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Rose v R [2017] NZCA 335 (4 August 2017)

Last Updated: 9 August 2017

IN THE COURT OF APPEAL OF NEW ZEALAND
BETWEEN
 Appellant
AND
 Respondent
BETWEEN
 Appellant
AND
 Respondent
Hearing:
26 June 2017
Court:
Miller, Lang and Mander JJ
Counsel:
B L Sellars for Appellant Jane Rose D J Dufty for Appellant Paul Rose N R Williams for Respondent
Judgment:



JUDGMENT OF THE COURT

  1. The application for an extension of time in CA337/2016 is granted.
  2. The application in CA337/2016 to admit fresh evidence is declined.
  1. The appeal in CA337/2016 against conviction and sentence is dismissed.
  1. The application to admit fresh evidence in CA266/2016 is granted.

E The appeal against conviction in CA266/2016 is dismissed.
____________________________________________________________________

REASONS OF THE COURT

(Given by Mander J)

[1] The appellant, Paul Rose, was convicted at trial on nine representative charges of obtaining by deception. He was sentenced to three years and two months’ imprisonment. He seeks to appeal both his convictions and his sentence. The other appellant, Jane Rose, was found guilty on eight charges of being a party to Mr Rose’s offending. She was sentenced to a term of nine months’ home detention. She appeals her convictions.

Background

[2] Mr Rose was a longstanding employee of Mighty River Power. He was employed initially as a technician and then as an electrical engineer at the Southdown power station from November 2001 until 2012.
[3] In 2004, Penrose Electrical Services Limited (Penrose Electrical) and Electrapro Automation Limited (Electrapro) were incorporated. Mr Rose’s former partner, Angela Soper, was the director and sole shareholder of both companies. In 2010, Aero Automation Limited (Aero Automation) was incorporated. Ms Rose, like Mr Rose’s former partner, was the sole shareholder and director of that company.
[4] The business of these companies (together the supply companies) exclusively involved the supply of electrical parts and services to Mighty River Power’s power station at Southdown. Between 2003 and 2006 Penrose Electrical and Electrapro, and then subsequently between 2010 and 2012 Aero Automation, engaged in business with Mighty River Power.
[5] The Crown’s case was that Mr Rose used the supply companies to surreptitiously conduct business with Mighty River Power, and that Ms Rose over a number of years assisted him in that endeavour. The Crown alleged that Mighty River Power would not have engaged in business with these particular companies but for Mr Rose’s employment at Southdown.
[6] While both Ms Soper and Ms Rose undertook the administrative tasks of these companies, neither had the skill, knowledge, or experience to operate such a business. However, Mr Rose did have the necessary technical skills and, by virtue of his employment, the knowledge of the particular requirements and needs of the Southdown power station.
[7] Under Mr Rose’s employment contract he was required to disclose any activity or association that could be considered a conflict of interest with his role at Mighty River Power. Mr Rose did not disclose any involvement or connection with the supply companies. The Crown alleged he deliberately concealed his connection with the supply companies to deceive Mighty River Power in order to allow him to funnel business to those companies from which he ultimately benefited.
[8] Mr Rose was convicted at trial before Edwards J and a jury on charges that represented payments totalling some $2.2 million. Ms Rose was found guilty of assisting Mr Rose in his deception of Mighty River Power in relation to payments totalling around $1.8 million.
[9] Mr Rose’s appeal was filed out of time. We grant an extension of time to bring the appeal.

The appeals

[10] In his appeal against conviction, Mr Rose argues the Crown presented misleading evidence about his employment agreements, and that the Judge failed to provide a direction regarding what in law constituted a conflict of interest. In relation to his sentence, Mr Rose maintains the starting point adopted by the Judge was excessive and that he should have been provided with a discount for his offer of reparation.
[11] Ms Rose appeals her convictions on the basis the trial Judge erred in her response to a question from the jury regarding her involvement with Aero Automation, and that leave should be granted to admit fresh evidence because it may reasonably have led to her acquittal.

