ROBERTSON v R [2020] NZCA 218

ROBERTSON v R [2020] NZCA 218 [5 June 2020]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA610/2019[2020] NZCA 218BETWEEN STEVEN ROBERTSONAppellantAND THE QUEENRespondentHearing: 30 April 2020Court: Gilbert, Wylie and Muir JJCounsel: T A Simmonds for AppellantB M Finn for RespondentJudgment: 5 June 2020 at 2 pmJUDGMENT OF THE COURTThe appeal against sentence is dismissed.____________________________________________________________________REASONS OF THE COURT(Given by Gilbert J)[1] Following a six week judge-alone trial before Katz J, Mr Robertson wasconvicted of 23 charges of theft by a person in a special relationship, 11 charges ofobtaining by deception and four charges of dishonest use of a document.1 He wassentenced to six years and eight months' imprisonment and ordered to servea minimum period of three years and four months' imprisonment.2 The sentence wasconstructed by adopting an overall starting point of seven years' imprisonment and1 R v Robertson [2019] NZHC 2032 [Verdicts judgment].2 R v Robertson [2019] NZHC 2773 [Sentencing judgment].allowing a discount of four months (approximately five per cent) for providing legallybinding undertakings that would assist recoveries for the victims of his offending.[2] Mr Robertson appeals against his sentence. He argues the sentence wasmanifestly excessive and no minimum period of imprisonment (MPI) was justified.In particular, he says:(a) The starting point adopted of seven years' imprisonment was excessiveand should have been of the order of six years.(b) A discount of approximately 10 per cent should have been allowed toreflect personal mitigating factors — previous good character,personal/family circumstances and remorse.(c) No MPI should have been imposed.The facts[3] The Verdicts judgment is comprehensive and runs to 191 pages. Helpfully, theJudge gave a succinct summary of the key facts in her Sentencing judgment:The "trading on behalf" charges[3] In summary, during the period 2009 to 2015 you operated variouscompanies that sold software packages to people to assist them to trade onshare, foreign exchange and commodities markets. The software programmeswere not easy to use, and some investors did not have the skills or time tomaster them or were not computer literate. When confronted with disgruntledinvestors, you would sometimes offer them an alternative. You (or sometimesone of your staff members) told them that if they gave you their money, you,or one of your companies, would trade it on their behalf by investing it forthem in the financial markets. You painted a glowing albeit false picture ofyour prowess as a trader, for example telling one investor that you were"as good as John Key".[4] You obtained significant funds for trading on behalf of clients in thisway. You did not, however, trade any of those funds as you had promised.Rather, you used the money for your own purposes, including funding a lavishlifestyle involving expensive cars, frequent travel by private helicopter, luxuryweekend getaways, overseas holidays (including by private jet), andexpensive jewellery.The shareholding charges (obtaining by deception)[5] You subsequently offered some of these "trading on behalf" clientsa further "opportunity". You invited them to become shareholders in one ofyour companies, or in a company you were planning to set up overseas.A number of people took up these offers. This group of victims paid tens ofthousands of dollars (and in some cases more than that) for fictitiousshareholdings. I found in my verdicts that you never actually intended totransfer shares in the relevant companies, or anything else of value, to thisgroup of investors. Rather, you continued to treat the relevant companies asexclusively your own. Most of these victims lost all of the money that theygave you.Credit card charges (dishonest use of a document)[6] Finally, on several occasions when you or one of your companies waslow on funds you resorted to simply stealing money out of clients' credit cardaccounts.[4] The net loss to victims from Mr Robertson's offending over the six-year periodwas assessed at the time of sentencing to be approximately $1.2 million andAUD 271,200.3[5] The Judge observed that of the 22 victims, most were elderly and either retiredor approaching retirement. The Judge described Mr Robertson as "an extremelyskilled and persuasive salesman", who targeted people who were, on the whole,elderly, trusting, and unsophisticated. These victims all lost capital they had savedover a lifetime of hard work and cannot now replace. This will have significantongoing consequences for them in their retirement. The Judge noted that because ofMr Robertson's offending, many were now facing financial difficulties, for example,having to continue working in their 70s to pay off a mortgage and being unable toassist family members, upgrade aging vehicles, or visit gravely ill relatives overseas.One victim was finding it difficult to pay rent. Another had to place his property onthe market because he could not afford to pay the rates.4 The Judge describedthe circumstances of one victim from whom Mr Robertson stole over $200,000.This victim is now aged 79. He and his wife were forced to