Whale v R [2013] NZCA 67 (18 March 2013)

Last Updated: 27 March 2013

IN THE COURT OF APPEAL OF NEW ZEALAND

CA313/2012 [2013] NZCA 67

BETWEEN RICHARD HENRY WHALE Appellant

AND THE QUEEN Respondent

Hearing: 19 February 2013

Court: Arnold, Simon France and Dobson JJ

Counsel: C J Tennet for Appellant P K Feltham for Respondent

Judgment: 18 March 2013 at 12 pm

JUDGMENT OF THE COURT

1. The application for an extension of time to appeal is granted.
2. The appeal against conviction and sentence is dismissed.

100. To the extent that it is uncompleted, the appellant is to resume his sentence 14 days after the date on which this judgment is delivered.

____________________________________________________________________

REASONS OF THE COURT

(Given by Arnold J)

Introduction

[1] Following a jury trial before Judge Burnett, the appellant, Mr Whale, was convicted on ten counts of accessing a computer system for a dishonest purpose contrary to s 249(1) of the Crimes Act 1961. He was sentenced to 12 months’ home detention and 380 hours of community work and was ordered to pay reparation of $141,000. The reparation order was subject to a condition that he be re-assessed every three months as to the repayment rate.[1]
[2] Mr Whale now seeks an extension of time to appeal against his conviction and sentence. So far as his sentence is concerned, we understand that Mr Whale has largely completed his community work and period of home detention, so that effectively the sentence appeal relates only to the reparation order.
[3] As Ellen France J directed in a minute dated 24 October 2012, we address the extension of time and the appeal together. Although the appeal was filed almost 12 months after the appellant was sentenced, the Crown is not prejudiced by the granting of an extension, so we extend time and focus on the merits of the appeal.

Background

[4] In November 2007, a long-standing friend (the complainant) moved in with Mr Whale at his invitation. The complainant had been a farmer for many years and had recently separated from his wife. As a consequence, he had been having personal difficulties, particularly concerning the settlement of relationship property issues.
[5] Early in 2007, the complainant had sold most of his livestock. The proceeds of the sale had been placed in an Elders Livestock Trust Account. The complainant’s wife managed to stop the release of the funds to the complainant. Mr Whale helped the complainant to obtain legal advice to enable the release of the funds and then suggested that the complainant deposit the funds in a dormant bank account which he (Mr Whale) had, so as to avoid any further problems of access to them. The complainant accepted this offer and arranged for $190,000 to be deposited in Mr Whale’s dormant account. The complainant intended to use the funds to meet tax obligations and to pay professional fees incurred in winding up his farming business and dealing with the relationship property dispute.
[6] Mr Whale provided the complainant with an EFTPOS card and a Mastercard to enable him to access the funds in the account. Mr Whale also advised the complainant that the account could be operated through internet banking, but did not provide him with all the information that he needed to do this.
[7] Between 13 December 2007 and 27 February 2008, the appellant used internet banking to make a number of transactions, the effect of which was to transfer a total of $155,000 from the account into four personal and business accounts which he operated.
[8] The Crown case was that because he did not get statements in relation to the account, the complainant did not discover that any funds were missing until he checked the account balance at an ATM machine early in 2008. Then he found that $45,000 was missing. The complainant confronted Mr Whale, who admitted that he had taken the money and promised the complainant that he would put it back. The complainant accepted that and told Mr Whale not to withdraw money again.
[9] However, when the complainant checked the account balance again about a month later, he found that the $45,000 had not been repaid and that a total of $155,000 had been removed from it. The complainant confronted Mr Whale. He acknowledged that he had transferred further funds. Following some discussions, Mr Whale signed two deeds of acknowledgement of debt. He paid approximately $10,000, but then stopped the payments.
[10] Mr Whale gave evidence at trial. He accepted that he had made the transfers from the account but said that before making each transaction he had discussed it with the complainant and received his consent to taking the money as a loan. That is, he obtained the complainant’s consent in advance to each individual transaction. The complainant’s evidence was that to the contrary. He said he did not authorise Mr Whale to make any of the transactions, nor did he give him any general authority or indication which might make him believe that he was entitled to take the funds.
[11] The jury accepted the complainant’s evidence and rejected that of the appellant, except in relation to the count involving $500, on which the appellant was acquitted.

Basis of conviction appeal

[12] Mr Tennet, who did not appear for the appellant at trial, raised two grounds on the conviction appeal. He argued that there was a miscarriage of justice because Judge Burnett:

(a) failed to direct the jury “adequately or at all” as to claim of right; and

(b) misdirected the jury in relation to inferences.

We address each ground in turn.

