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McGurk v R [2015] NZCA 148 (15 May 2015)

Last Updated: 28 May 2015

IN THE COURT OF APPEAL OF NEW ZEALAND
BETWEEN
 Appellant
AND
 Respondent
Hearing:
12 March 2015
Court:
Stevens, Asher and Williams JJ
Counsel:
M L Wotherspoon for Appellant B D Tantrum and M J Hammer for Respondent
Judgment:


JUDGMENT OF THE COURT

  1. The appeals against conviction and sentence are dismissed.
  2. The appellant is to surrender to bail by presenting himself to the Registry (Criminal Counter, Level 1) at the Auckland District Court no later than 3.00 pm, seven days from the date of this judgment to commence his sentence of home detention and community service. The sentence is to commence on the date of his surrender.

____________________________________________________________________

REASONS OF THE COURT

(Given by Williams J)

[1] The appellant Michael McGurk was found guilty on 7 February 2014, following a jury trial in the Auckland District Court, of one count of theft by a person in a special relationship pursuant to s 220 of the Crimes Act 1961.
[2] The indictment alleged that:

... between 16 November 2009 and 24 November 2009, having control over gaming machine proceeds on terms or in circumstances that he knew required him to deal with the gaming machine proceeds in accordance with the requirements of the Nautilus Foundation (formerly the Pacific Sports and Community Trust) as set out in the venue agreement, intentionally dealt with the gaming machine proceeds otherwise than in accordance with those requirements.

[3] The “venue agreement” referred to above is one of two agreements between Nautilus Foundation (Nautilus), the owner of the gaming machines, and Albion Hotel 2005 Ltd (the company that ran Albion Hotel) (the company), according to which Albion Hotel (the hotel) operated gaming machines.[1] The relevant requirement was contained in cl 18 of the second of these agreements. The appellant was owner and sole director of the company. Clause 18 required the company to keep all gaming machine proceeds separate from hotel trading revenue prior to banking it in Nautilus’ account. The hotel staff, instead, banked gaming machine proceeds into the company’s trading account. This caused there to be a significant shortfall in gaming machine funds banked into Nautilus’ account at the end of the period 16–24 November, the week during which the company was placed in receivership. The receivership meant the shortfall of $35,447.13 was never recovered.
[4] The company’s failure to keep gaming machine proceeds separate was attributed to the appellant. District Court Judge Ryan sentenced the appellant to five months’ home detention and 100 hours’ community work.[2]
[5] The appellant appeals against both conviction and sentence. The most significant, but by no means the only issue in this appeal, is whether the jury was entitled in law to attribute the company’s breach of cl 18 to the appellant.

The facts

Gaming machines at the Albion Hotel

[6] The company owned and operated the Albion Hotel, a bar in central Auckland with a relatively large gaming machine floor on the premises. The bar and gaming floor were open 24 hours a day, seven days a week. The hotel employed a manager and a number of on-site staff. The appellant, through various separate companies, owned eight other gaming machine venues.
[7] The Department of Internal Affairs grants various licences for gaming machines and venues, in accordance with the Gambling Act 2003 (the Act). Nautilus held a class 4 operator’s licence and a class 4 venue licence for the purposes of operating its gaming machines at the hotel.[3] Nautilus was a charitable trust in accordance with the requirements of the Act.[4] The company entered into two separate venue agreements with Nautilus allowing for its machines to be placed in, and operated from, the hotel in return for an agreed fee. The first agreement was executed in 2006 and when that expired, a new agreement was executed in 2009 (at all material times, one or the other of these agreements was in force. Where relevant, we specify the particular provisions. Otherwise, we refer to them, interchangeably, as the venue agreement).
[8] The company was, in accordance with the agreements, to be the venue operator. The appellant personally was to be the venue manager, a role that carried its own specific obligations under the Act and the venue agreements.[5] However, it was the specific obligations imposed on Albion Hotel in respect of the handling of gambling proceeds that gave rise to the criminal charge in this case.

Banking requirements of the Act and Regulations

[9] The Act and associated regulations contain specific requirements with respect to banking the proceeds from gaming machines.[6] Section 104(1) of the Act requires a venue manager to bank all “gaming machine profits” into a “dedicated account at a registered bank in the name of the holder of the Class 4 operator’s licence” – that is, in the name of Nautilus. Regulation 4 of the Gambling (Class 4 Banking) Regulations 2006 requires that such banking occur within five working days of the date upon which the venue operator calculates them.

Banking requirements in the venue agreements

[10] It is necessary to traverse the relevant provisions of the venue agreements because they were not in identical terms. The difference is material because one of the defence arguments at trial was that the appellant was unaware of the particular banking requirements in the 2009 agreement, which were different to those in the 2006 agreement.
[11] The 2006 agreement provided in cl 3 that “the Machines, the Additional Equipment and the Proceeds shall be and remain the property of [Nautilus]”. “Proceeds” were defined in cl 1 as “the total gross proceeds from the operation of the Machines, before expenses and distributions are made”. Clause 11(e) echoed s 104 of the Act, in requiring that Albion Hotel:

... collect the Proceeds from the operation of the Machines and pay the weekly gaming machine profit without any deduction whatsoever into the nominated bank account of the trust within five days after the proceeds are calculated. This event is to be at least once in each and every week throughout the duration of this agreement. ...

[12] The agreement was signed by Winston Timaloa, a trustee for Nautilus’ predecessor, and the appellant for the company.
[13] Schedule 1 of the agreement set out the duties of the venue manager – the appellant personally. They included that he must:

(c) Ensure that all gaming machine proceeds are collected for and deposited to the Trust;

[14] Schedule 1 was signed by the appellant twice, both on behalf of Albion Hotel and then in his personal capacity as the venue manager.
[15] In the 2006 agreement there was no specific requirement on the company (as the venue operator) or the appellant (as venue manager) to keep gaming machine proceeds separate from general trading revenue while the proceeds were held by Albion Hotel. The specific obligation was only to bank gaming machine proceeds into Nautilus’ account within five working days of the proceeds being calculated.[7] The calculation was completed weekly in accordance with the venue agreement.[8]
[16] In May 2009, after expiry of the 2006 agreement, Nautilus and Albion Hotel entered into a fresh venue agreement.[9] The 2009 agreement was extant at the time of the offending. The banking requirements under this agreement were stricter.[10]
[17] Clause 17 declared Albion Hotel to be a trustee, bailee and agent of Nautilus with respect to gaming proceeds. Clause 18 provided as follows:

The Venue Operator shall keep the gaming proceeds separate from all other funds. The Venue Operator shall immediately notify the Trust and other relevant agencies of a theft of proceeds from the Venue.