sell their family home andmove to an apartment in another town. They face an uncertain future as they will not3 At [16].4 At [8]–[11].be able to afford to pay outgoings on this apartment after three years. The Judgestated:5As a result, in their early 80s, they will need to move again, to somewhereeven cheaper. You have robbed them of the comfortable retirement they hadworked hard for and left them stressed and anxious about their future. It wasapparent from the evidence at trial that [Mr Robertson] recognised this victimas particularly vulnerable and exploited him shamelessly.Starting point[6] The Judge identified the following aggravating factors — the nature and extentof the offending, the level of sophistication involved, the motivation (greed),the vulnerability of the victims and the serious breaches of trust, and the impact onthe victims.6 Mr Simmonds, for Mr Robertson, does not dispute the existence of theseaggravating features of the offending.[7] However, Mr Simmonds submits the Judge simply chose the approximatemid-point of the various authorities that were referred to the Court by counsel wherestarting points ranging from five to eight and a half years' imprisonment were adopted.He says this approach was in error. Instead, the Judge should have been guidedparticularly by two cases, Mount v R and R v Scott7, where respective starting pointsof six and seven years' imprisonment were adopted.[8] We reject this submission. There is absolutely no basis for the contention thatthe careful and experienced Judge simply chose a mid-point without making anyproper comparison between the cases cited to her and the circumstances of the presentcase.8 In fairness to Mr Simmonds, he acknowledged that this was not the strongestfeature of the appeal. Having considered the authorities referred to and the manyaggravating factors involved in the index offending, we are quite satisfied the startingpoint adopted by the Judge cannot be impeached.5 At [12].6 At [16].7 Mount v R [2015] NZCA 489 at [95], R v Scott [2017] NZHC 2510 at [32].8 See Sentencing judgment, above n 2, at [17].Discount for personal mitigating factorsPrevious good character[9] The Judge was not prepared to allow any discount for previous good charactergiven the scale and prolonged nature of Mr Robertson's offending and the degree ofsophistication and premeditation involved.9 Mr Simmonds submits that up to 2009,when the index offending commenced, when Mr Roberson was aged 36, he had leda responsible and blameless life. Mr Simmonds argues that the Judge was wrong notto allow a modest discount for this. We disagree. The case for a discount for previousgood character was weak at best given the scale of Mr Robertson's cynical offendingagainst his elderly and vulnerable victims over a six-year period. This was hardlya one-off, out of character fall from grace by a person who had led an otherwiseblameless life. We are unable to see any error in the Judge's exercise of her sentencingdiscretion in declining to allow any discount for previous good character in allthe circumstances.Personal/family circumstances[10] Mr Simmonds urged the Judge to allow a "modest" discount to reflectMr Robertson's personal circumstances, including the impact his imprisonment willhave on his eight year old son. The Judge responded to this submission by saying thatimprisonment was the inevitable consequence of the decisions Mr Robertson made tooffend as he did.10 No error in this analysis is evident.Remorse[11] The Judge was not prepared to allow any discrete discount for remorse.She considered any remorse Mr Robertson felt was primarily a response tothe situation he now found himself in.11 The Judge's assessment was consistent withan observation made by the probation officer who prepared the pre-sentence report:Mr Robertson expressed remorse for his actions and how they have affectedthe victims, however there was an element to this that suggested he is moresorry for how his conviction has had an effect on his own circumstances.9 Sentencing judgment, above n 2, at [19].10 At [20].11 At [25].[12] Last minute claims of remorse at sentencing are commonplace. Such claimsare easily made and therefore require robust assessment to determine whether they aretruly genuine and deserving of a sentencing discount. The Judge was well-placed tomake this assessment. There was no tangible evidence of genuine remorse here, suchas a prompt confession or efforts to make amends to the victims. On thecontrary, despite the strength of the Crown's case, Mr Robertson denied his offendingto the end. Although this was his right, his refusal to accept responsibility added tothe stress already on his elderly victims because it meant they had to come to theHigh Court to give evidence. Mr Robertson's very late expression of remorse seemsmore consistent with his ongoing promotion of self-interest rather than beingmotivated by any genuine concern for the plight of his victims. Mr Robertsonundoubtedly now regrets what he did, but this is not the same as genuine remorse.