[1] The appellants were each convicted after trial on one count of arson and one of attempting to obtain a pecuniary advantage by deception. The jury brought in majority verdicts in each case. They were each sentenced by Potter J on 18 December 2009 to imprisonment for four years. [1]
[2] The offending related to a fire at a cafe operated by the appellants in Howick, Auckland. The Crown case was that the appellants were in financial difficulties and deliberately lit the fire in an attempt to make a claim on their insurer for the losses they claimed to have suffered.
[3] The appellant in CA824/2009 (Mr Carlos) appeals against conviction on the sole ground that the Judge erred in directing the jury in relation to the deception charge that they did not need to be unanimous (or reach the necessary majority) as to which of four particularised representations was established. He also appeals against sentence.
[4] We record that the appellant in CA266/2010 (Ms Husen) earlier abandoned her appeal against conviction and sentence and seeks to reinstate it. She relies on the same grounds as Mr Carlos.

Background

[5] The background facts are succinctly stated in Mr Kaye’s submission on behalf of the appellants:

2.1 The Appellants are husband and wife. Together they owned and operated a restaurant known as Cafe Hasan Baba in Howick, Auckland. At approximately 3.11am on the 17th of February 2008, a large explosion occurred at the restaurant premises. The building generally, and the restaurant in particular, were extensively damaged.

2.2 During the evening prior to the explosion, customers were required to pay for their meals in cash as the Eftpos machine was not working. The Appellants left the restaurant shortly before 2am.

2.3 Shortly after 3am that morning, a member of the public was walking past Cafe Hasan Baba when he saw a flash followed by a large explosion which caused the doors and front windows of the cafe to be thrown onto the street and across the road. Thankfully this member of the public was unharmed.

2.4 Evidence was given as to the finances of the Appellants, showing that they were in debt at the time of the explosion. There was significant insurance cover on the Cafe Hasan Baba. After the explosion, the Appellants attempted to claim on the insurance, however the insurance company refused to pay the claim until the completion of the Police investigation.

[6] It was accepted at trial that the fire was deliberately lit but the appellants denied any involvement and submitted that it must have been caused by others. The Crown had a strong circumstantial case against the appellants. They claimed insurance for damage to the premises, cash takings they claimed were in the till, as well as an expensive Persian rug which they said had been inside the premises. Evidence disclosed that the rug had not in fact been in the premises at the time.

The indictment

[7] It is necessary to set out the content of the indictment in full:

Indictment

1. The Crown Solicitor at Auckland charges that Antonio Banderas Carlos and Khalida Hasan Husen, on or about 17 February 2008 at Auckland, intentionally damaged by fire or by means of explosive, any property, namely the premises of Cafe Hasan Baba, with intent to obtain a benefit, namely an insurance claim.

2. The said Crown Solicitor further charges that Antonio Banderas Carlos and Khalida Hasan Husen, between 17 February 2008 and 25 March 2008 at Auckland, attempted, by deception and without claim of right, to obtain ownership of a pecuniary advantage, namely an insurance claim.

Particulars

By falsely representing to John Burrows that:

(a) the explosion and fire at Cafe Hasan Baba at 13 Cook Street, Howick, which occurred on 17 February 2008, was not deliberately caused by them;

(b) they had left $7,500.00 in cash in the till of Cafe Hasan Baba when they secured the Cafe at 1.56.44am on 17 February 2008;

(c) they had left a Persian rug worth in excess of $10,000.00 on the wall of Cafe Hasan Baba when they secured the cafe at 1.56.44am on 17 February 2008;

(d) they had income from diners on Saturday 16 February 2008 of $4,000.00.

The Judge’s directions

[8] The Judge provided a written questionnaire to the jury. For Count 2, it provided:

Count 2: attempting to obtain a benefit by deception

In relation to each accused:

1. Did the accused attempt to obtain payment of an insurance claim:

YES/NO

Did the accused do so without claim of right; that is, without a belief that his/her actions were lawful?