[18] Clause 21 then echoed the requirements of s 104(1) and the regulations:

The Venue Operator (via its Venue Manager) shall deposit the gaming machine proceeds (as determined by the weekly EMS venue activity level report – Venue Level) and any interest earned on the gaming machine proceeds into the Trust’s nominated bank account without set-off, counterclaim or any deduction within 5 working days beginning on the day that the proceeds are, or ought to be, calculated.

[19] The 2009 agreement was once again executed by Winston Timaloa on behalf of Nautilus and the appellant on behalf of Albion Hotel.
[20] Schedule 1 to the agreement recorded the duties of the appellant as Venue Manager. Like the schedule in the 2006 Agreement, cl (c) made it the appellant’s duty to:

Ensure that all gaming machine Proceeds are collected for and deposited to the Trust;

[21] And cl (f) made it the appellant’s duty to:

Supervise and arrange suitable training for staff employed in the gaming operation of the Venue;

[22] The appellant signed the schedule twice in the two spaces provided. We infer, though it is not explicit on the document, that the first signature is by the appellant in his capacity as director of the company, and the second signature is by the appellant in his personal capacity as Venue Manager. Thus, the only explicit requirement to keep gambling proceeds separate while they were held by Albion Hotel is that contained in cl 18 of the 2009 agreement. That requirement binds the company but does not purport to bind the appellant directly.

Receivership

[23] By late 2009, the company owed significant sums to its creditors. In November 2009, one of them – New Zealand Breweries Ltd – was owed in the vicinity of $350,000. It exercised powers under its credit arrangements with Albion Hotel and appointed receivers.
[24] Shortly after the receivers had stepped in, Nautilus discovered that Albion Hotel had failed to bank into Nautilus’ bank account the full gaming machine proceeds for the week ending 22 November 2011 as required by cl 18. By Nautilus’ auditing systems, those proceeds (profits in terms of s 104(1) of the Act) should have amounted to $46,975.13. Instead, the receivers banked only $11,528 leaving a shortfall of $35,447.13. Albion Hotel therefore breached cl 21 of the venue agreement and reg 4 of the Gambling (Class 4 Banking) Regulations by failing to bank the full proceeds within the required timeframe.
[25] It is common ground that this shortfall occurred because Albion Hotel did not accumulate daily gaming machine proceeds into a separate bank account or safe location prior to the weekly transfer to Nautilus’ bank account, as required by cl 18 of the venue agreement. Rather, the practice at the Albion Hotel was that those proceeds would be progressively banked by on-site staff into the company’s own ordinary trading account. At the end of each operating week staff would then calculate the net gaming machine proceeds (that is, receipts less prizes paid) and forward a cheque to Nautilus for that net amount.
[26] It is also common ground that the appellant had no personal involvement at all in this weekly banking procedure. The question was rather whether he knew how gaming machine funds were routinely handled at the hotel and sanctioned those procedures as the sole director of the company running it.
[27] The receiver indicated that he could identify the $11,528 ultimately forwarded to Nautilus as gaming machine proceeds because it was made up of “cash on hand” on entering the premises. The proceeds that had already been progressively banked that week into Albion Hotel’s trading account had, he said, become co-mingled with the company’s other revenues and could no longer be separately identified. The receiver would not therefore pay Nautilus the $35,447.13 shortfall from funds in the hotel’s trading account. Rather, he considered that this money belonged to Albion Hotel and should be made available to meet the demands of the company’s creditors.

Appellant’s explanations

[28] In an interview conducted by a Mr Simpson of the Department of Internal Affairs four months later, the appellant said he knew that general trading receipts and gaming machine proceeds were co-mingled with other funds in the company’s bank account from trading at the hotel. He said it had been done that way for 10 years. In response to a question broadly about why only $11,300 in gaming machine proceeds had initially been banked by the receivers, the appellant said:

MM: We get a situation which is exactly the same as we’ve done it with all of our pubs over the whole thing. I mean this pool of money doesn’t really matter a toss what what monies were, whether it’s banking it’s breweries it’s this. The poor man’s gotta get paid.

CS: Yeah.

MM: So umm ... because we were on stock credit we’d just bought a whole heap of booze and so on which would pay cash umm ... to the breweries for. Any other monies wasn’t due til the following Friday.

CS: Umm.

MM: So all the stock that should have been sold that week would have been there to cover the banking for the following Friday the same as it’s always been.

CS: Yeah.

MM: The same as it was done for ten years.

[29] And further:

MM: you know it ... Like is is you’re aware yourself. Like I’m I’m buggered if I know quite how these things work but some weeks you you seem to be behind and you think

CS: Yeah

MM: how the fig does that, that work. You can only pay out so much. So you rob money from your bar to to pay the pokies. Now a week or two later it seems to balance it out and you’re you’re back in credit and it’s so one covers the other.

[30] He said all of his gaming machine venues ran that way:

MM: It was never separate.

CS: Yeah.

MM: It had never been run like that.

CS: Yeah.

MM: That was stock. So that stock money should have gone back into paying the pokies.

CS: Yeah.

MM: Now which is the way we’ve done it forever. I mean on on every one of our pubs. I mean it, obviously you’ll you’ll have all their records. You’ll know how many pubs we’ve had and what we’ve done. That’s the way it’s always been done.

[31] The appellant did not give evidence at trial but an audio recording of his interview was played to the jury.

Theft in a special relationship

[32] Section 220 of the Crimes Act provides as follows:
  1. Theft by a person in a special relationship

(1) This section applies to any person who has received or is in possession of, or has control over, any property on terms or in circumstances that the person knows require the person—

(a) to account to any other person for the property, or for any proceeds arising from the property; or

(b) to deal with the property, or any proceeds arising from the property, in accordance with the requirements of any other person.

(2) Every one to whom subsection (1) applies commits theft who intentionally fails to account to the other person as so required or intentionally deals with the property, or any proceeds of the property, otherwise than in accordance with those requirements.

(3) This section applies whether or not the person was required to deliver over the identical property received or in the person's possession or control.

(4) For the purposes of subsection (1), it is a question of law whether the circumstances required any person to account or to act in accordance with any requirements.