Claim of right

[13] Section 249(1) is contained in pt 10 of the Crimes Act. It provides:

Every one is liable to imprisonment for a term not exceeding 7 years who, directly or indirectly, accesses any computer system and thereby, dishonestly or by deception, and without claim of right,–

(a) obtains any property, privilege, service, pecuniary advantage, benefit, or valuable consideration; or

(b) causes loss to any other person.

[14] Section 217 provides that in pt 10, unless the context otherwise requires:

dishonestly, in relation to an act or omission, means done or omitted without a belief that there was express or implied consent to, or authority for, the act or omission from a person entitled to give such consent or authority.

By contrast, claim of right is defined in s 2 as follows:

claim of right, in relation to any act, means a belief at the time of the act in a proprietary or possessory right in property in relation to which the offence is alleged to have been committed, although that belief may be based on ignorance or mistake of fact or of any matter of law other than the enactment against which the offence is alleged to have been committed.

[15] The heart of Mr Whale’s defence was captured in the following extract from defence counsel’s closing address to the jury:

Now, the defence is very, very clear, as it has been from the outset. Mr Whale’s [position] is that he asked [the complainant] on each and every occasion that he took money from the account. He was given permission and then he took the money. There was a comment made that there was some sort of general authority. Clearly there was some sort of discussion, but that is irrelevant. What is relevant is Mr Whale’s evidence that on each and every occasion he asked [the complainant] for that money and that permission was given.

[16] It can be seen that, as explained by counsel, the defence went to the absence of dishonesty in terms of s 217, not to a claim of right in terms of s 2. The essence of Mr Whale’s defence was that he had the complainant’s express permission in respect of each and every withdrawal. He raised the possibility of some general authority to take the money but did not suggest that he believed mistakenly that he had some proprietary or possessory right to it. The complainant’s evidence was that Mr Whale did not have his permission to take the money. Clearly the jury believed the complainant’s evidence and rejected Mr Whale’s (subject to the count concerning the $500, on which Mr Whale was acquitted).
[17] In the course of her summing up, Judge Burnett addressed the ingredients of the offence in terms of a flowchart that she provided to the jury. Having identified what was not in dispute, the Judge said:

What is disputed ..., as you know, is that when the accused did each of these transfers whether or not he did them dishonestly. That is without a belief he had [the complainant’s] express or implied consent or authority to do so, and when he did those transfers he did so without a claim of right, which is without a belief his actions were lawful. So, those are the elements for you to focus on. As you know there are two very different versions. The accused says that on each and every one of those 11 occasions, before he transferred any money he asked [the complainant] if he could and [the complainant] said, “Yep, yep, no worries.”

Whereas [the complainant] says the accused never asked him and that [the complainant] says that he never gave his consent on any of the 11 occasions and nor had he given any blanket authority to the accused to transfer any of those 11 sums out of this account. The relevant time for you to focus on is as to what was authorised or what wasn’t authorised or what the accused believed he was entitled to do is at the time each of those sums were transferred. That is when the accused carried out those transfers and defence remind you that the fact that the money hasn’t been paid back is not relevant, and that’s correct because the time you focus on is when those transactions were carried out by the accused. So you need to focus on had the accused asked [the complainant] for his consent on each and every occasion that you’re considering and had he been given [the complainant’s] consent on each of those occasions or did the accused believe he had some sort of blanket authority based on two discussions that he talked about. ...

[18] As will be noted, although defence counsel did not rely on the general authority argument, the Judge did put the defence to the jury in those terms as well as on the basis of express authority in respect of each of the transactions. But on either version (that is, specific or general authority), the focus of the defence was on a lack of dishonesty, not on a claim of right. Accordingly, in the context of this case we do not consider that the Judge was required to say any more than she did. She put the defence fairly to the jury.
[19] We reject this ground of appeal.

Inferences

[20] In relation to inferences, Judge Burnett said:

Now, I need to talk to you about a couple of further matters. The next one is that you will have heard both Crown and defence lawyers say that where there are facts or evidence that you agree with that the law permits you to draw inferences, providing those inferences are reasonable and logical inferences then the law permits you to do that. You can’t guess or you can’t speculate and that’s correct. I’ll give you a general example. When coming back from lunch you may be aware of the beautiful weather outside, there’s no windows in this courtroom but if during the time when we’ve been back in Court people came to the door of the courtroom and they had dripping raincoats or dripping umbrellas you might, based on what you could see of the raincoats and umbrellas, that you might reasonably and logically infer that the weather outside had changed and it was now raining. So, that’s what lawyers and Judges mean when they say that you can infer certain things from the evidence that you agree with or from facts that you agree with. The evidence that you agree with and any inferences you draw from those are a matter entirely for you. You’ll recall that Crown have suggested to you that you can infer from the general circumstances that there’s simply no way that [the complainant] would have agreed to the transfer of these large sums of money when he had other bills to pay and he was counting on that money. Equally the defence say to you, well, you can infer the opposite from a number of other circumstances including the fact that [the complainant] would have had other money possibly available to him part-way through 2008 to meet those sorts of accounts. Those are the sorts of inferences that you’re being asked to look at and consider. As I say to you, what facts you agree with and what inferences you draw from those are entirely a matter for you.