YES/NO

Did the accused do so by deception by making any one of the false representations to John Burrows:

(a) the explosion and fire at Cafe Hasan Baba at 13 Cook Street, Howick, which occurred on 17 February 2080, was not deliberately caused by them;

(b) they had left $7,500.00 in cash in the till of Cafe Hasan Baba when they secured the Cafe at 1.56.44 am on 17 February 2008;

(c) they had left a Persian rug worth in excess of $10,000.00 on the wall at Cafe Hasan Baba when they secured the Cafe at 1.56.44am on 17 February 2008;

(d) they had income from diners on Saturday 16 February 2008 of $4,000.00.

YES/NO

[9] By reference to the questionnaire, the Judge then directed the jury in these terms:

[60] A word about those particulars that appear at question 3 in relation to Count 2. As I said, they are the particulars of the false representations the Crown alleges the accused made to John Burrows in order to obtain payment of an insurance claim. Those particulars essentially notify the factual basis on which the Crown says that this crime has been committed. You do not have to all be agreed, or all agreed except one in the case of a majority verdict – you do not all have to be agreed or have a majority verdict in respect of any of the alleged particulars when you come to determine your verdict. It is not necessary that the Crown prove all of the items particularised as (a), (b), (c) and (d). Particulars are not essential elements of the charges. If you find that any one of the items particularised did occur and the accused was deliberately responsible for it, then that could form a proper basis on which to return a verdict of guilty on Count 2, provided you are sure that each of the three essential elements which are the subject of questions 1, 2 and 3, has been proved by the Crown. They are that the accused in question attempted to obtain the payment of an insurance claim, that he or she did so without claim of right (a belief that it was lawful), and that he or she did so by deception by making a false representation or false representations. It could be that you find a number of the allegations particularised in (a)-(d) have been proved. Any one or more of those matters particularised can form a factual basis upon which you can go on to determine whether the third essential element in Count 2, namely deception by false representation, has been proved. You do not all have to agree on any particular.

The appellants’ submission

[10] Mr Kaye submitted that the Judge erred in directing the jury that they did not have to be unanimous as to which of the four particulars in Count 2(a) – (d) were established so long as they were unanimous (or reached the necessary majority) as to the three elements set out in the questionnaire. Mr Kaye relied particularly on the decision of this Court in R v Mead[2] and Fermanis v Western Australia,[3] a decision of the Court of Appeal of Western Australia.
[11] In Mead, the appellants were charged with several counts of wilfully ill-treating a child under their care or control in a manner likely to cause unnecessary suffering, contrary to s 195 of the Crimes Act 1961. The particulars of the alleged ill-treatment embraced a number of different types of conduct over a period of approximately six months when the appellants were living in a domestic relationship and had the care of three children. There were four counts in the indictment. Each of the first three charges related to a separate child, but contained the same allegations and particulars of conduct in respect of each. The fourth charge was specific to one of the children and alleged that the wilful ill-treatment arose through one particular act.
[12] The Judge directed the jury that they did not have to be unanimous on which of the particulars of the first three counts caused the unnecessary suffering, provided they were unanimous in reaching the conclusion that the appellants had wilfully ill-treated the victims in a way likely to cause unnecessary suffering.
[13] The majority of this Court (Thomas and Anderson JJ) held that the particulars provided by the Crown were not ingredients of the offence. Their purpose was to inform the appellants of the case to be met. The majority upheld the direction of the trial Judge. After reviewing the authorities, Thomas J said:

[87] An accused is guilty if he or she has wilfully ill-treated a child in a manner likely to cause unnecessary suffering. Different views may be entertained as to the conduct which comprised that ill-treatment without detracting from the accused’s guilt. If the jury is satisfied of the ingredients of the offence, then, 12 jurors have agreed that the accused is guilty of cruelty in terms of the section. The particular evidence which may have been accepted by individual jurors does not destroy their unanimity on the core elements of the charge and the guilt of the accused.