[33] As the Judge correctly set out in her question trail, s 220 imposed four requirements on the Crown for proof beyond a reasonable doubt.[11] They were that the appellant:
[34] The question trail itself closely followed the form endorsed by this Court in Tallentire v R.[12]

Appeal jurisdiction

[35] As the proceeding was commenced prior to 1 July 2013, the appeal must be dealt with under s 385 of the Crimes Act in accordance with s 397 of the Criminal Procedure Act 2011. The broad ambit of this Court’s jurisdiction on appeal against conviction and sentence is therefore contained in s 385(1)–(3).

Grounds of appeal against conviction

[36] The appellant advanced five grounds in the appeal against conviction:
[37] We will address each of these grounds in turn. We will then turn to the appeal against sentence.

Unreasonable verdict

Application of s 385

[38] There is no disagreement between counsel as to the circumstances in which s 385(1)(a) will apply. This is set out by the Supreme Court in R v Owen affirming and applying the principles settled upon by this Court in R v Munro.[14] The test is best encapsulated in the following passage of the judgment in Owen:

[5] Section 385(1)(a) contains two distinct, albeit overlapping, concepts. The first concerns a verdict which is unreasonable. A verdict will be unreasonable if, having regard to all the evidence, the jury could not reasonably have been satisfied to the required standard that the accused was guilty. The second concept concerns a verdict which cannot be supported having regard to the evidence. That will be so when there is no evidence capable of supporting it. This can arise particularly when a specific factual ingredient of the evidence lacks evidentiary support. It is unlikely that a case will have reached the point of a verdict of guilty if that is so, but this ground is contained in para (a) both for historical reasons to be mentioned below, and because it must have been thought necessary to cater for that kind of case. Although they are distinct, the two limbs of s 385(1)(a) overlap because a verdict of guilty based on no evidence must necessarily be an unreasonable verdict. On the other hand, a verdict of guilty based on some evidence is not necessarily a reasonable verdict.

(Footnotes omitted)

[39] The Supreme Court then distilled and endorsed the following relevant principles from the decision of this Court in Munro:[15]

Submissions

[40] Under the unreasonable verdict heading, the appellant advanced three key grounds:
[41] The appellant submitted that s 220 required evidence of overt acts of control and dealing by him personally. Because the appellant was never on-site on any regular basis, he did not personally handle or bank any gaming machine proceeds at all. This, on the evidence, was done by on-site staff. As the appellant submitted, “Albion Hotel 2005 Ltd was a one-man company, but the appellant was not a one-man band.” Nor was there any evidence that he directed his staff to deal with gaming machine proceeds in the way they did. In that crucial requirement of s 220, the appellant submitted, the record was entirely silent and so the charge was not proved.
[42] On the requirement of knowledge of the prohibition on co-mingling gaming machine proceeds with other hotel funds, the appellant argued that cls 17 and 18 of the 2009 agreement were new clauses not present in the 2006 agreement. He argued there was no evidence that they had been brought to his attention or indeed discussed at all at the time that agreement was signed. Nor was there any evidence, it was submitted, of cl 18 being brought to the appellant’s attention during the six months between execution of the agreement in May 2009 and receivership in November 2009. Rather, the evidence was that the appellant had always co-mingled gaming and trading proceeds at all nine of his gaming venues. The inference was, therefore, available that he did not know co-mingling was wrong.
[43] There is, the appellant argued, no legal presumption that he had read and understood the contents of the second venue agreement just because he signed it.
[44] The Crown’s response on all three points was that although there was no direct evidence of knowledge, control and dealing by the appellant, relevant inferences were available from the evidence that was before the jury. The Crown pointed to the appellant’s position as owner and director of the company, to his responses in the interview with Mr Simpson of the Department of Internal Affairs, and to the fact that he signed the 2009 agreement.

Analysis

Attribution generally in criminal cases

[45] In this case, the obligation to keep the gaming machine proceeds separate binds the company not the appellant personally. There was no obligation on the appellant to that effect arising from his role as venue manager. As the learned authors of Principles of Criminal Law set out:[16]

As a general rule, a director or controlling member of a company is not criminally liable for the acts of the company simply because of his or her position. Liability is not automatically vicarious. Furthermore, it does not follow that because a company may be criminally liable for the acts of its officers, acting within the scope of their employment, an individual officer must be criminally liable because the company has been found to be criminally liable. The company’s acts are defined by the actions of those who are identified as the “directing mind and will” of the company. But an individual officer of the company may avoid liability if he or she did not know of the facts which were constitutive of the offence or offences committed by other senior officials of the company and by which the company was itself impugned.

[46] A useful example of these principles in action may be found in Cullen v R, an appeal to this Court in respect of a charge of receive stolen property.[17] The appellant argued that the trial Judge was wrong to refuse to allow attribution to staff more junior to Mr Cullen who was the general manager of the company in question. Junior staff were more hands-on in the company’s operations and more involved in the events that led to the prosecution. This Court found:[18]

The underlying dispute in the case is whether Judge McNaughton was right to determine that the acts and state of mind of Mr Cullen, and only Mr Cullen, could be attributed to TML for the purpose of TML’s offence under s 246. Mr Cassidy’s principal submission is that the Judge was wrong because the acts and states of mind of other employees of TML should not have been excluded.

An examination of s 246 does not provide any clear guidance on the question of attribution for receiving by a company. Nor are Parliament’s intentions apparent from the statutory position. In the case of a company with a licence under the [Secondhand Dealers and Pawnbrokers] Act there is, however, some indication that the company’s offending would need to involve senior management because of the unlikelihood of Parliament intending the licence under the Act to be lost merely as a result of the actions of junior employees. The focus of the SDP Act appears to be on the actions of the licence holder and those responsible for its management.

When, however, TML’s legal and actual management structures are examined, the position is clear:

(a) Mr Cullen had sole legal responsibility for the establishment and operation of TML. He accepted that he set it up, he was the sole director of the company, he applied for the company licence under the SDP Act and he was named on the licence as the only person involved in TML’s management.
(b) Mr Cullen had sole actual management responsibility for the operation of TML’s business. He accepted his day to day role in the management of the business meant that he was “in charge of the company’s scrap metal business”.
(c) The roles and responsibilities of [the junior employees] were at a quite different level.
[47] Two important points arise from this passage – first, that the statutory context is important in determining the outer limits of permissible attribution in the particular case; and second, the outer limits of attribution are the platform upon which the trier of fact must assess evidence about the extent of the defendant’s responsibility for set-up and operation of the company.
[48] The authorities are unanimous that theoretical control through ownership or directorship of the company will not alone be enough to make out offending of the kind encapsulated in s 220.[19] A factual analysis is required of the extent of the appellant’s actual control of, and dealing with gaming machine proceeds at the Albion Hotel. This must be coupled with an assessment of the evidence relating to his actual knowledge of the requirements of cl 18 of the 2009 venue agreement.
[49] In this case, there is no evidence that the appellant actually handled gaming machine proceeds at the Albion Hotel during the period 16–24 November 2009. He did not, himself, do any of the banking. Nor does the appellant say, at any stage, that he had read and understood the terms of cl 18 of the agreement. Proof that the appellant controlled and dealt with gaming machine proceeds at the hotel during the relevant period, and did so knowing of the requirement to keep the proceeds separate, but actively chose to co-mingle them, must be inferred from other indirect evidence.
[50] If there was evidence from which such inferences could reasonably be drawn, then the unreasonable verdict test in Owen as set out above is not satisfied. As this Court said in Munro, it is a matter for the jury whether to prefer evidence from which guilt may be inferred over other, potentially exculpatory evidence. It is not for this Court on appeal to substitute its own view of the evidence.[20]

