THE QUEEN v STEPHEN ANDREW ROBERTSON [2003] NZCA 40 (4 March 2003)

IN THE COURT OF APPEAL OF NEW ZEALAND

CA 424/02

THE QUEEN

v

STEPHEN ANDREW ROBERTSON

Hearing: 17 February 2003 at Auckland

Coram: Elias CJ

Panckhurst J

Paterson J

Appearances: M J Hammond and O Collette-Moxton for Appellant

P S Dean for Respondent

Judgment: 4 March 2003

JUDGMENT OF THE COURT DELIVERED BY PANCKHURST J

Introduction

[1]	After a trial before a Judge alone in the District Court the appellant was convicted upon two charges of theft as a servant.He was sentenced to two and a half years imprisonment.This appeal is against conviction and sentence.The conviction appeal involved a direct challenge to the process of reasoning of the trial Judge, coupled with a submission that the verdicts on the two counts were unreasonable on the basis of certain factual contentions.The sentence imposed is said to be manifestly excessive in the circumstances.
[2]	The trial occupied eleven days to 14 October 2002.After detailed submissions from counsel on the final day the Judge reserved his decision.On 31 October 2002 reasons for the two guilty verdicts were delivered.On 5 December 2002 the sentence of two and a half years imprisonment was imposed.
[3]	In significant measure the length of the trial reflected the circumstance that at the outset the indictment contained 76 counts.Counts 1 to 53 alleged that periodically between September 1997 and June 1999 the appellant stole various sums from his employer, the Waikato Snooker & Eight Ball Club Incorporated (the Club).These sums were amounts from the general income of the Club from table hireage and the sale of refreshments (excluding its income from gaming machines).The appellant was acquitted on these counts in a ruling pursuant to s347 of the Crimes Act.
[4]	Count 54, as amended, became a global count by which it was alleged the appellant systematically stole a very significant sum from the Club’s gaming machine receipts.Counts 55 to 75 were also allegations of theft, namely that the appellant each month between October 1998 and June 2000 stole a smaller sum from the gaming machine income.These counts were likewise the subject of a s347 direction since upon amendment of count 54 it covered the total alleged criminality.Finally count 76 alleged that on 22 June 2000 the appellant stole an unknown sum in notes from the Club.It was the emergence of this allegation which led to the appellant’s dismissal and, in due course, to an audit, and the laying of the charges.