[14] Anderson J said:

Elementary principles

[105] The elementary principles include that the essential elements of a crime are defined by law, not evidence; that particulars in an indictment are of an evidential, not a legal, nature; and that juries have conventionally been entitled to reach a collective conclusion without individual members of the jury being unanimously satisfied as to the occurrence, weight or significance of the evidence, including parts of the evidence of a witness. There is no principled reason why it should be otherwise in respect of s 195 of the Crimes Act 1961. Rather, the evaluative and conclusionary nature of the offence suggests that the conventional view is entirely appropriate.

Statutory purpose

[106] The purpose of s 195 is to proscribe cruelty to children, not merely by single acts but by a course of conduct inflicted by those who have custody, control or charge of a child. Specific acts of cruelty might be met by specific offences such as the various types of neglect or degrees of assault referred to, for example, in Part VIII of the Crimes Act. But s 195 recognises the realities of child abuse within a relationship of adult authority where the accumulation of wilful ill-treatment or neglect may be obvious although the causes may be practically incapable of proof as individual offences or even incidents.

Evidential realities

[107] The evidential realities include the likelihood that the principal witnesses will often be the young victims of the domestic cruelty itself. For them the chronology and specificity of conduct which amounts to a regime of cruelty will be less significant than the harmful consequences. Their recollections are likely to be general, as indeed adults’ would be, because of the very nature of chronic domestic cruelty. Analysis of discrete causative impact may be an unrealistic expectation. Moreover, the consequences of cruelty may be a combination of unnecessary suffering, actual bodily harm, injury to health, mental disorder or disability in ways that defy particular categorisation or relativity with each other but loudly bespeak combined damage. The likelihood of such cases indicates general evaluation rather than acute dissection of conduct.

[15] The Chief Justice dissented. She identified the essential principles to be applied in the following passages:

[14] A jury must be unanimous as to the essential ingredients of the offence. This principle, so fundamental as to be generally assumed without need for authority, is affirmed in More (1988) 86 Cr App R 234, 252 (HL) per Lord Ackner. But it does not of itself answer the question what are the essential ingredients upon which there has to be unanimity.

[15] It is not necessary that jurors be in agreement about the evidence. They can arrive at the same point by different reasoning. But the essential points upon which they must agree are not simply a conclusion based upon the statutory criteria for the offence. The statutory elements will need to be anchored to the facts relied upon by the prosecution as the basis of liability and put in contention by the defence. The jury must be agreed upon the factual basis on which they find the accused guilty: Giannetto [1997] 1 Cr App R 1, 8 (CA) per Kennedy LJ; Carr [2000] 2 Cr App R 149, 158 per Lord Bingham CJ. Without such agreement there is no common foundation for the verdict.

[16] The standard jury direction about the need for unanimity refers to the need for the jury to be unanimous as to the "elements" of the offence. As noted in R v Menzies (CA 222/97, 29 September 1997) at p 12, it is usual for the Judge to make it clear what are the essential elements of the case during the course of the summing up. It is important that the summing up be tailored to the actual case before the Court in this way.

[16] Importantly, the Chief Justice went on to state: [4]

What elements are essential to criminal liability in the particular case and require jury unanimity is a practical question, not a technical one. It turns not only upon the legal elements of the offence, but also the factual elements essential to the cases put for the prosecution in defence ...

[17] The Chief Justice added that particulars ensure that an accused is given notice of the case against him (in compliance with the obligation under s 329(4) of the Crimes Act) and that, in many cases, particulars are likely to assist in identifying elements in the case which are essential.[5]
[18] The Chief Justice placed reliance (amongst other authorities) on the decision of the English Court of Criminal Appeal in R v Brown (Kevin)[6] in which the accused was charged with fraudulently inducing four people to acquire shares in a company by making misleading statements.
[19] In Brown the Court was considering a conviction under s 13 of the Prevention of Fraud (Investments) Act 1958 (UK). The appellant was charged with knowingly making a misleading, false or deceptive statement, promise or forecast which induced investors to acquire shares in a company. The indictment stipulated four separate statements which were said to have been made. The trial Judge failed to direct the jury that they had to be unanimous (subject to the possibility of a majority verdict) that at least one of the particular statements was made out.
[20] Speaking for the Court of Appeal, Eveleigh LJ held:[7]

In a case such as that with which we are now dealing, the following principles apply:

1. Each ingredient of the offence must be proved to the satisfaction of each and every member of the jury (subject to the majority direction).