Control of and dealing with gaming proceeds

[51] On the question of control and dealing, we consider that the necessary inferences were reasonably available for the jury to draw.
[52] First, while the appellant’s position as sole director and shareholder of Albion Hotel during the relevant period is not dispositive of the issue, it is nevertheless a relevant strand in the analysis. Second, as the Department of Internal Affairs interview makes clear, the appellant knew very well that the gaming machine proceeds were always progressively banked into the hotel’s trading account, causing it to be co-mingled with the company’s other revenues until a weekly settling up occurred. As the appellant said “so you rob money from your bar to pay the pokies”.[21] And in relation to the particular week on which the $35,447.13 shortfall was found, the appellant explained “we’d just bought a whole heap of booze and so on which could pay cash ... to the breweries for. Any other monies [i.e. gaming machine proceeds] wasn’t due until the following Friday”.[22]
[53] And further, “so all this stock that should have been sold that week would have been there [in the company’s trading account].” This was, the appellant said, “the way we’ve done it forever. I mean on every one of our pubs”.[23] The evidence established that New Zealand Breweries had, due to the credit arrears that later led to the company’s receivership, imposed “cash on delivery” terms on the company. Thus the company had no choice but to use gaming machine proceeds as a kind of working overdraft.
[54] At his interview the appellant utilised the collective nouns “we” and “our” to describe both the practice and its broad application across all of his venues. The clear inference is that the appellant himself authorised the widespread practice of co-mingling at all venues. This was, after all, a uniform practice.

Knowledge of breach

[55] As to whether the appellant knew that co-mingling was in breach of cl 18 of the venue agreement, two pieces of evidence provide a basis for the jury reasonably to infer that he did.
[56] First, he signed the agreement containing the clause in question. In fact he signed it three times – twice on behalf of the company and once personally as Venue Manager. Although the appellant is right that there is no necessary legal presumption that on signing the agreement, he understood its entire meaning, the presence of his signature is, at least, an available and relevant strand in the evidence from which inferences can be drawn. In the absence of positive evidence to the contrary, the jury was entitled to infer that an experienced venue operator with nine gaming venues and a wealth of business experience in hotel management understood the obligations imposed on the company in the agreement. There was thus an obvious tactical decision that had to be made by the appellant as to whether to adduce evidence to displace that reasonably available inference. That decision was made and it was to not call the defendant to explain his understanding of what the agreement meant.
[57] Second, unlike the directors in Whale who both denied knowing of the relevant breached obligation (and were both acquitted of the relevant charges partly on that basis),[24] the appellant in this case did not deny in evidence knowing of the requirement to keep the gaming proceeds separate. On the contrary, the appellant’s interview contained two important and related concessions. First, that the terms of trade with creditors meant that he had no choice but to borrow cashflow from the gaming machine proceeds to pay for mid-week deliveries before repaying the machines from strong bar cashflow toward the end of the week. The survival of the venue apparently depended on this practice. And second, that as venue manager, he was personally responsible for that non-compliant state of affairs. In his interview with the Department of Internal Affairs, the appellant acknowledged:

Yeah I know I’m the venue manager and so I’m responsible for it at the end of the day.

[58] It was open to the jury to infer the appellant knew the money did not belong to the company. Both the 2006 and 2009 venue agreements made that clear. It was a fundamental aspect of the relationship between the venue operator (Albion) and the licence holder (Nautilus) that Albion Hotel was paid a fee to provide a space and administrative support for Nautilus’ gaming operation. The machines and the proceeds all belonged to Nautilus and the appellant unquestionably knew that. From that starting point, it was a short and obvious link in a chain of reasoning to conclude that the appellant must have known that he had no right to treat those funds, or to authorise his staff to treat, those funds as if they belonged to Albion Hotel as some kind of informal working overdraft to be accessed as and when required.
[59] The jury had ample evidence from which to draw the inference beyond a reasonable doubt that the appellant knew the Albion Hotel was not allowed to comingle gaming machine proceeds but that, to survive, he permitted his staff to do it anyway. The first ground of appeal must fail accordingly.

Challenge to trial Judge’s rulings

[60] Under this heading, counsel for the appellant presents a hotchpotch of arguments connected to the trial Judge’s ruling of 5 February 2014 rejecting the appellant’s application for a discharge under s 347 at the close of the Crown’s case.[25]
[61] These arguments are largely unclear. It seems the appellant first challenged the Judge’s over-emphasis on the appellant’s status as Venue Manager with personal obligations under sch 1 of the two venue agreements. The appellant argued that the learned Judge wrongly used these sch 1 obligations as a basis for sheeting home criminal liability to him when these obligations were irrelevant and in any event, could not bind him.
[62] Second the appellant argued that venue managers are only liable for Gambling Act penalties for breach of their obligations under that Act, so s 220 of the Crimes Act has no application to the appellant’s breaches.
[63] The appellant’s third argument was that the venue manager’s obligations, such as that under cl (f) of sch 1,[26] to supervise and arrange training for staff, were too general to found criminal liability under s 220.
[64] The appellant’s final argument was that the Judge erred in ruling that Albion Hotel was the appellant’s alter ego and as such the appellant was liable for the company’s wrongdoing. We turn now to address these various arguments in order.

Venue Manager obligations

[65] In her s 347 ruling, the Judge first asked herself whether there was sufficient evidence at the conclusion of the prosecution case upon which a properly directed jury could find the elements of s 220 were proved beyond a reasonable doubt. She found, primarily from the material contained in the appellant’s Department of Internal Affairs interview and applying the cases to which we have already made reference, that there was sufficient evidence. We agree with that conclusion.
[66] On the question of the appellant’s knowledge of the company’s obligations to Nautilus, the Judge found:[27]

Mr McGurk’s admissions in his interview with Mr Simpson show an intimate knowledge of the process and justification for [co-mingling of funds] so it may be open to a properly directed jury to draw the logical inference that he must have been intimately involved. ...