[21] Mr Tennet made three complaints about this passage. First, he said that the dripping umbrella example was unhelpful. Second, he argued that the Judge did not give examples tailored to the case. Third, he submitted that the Judge had not dealt with the burden of proof in this context.
[22] The context of the Judge’s instructions is important. This was not a case in which the Crown had to rely on an inference to establish a factual ingredient of the offence: the jury was not being asked to infer the existence of fact B from the proof of facts A and C. The question for the jury was whether they believed the complainant when he denied that he had given Mr Whale permission to take money from the account or whether they believed Mr Whale’s version of events, or at least considered that he had raised a reasonable doubt. Counsel for the Crown and for the defence urged the jury to consider various features of the factual background when considering the credibility of the two protagonists. So, the Crown pointed to the complainant’s need for funds for various purposes and argued that it was implausible that he would have agreed to the transfers in light of that. Defence counsel pointed to other circumstances, which he said were consistent with Mr Whale’s version of events. While the language of drawing inferences was used, all that counsel were doing was pointing to circumstances that they said indicated that one or other of the witnesses was telling the truth. This is an everyday occurrence in trials and is not a matter that usually calls for an inference direction.
[23] That said, we see no harm in what the Judge said. She identified the circumstances that counsel identified as supporting the competing versions presented by the complainant and the appellant respectively. In this way she attempted to provide assistance to the jury in their task of assessing the credibility of the two protagonists.
[24] Accordingly, we reject this ground of appeal as well.

Basis of sentence appeal

[25] As we have said, Judge Burnett sentenced the appellant to home detention for 12 months and to 380 hours of community work. The Judge also ordered that the appellant pay reparation in full ($141,000) and be assessed every three months in respect of the repayment rate until full repayment was made. In the course of sentencing Judge Burnett said:[2]

When I look at this matter I take a starting point of between two and two and a half years. I accept your previous good character and the fact that you accept reparation and reparation will be ordered in full, and you are willing to repay that. Accordingly, I am willing to reduce the sentence to a term of two years’ imprisonment in recognition of those features.

Having reached that point, the Judge then accepted that home detention was the least restrictive outcome.

[26] The appellant has substantially completed his sentence of home detention and community work. His appeal is focussed on the order that he pay reparation.
[27] Mr Tennet argued that the appellant should not have been ordered to pay reparation, at least in full. While acknowledging that the Judge had obtained a pre-sentence report, he noted that she did not obtain a reparation report under s 33 of the Sentencing Act 2002. He submitted that before making a reparation order for such a significant sum, the Judge should have done so.
[28] We make two points. First, as Ms Feltham emphasised, s 12 of the Sentencing Act creates a strong presumption in favour of reparation in this case.
[29] Second, we are surprised at the appellant’s challenge to the reparation order. The Judge ordered reparation because the appellant, through his then counsel, offered to pay reparation in full. Counsel noted that the appellant had been declared bankrupt in September 2010 but said that reparation could properly be ordered. He referred to the appellant’s involvement in a new business enterprise, which could be expected, with some growth, to produce an income for him.
[30] The Judge obviously considered that the appellant’s offer was not an empty gesture, presumably because the evidence indicated that he had some commercial acumen and skills. As can be seen from the extract from the sentencing notes quoted at [25] above, the offer to pay reparation in full was a significant factor in the Judge’s decision to reduce the starting point to two years. This reduction brought the possibility of a sentence of home detention into play. It is concerning that the appellant, having put the matter to the Judge as he did and obtained a substantial benefit in the form of a less restrictive sentence than would otherwise have been imposed, should serve the reduced sentence and then contend that the Judge ought not to have ordered him to pay reparation. It smacks of an abuse of process.
[31] That said, we accept that the appellant may not have been able to live up to the commitment which he made for reasons which he did not foresee at the time. In those circumstances, he could seek to have the amount of the repayments reduced in the three monthly review or could apply under s 38A(2) of the Sentencing Act (which came into force on 1 August 2012) for the sentence of reparation to be cancelled. But we see no basis for granting the sentence appeal.

Decision

[32] The application for an extension of time to appeal is granted.
[33] The appeal against conviction and sentence is dismissed.
[34] To the extent that it is uncompleted, the appellant is to resume his sentence 14 days after the date on which this judgment is delivered.

Solicitors:
Crown Law Office, Wellington for Respondent

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[1] R v Whale DC Hamilton CRI-2009-075-0730, 3 June 2011.
[2] R v Whale, above n 1, at [10].