2. However, where a number of matters are specified in the charge as together constituting one ingredient in the offence, and any one of them is capable of doing so, then it is enough to establish the ingredient that any one of them is proved; but (because of the first principle above) any such matter must be proved to the satisfaction of the whole jury. The jury should be directed accordingly, and it should be made clear to them as well that they should all be satisfied that the statement upon which they are agreed was an inducement as alleged.

A similar view was reached in Fermanis. The appellants were convicted after trial on six counts of gaining a benefit with intent to defraud, by deceit or fraudulent means, contrary to s 409(1) of the Criminal Code (WA). The charges related to representations made by investors to provide funds for the purchase of a hotel. The trial court directed the prosecutor to provide particulars of the false representations relied upon. Seven particulars of deceit or fraudulent means were provided. These included alleged misrepresentations as well as alleged concealments and failure to inform investors of specific matters.

[21] The judgment of the Court of Appeal was delivered by Steytler P. After an extensive examination of the authorities, including Brown and Mead, the Court concluded that it was essential for the jury to be unanimous in respect of at least one of the particulars given. [8] The jury should have been directed accordingly.
[22] Steytler P noted the undisputed proposition that the jury must be unanimous on all essential elements of an offence. However, he saw: [9]

... a plain distinction between a factual conclusion as regards the existence of an essential element of an offence, on the one hand, and factual conclusions as regards the evidence which is led for the purpose of proving that essential element on the other. Jurors do not have to be unanimous in relation to the evidentiary route by which they make the finding with respect to an essential element of the offence.

[23] Steytler P went on to express the view that the essential elements of an offence are not necessarily determined merely upon the wording of the statute creating the offence. He endorsed the view expressed by Elias CJ in Mead that: [10]

The statutory elements will need to be anchored to the facts relied upon by the prosecution as the basis of liability.

[24] Steytler P added that the way in which the charge against the accused is formulated will be a relevant factor in deciding the extent to which unanimity is required in a case where the prosecution proceeds on alternative bases. He succinctly summarised the position in a case involving alternatives A and B by stating:

They had to be unanimous in finding either or both of representations A and B proved. However, each might rely upon different evidence in finding that representation proved.

[25] The rationale for the conclusion of the Court of Appeal in Fermanis was expressed in the following passage:[11]

Any other conclusion seems to me to be objectionable in principle. So, for example, in a case in which two different representations are relied upon, it seems to me that there would be a very real risk of injustice if a person could be convicted in circumstances in which each representation was found by half of the jury not to have been proved. While I recognise that there is some danger, also, in a system which permits individual jurors to rely upon different evidence in reaching their conclusion as to the making of a representation, it seems to me that the risk of injustice is much higher if the posited course should be regarded as permissible. (See, in this respect the commentary to the report of Agbin (at 171-172), in which, after giving as an example a case in which the indictment alleges 12 separate false statements and every juror is satisfied in respect of only one allegation with each allegation being disbelieved by 11 jurors, the author suggests that it would be a “travesty” to say that the jury, as opposed to each individual juror, was satisfied that the defendant was guilty of obtaining or procuring by deception. See also J C Smith, “Satisfying the Jury” (1998) Crim LR 335 at 335-336).

