328.54 to Malaysia via Western Union.District Court decision[5] Judge Callaghan found that the offending was serious because it involvedinterception of legitimate emails and then the using of those emails to obtain funds.The Judge said, while it is impossible to know how Ms Murdoch came into possessionof the accounts and emails, she was "savvy enough" to forward them to the recipientsand receive money from them. The Judge emphasised the substantial financial strainthe offending had placed on each of the victims. He highlighted the need for thevictims to be compensated.[6] The Judge adopted a starting point of eight months' imprisonment. He appearsto have made a global discount of three months for Ms Murdoch's guilty pleas and herprevious good character. Thus, the end sentence would be "somewhere in the regionof five months imprisonment." The Judge ultimately found a six month term ofcommunity detention was the appropriate sentence in light of the nominal end sentenceof imprisonment.[7] The Judge also made reparation orders for the full amounts received by MsMurdoch in respect of each incident of receipt. The total reparation amount wastherefore $12,319.Principles on appeal[8] 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 only be allowed by this Court if it is satisfied there has been anerror in the imposition of the sentence and that a different sentence should beimposed.1 As the Court of Appeal mentioned in Tutakangahau v R, quoting the lowercourt's decision, "[an appellate] court 'will not intervene where the sentence iswithin the range that can properly be justified by accepted sentencing principles'".2 Itis only appropriate for this Court to intervene and substitute its own views if thesentence being appealed is "manifestly excessive" and not justified by the relevantsentencing principles.3 The focus of an appellate court must "primarily be on theappropriateness of the end sentence, not the means by which that end sentence hasbeen reached".4SubmissionsAppellant's submissions[9] Mr Ross for Ms Murdoch submits the Judge erred, first, in overstating MsMurdoch's culpability and, secondly, in failing to consider her meagre financialcapabilities when imposing reparation orders. He suggests a three month communitydetention period should be imposed as well as a nominal reparation amount of $1,000divided equally between the two victims.[10] Mr Ross submits the Judge erred by considering Ms Murdoch's culpability onthe basis of the primary offence, not simply on the basis of the reckless receipt thatshe pleaded guilty to. He says the primary offender was the person who interceptedthe emails, altered the invoices and forwarded them on to the victims. Ms Murdoch,as the secondary offender, the recipient of the unlawfully obtained monies, cannot bepenalised for the primary offending. Mr Ross also notes that an analysis of the relevanttransfers in and out of Ms Murdoch's accounts shows that she experienced a net loss1 Criminal Procedure Act 2011, ss 250(2) and 250(3).2 Tutakangahau v R [2014] NZCA 279, [2014] 3 NZLR 482 at [36].3 Ripia v R [2011] NZCA 101 at [15].4 Skipper v R [2011] NZCA 250 at [28].of $58.79. She received a total of $12,319.756 and transferred a total of $12,378.54to an unknown recipient in Malaysia.[11] Mr Ross says the Judge attributed the initial deception, which was obviouslysophisticated, to Ms Murdoch when she simply received the funds. He explains thatthe offending occurred in the context of Ms Murdoch beginning an online relationshipwith a person who used Ms Murdoch's accounts (and her) to funnel funds to anoffshore account. He admits she was reckless as to the source of the funds but saysshe was not the mastermind of the operation.[12] Mr Ross submits a sentence of no more than three months' communitydetention would be appropriate. He says the six month term imposed by the Judge,together with the 84 hour per week confinement period, was excessive in relation toMs Murdoch's culpability and was the maximum that could be imposed.[13] As to the issue of reparation, Mr Ross submits the Judge erred in failing toconsider Ms Murdoch's financial capacity when making orders of full reparation. Thisconsideration is mandatory under s 35 Sentencing Act 2002. He notes the amountordered to be repaid should be "realistic" given the financial resources of the offender.5A sentencing judge must also have a "reasonable measure of confidence" that thereparation payment is able to be made.6 He cites a number of cases that state that,where there is no realistic prospect of payment being made within a reasonable time,an order should not be made for the full amount.7 Mr Ross also cites cases where thereparation amount was reduced to ensure they were such that a court would have arealistic measure of confidence that the orders would be complied with.8[14] In this case, Mr Ross says the Judge erred in not accounting for Ms Murdoch'sability to pay in imposing full reparation. He notes the Judge said, "[t]here is littlechance of reparation but I am going to order it nonetheless." The Judge did not have5 R v Bailey CA306/03, 10 May 2004 at [25].6 R v Creek CA199/06, 17 August 2006 at [12]; and R v Pender [2007] NZCA 465 at [15].7 Rihari v Department of Social Welfare (1991) 7 CRNZ 586 (HC) at 590; Ruka v Department ofSocial Welfare [1997] 1 NZLR 154 (CA) at 156; Ghulami v Police [2013] NZHC 1055 at [22].8 See for example Scanlon v R [2013] NZCA 502 at [9]–[15]; and Kennett v Police [2014] NZHC231 at [16]–[20].a reparation report or statement of financial means from Ms Murdoch at the time ofsentencing.