The Queen v Nua [2001] NZCA 190; [2001] 3 NZLR 483 (28 June 2001)

Last Updated: 13 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA 106/01

THE QUEEN

V

PHILLIP NUA

Hearing:	19 June 2001
Coram:	Blanchard J Fisher J Potter J
Appearances:	R A Harrison for Appellant K Raftery for Crown
Judgment:	28 June 2001

JUDGMENT OF THE COURT DELIVERED BY FISHER J

Introduction

[1] Phillip Nua appeals against concurrent sentences of four years’ imprisonment imposed in the District Court following his pleas of guilty to one charge of corruption (Crimes Act 1961, s 105(1)) and 30 of fraudulently using documents (s 229A).

Factual background

[2] Mr Nua was a senior customs officer who had been with the New Zealand Customs Service for 12 years. His work included the unsupervised inspection of imported used vehicles. It was his job to ensure that odometers were unaltered, that the vehicles did not contain uncustomed or prohibited goods, and that the correct tax or duty was paid.
[3] In April 1999 Mr Nua was approached by a Mr Loh, an importer of used vehicles. Mr Loh was concerned that on earlier occasions Customs had impounded a number of his vehicles for odometer tampering. The two came to an arrangement that for an appropriate consideration Mr Nua would allow Mr Loh’s future vehicles into the country without inspection or goods and services tax.
[4] Over the next 15 months Mr Nua allowed the importation of 154 of Mr Loh’s vehicles in 30 shipments without inspection or GST. Mr Loh entered false details in the official computer records to which he had full access. He also created 30 false hand-written records. By this means commercially imported vehicles of high value were officially shown as personal imports of low value.
[5] The result was the loss of $293,000 in unpaid GST and the release of 154 unchecked vehicles into the New Zealand community. The released vehicles potentially contained fraudulent odometers and uncustomed or prohibited contents. Although inspections were normally limited to spot checks, the indications are that without Mr Nua’s intervention Mr Loh’s vehicles would have received special attention in view of his history of odometer tampering.
[6] In return for Mr Nua’s services Mr Loh made electronic transfers to various bank accounts nominated by Mr Nua. In addition he gave Mr Nua seven to ten envelopes of cash of up to $10,000 at meetings arranged for that purpose in quiet locations around Auckland. Well in excess of $100,000 was paid in total. Mr Loh also provided Mr Nua with two of the imported vehicles at a combined value of about $50,000, and a number of paid overseas trips. The exact combined monetary value of all payments and benefits received over the 15 months is unknown but we accept the Crown’s submission that it lay somewhere between $150,000 and $200,000.
[7] The offending stopped only when Mr Nua learned that Mr Loh had been apprehended and that questions were being asked. To his credit, he went promptly to his superiors, made a full confession, resigned from his position, co-operated fully with authorities, and pleaded guilty at the first opportunity. He had sold one of the vehicles received from Mr Loh but the other and more valuable one was recovered by Customs. There is no further prospect of reparation.

Sentencing in the District Court

[8] The sentencing Judge referred to the greater level of trust now placed on senior Customs officers by the introduction of a spot check system; the extreme seriousness of corruption among public servants; the way in which bribery and corruption cases had been unknown in New Zealand until recently but were now growing; the lengthy period of offending; its complex nature; the magnitude of the bribes; the gross breach of trust; the damage to the reputation of the Customs Service; and the lack of any prospect of reparation. In mitigation he noted the early plea of guilty; the fact that Mr Nua was a 31 old achiever; and his lack of previous convictions. Reference to other cases led the Judge to the concurrent sentences of four years.

The appeal

[9] Three grounds were advanced in support of the appeal: (1) that four years was inconsistent with sentencing precedents; (2) that the Judge failed to take mitigating factors into account; and (3) that he paid inadequate regard to s 7 of the Criminal Justice Act.

(1) Sentence inconsistent with precedents

[10] Two distinct lines of precedent were cited to us. They appropriately reflected the two types of charge which Mr Nua faced - fraud (s 229A) and corrupt acceptance of bribes (s 105).