The Crown’s response

[26] On behalf of the Crown, Mr Downs submitted that the point raised by the appellant is a matter of some difficulty. This was illustrated by the difference of view between the members of this Court in Mead and subsequent decisions of this Court such as R v Shaw[12] and R v Donnan[13] (which were concerned with the need for unanimity in the context of primary and secondary offenders). He questioned whether fraud should be treated differently from, say, representative counts of sexual misconduct or cases of wilful ill-treatment such as Mead.
[27] However, Mr Downs submitted that it was unnecessary to answer the question raised by the appellant in this case because it must follow from the conviction on count 1 that the necessary majority of the jury were all in agreement that the first alleged representation (that the fire was not deliberately caused by them) was false. There was therefore no miscarriage of justice since any error in the direction was not capable of affecting the verdict.

Discussion

[28] We consider the point made by Mr Downs is unanswerable. It was an essential ingredient of count 1 that the appellants were responsible for the intentional damage of the premises with intent to obtain a benefit under the insurance policy. It necessarily followed that the jury (or the necessary majority) must have been satisfied to the required standard that the representation specified in particular (a) of count 2 was false.
[29] Mr Kaye submitted that this conclusion would not necessarily have followed if the jury had reached its verdict first on count 2 and then moved to consider count 1. We are unable to accept Mr Kaye’s submission in this respect. The order in which the jury approached its task could not affect the inevitable conclusion that, in each case, the required majority must have been satisfied that the fire was deliberately lit and that the first of the alleged misrepresentations in count 2 was established.
[30] The appeal by Mr Carlos against conviction is dismissed. In the light of our conclusion on the merits, there is no proper basis to reinstate Ms Husen’s abandoned appeal.
[31] Although not necessary for our decision on the appeal against conviction, we consider that a false representation was an essential element on the charge of obtaining by deception contrary to s 240 of the Crimes Act. That conclusion follows plainly from the statutory language. Section 240 provides:

240 Obtaining by deception or causing loss by deception

(1) Every one is guilty of obtaining by deception or causing loss by deception who, by any deception and without claim of right,—

(a) obtains ownership or possession of, or control over, any property, or any privilege, service, pecuniary advantage, benefit, or valuable consideration, directly or indirectly; or

(b) in incurring any debt or liability, obtains credit; or

(c) induces or causes any other person to deliver over, execute, make, accept, endorse, destroy, or alter any document or thing capable of being used to derive a pecuniary advantage; or

(d) causes loss to any other person.

(2) In this section, deception means—

(a) a false representation, whether oral, documentary, or by conduct, where the person making the representation intends to deceive any other person and—

(i) knows that it is false in a material particular; or

(ii) is reckless as to whether it is false in a material particular; or

(b) an omission to disclose a material particular, with intent to deceive any person, in circumstances where there is a duty to disclose it; or

[32] Unlike the charge of wilful ill-treatment considered in Mead, the central concept of deception is specifically defined in subs (2). Here, subs (2)(a) was relied upon. Under this provision, the prosecution must prove a materially false representation which is intended to deceive any other person and which is either known to be false or is made recklessly as to its truth or falsity.
[33] We consider this case is on all fours with Brown and Fermanis. The false representation which must be proved is an essential element of the offence where s 240(2)(a) is relied upon. In such a case, the prosecution is obliged to specify the false representation alleged. Where only one representation is alleged, no difficulty arises. Clearly, the jury (or the necessary majority) must be unanimous that the false representation is established. Where more than one false representation is alleged, the jury (or the necessary majority) must be unanimous in respect of at least one of the representations alleged. The jury must be directed accordingly.
[34] To avoid confusion and overcome any possible difficulties in this respect, it is desirable where more than one false representation is alleged, to include each alleged misrepresentation in a separate count. This approach will also assist the Judge at sentencing in the event of a conviction, since the degree of culpability may depend upon the number and nature of the false representations established by the jury’s verdict.