Mr Rose’s appeal against conviction

[12] Mr Rose appeals his convictions on two grounds:

Evidence of employment agreements

[13] Mr Rose seeks leave to admit evidence relating to a 2003 employment agreement which was not referred to at trial. He contends that had the jury been provided with evidence of the 2003 agreement it would have influenced their consideration of his knowledge and understanding of his duty to disclose conflicts of interest.
[14] Two employment agreements were produced at trial. The first, dated 16 April 2002, included a requirement that “[Mr Rose] must ensure that [his] outside interests and activities, whether of a business, personal or social nature do not ...conflict with the interests of the company”. The second employment agreement, dated 14 December 2005, required Mr Rose to “disclose any activity or association that could be considered a conflict of interest with [his] role at Mighty River Power”. This latter agreement remained in force until Mr Rose ceased employment with Mighty River Power in 2012.
[15] Mr Rose seeks to rely on six documents disclosed by the prosecution before trial in the ordinary way but not produced as exhibits. It is submitted these documents indicate that Mr Rose must have entered into an employment agreement in April 2003 which would have remained in force through to December 2005. However, neither Mr Rose nor the Crown have a copy of this document. The content of the employment agreement and whether it contained a provision regarding conflicts of interest and, if so, whether its terms differed from the earlier or later employment agreements, is unknown.
[16] Mr Rose deposes in his affidavit in support of the admission of this evidence that he did not raise the issue of a 2003 employment agreement at his trial because there were several variations to his employment agreement, and he assumed the agreements presented at trial were the operative agreements relevant to the particular time periods of the charges. It was only on preparing the appeal, when Mr Rose looked through the disclosed employment records, that he saw the references to a 2003 agreement in some documents which had not been referred to at trial.
[17] The documents Mr Rose seeks to admit on his appeal no doubt constitute credible evidence, however, it is acknowledged this evidence is not fresh. The documents Mr Rose seeks to have admitted were disclosed to him prior to trial. The issue therefore devolves to an assessment of whether, despite the evidence not being fresh, the strength and potential impact of the evidence on the safety of the convictions is such that there is a risk of a miscarriage of justice if this material is not admitted.[1]
[18] We do not consider the proposed evidence gives rise to any risk of a miscarriage of justice. The relevance of any 2003 agreement is limited to Mr Rose’s employment obligations up until the 2005 agreement was signed in December of that year. The Crown relied upon the 2002 employment agreement as being operative for the period prior to the signing of the 2005 agreement. That premise may have been erroneous if there existed a 2003 employment agreement which superseded or differed from the earlier 2002 agreement. However, any such error was immaterial.
[19] Mr Rose was discharged by the trial Judge on the only two charges which related to the period prior to December 2005. These concerned alleged conduct during two periods between February and December 2005. These charges were dismissed because the 2002 employment agreement, upon which the Crown relied in relation to these charges, did not contain any express requirement to disclose a conflict of interest. The remaining charges all related to periods after the 2005 agreement had come into force. Charge 2 related to conduct in 2006 involving Penrose Electrical. The other charges involved Aero Automation, which was not incorporated until 2010.
[20] On behalf of Mr Rose, Mr Dufty acknowledged that a 2003 agreement would not have direct application to any of the charges that went to the jury. However, he submitted that had the jury been provided with evidence showing the existence of a 2003 agreement, they may not have been sure that Mr Rose was subject to any conflict of interest obligation between April 2003 and December 2005. This, it was submitted, may have influenced their consideration of Mr Rose’s subsequent knowledge and belief about his duty to disclose conflicts of interest under the 2005 agreement because his understanding, in part, may have been based on the terms of the prior employment agreement.
[21] We consider that submission to be flawed. There is no evidence of what the terms of the 2003 agreement were. It is likely, as with the prior and later employment agreements, that the 2003 agreement included some form of conflict of interest provision. However, whether that was so or not is largely irrelevant because Mr Dufty’s submission is entirely based upon speculation as to the content of the 2003 agreement. Mr Rose himself was unaware of the 2003 agreement having existed until after the trial. He deposes in his affidavit to being under no misconception as to his duties of disclosure as a result of the terms of a 2003 agreement, nor to a belief based on its content that led him to an erroneous understanding of his obligations under the 2005 agreement.
[22] We do not consider the proposed evidence is of material relevance to the charges upon which Mr Rose was convicted, nor that the proposed evidence sought to be admitted on his appeal could have affected the outcome of his trial. As a result, we decline leave to admit the evidence of the existence of a 2003 agreement.