[67] The appellant is right that at [50] and [51] the Judge did say as follows:

It makes no sense, in the absence of any case or legislation, to say that as a venue manager he was simply not bound by the contract he signed, because he could not be a party to a contract signed by a corporate entity. The whole purpose of getting a venue manager to sign the contract is to ensure that first of all that person is undertakes [sic] certain obligations or responsibilities, that the person is aware of the responsibilities, that the operation can be carried out successfully because somebody is responsible for ensuring the obligations, in this case accounting to the trust, are carried out and finally there is a responsible individual to ensure that the transactions are conducted at arm’s-length.

It is not in accordance with the spirit and plain meaning of such a contract, to suggest that because Mr McGurk signed it as an individual, he was not bound by it. If that was so, then the contract and class 4 licence would be in jeopardy and the purpose of the Act undermined.

[68] All the Judge is saying here is that, as the appellant signed also as Venue Manager with his own separate and personal obligations, he must have known what was in the agreement. We do not take the Judge to have concluded that the obligation to keep gaming machine proceeds separate was a personal obligation of the venue manager. Plainly it was not under the venue agreement.
[69] The Judge addressed the terms of the venue agreement in the context of Question 2 of her question trail in which she directed the jury that the question of whether the appellant was required to deal with gaming machine proceeds in accordance with the requirements of Nautilus was a question of law. She directed the jury (in accordance with the authority in Nisbet v R) that the answer to that question was “yes”.[28] She recorded in her question trail as follows:

I direct you that the requirements of Nautilus Trust were as follows:

(a) the proceeds from the gaming machines were to be held on trust for the Nautilus Foundation. (This means that Mr McGurk could not use the monies as he saw fit). (Clause 17, venue agreement, Exhibit 2)
(b) the proceeds were to be kept separate from the Albion Hotel money (clause 18 venue agreement, exhibit 2.)
(c) the venue manager was to bank the full proceeds or to ensure the full proceeds were banked into the Nautilus Foundation account within 5 days of calculation of the amount to be paid (s 104 Gambling Act 1993 (Exhibit C), clause 21 venue agreement, exhibit 2, Clause c, Schedule 1, venue agreement (Tab 2), s 4 Gambling Act 1993, exhibit B)
(d) the venue manager was to supervise any other venue personnel (employees, staff) handling the proceeds. (Schedule 1 to venue agreement, Exhibit 2)

The requirements of Nautilus Foundation are set out in the venue agreement, entered into between the company (Albion Hotel (2005) Ltd) and Nautilus. Technically, any failure to carry out those requirements was by the company, not an individual. A company however can only act through those who control it and/or are responsible for its governance. In this case, that person was Mr McGurk.

Accordingly, Mr McGurk was under the obligation to carry out the above requirements;

(a) As director of the company which was his instrument, which ran at his direction and for which he was responsible;
(b) As the venue manager responsible for ensuring the full proceeds were banked and responsible for supervising employees to make sure that was done.

(emphasis in original)

[70] It is true that in these directions, the Judge identifies not just the obligations of Albion Hotel but also the personal obligations of the appellant as venue manager. While cl 18 was, ultimately, the relevant requirement, the Judge cannot be faulted for directing the jury on all of the requirements with which the appellant was bound to comply.

The Act as a code

[71] We do not agree with the appellant’s submissions that the Gambling Act is a code, such that the appellant could only have been charged under the penalty provisions in that Act, and not the more serious Crimes Act charge. Section 104 of the Gambling Act, together with reg 4 of the Gambling Act (Class 4 Banking) Regulations 2006, required that gaming machine proceeds be banked into Nautilus’ account within five working days of their being calculated. The penalty for breach of that requirement is contained in s 104(4). It provides that the maximum penalty is a fine of $5,000.
[72] The short answer to this submission is that the appellant’s wrongful conduct was not just his breach of the five day banking deadline; it was also that he converted in excess of $35,000 of Nautilus’ gaming machine proceeds to the use of his company. This aspect of his conduct could hardly be described as a mere regulatory breach. The money was permanently lost to Nautilus. It is no response to say this was a matter capable of being adequately dealt with by a fine or that the penalty provisions in the Gambling Act were designed to address wrongdoing of this magnitude.

Nautilus requirement too general?

[73] Nor, contrary to the appellant’s submission, do we consider that the obligation actually at issue in this appeal was too general to warrant the intervention of the criminal law. The appellant points to the requirement in sch 1 of the venue agreement (referred to by the trial Judge in her summing-up and in the question trail) of adequately supervising and training hotel staff. He submits that this requirement is too vague to form the basis of a criminal charge.
[74] We disagree. The evidence provided a basis for the irresistible inference that the appellant actually authorised his staff to co-mingle gaming machine proceeds. This was not merely a failure of supervision case (even if the appellant had that obligation). And it was not merely a case about the appellant’s obligations as venue manager. Rather, it was a case about the appellant’s role as the individual in ultimate control of Albion Hotel’s misuse of gaming machine proceeds, while they were in the company’s custody.
[75] If the failure to supervise staff was indeed the essence of the appellant’s wrongdoing and the only basis upon which he could be found guilty, there might be something in the argument. Such obligations are very general in nature and not unlike the “business prudence” obligation rejected in the High Court in both Whale and Sullivan as a foundation for liability under s 220.[29] But as we have said, the evidence took this case well beyond mere omission to ensure staff complied with Nautilus’ requirements. The jury was entitled to infer that the appellant actually authorised co-mingling knowing it to be in breach of the venue agreement.

Alter ego

[76] Finally, we reject the appellant’s argument that the Judge effectively (and wrongly) ruled that Albion Hotel was his alter ego. Rather, the Judge ruled that there was sufficient evidence upon which a properly directed jury could conclude that the appellant knew his company was required to deal with gaming machine proceeds in accordance with the venue agreement, but controlled and intentionally dealt with those proceeds in a different manner. We agree with that conclusion.
[77] We consider the alter ego label is a distraction from the precise requirements of the section upon which the Judge was rightly focused.