[15] Mr Ross points to an affidavit of Ms Murdoch filed with the Court dated 4December 2019 which outlines her financial means at the time of sentencing andcurrently. In her affidavit, Ms Murdoch deposes that, while at the time of sentencingshe was employed at minimum wage as a cleaner with a total supplemented weeklyincome of between about $360 and $400 per week, she is now unemployed and reliessolely on a benefit at about $340 per week. Her weekly expenses were previously$350 per week but her rent has since increased and her total expenses appear to beabout $370 per week. By her own evidence, it appears she is at a shortfall of $30 perweek, yet she says she would be able to meet a reparation payment of no more than$5 per week.[16] Mr Ross submits the reparation order was unrealistic and the sentencing Judgewas fully cognisant of that. He submits the orders should be quashed and replaced byorders for reparation totalling $1,000 divided equally between the two victims.Respondent's submissions[17] For the Police, Ms Woodward submits that the starting point of eight months'imprisonment was within range and could be considered lenient when regard is had tothree cases she cites:(a) In Proctor v Police, the appellant received $5,000 worth of jewellerythat had been stolen from the victim's home, he then sold it for $1,160to a secondhand dealer that day. 9 He pleaded guilty on the basis ofrecklessness. A starting point of 15 months' imprisonment was upheldon appeal.(b) In R v Singh, the appellant pleaded guilty to receiving eight stolenlaptops and miscellaneous computer equipment.10 The Court of Appealupheld his end sentence of six months' imprisonment and noted, while9 Proctor v Police [2018] NZHC 763.10 R v Singh CA17/05, 19 May 2005.the District Court Judge did not specify a starting point, it was likely tohave been in the order of seven or eight months given his late guiltyplea.11(c) In Nikau v R, the appellant received $6,940 worth of televisions,jewellery and other items that had been taken from a house the previousday.12 A starting point of 12 months for that offending was upheld bythis Court.[18] Counsel agrees the reparation orders should be quashed and reparation set at amore realistic level.AnalysisStarting point[19] While Ms Murdoch was not criminally responsible for the original deception,she pleaded guilty on the basis that she was reckless as to whether the monies had beenobtained as a result of some imprisonable offence. In New Zealand, recklessnessrequires the conscious taking of an unreasonable risk.13 Relevantly, for the presentcase, the Supreme Court has recently said recklessness requires that the defendantmust have "recognised that there was a real possibility thatthe proscribedcircumstances existed; andhaving regard to that risk those actions wereunreasonable."14 In light of the way Ms Murdoch accepted, through her guilty pleas,she had the relevant mens rea and was consciously reckless, the Judge was entitled toinfer that she knew there was a real possibility that the funds had been obtainedthrough fraud or deception.15[20] On the basis of her guilty pleas, Ms Murdoch was clearly not expectingpayments in these amounts from the accounts that made the payments. She would nothave recognised the names of the payers in her bank accounts' transaction records.11 At [9].12 Nikau v R [2017] NZHC 1366.13 Cameron v R [2017] NZSC 89, [2018] 1 NZLR 161 at [73].14 Cameron v R, above n 13, at [73]; and at [68] citing R v G [2003] UKHL 50, [2004] 1 AC 1034 at[41] per Lord Bingham.15 Sentencing Act 2002, s 24(1)(b).After the funds arrived, she deliberately transferred large sums to overseas accountsalmost immediately. There would however appear to have been an attempted furtherdeception and concealment of what was happening in that the amounts transferred tothe Malaysia account did not immediately match up with the amounts received. Shealso did not explain to the Police how she had become involved in these frauds whenshe was first questioned about them by the Police.[21] The Judge was entitled to infer from the conduct she pleaded guilty to that shewas fully aware there was a real possibility the funds had been obtained as a result ofa sophisticated fraud. While she is not to be held criminally responsible for that fraud,her actions and her recklessness were necessary and essential components of the fraudbeing carried out. I find the Judge was cognisant of those matters and his commentsas to the deception carried out in this offending were background facts that inform thematters which Ms Murdoch was reckless as to. He did not sentence her on the basisthat she had actually carried out the original deception.