Failure to provide a direction about what constitutes a conflict of interest

[23] Mr Dufty submitted the trial Judge erred in her summing up by not providing the jury with an explanation or guidance as to what constitutes a conflict of interest. He submitted that without such a direction the jury may have considered a conflict of interest to have existed which, in law, was incapable of being categorised as such. That critique is based upon a contention that a bare connection between Mr Rose and the supply companies operated by his former partner and by Ms Rose was not by itself sufficient to constitute a conflict of interest.
[24] The Crown submitted there was no requirement for the trial Judge to provide a direction as to what constituted a conflict of interest because this was a matter properly for the jury to determine based on their findings of fact. The Judge directed the jury that whether or not Mr Rose had a duty to disclose was a matter for them based upon their assessment of the evidence as to whether a sufficient connection or interest in the supply companies had triggered that duty.
[25] The Judge provided comprehensive directions regarding the charge of obtaining by deception, and, in particular, the component parts of the element of deception which the Crown had to prove. Based on the statutory definition of deception, the Crown’s case was that Mr Rose had, with intent to deceive, omitted to disclose a material particular in circumstances where he had a duty to disclose.[2] The material particular relied upon by the Crown was Mr Rose’s connection to, or interest in, the supply company. The Judge directed that a failure to disclose that material particular was not by itself sufficient to find Mr Rose guilty, but that the jury would need to be sure that Mr Rose had failed to disclose the material particular with intent to deceive Mighty River Power.
[26] The final element of the statutory definition of deception is the duty to disclose. The Judge correctly directed the jury that the omission to disclose the material particular with an intent to deceive must have occurred in circumstances where there was a duty to make such a disclosure. The Crown case was that Mr Rose did have a duty to disclose because he was under the legal duty set out in his employment agreement to disclose “any activity or association that could be considered a conflict of interest with [his] role at Mighty River Power”. The Judge directed the jury that whether or not that legal duty was triggered was a matter for them, and that, in relation to each charge, they would have to consider whether or not Mr Rose had a duty to disclose his connection to any of the companies.
[27] As is apparent from this summary, the duty to disclose depended upon whether or not Mr Rose had “any activity or association” which could be considered a conflict of interest. However, the jury were not provided with any guidance as to what as a matter of law is capable of constituting a conflict of interest, at least within the setting of an employment relationship, which could trigger the duty to disclose. This issue was ultimately a question for the jury to determine, and the threshold for triggering a duty to disclose in the employment agreement was low (it being sufficient that the activity or association could be considered a conflict of interest). In these circumstances we consider it would have been preferable for the Judge to have provided some assistance as to what the law finds capable of giving rise to a conflict of interest. However, we do not consider the omission gives rise to any miscarriage of justice.
[28] The defence presented at trial by Mr Rose did not focus on whether his connection with the supply companies could constitute a conflict of interest. Rather, he claimed an honest belief that his connection to the supply companies was not sufficient to amount to a conflict of interest which he was required to disclose, and that he did not know his connection gave rise to a conflict. His mistake was not realising that his relationship with his wife and former partner was capable of constituting a conflict of interest that had to be disclosed.
[29] We accept that guidance as to what may constitute a conflict of interest may still have been relevant to assessing that issue. However, Mr Rose had an undisputed close personal relationship with Ms Rose, the sole director and shareholder of Aero Automation, who was his partner and later his wife. He shared a similar close relationship with his former partner, Ms Soper, who held the same positions in Penrose Electrical and Electrapro. Because of these relationships and the associated financial benefit accruing to him, it could not realistically be contended that such an association did not give rise to a conflict of interest with his role at Mighty River Power.
[30] Mr Rose argues that he did not have a duty to disclose a connection with companies in respect of which he had little or no interest or involvement, and that a bare connection between himself and the supply companies run by his partners was not of itself sufficient to potentially constitute a conflict of interest. We do not consider such a proposition to be tenable in the circumstances of this case. This is illustrated by the direction which Mr Dufty proposed the Judge could have provided to the jury regarding the legal ambit of a conflict of interest. He suggested the jury should have been told that a possible conflict of interest would only arise if the defendant had been involved in running the supply company or “[derived] a personal interest” from its activities.
[31] Even if it is accepted for present purposes that Ms Rose and Ms Soper operated the respective companies as their own businesses, as the defence contended was the case at trial, it is incontestable the income derived from the companies’ activities, which in the case of Aero Automation amounted to hundreds of thousands of dollars in profit and salary drawn by Ms Rose, was available to the couple to support their life together and benefited both of them. That, without more, meets the test of deriving a personal interest from the companies’ activities.
[32] In support of his argument, Mr Dufty sought to emphasise evidence given at trial relating to the absence of communication and guidance by Mighty River Power as to what may constitute a conflict of interest, and other employees’ understanding of the scope of activities that may require to be disclosed. That evidence, all of which was before the jury, went to Mr Rose’s defence of his honest belief about what was required to be disclosed. However, that evidence does not alter the fact that the companies, even if operated solely by Ms Rose and Ms Soper, as the defence case would have it, generated profit and income from their business with Mighty River Power, which was to Mr Rose’s benefit and interest. That caused what was unquestionably a conflict of interest.