Errors in summing-up

[78] The appellant raises, in all, 25 complaints in relation to the trial Judge’s summing-up.[30] As the Crown points out, there is no suggestion that any of these complaints was raised by trial counsel at the conclusion of the Judge’s directions to the jury.
[79] Unhelpfully this process simply picks through the entrails of the trial Judge’s summing-up paragraph by paragraph, in an attempt to unearth evidence supporting the risk of a miscarriage of justice. The problem is that this approach serves only to abstract each successive paragraph placed under counsel’s microscope from the context into which the Judge so carefully placed it. The result is, inevitably in our view, loss of true perspective. Accordingly we deal only briefly with each point.
(a) The Judge failed to direct the jury in relation to the mental element of control – that is the appellant must have intended to control the gaming machine proceeds.
[80] In her question trail the Judge said:

To have “control” over the proceeds from the gaming machines means to be in a position to lawfully determine or decide how those proceeds are to be dealt with. The person said to be in control may not be the only one who controls the use to which the proceeds are put. Nor does the person have to physically deal with the proceeds, for example, actually bank them, to be in control of them.

[81] This wording is taken in large part from Lang J’s decision in Whale, although there is some reference to these matters in Heath J’s decision in R v Bowden.[31] This direction was adequate and accurate. There was no need to direct separately on intention to control. Control, of its nature, involves intentional behaviour.

(b) The Judge’s direction that control “does not mean physically handling” was wrong.[32]

[82] The appellant argued that physical handling is actually evidence of control and should not have been excluded from the jury’s reckoning.
[83] This submission is technically correct. But the sentence quoted is taken out of context. In the written question trail and in the immediately preceding paragraph in the summing-up, the Judge makes the very point that counsel made:[33]

... nor does the person have to physically deal with the proceeds, for example, actually bank them to be in control of them.

[84] That passage makes it clearer that what the Judge means is that physical control is not a necessity. She is not suggesting it is not relevant at all. There is nothing in this point.

(c) The Judge wrongly concluded that evidence of transfers between bank accounts of Albion Hotel and another company owned by the appellant provided a basis for the inference that he was in control of Albion Hotel’s accounts.

[85] In fact, the Judge concluded nothing of the sort. The passage complained of was a summary of the Crown’s case, not the Judge’s own direction.

(d) The trial Judge was wrong in saying that by signing the venue agreements, the appellant “agreed to carry out the duties required of his company”.

[86] Two points are relevant here. The first is that the Judge was, with this point, summarising the Crown’s case. The second is, in the absence of contrary evidence, it is possible to infer from the appellant’s signature on the agreements, that he understood both the nature of the company’s duties and his role as its sole director in that respect.

(e) The phrase “Yeah I know I’m venue manager and so I’m responsible for it at the end of the day” was not to be interpreted as an admission as the Judge suggested.[34] It could equally have meant “I am the venue manager and I know I can be fined”.

[87] Again the Judge was summarising the Crown’s case as she was required to do. In any event, when combined with other circumstances, the inference suggested by the Crown was available as we have already described.

(f) In relation to [47] of the summing-up, the appellant argued the Judge said that the appellant knew when the banking was done but there was no evidence of this knowledge.

[88] The Judge was summarising the Crown’s case. In any event, the evidence confirmed that the appellant did know when the banking was done. The appellant told Mr Simpson from the Department of Internal Affairs three times that gaming machine proceeds from the Albion Hotel were banked on Fridays.

(g) The trial Judge was wrong to peg the appellant’s control of the $47,000 in gaming machine proceeds to the week of 16–24 November, because none of the appellant’s comments could be connected to that week.

[89] This was a summary of the Crown’s case. But in any event the transcript is clear that the appellant did refer specifically to the use of proceeds in respect of the receivership week.[35]

(h) The trial Judge misquoted the appellant at [47] by stating “When someone came in to deliver food or alcohol, you paid the poor man because he needed the money”.

[90] It is true that is not the exact quote, but the difference between the paraphrase and the actual quote is immaterial.

(i) At [49] of the summing-up the trial Judge was wrong to suggest in the following passage that the appellant must give evidence to disprove control:

“It was not a man who said, “I don’t know what they’re doing. I told them to put money in a separate account, I’m horrified they didn’t. I told them to fill out a chequebook, a deposit book and say, ‘this money is for gaming’. I told them to keep records. They didn’t do it.”

[91] First, this is still in the summary of the Crown’s case. Second, the Judge gave careful directions on the burden of proof earlier in the summing-up.[36]
[92] The Judge also dealt correctly with the Crown suggestion there is a tactical burden – a choice to provide explanations in order to counteract inferences that might reasonably be drawn from the available evidence. The Judge did not reverse the burden and onus.

(j) The Judge should not have ruled that cls 17 and 18 of the venue agreement applied to Mr McGurk personally.

[93] This matter has been extensively traversed already under the first general ground of appeal.[37]

(k) Schedule 1 did not contain requirements relevant to s 220 of the Crimes Act.

[94] We have already addressed this matter in depth above.

(l) The Judge was wrong in the summing-up at [59] and [61] to suggest that the appellant had obligations under the venue agreement “as director” of the company.

[95] The obligations were those of the company. At [61] of the summing-up the Judge directed:

However, at law I direct you as follows: a company can only act through those who control it and/or are responsible for its governance. In this case that person was Mr McGurk. He had obligations as the director of the company and he had personal obligations as the venue manager. Accordingly, Mr McGurk was under the obligation to carry out those four requirements [first] as the director of the company, which was his instrument, which ran at his direction and for which he was responsible and, secondly, as the venue manager responsible for ensuring the full proceeds were banked, and responsible for supervising employees to make sure that was done. ...

[96] It is to be remembered that, at this stage the Judge had already addressed the first element of the offence in relation to control. She was then addressing the second element in relation to meeting Nautilus’ requirements.
[97] Once the jury had answered the first question in relation to control over gaming machine proceeds against the appellant, he being the person in control of the company, the company’s obligations were his. The Judge directed the jury on what those obligations were. He was the sole director of the company. There is no flaw in the Judge’s direction.

(m) The Judge’s directions at [61] of her summing-up amounted to a direction that the appellant in fact did have control of the company.

[98] This submission is taken out of context. The Judge had earlier made it clear that the question of control was for the jury. The Judge was obliged to direct on the requirements binding the person in control. Read in proper context, there is no flaw in the Judge’s directions in this respect.

(n) The mirror directions in Question 2 of the question trail were wrong for the same reason as (m) above.

[99] The same response applies.

(o) The Judge was wrong to speculate that “this man is no stranger to the gambling business”[38]

[100] It is difficult to see how this argument can be sustained. The appellant had operated the Albion Hotel venue for six years. He had eight other gaming venues. The Judge’s directions cannot be faulted.