Crown case

[5]	The appellant is a talented snooker player.He has represented New Zealand and played professionally for a considerable period.In 1995 he was employed by the Club as its manager.In 1998 his position changed to one of senior supervisor.A second person was also appointed to the position of senior supervisor.In general the appellant was in charge of the club during the daytime and the other person at night, since the hours of operation were from 8 am until late evening.
[6]	In addition to providing cue sports playing facilities the club operated eighteen gaming machines.Indeed these were its major source of revenue.In accordance with Department of Internal Affairs’ requirements the machines were programmed to provide a monthly analysis of their performance.A further requirement was that net revenue from the machines be paid into a separate bank account from which gaming tax was payable.
[7]	The appellant was responsible for the Club’s banking.Money from all sources was pooled and initially banked into the Club’s general account.Ordinarily this occurred twice weekly on Monday or Tuesday and on Friday.The appellant determined the amount to be banked after making allowance for a sizeable cash float which was required for the operation of the gaming machines.
[8]	Such machines produced a monthly machine analysis form.It showed the amount placed through the machine, the pay-outs from it and the profit which remained.On the basis of the analysis from each of the eighteen machines the appellant was required to calculate the total revenue for the month and this sum was transferred from the general account into the designated gaming machine account, as required by Internal Affairs requirements.
[9]	The essence of the Crown case was that in early September 1998 the appellant instructed an independent computer technician who serviced the Club’s gaming machines to alter the formula by which the profitability of each machine was calculated.Until the change the formula was turnover, minus jackpots, minus wins, equals the machine’s monthly profit.The newly programmed formula was turnover, minus wins, minus jackpots, minus refills equals machine profit.In other words an additional element was programmed into the formula by way of deduction before the calculation of profit.
[10]	There was no logical justification for the change.Wins and jackpots represented money which was returned to patrons using the machines.Refills did not.They represented the replenishment of machines, required from time to time when a large pay-out had depleted the necessary coin supply within the machine.The deduction of the refill amounts meant that the monthly calculation of gaming machine profit was understated.Therefore less money was banked into the designated account.But unless the excess was removed the Club would be in possession of unexplained cash reserves.
[11]	Evidence was led to establish that the accused initiated the change to the gaming machine’s formula, was responsible for cash reconciliation and banking, and that the under banking to the designated account did not accumulate as part of the Club’s liquid reserves.The Crown alleged that the money must have been stolen.
[12]	The amount of refills varied from about $3,000 to $17,000 per month.For the period from September 1998 to 22 June 2000 the total was $164,200.The audit by which this figure was established also revealed that during the same period there was a shortfall in the total banked to the designated gaming machine account of $187,337.54.The difference between these two figures became an issue at trial.
[13]	In further support of its case the Crown adduced evidence of the total sums banked into the appellant’s personal bank accounts over the period September 1998 to June 2000.The analysis was into the accounts of both the appellant and his wife, Gaye Robertson.The police officer who prepared the analysis concluded that $83,193.35 was deposited for which there was no readily explicable source.In terms of monthly unexplained deposits the total varied from about $1,400 to a high point of $7,000.A similar analysis was undertaken with reference to the period from 26 June 2000 (by which time the appellant was no longer employed by the Club) to the end of the financial year, 31 March 2001.In this period there was only $3,349.09 by way of deposits which could not be identified as to source.
[14]	This aspect of the case assumed significant proportions.Both the appellant and his wife gave evidence to the effect that the so-called unexplained deposits were from snooker tournament winnings, side bets on matches, and coaching snooker players.There was also evidence presented concerning the appellant betting heavily for which purpose he maintained a TAB account.It was necessary for the trial Judge to consider and ultimately decide upon the probative value of the “unexplained deposits” aspect of the evidence.
[15]	A further analysis was undertaken by the police officer with reference to the cash position of the Club before and after 22 June 2000.It revealed that for the nine months prior to that date the total banked to the designated gaming machine account was $107,567.For the nine months post dismissal the comparable figure was $162,833, an average increase of $6,140 per month.Again the inference which the Crown sought to draw from these figures was strongly contested.The accused through cross-examination and evidence pointed to a general laxity in the Club’s financial systems, coupled with specific examples of dishonest activities practised by certain patrons of the Club.In effect it was suggested that after June 2000 security had improved generally which explained any upturn in gaming machine profitability.Accordingly this aspect of the case also required of the trial Judge that he assess credibility issues and determine the probative value of the evidence.
[16]	The evidence in relation to count 76 was discrete.The relevant day, 22 June 2000, was a Thursday.The appellant was on leave in order to compete in a tournament at Auckland, but he returned early to Hamilton having been eliminated from the competition.He went to the Club ostensibly to uplift his wife at the conclusion of her shift.Although not on duty the appellant was observed by a fellow employee acting in a manner she regarded with suspicion behind the counter of the Club.The appellant was seen to open a safe which was secured by a key and used to secure lesser quantities of cash before it was transferred into a more secure safe known as the drop safe.The employee considered there was no reason for the appellant to open the safe at all.Moreover, she observed the appellant with a bundle of $20 notes encased in his hand which was curled into a fist.The appellant’s immediate and subsequent actions, she considered, were consistent with his surreptitiously placing the notes into a pocket.
[17]	The employee mulled over what she should do in relation to her observations.After the appellant and his wife had left the Club she conferred with another employee and decided to contact the Club’s president.This was done.In light of what he was told the president examined footage from a security camera which monitored the area behind the counter.Such footage was given to the police and in due course was relied upon at trial.The appellant in evidence denied that anything untoward had occurred on 22 June.He advanced an explanation for his actions and asserted that the video footage did not support a sinister interpretation of his conduct.Again, then, the trial Judge was faced with conflicting evidence where issues of both credibility and interpretation arose.
[18]	For detailed reasons to which we shall turn shortly the Judge was satisfied beyond reasonable doubt as to the proof of both charges.However, in reaching these conclusions he said that the evidence in support of the global charge, viewed in isolation from the evidence relevant to 22 June 2000, excited “a high level of suspicion” but did not prove guilt to the required standard.He then reviewed the evidence relevant to the specific count, concluded it was proved beyond reasonable doubt, and by bringing this evidence of actual dishonesty to account found that count 54 was also established.