Sentence appeal

[35] The appellants were charged under s 267(2)(b) of the Crimes Act which carries a maximum penalty of seven years imprisonment. In submitting that the sentences were manifestly excessive, Mr Kaye correctly submitted that there is no fixed tariff for arson. Each case will depend on its own facts. Sentences have varied considerably from substantial prison terms to non-custodial sentences.
[36] Mr Kaye acknowledged there was a degree of planning and premeditation and that there was a risk to fire fighters attending the blaze. However, he submitted there was no other danger to life since the premises were commercial in nature which, he submitted, were known to be empty at the time of the fire. Mr Kaye’s final point was that the sentences would be disproportionately severe given the appellants’ obligations to their young child. He did not seek to differentiate between the appellants in terms of culpability.
[37] Mr Kaye particularly relied on R v Gemmell[14] in which this Court upheld a sentence of 17 months imprisonment for arson and attempting to pervert the course of justice. The appellant had been convicted after trial in relation to the burning down of a house in order to claim insurance. She was not directly involved in the arson, but had taken an important role in its planning. She was also a party to an attempt to persuade an important witness to retract his evidence. We accept that the sentence imposed in Gemmell was significantly less than those in the present case, but we observe that the original sentence appears to have been lenient.
[38] We are satisfied that the sentences imposed were justified. As the Judge noted, this Court observed in R v Gilchrist[15] that arson is usually serious and deterrence is an important aspect of punishment. In that case, a sentence of four years was upheld after commercial premises were extensively damaged by fire. Aggravating factors were the use of a professional burglar and the deliberate destruction of business records so the appellant could avoid a debt.
[39] In our view, the Judge correctly identified the aggravating factors: the high level of premeditation involved; the extensive damage caused in the explosion, not only to the subject premises but also to adjoining premises; the narrow escape from serious injury by a passerby and the substantial amount of the claim made on the insurer (assessed by a loss adjustor as approximately $435,000).
[40] As to the personal circumstances of the appellants, they were, at the time of sentencing, aged 31 and 29 years respectively. Their daughter was then three years of age. Neither had any relevant previous convictions and were assessed as having a low risk of re-offending. The appellants had previously been of good character and had worked hard in establishing their restaurant business and their lives in New Zealand having emigrated here from Iraq in 1998.
[41] The Judge approached the offending on a totality basis. She adopted a starting point of four years, three months imprisonment, taking arson as the lead charge and treating count 2 as an aggravating factor. She did not see any mitigating features of the offending. As to personal factors, she noted that the appellants had not expressed any remorse. However, she did take into account the personal mitigating factors already identified by allowing a discount of three months.
[42] In the result, a sentence of four years imprisonment was imposed on the charge of arson with a concurrent sentence of 15 months imprisonment on the charge of attempting to obtain a pecuniary advantage by deception.
[43] We consider the sentences to be within range although relatively stern. Arson is difficult to detect and the consequences, as in this case, can be devastating. It was fortunate for the appellants that no member of the public or the emergency services was injured in the very large explosion and fire which occurred. Extensive property damage resulted. As well, the attempted deception of the insurance company for a substantial sum cannot be treated as anything other than a serious aggravating factor.
[44] For these reasons, the appeal of Mr Carlos against sentence is dismissed. There is no proper basis to reinstate Ms Husen’s sentence appeal.

Solicitors:
Crown Law Office, Wellington for Respondent

[1] R v Carlos HC Auckland CRI-2008-0925680, 18 December 2009.
[2] R v Mead [2002] 1 NZLR 594.
[3] Fermanis v Western Australia [2007] WASCA 84.
[4] At [17].
[5] At [18].
[6] R v Brown (Kevin) [1983] 79 Cr App R 115.
[7] At 119.
[8] At 454 – 455.
[9] At [68].
[10] At [15].
[11] At [70].
[12] R v Shaw [2009] NZCA 232; (2009) 24 CRNZ 501.
[13] R v Donnan [2009] NZCA 171.
[14] R v Gemmell CA257/96, 2 October 1996.
[15] R v Gilchrist CA429/90, 15 April 1991.

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