(p)–(r) The appellant’s understanding of the contents of signed legal documents.

[101] We are satisfied the inference was available to be drawn that a businessperson with some considerable experience in dealing with Nautilus and in running gaming machine venues was likely to understand the essence of the agreement that he signed both as director and as venue manager. Such an inference is all the more powerful when it is understood that it was a fundamental element of the structure of relationships between licence holders and venue operator that the licence holder owned the machines and the proceeds, while the venue owner hosted and administered them in return for a fee.

(s) Failure to direct the jury about the necessity to be satisfied that the appellant not only deliberately dealt with the relevant gaming machine proceeds but did so with the intention of breaching the venue agreement.

[102] The question posed in the question trail was “Are you sure that [the appellant] intentionally dealt with the proceeds from the gaming machines otherwise than in accordance with the requirements of the Nautilus Foundation?” Such formulation is consistent with the statement of this element endorsed by this Court in Tallentire.[39] We observe that from an earlier question, the jury would already have been satisfied that the appellant knew what Nautilus’ requirements were. In combination, they mean that the appellant, knowing the correct manner of dealing with the proceeds, intentionally dealt with them in an incorrect manner. There is nothing in this point.

(t) Failure to direct the jury that the Crown’s case was flawed by suggesting the appellant had “Permit[ted] others to deal with the funds in a way contrary to the requirements of Nautilus”.

[103] An inference to this effect was available to be drawn from the evidence. The Judge made no error in her directions.

(u)–(y) Further criticisms.

[104] The appellant complained that the Judge made several other errors in summarising the Crown case, in the language she used and in the evidence referred to. We have carefully considered all such criticisms. They are without foundation. Neither singly, nor in combination, do they come close to demonstrating a miscarriage of justice.
[105] All challenges to the Judge’s summing-up therefore fail.

Inadmissible evidence

[106] The appellant argued that the Crown adduced inadmissible evidence in relation to the alleged transfer of funds between Albion Hotel and another of the appellant’s companies, The Spa and Pool Company.[40] From this, the appellant complained, the trial Judge extrapolated that it was possible to infer that the appellant was indeed in actual control of Albion Hotel’s bank accounts.
[107] Mr Wotherspoon, for the appellant, accepted that he did not object to the evidence at the time it was called. He said he warned the Crown in a pre-trial callover memorandum as follows:

At this stage I do not understand the reference in [the receiver’s] brief to The Spa and Pool Company. It does not seem to be relevant. ... Section 344A applications may need to be made by the Crown if they disagree.

[108] Mr Wotherspoon submits that no s 344A application was made by the Crown to clarify the position with respect to this evidence and it should never have been called. The difficulty with this submission is that the evidence was far from irrelevant. It provided a basis upon which to strengthen the inference that the appellant had control of Albion Hotel’s bank accounts, as the Crown submitted. Just as importantly, the passage of the Judge’s summing-up in which this matter is mentioned is in fact a summary of the Crown’s case. The Judge never adopted this reasoning in her own directions to the jury.
[109] We are satisfied there was no basis upon which it could be argued that the admission of this evidence caused a risk of a miscarriage of justice, even if it had been raised in the trial.

Abuse of process

[110] Under this heading the appellant relies on a letter of 9 December 2009 from the solicitors for Nautilus (copied to the Department of Internal Affairs) in which demand is made of Albion Hotel for payment of the shortfall in gaming machine proceeds.[41] The letter closed in these terms:

Payment of the $35,435.90 due must be banked by 4pm Thursday 17 December 2009. If payment is not received criminal and civil proceedings will be commenced.

[111] The appellant argued that this amounted to threatening to use the criminal process to achieve a collateral advantage and so was an abuse of the Court’s processes, citing the decision of this Court in Fox v Attorney General.[42] This was a case in which the police reached an agreement with Fox whereby he would plead guilty to reduced charges. The charges had been laid indictably. The Crown prosecutor expressed the view to the police that the reduced charges did not sufficiently reflect the overall criminality of the offending. He advised that the withdrawn charges should be re-laid. This was done. Fox then argued that re-laying charges the police had agreed would be withdrawn amounted to an abuse of the Court’s process and the prosecution should be stayed.
[112] This Court rejected that argument. Referring to an earlier decision of this Court in Moevao v Department of Labour[43] as well as decisions of the High Court of Australia[44] and the House of Lords[45], McGrath J held that the focus for the exercise of the exceptional, indeed “extreme” step,[46] of staying a prosecution is the protection of the integrity of the processes by which criminal justice is administered under law.
[113] A stay may be granted where it will be impossible to give the accused a fair trial, where the Court’s processes are being used for wrongful purposes unrelated to the proper administration of criminal justice or the prosecution is so vexatious and oppressive that it may undermine the very integrity of the process itself. Mere unfairness to the accused in a general sense will not be enough. Nor is stay available for disciplinary purposes or to reflect the Court’s view that a prosecution should not have been brought. Bad faith or some improper motive is usually required.[47]
[114] The facts in this case do not reach that high standard. Even if a threat by the prosecutor to initiate criminal proceedings unless funds are repaid did amount to improper conduct, the letter was not from the prosecutor. It was merely copied to the prosecutor. Nautilus had no power to initiate criminal proceedings and so lacked any ability to abuse the prosecutorial process. The threat, if it could be properly so described, was an empty one.
[115] This ground fails.

Appeal against sentence

[116] Finally, the appellant appeals against sentence on the basis that the sentence of community work was just, but the term of home detention was manifestly excessive. Mr Wotherspoon argued that the appellant had operated gaming machine venues in which relevant trusts had been paid for “nine or 10 years”. He submitted that the appellant gained nothing personally from this offending and Nautilus would have been paid in full had Albion Hotel not been put into receivership in November. In the end, he submitted, it was New Zealand Breweries that received the windfall.
[117] Mr Wotherspoon argued this case was analogous to or less serious than that the subject of the decision of the Supreme Court in Graham v R.[48] There the Court held, Mr Wotherspoon said, that deterrence was most applicable only where the offending was calculated or there was a deliberate departure from appropriate standards.[49] It was less relevant in cases of mere misjudgement. As the appellant in that case was sentenced only to community work, Mr Wotherspoon argued that the appellant in this case should have been similarly treated.
[118] There is no merit in this challenge. Judge Ryan considered that a starting point of 14 months’ imprisonment was appropriate.[50] She made no uplifts for aggravating features and allowed a discount of a little over 20 percent leading to a notional period of imprisonment of 11 months.[51] In light of that assessment (with which we agree), a relatively short period of home detention was clearly the least restrictive outcome. The end sentence was five months’ home detention together with 100 hours’ community work.[52] This must be seen in the context of the maximum penalty for this offence which is seven years’ imprisonment.
[119] The short point is that, given the verdict, there is no basis upon which it could be said that the appellant’s wrongdoing was a matter of mere misjudgement or accident. Rather, the jury found that the appellant controlled the gaming machine proceeds, and intentionally dealt with them inconsistently with requirements of which he was well aware. Although the amount involved was far smaller, the appellant’s culpability in this case was greater than that in Graham.
[120] It is also to be remembered that the appellant had been paying company creditors from gaming funds for nine years. The case is thus distinguishable from Graham also because there was a different maximum sentence in that case (five years as opposed to seven), the offending in Graham was over a much shorter timeframe and was of an entirely different type – relating to misstatements in advertising and prospectus.
[121] The appeal against sentence must fail.