The appellant’s case

[19]	Mr Hammond in a forceful argument in support of the conviction appeal focused initially upon the process of reasoning adopted by the Judge.He maintained that it was fatally flawed.The Judge found in relation to count 54 that the evidence in support was insufficient unless the evidence specific to count 76 was also brought to bear.Mr Hammond submitted this approach was at odds with that of the Crown (which presented the two counts as separate entities) and, moreover, that the evidence relevant to events on 22 June 2000 was not supportive of the more general allegation contained in count 54.Although the label of similar fact evidence was used in this context, it became evident in the course of oral submissions that counsel’s real complaint was that the evidence of taking notes from the key safe was not consistent with the system allegedly employed with reference to the global theft.We shall return to this point in a moment.
[20]	Such argument was developed in terms of first principles.That is the need for separate consideration of individual counts and that evidence on one count should not be used to bolster that on another, unless a proper basis exists for doing so.It was argued that the process of reasoning adopted in this instance offended against these basic requirements.
[21]	Alternatively with reference to count 54 the verdict was criticised as unreasonable on account of what counsel termed errors and omissions.It was submitted that on all the evidence the president of the Club was privy to the programmed change to the formula for the gaming machines.Hence that responsibility for this should not have been sheeted home to the appellant.With reference to the alleged unexplained bankings into the accounts of the appellant and his wife counsel argued that the Judge failed to consider aspects of the defence explanation.Likewise with reference to the increase in the Club’s profitability post June 2000, counsel submitted that explanations advanced in evidence for this were not adequately considered.
[22]	A further submission focused upon the central figures advanced by the Crown in support of its case.A figure of $187,337.54 was asserted as the amount of the under-banking into the designated account, yet the total figure for refills over the same period was only $164,200 (when in terms of the Crown’s theory of the case the two should have aligned).Likewise it was contended that the unexplained bankings to the accounts of the appellant and his wife, allegedly $138,771.57, bore no relationship to either the underbanked figure or to that for refills.
[23]	Turning to the verdict in relation to count 76 counsel argued it too was unreasonable.He submitted that the surveillance camera footage was inconsistent with the allegation, no money was shown to be missing from the safe and that there was nothing untoward in the appellant’s actions on 22 June 2000.If it was accepted that the evidence in support of count 76 was insufficient, then in terms of the Judge’s own reasoning count 54 must also fail.

Discussion

[24]

For reasons which will become apparent we think the convenient course is to first consider the argument that the verdict in relation to count 76 was unreasonable.We disagree.It is apparent from the reasons for verdict that the trial Judge formed a favourable impression of the witness who observed the appellant’s actions.He described her as “a most impressive witness”.By contrast, having seen and heard the appellant give evidence in an endeavour to justify his actions on 22 June 2000, the Judge concluded that he was not to be believed.It is apparent from the record of the trial that the surveillance video footage was closely considered with reference to the competing versions of events.In the result the Judge concluded that the footage confirmed the appellant’s movements as described by the other employee.The circumstance that it was not possible to reconstruct whether a sum was missing from the key safe does not, in our view, raise doubt.Such is more a reflection of the money handling practices which prevailed, in particular that a running total of the sum stored in the safe was not kept.

[25]

We turn to the issue of the process of reasoning adopted by the Judge.It is captured in the following excerpts from the judgment:

[63] This case relies largely upon the circumstantial evidence that I have covered in the preceding paragraphs.If the Crown case relied just upon that evidence, I would find the Accused not guilty on both counts.While that evidence points reasonably conclusively to the Accused’s guilt, to the point where I am left with a high level of suspicion that he is responsible for the losses because of a pilfering system designed and employed by him, I am not taken to the point where I would be sure of his guilt.Certainly, I consider on that evidence that he is probably guilty but that is not proof beyond reasonable doubt.The loose cash management system employed by the Club over that period and the possibility that others might have detected and taken advantage of the opportunity created by the machine programming change would have left me in a reasonable doubt that this Accused stole from the Club over this period.Indeed, I could not ignore the possibility that the Accused’s wife was the thief.

[64] All the circumstantial evidence that I have covered is entirely consistent with the Accused’s guilt but does not amount to proof beyond reasonable doubt.