[11] As to the former, imprisonment has usually been imposed where public servants have systematically stolen, or fraudulently diverted to themselves, substantial sums in breach of the trust. Typical are R v Chapman (1997) 14 CRNZ 664 (CA) (six months’ imprisonment increased to 18 months on appeal where senior civil servant misappropriated about $55,000 in a series of small frauds spread over three and a half years) and R v Clayton (CA 324/98, 10 December 1998) (two years’ imprisonment upheld where Inland Revenue clerk misapplied cheques totalling $40,000 over 16 months). While recognising that the high level of trust reposed in public servants can be an aggravating feature, the Courts in such cases have usually taken conventional sentences for theft as a servant or its equivalent as their starting point. Imprisonment has usually been imposed for repetitive theft as a servant involving large sums over a lengthy period. While emphasising that each case is to be determined on its own facts, the Court in Clayton pointed out that imprisonment for two and a half to four years was likely in such cases.
[12] As to bribery and corruption precedents, three Court of Appeal cases of actual or attempted bribery were cited. In R v Vergis (CA 165/92, 17 July 1992) a sentence of two years’ imprisonment was reduced on appeal to eight months where the appellant had been found guilty of being party to forgery. On five occasions he had paid a 17 year-old immigration office clerk modest sums to forge residence and work permits. Two years later in R v Ram (CA 23/94, 16 March 1994), a sentence of 18 months’ imprisonment was reduced on appeal to nine months where an appellant of good character had been found guilty on one charge of offering a bribe to an immigration officer. It was an isolated act intended to benefit his own family. After noting various mitigating and special factors, which included a suspended sentence for the young co-offender, the Court went on to say:

The factors to which we have referred, combined with the disparity of the present sentence when compared with that imposed in Vergis, in our judgment justify a conclusion, which we reach with some reluctance, that the sentence of 18 months imprisonment was excessive. We state, however, that further examples of this kind of offending may well require for deterrent purposes a reconsideration of the sentencing level evidenced by Vergis. (emphasis added).

[13] Ram was followed by an ex parte decision in R v Malyon (CA 435/97, 18 December 1997). In that case a sentence of two years’ imprisonment was upheld where the appellant had been found guilty of the attempted bribery of a law enforcement officer, having offered a police officer $5,000 to suppress impending charges. The Court had no difficulty in upholding the sentence of two years notwithstanding that the bribery attempt had failed and that the two years was cumulative upon other terms of imprisonment. Again, the Court pointed to the warning in Ram that “further examples of this kind of offending may well require for deterrent purposes a reconsideration of the sentencing levels evidenced by R v Vergis (CA 165/92, 17 July 1992).”
[14] We do not think that those decisions attempt to establish any real guidance for corruption cases like the present one. This appellant was a mature and experienced civil servant. He had been trusted to carry out field operations without supervision. He was also entrusted with the power to enter and alter official computer records. He took advantage of his powers to embark on a systematic course of corruption netting substantial sums over a lengthy period. The case is much more serious than those in which bribes have been offered or received on one or more isolated occasions, where modest sums were involved, and/or where there was a family rather than commercial motivation. We do not consider that the sentence should be interfered with on the ground that it was inconsistent with earlier decisions, particularly given recent warnings that a reappraisal of sentences for bribery and corruption was likely.

(2) Failure to have regard to mitigating factors

[15] At an early point in his reasoning the Judge referred to the entry of a plea of guilty at the first available opportunity. Mr Harrison pointed out that he did not return to that topic later, perhaps because he did not adopt a starting point from which there was a deduction for mitigating factors. Nor did he expressly include the early confession and full co-operation with authorities among the mitigating factors.
[16] We agree that in an ideal world those matters would have been expressly dealt with. On the other hand we do not think that it should be lightly assumed that this experienced Judge would have overlooked them as factors to be taken into account in the process of arriving at his ultimate figure of four years.