[13] Despite Mr Simmonds' careful submissions on behalf of Mr Robertson, we arenot persuaded the Judge was wrong to conclude that no discrete discount waswarranted for Mr Robertson's claimed remorse. Indeed, we cannot see any basis onwhich we could properly interfere with her assessment.Undertaking/recovery[14] Following the intervention of the Financial Markets Authority (the FMA), allassets under Mr Robertson's control were placed under the control of receivers andliquidators by order of the Court. In response to a minute issued by Katz J on23 October 2019, one week before sentencing, Mr Robertson provided a writtenundertaking to the effect that he would cooperate in allowing any funds recoveredfrom these assets to be made available to meet the claims of victims. Mr Robertsonalso undertook not to oppose any application by the receivers, the liquidators orthe FMA to release those funds. The Judge was satisfied Mr Robertson deserved creditfor these undertakings which would streamline the legal process. She considered theseundertakings were a tangible and important acknowledgement of wrongdoing andjustified a discount of four months (approximately five per cent) on sentencing.1212 At [26]–[27].[15] Mr Simmonds does not challenge this discount. Rather, he submits a furtherfive per cent discount ought to have been allowed for the likely recoveries which hesays can be characterised as reparation to the victims. Mr Simmonds provided a letterdated 5 March 2020 from counsel for the receivers and liquidators advising that totalcreditor claims against Mr Robertson and related parties are $2,786,802 and assetsavailable to meet these claims have an assessed value of $1,943,673. Mr Simmondssays it is apparent from this updated information that there will be a significantrecovery, and this should be recognised by an additional discount of five per cent.Mr Simmonds says this factor and the complaint about the MPI together form the realsubstance of the appeal.[16] The extent of the losses suffered by the victims is relevant to the assessment ofthe appropriate starting point. The assessment must be made at the time of sentencingbased on the information available. The Judge found the net loss was approximately$1.2 million plus AUD 271,200. She added that the quantum of any recoveries couldnot be accurately assessed.13 There is no suggestion the Judge made any error in theserespects.[17] Nothing has changed. The victims have still not received any recovery, so theirnet loss remains the same. The quantum of future recoveries has still not been able tobe accurately assessed. The question of whether the victims will receive any recovery,and if so at what level, remains unclear. The shortfall between assets and liabilities onthe latest information is of the order of $840,000. If the assets had all been realised,no further costs needed to be incurred, and all creditors were entitled to share equally,they might expect to receive a dividend of nearly 70 cents in the dollar. However, thatis plainly not the case. The assets have not yet been realised. Because of the wayMr Robertson conducted his financial affairs, including intermingling the assets ofdifferent entities, the position as between the various creditor classes is complicated.The receivers and liquidators have not yet been able to determine questions of priority,and therefore where the victims will sit relative to Mr Robertson's other creditors.In the result, there is still no indication of whether, and if so when, these elderly victimsmight recover any of their money.13 At [16(a)].[18] Mr Robertson cannot claim any credit for reparation. The only credit he canclaim is for his undertaking not to oppose the receivers' and liquidators' efforts inendeavouring to untangle the financial mess he created and maximising recoveries inthe best interests of the various classes of creditors. We consider the Judge was correctto provide a discount in recognition of the undertakings, but not otherwise forreparation.Minimum period of imprisonment[19] The Court may impose a MPI if it is satisfied that the normal parole period isinsufficient for any or all of four stated purposes in the Sentencing Act 2002.14In general terms, these are: to hold the offender accountable for the harm done bythe offending; to denounce the conduct; to deter the offender or other persons fromcommitting the same or any similar offence; and to protect the community fromthe offender.[20] The Judge considered the first three of these purposes were engaged andrequired a MPI to be imposed. The Judge repeated that Mr Robertson had targetedmultiple elderly, unsophisticated and vulnerable victims and robbed them ofthe security and comfort they were entitled to expect in their retirement. The sentenceimposed needed to be sufficient to hold Mr Robertson accountable for this harm.The Judge also considered that the normal parole period would not suffice to denounceMr Robertson's conduct, given its nature and scale. The Judge identified specific andgeneral deterrence as being key considerations in a case such as this wherethe motivation was pure greed and the offending involved persistent dishonesty overa lengthy period targeting multiple vulnerable victims. The Judge took all thesefactors into account in reaching her conclusion that the normal non-parole period(one-third of the sentence, calculated as two years and five months' imprisonment)would be insufficient and a MPI of three years and four months (50 per cent ofthe sentence) was required.1514 Sentencing Act 2002, s 86(2).15 Sentencing judgment, above n 2, at [28]–[36].