[26]	At this point the Judge considered count 76 and concluded, for the reasons we have just discussed, that such charge was established to the requisite standard.He continued:

[75] I accept and find proved beyond reasonable doubt that the Accused did take a pile of $20.00 notes from the key safe that day and put this in his pocket.This is a significant finding because it connects the Accused directly to the taking of cash from the Club’s reserves and it lifts the case against him from the point of high suspicion to one where I am left sure of his guilt both in respect of Count 54 and Count 76.I do not accept that the Accused had a legitimate purpose for taking the cash and this finding indeed confirms that he was clearly a person actively involved in stealing from the club by the employment of a system designed by him through the programming change for the gaming machines.

Is such reasoning deficient as Mr Hammond contended?

[27]	We see nothing in the submission that because the Crown did not present its case on the footing count 76 added to the weight of evidence in relation to count 54, the Judge was precluded from doing so.Whether evidence supportive of the specific charge also added to the Crown case in relation to the global charge is an issue of relevance.How trial counsel for the Crown fashioned her case is not determinative thereof.
[28]	As we understood it the essence of counsel’s argument was that an isolated and seemingly opportunistic taking of a handful of notes from the key safe was not probative of the more general allegation that the appellant systematically stole significant sums from the Club’s funds.We are unable to accept this submission.It may be that systematic taking of cash aligned to calculation of the sum to be banked and the sum to be transferred into the designated account was the tenor of the Crown case.But it does not follow that the theft of notes was not evidence supportive of count 54.
[29]	That the appellant was seen stealing money at all was highly significant in itself.Moreover, the general income of the Club and that from gaming machines was not kept separate, but rather mixed, until a transfer was made from the general account to the designated account.It follows that a theft of notes, provided it was from the Club’s funds, was consistent with the systematic dishonesty alleged.Moreover given that the appellant was responsible for general banking he was the one in a position to cover up the theft of any notes taken on 22 June 2000 (had he not been dismissed).
[30]	In these circumstances we agree that the evidence in support of count 76 was both admissible in relation to, and supportive of, count 54 which counsel for the appellant accepted.It was evidence of an act of taking which was an incident of the global fraud.The Crown could well have elected not to include count 76 in the indictment.In that event the evidence relevant to it would have been directly received with reference to count 54.There could have been no objection to that course.It follows, we think, that there was no infringement of the principles that separate counts must be considered individually and evidence relevant to one may not be applied in relation to another.That is not this case.
[31]	For these reasons we are not persuaded that the process of reasoning of the trial Judge was fatally flawed.However, we do not necessarily subscribe to the approach which was adopted, in particular the conclusions set out in paragraph [63] of the reasons for verdict. The better course would have been for the Judge to consider all of the evidence as a whole before he set out his views as to proof.We are also surprised at the seeming absence of weight given to parts of the Crown case.The change to the gaming machine formula was plainly pivotal to the fraud.It was the means by which extra cash remained in the system and was available to be taken.Indeed unless such moneys were removed the change to the formula was bound to be discovered.The evidence that it was the appellant who initiated the change to the formula and that it was the appellant who controlled the Club’s bankings was in our view compelling evidence indeed as to the identity of the thief.
[32]	It remains to consider the associated factual submissions.We do not accept the evidence showed that the Club president was party to the formula change to the gaming machines.He denied all involvement.The computer technician said that it was the appellant who gave the relevant instruction.The appellant himself said he had no recollection of doing so although he did not contest the technician’s evidence, but if he had given such an instruction it would have been on behalf of the president.The Judge clearly preferred the evidence of the other witnesses over that of the appellant.There is no basis for the intervention of this Court.
[33]	Nor are we persuaded that the Judge’s consideration of evidence concerning unexplained deposits into the accounts of the appellant and his wife was unsatisfactory.Evidence of this kind is typically indicative in nature.It was not to be expected that all money taken would be banked.In addition there was scope for the appellant to dispute the figures on account of money he had gained from other activities, including gambling.Hence the evidence did not permit of exactitude.The trial Judge found:

Allowing for some tolerance in relation to income from gambling sources and the uncertainty that runs hand in hand with any attempt to analyse the income of a gambler, what is abundantly clear to me is that the Accused could provide no credible explanation for the substantial quantity of cash deposited in those bank accounts on a regular basis throughout the relevant 22 months.

This assessment is one which was plainly open on the evidence.The Judge carefully considered the explanations given for the cash deposits and, importantly, accepted that the total figure initially advanced by the Crown was not sustainable.That there still remained, on the Judge’s finding, a significant amount of unexplained bankings was a telling additional aspect of the Crown case.