(3) Inadequate regard to s 7 of the Criminal Justice Act

[17] Section 7 of the Criminal Justice Act 1985 requires that when sentencing for an offence punishable by imprisonment the Court should have regard to the desirability of keeping offenders in the community so far as that is practicable and consonant with the safety of the community. Where imprisonment is required, the term should be kept as short as possible in that light. Mr Harrison accepted that a term of imprisonment was inevitable in the present case but submitted that inadequate regard had been paid to the statutory requirement that the term should be kept as short as possible consonant with the safety of the public.
[18] It is well established that where substantial thefts have been committed by persons in positions of trust, or circumstances analogous thereto, substantial terms of imprisonment will usually be regarded as consistent with the requirements of s 7 - see, for example, R v Clayton, supra, at p 3. The present case combined the systematic obtaining of substantial sums by fraudulent means with the acceptance of bribes by a public official. We are left in no doubt that a substantial term of imprisonment was required notwithstanding the requirements of s 7.

Appropriate sentence

[19] The sentencing Judge remarked upon the danger that New Zealand’s traditional freedom from corruption may now be coming under threat. We agree. While counsel were unable to locate any earlier Court of Appeal cases, there were three in the last 10 years (Vergis, Ram and Malyon supra) to which we would add two in the High Court - R v Clark (High Court Auckland T168/89), Tompkins J, 26 April 1990) and R v Dyer (High Court, Palmerston North S3/91, Neazor J, 21 February 1991). In the District Court there have been at least five in the last three years - R v Monteith (District Court, Hamilton S982133, Judge Spear, 18 November 1998), Police v Robinson (Auckland District Court CRN 9004074605 and others, Judge Rushton, 3 March 2000), R v Telea (Auckland District Court, T 992227, Judge Unwin, 21 July 2000); R v Prasad (Hamilton District Court DCT 64/907, Judge Rea, 6 March 1998) and the present one. The majority of these cases have centred on immigration or importation procedures, perhaps reflecting a growing influence from those less used to the corruption-free environment which New Zealanders have traditionally enjoyed. The time would now seem to have arrived for unmistakable deterrence.
[20] Theft of public funds by a public official is plainly serious enough, but it at least involves no more than an aberrant individual. The successful bribing of a public official draws others into the web of corruption. As the circle widens so does the insidiousness of the corruption and the encouragement for others to participate or copy. The opportunities are unlimited and the temptations great. As was said by Lord Templeman in delivering the judgment of the Privy Council in Attorney General for Hong Kong v Reid [1994] 1 NLZR 1 at p 3:

Bribery is an evil practice which threatens the foundations of any civilised society.

[21] In the United Kingdom heavy sentences have been passed in corruption cases with aggravating features, examples being R v Donald [1997] 2 Cr.App R (S.) 272 (11 years’ imprisonment where appellant detective constable agreed to accept £50,000, and had actually received about £18,500, in return for disclosing information about an inquiry and destroying surveillance logs) and R v Brown, Mahoney and King [1999] Cr.App R (S.) 284 (six years for plea of guilty to conspiracy to bribe detective chief inspector, co-offenders receiving sentences of five and three years respectively). More leniency was shown in R v Foxley (1995) 16 Cr.App R (S.) 879 (starting point six years reduced to four for mitigating factors where, over eight years, Ministry of Defence employee accepted over £2M in benefits, of which £1.5M recovered, in return for showing favour to potential suppliers) but it may be noted that Foxley was an unsuccessful offender’s appeal, as distinct from an appellate exercise in appropriate minimums.
[22] In the present case the aggravating features included the breach of trust by a senior official; the lengthy period of offending; the elaborate nature of the deceptions; the number of separate deceptions; the magnitude of the personal gain; the commercial element; the magnitude of the irrecoverable loss to public revenues; the corrupt combination with another; and at least the potential (we have no way of knowing whether it was realised) for drawing others into a position of complicity. In mitigation there were the early confession, full co-operation with authorities, and early guilty pleas from a first offender showing genuine remorse.
[23] A substantial reduction was plainly appropriate for matters in mitigation. Equally, however, a deterrent sentence in excess of five years could have been justified as the starting point. While a net sentence of four years’ imprisonment was at the upper end of the range we do not regard it as manifestly excessive.

Result

[24] The appeal is dismissed.

Solicitors:
Crown Solicitor, Auckland