[21] Mr Simmonds refers to this Court's recent decision in Zhang v R where it wasemphasised that MPIs must not be imposed as a matter of routine or in a mechanisticway.16 A reasoned analysis is required as to whether an MPI should be imposed and,if so, for how long. This is, of course, correct. But there is no indication the Judgeimposed the MPI mechanistically or as a matter of routine.[22] Mr Simmonds observes that in Mount and Scott, referred to at [7] above, noMPI was imposed. Mr Mount was a financial consultant and investment advisor.Over a period of about 10 years he stole approximately $510,000 from his clients byinflating the reported purchase price of their investments and deflating the reportedsale price, a process described as "skimming".17 Following trial in the District Court,Mr Mount was sentenced to six years and nine months' imprisonment and ordered toserve a MPI of 50 per cent.18 On appeal to this Court, the sentence was reduced to sixyears' imprisonment and the MPI quashed. This was because the uplift of nine monthson the six-year starting point adopted in the District Court reflected conduct for whichMr Mount was neither charged nor convicted. The MPI was quashed because the sameflawed reasoning infected the justification for its imposition.19 It will be observed thatthe scale of this offending was significantly lower than that of Mr Robertson.[23] Mr Scott defrauded 13 victims over a lengthy period resulting in them sufferinglosses of approximately $2.165 million. A starting point of seven years' imprisonmentwas adopted, the same as for Mr Robertson.20 However, unlike Mr Robertson, MrScott, worked "assiduously" towards resolving the matter with the Serious FraudOffice, pleaded guilty to all charges, acknowledged the consequences of his offendingand was genuinely remorseful. He sold assets in an attempt to pay back his victimsbut was ultimately declared bankrupt. He was an older man and in very poorhealth. His doctor expressed concern about the potential effects a prison sentencewould have on him. The Judge accepted that the range of medical conditions Mr Scottsuffered from would make imprisonment particularly difficult for him.21 No MPI was16 Zhang v R [2019] NZCA 507 at [169].17 Mount v R, above n 7, at [7].18 R v Mount DC Nelson CRI-2011-042-968, 17 December 2014.19 Mount v R, above n 7, at [98].20 R v Scott, above n 7, at [32].21 At [33]–[41].even sought in his case. It will be obvious that the circumstances in Mr Scott's caseare very different from the present.[24] Mr Simmonds also refers to this Court's recent decision in Chen v R whereMPIs imposed on two offenders involved in a scheme to deceive three major banksthrough fraudulent loan transactions over a two-year period were quashed.22These cases are also distinguishable from the present.[25] Mr Chen was a conveyancing solicitor, described by this Court as"the middleman". He assisted the principal offender who was the primary beneficiaryof the scheme.23 Mr Chen did not obtain any monetary benefit for his role. In quashingthe MPI imposed on Mr Chen, this Court considered the Judge had failed toacknowledge Mr Chen's previous good character and the fact that he did not obtainany monetary benefit from his offending.24 We do not see how Mr Chen's positioncan usefully be compared to that of Mr Robertson.[26] Mr Jiang was a co-offender of Mr Chen. He was a bank employee who assistedwith the fraudulent loan applications and received $240,000 in secret commissions.Mr Jiang was involved in about a third of the overall transactions.25 This Court didnot consider an MPI was necessary in Mr Jiang's case because he was said to be anotherwise law-abiding citizen and had consented to a forfeiture order enabling$850,000 to be recouped. This was regarded as an important acknowledgement ofwrongdoing. The forfeiture order was also seen as an additional form of denunciationand deterrence.26[27] Mr Robertson's position is not comparable. He was not a "middleman" whoreceived no reward like Mr Chen, nor was he merely a knowing assister performinga limited facilitation role, like Mr Jiang. Mr Robertson was the principal offender andhe directly benefited by deceiving multiple vulnerable victims over a six-year period.The scale of his offending resulted in net losses to these victims of approximately22 Chen v R [2019] NZCA 299, (2019) 29 CRNZ 113.23 At [8].24 At [52].25 At [54].26 At [55].$1.5 million. Mr Robertson benefitted directly in the same amount, which is an orderof magnitude greater than the sum Mr Jiang received. Further, Mr Jiang assisted inthe recoupment of a very substantial sum, considerably more than he personallyobtained.[28] We do not see these cases as providing support for Mr Simmonds' contentionthat a MPI could not be justified in Mr Robertson's case. We are not persuadedthe Judge was wrong that a 50 per cent MPI was warranted in all the circumstancesshe identified.Result[29] The appeal against sentence is dismissed.Solicitors:Kendall Sturm & Foote, Auckland for AppellantMeredith Connell, Auckland for Respondent