[22] In light of that, I find a starting point of eight months' imprisonment to havebeen appropriate. As the cases cited by Ms McKenzie show, offending involvingstolen or unlawfully obtained goods with values less than seen in the present case haveattracted higher starting points than eight months. In particular, I note that, in Proctor,a starting point of 15 months was endorsed by this Court for the reckless receipt ofthem worth $5,000 (stolen from the victim's home).16 Then, in Singh, a starting pointof 12 months was also endorsed by this Court in relation to the receipt of $6,940 worthof goods stolen from the victim's home.[23] I accept there is no element of home invasion in the origin of the unlawfultaking of the goods in this case.[24] There is also a distinction in that it does not appear Ms Murdoch received themonies with the intention of profiting from the stolen monies financially. Thesummary of facts said that, when spoken to by Police, Ms Murdoch acknowledgedreceiving the money but offered no explanation for where it went. The pre-sentencereport however provided an explanation for the offending. Ms Murdoch stated that16 Proctor v Police, above n 9.she had been "scammed" and "used". Information in the report suggested MsMurdoch is relatively socially isolated in her life in Gore but has overseas friendshipsand relationships through the internet. It seems likely that someone overseas identifiedMs Murdoch as a person they could use and exploit to assist with a sophisticated fraudthat has caused a substantial loss and financial strain on the two victims. The totalvalue of $12,319 is a substantial amount of money. Ms Murdoch was willing toparticipate and assist with that fraud through whatever benefits she thought she wasgoing to obtain from the relationship she had with the overseas person.[25] In agreeing to assist in this way, Ms Murdoch chose to participate in and assistwith a fraud that has caused significant harm to the victims of her offending. I considera starting point of eight months was appropriately arrived at by the Judge, especiallyso when Ms Murdoch was not in a position to make meaningful reparation.Reparation orders[26] Counsel agree that full reparation orders are not appropriate in light of MsMurdoch's financial situation. It is enough to say that, when the Judge made theorders, it was clear to him that there was no realistic prospect that Ms Murdoch wouldbe able to meet them. The making of those orders was therefore an error of law.17[27] Ms Murdoch filed an affidavit with her appeal providing details of her financialsituation at the time she was sentenced in July 2019 and now. In July 2019, she hadcasual work as a cleaner and a Work and Income benefit. She was receiving about$360 to $400 per week. Her detailed expenses included rent of $185 per week and aphone and the internet of $20 a week. It is use of the internet which brought about thisoffending. It also puts Ms Murdoch at risk of further offending.[28] Ms Murdoch says she no longer has casual work as a cleaner and solely relieson the benefit, receiving about $340 per week. She lives alone in a rented flat. InOctober, her weekly rent increased by $20.17 See for example R v Pender, above n 6, at [15].[29] Ms Murdoch previously had a slightly higher income through having work asa casual cleaner. Included in the pre-sentence is information which suggests MsMurdoch may have difficulty interacting socially with others. Her offending-relatedfactors were identified as including relationships and attitudes. It said Ms Murdochdisplayed limited insight into her offending, placing all the blame on her co-offenderand denying any wrongdoing. It also said she was "unable to understand herinvolvement was an integral part of the offending and very limited remorse was showntowards the victims". At times, when discussing the offending and the possiblesentencing outcomes, Ms Murdoch became agitated and aggressive towards the writerand was reminded about appropriate behaviour.[30] Realistically, there would appear to be little prospect of Ms Murdoch payingreparation in the sums ordered in the District Court. If she were to make payments ona weekly basis, the payments would be at such a low level, they would be of littleassistance to the victims who lost substantial sums through her offending. Althoughit will not compensate her victims and will bring little solace to them, I consider themost appropriate way to hold Ms Murdoch accountable for her offending, and theharm it caused, is through the particular sentence of community detention which wasimposed in the District Court.Conclusion[31] A starting point of eight months' imprisonment was appropriate and the endsentence of six months' community detention was within range. The appeal againstthat sentence is dismissed. However, the reparation orders were excessive. Any orderthat might be made for reparation would be of negligible value to the victims of youroffending. The appeal against the making of those orders is allowed and the reparationorders are quashed.Solicitors:J R Ross, Barrister, InvercargillCrown Solicitor, Invercargill.This judgment was delivered by me on 19 December 2019 at 4.00 pmRegistrar / Deputy RegistrarDate: 19 December 2019