[34]

Nor are we persuaded that the Judge failed to adequately consider the evidence of the Club’s increased profits after June 2000.The defence case was that there were other reasons which explained any increase.Evidence was indeed led concerning dishonesty on the part of both patrons and one staff member.Such evidence was not unduly discounted, much less ignored.The Judge assessed matters in this way:

However on any analysis of the evidence in respect of those fraudulent endeavours, the amount that could have been generated would have been significant but nowhere near the total amount of under-banking.It would have been well within the $23,337 (the difference between the total amount of the under-banking from the gaming machines and the total amount of the refills over that relevant period).Indeed, I consider that it was likely that the amount lost to those dishonest schemes (was) significantly less $23,337 although it is of course impossible to be precise in that respect.

Again we can see no basis for a conclusion that this assessment was not one available to him.

[35]

We have already indicated our view with reference to the significance of the central figures advanced by the Crown in support of its case.That is the figure of $187,337.54 for underbanking to the designated account, $164,200 for refills over the relevant period, and $138,771.57 being the analysis of unexplained deposits to the accounts of the appellant and his wife.The latter was realistically discounted by the trial Judge in his reasons for the verdicts.That there is no match between the underbanked and the refill figures is not destructive of the Crown case.It was not necessary for it to establish a precise defalcation figure, although the Judge ultimately concluded that “an amount broadly equivalent to the total refills for (the 22 month) period of $164,200” was stolen.Whether that figure was on the high side is, we think, more relevant to the sentence appeal than to conviction.

[36]

For the reasons we have endeavoured to express we are satisfied that the conviction appeal must fail.The Crown case was a strong one.The appellant gave evidence and was disbelieved.Such concerns as we have in relation to the reasons for the verdicts do not give rise to any possibility of a miscarriage of justice.

The sentence appeal

[37]	In support of this aspect Mr Hammond submitted that the Judge gave insufficient weight to strong mitigating factors including a realistic offer of reparation (s8(j) of the Sentencing Act 2002), that the starting-point adopted of three and a half years was too high and out of line with sentences imposed in more serious cases (s8(b) and (e) of the Act), and that a sentence of less than two years was appropriate, coupled with leave to apply for a release to home detention.
[38]	Mr Dean for the Crown stressed some serious aspects of the offending and, in light of them, submitted that a sentence of two and a half years was comfortably within the appropriate sentencing range for offences of this nature.
[39]	We have of course closely considered the Judge’s sentencing remarks.He noted that the Club did not have “a strong cash management system”.He saw the dishonest scheme put into place by the appellant as “a shocking breach of trust”.The sentence was imposed on the basis that a sum in the vicinity of $164,000 had been stolen.
[40]	With reference to the appellant’s personal circumstances the Judge saw him as a man who had “fallen far” in that his national sporting reputation had been lost. Certain health difficulties were brought to account, as was the circumstance that the appellant was “a strong, loving, and helpful member of his family”.The Judge noted an offer to make reparation in the sum of $10,000 (made without admission of liability) provided the appellant remained in the workforce which did not of course eventuate.
[41]	In the result the starting-point of four years imprisonment was adopted from which the Judge made a “slight adjustment” by way of credit for the offer of reparation and for the medical factors mentioned in a doctor’s report.In fact he allowed a deduction of eighteen months to arrive at the sentence of two and a half years imprisonment on each count.
[42]	We have two concerns about the reasons given for the sentence imposed.It may be that the figure of $164,200 which was adopted as the approximate figure stolen was on the high side.The Judge inferred that approximately that sum was stolen by the appellant and that the difference between it and the figure underbanked to the designated account represented the approximate amount stolen by others.We question whether the evidence in this case permitted of this level of certainty.
[43]	In light of this concern we consider that the starting-point of four years was perhaps too high.On the other hand a generous deduction of eighteen months was made from that starting-point on account of a conditional offer to pay reparation and on account of the appellant’s health problems.This was a reduction of somewhat over one-third of the indicated sentence.Such is difficult to justify.In the end result then we agree with the submission that the sentence imposed of two and a half years was well within the sentencing discretion of the Judge.
[44]	It follows that the appeal against sentence must also be dismissed.

Solicitors:

Tompkins Wake, Hamilton for Appellant

Crown Solicitor, Auckland for Respondent