Result

[122] The appeals against conviction and sentence are dismissed.
[123] The appellant is to surrender to bail by presenting himself to the Registry (Criminal Counter, Level 1) at the Auckland District Court no later than 3.00pm, seven days from the date of this judgment to commence his sentence of home detention and community service. The sentence is to commence on the date of his surrender.








Solicitors:

Crown Law Office, Wellington for Respondent

[1] The agreement was signed by a trustee on behalf of Nautlius’ predecessor.

[2] R v McGurk DC Auckland CRI-2010-004-19436, 29 July 2014 [sentencing decision].

[3] “Class 4” refers to premises where the primary activity involves persons 18 years of age and over.

[4] The Nautilus Foundation was formerly known as the Pacific Sports and Community Trust. It changed its name to the Nautilus Foundation at some point in 2009, after it entered into the second venue agreement with Albion Hotel, but before the company’s receivership in November of that year. We will, for the sake of clarity, refer to the relevant entity as Nautilus throughout this judgment.

[5] Specifically, this was to ensure all gaming machine proceeds are collected for and deposited with the Trust.

[6] Gambling Act 2003, s 104(1) and Gambling (Class 4 Banking) Regulations 2006, reg 4.

[7] Or profits – there is no material difference between these two terms, both meaning total receipts less prizes paid, as defined in cl 1, noted above at [11].

[8] Note that the 2006 agreement referred only to five days not five working days as per the regulations, but no party took issue with this minor inconsistency.

[9] It seems that the Venue Operator was mistakenly recorded in the agreement as Oasis Properties Ltd – another company owned by the appellant – but it is agreed that this was a mistake probably made by Nautilus and no significance was attributed to it by any party.

[10] The change to the draft according to Winston Timaloa, a Nautilus employee at the relevant time, came as a result of consultations between the Department of Internal Affairs and industry stakeholders.

[11] See for example the summary of elements under s 220 of the Crimes Act 1961 as described in R v Whale [2013] NZHC 731 at [58] and Tallentire v R [2012] NZCA 610, [2013] 1 NZLR 548 at [51].

[12] Tallentire v R, above n 11, at [58].

[13] Crimes Act, s 347.

[14] R v Owen [2007] NZSC 102, [2008] 2 NZLR 37; R v Munro [2007] NZCA 510, [2008] 2 NZLR 87 (CA).

[15] R v Owen, above n 14, at [13].

[16] Andrew Simester, Warren Brookbanks and Neil Bolster Principles of Criminal Law (4th ed, Thomson Reuters, Wellington, 2012) at [7.25].

[17] Crimes Act, s 246; Cullen v R [2014] NZCA 325, [2014] 3 NZLR 471.

[18] At [27]–[29] (footnotes omitted).

[19] See Tallentire v R, above n 11, at [97]–[103]; R v Whale, above n 11, at [59]; R v Bowden [2012] NZHC 1249 at [12]; R v Sullivan [2014] NZHC 2501 at [459].

[20] See the Supreme Court’s distillation in Owen v R, above n 14, at [13](a)–(c), above at [39].

[21] See above at [29].

[22] See above at [28].

[23] See above at [30].

[24] R v Whale, above n 11, at [272]–[274].

[25] R v McGurk DC Auckland CRI-2010-004-19436, 5 February 2014 [discharge application decision].

[26] See above at [13] and [20]–[21].

[27] Discharge application decision, above n 25, at [46].

[28] Discharge application decision, above n 25, at [34]; Nisbet v R [2011] NZCA 285, [2011] 3 NZLR 4 at [13] holding “Liability cannot arise under s 200 unless the circumstances required the accused to deal with property in accordance with the requirements of another person. Section 220(4) provides that it is a question of law whether the circumstances give rise to that obligation on the part of the accused. Questions of law are the province of the trial judge and not the jury”.

[29] R v Whale, above n 11, at [285]; R v Sullivan, above n 19, at [477]–[482].

[30] R v McGurk DC Auckland CRI-2010-004-19436, 7 February 2014 [summing-up].

[31] See for example R v Whale, above n 11, at [124]–[125] and R v Bowden, above n 19, at [10].

[32] Summing-up, above n 30, at [37].

[33] Summing-up, above n 30, at [36] (emphasis added).

[34] Summing-up, above n 30, at [46]–[47].

[35] See above at [2] and [24]–[27].

[36] At [10].

[37] See above at [48]–[54].

[38] Summing-up, above n 30, at [61].

[39] Tallentire v R, above n 11, at [51](d) and [80].

[40] These transfers were also the subject of separate challenge not directly relevant to this appeal.

[41] The amount demanded was slightly different to the figure ultimately identified in the prosecution. Nothing turned on this discrepancy.

[42] Fox v Attorney-General [2002] NZCA 158; [2002] 3 NZLR 62 (CA).

[43] Fox v Attorney-General, above n 42, at [32]; Moevao v Department of Labour [1980] 1 NZLR 464 (CA).

[44] Fox v Attorney-General, above n 42, at [36], citing Williams v Spautz [1992] HCA 34; (1992) 174 CLR 509 and Jago v District Court of New South Wales [1989] HCA 46; (1989) 168 CLR 23.

[45] At [36], citing R v Horseferry Road Magistrate’s Court ex parte Bennett [1993] UKHL 10; [1994] 1 AC 42 (HL).

[46] Moevao v Department of Labour, above n 43, at [37].

[47] Fox v Attorney-General, above n 42, at [37].

[48] Graham v R [2014] NZSC 55.

[49] At [33].

[50] Sentencing decision, above n 2, at [41].

[51] At [43].

[52] At [45] and [49].

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