Mr Rose’s sentence appeal

[33] Mr Rose argued the sentence of three years and two months’ imprisonment was manifestly excessive. That contention was based on two grounds. Firstly, that the starting point taken by the Judge was excessive in the absence of significant loss being incurred by Mighty River Power. Secondly, that a discrete discount should have been afforded to Mr Rose for his offer of reparation.
[34] Mr Rose was sentenced on the basis he was the principal offender who deliberately deceived Mighty River Power into making payments to the supply companies. The Judge considered Mr Rose to be the main offender and significantly more culpable than Ms Rose.[3] A preliminary submission made on Mr Rose’s behalf, that the Judge was not entitled to proceed to sentence him on such an assessment but rather on the basis of some limited and indirect involvement with the supply companies, is meritless. A trial Judge who has heard the evidence is entitled to take any view of the facts so long as they are consistent with the jury’s verdicts. There is no requirement for a Judge to take a view which is most favourable to a defendant.[4] The Judge was entitled to proceed as she did, placing Mr Rose at the “centre of the offending”.[5]

Starting point

[35] Mr Dufty submitted that three years’ rather than three years and eight months’ imprisonment should have been taken as a starting point. The basis for that submission was that Mighty River Power had not been overcharged for parts and services that were provided by the supply companies and had suffered no significant loss as a result. This was to be contrasted with other cases where there was a direct correlation between the financial loss incurred by a victim and the benefit received by the offender. While it was acknowledged that Mr Rose received a benefit as a result of his deceptive conduct, which it was conceded remained a relevant consideration to be taken into account, it was submitted that more emphasis should have been placed on the absence of any direct loss incurred by Mighty River Power. This should have resulted in a lesser starting point.
[36] We do not consider the starting point taken by the Judge was excessive. The Judge took into account the premeditated and sophisticated nature of the offending and the way in which Mr Rose exploited deficiencies in Mighty River Power’s processes and systems for his personal gain. Most of the offending had taken place over a continuous three year period, and the deliberate and repetitive nature of that offending was rightly considered to be an aggravating feature.[6] A further aggravating feature was the extent of the abuse of trust, and the way Mr Rose used his specialist skills and knowledge of the processes and operations of Mighty River Power to direct business to the companies from which he ultimately personally benefitted. These were all relevant aggravating factors to be taken into account in setting an appropriate sentence starting point.
[37] The Judge at some length considered the nature and quantum of the loss caused to Mighty River Power and the benefit which Mr Rose gained as a result of his offending. There was no dispute that investigative costs incurred by Mighty River Power following the detection of Mr Rose’s activities amounted to some $203,000. That was the only loss which the Judge was prepared to take into account in the absence of the Crown being able to prove that Mighty River Power suffered any loss from the payments it made to the supply companies for parts and services provided.[7] The Judge was unable to be sure whether an excessive mark-up had been applied in relation to the provision of these goods and services.[8] When account was taken of the value of some parts supplied by Aero Automation which were not paid for by Mighty River Power before Mr Rose’s offending was discovered and which it retained, the net loss was approximated at $60,000.[9]
[38] The Judge considered a better indicator of Mr Rose’s culpability was the benefit he derived from the offending, which the Judge considered to be substantial. The maximum total benefit was calculated to be some $618,000 which included the net profit disclosed in Aero Automation’s accounts and the salary drawn by Ms Rose over the three years of its operation. The Judge considered that Mr Rose had personally benefited from the wealth generated by the offending, which was applied to fund a lifestyle that he and Ms Rose shared together. The Judge was satisfied the whole purpose of deceiving Mighty River Power into making the payments and the motivation for Mr Rose’s offending was to obtain personal benefit from the profits obtained.
[39] The Judge carefully considered three cases which involved similar circumstances to the present offending where employees had set up companies to supply goods and services to their employer. A failure to disclose their involvement with the companies was a key element of the fraud in each case.[10] The sentencing Judge expressly acknowledged that in each of those cases overcharging had been an aggravating feature, and that the absence of that factor in the present offending justified a starting point towards the lower end of a range of three to five years’ imprisonment.[11]
[40] However, as the Judge observed, in comparison with those cases Mr Rose’s offending involved amounts substantially higher, a longer duration, and a greater number of payments. The Judge took a starting point modestly greater than the three year starting point adopted in the case of R v Taylor, which involved an offender obtaining a personal benefit of approximately $113,000 where overcharging had also been established.[12]
[41] We consider the starting point of three years and eight months’ adopted by the Judge, after her careful analysis of the material aggravating factors and the relevant authorities, to be well within range notwithstanding the absence of overcharging.

Reparation

[42] Mr Rose made an offer of reparation of $100,000. At the time he made this offer, Mr and Ms Rose had assets of approximately $1.5 million which had been restrained under the Criminal Proceeds (Recovery) Act 2009. The Judge declined to order reparation. Mr Dufty submitted the sentencing Judge should have ordered reparation, despite payment possibly having to await the outcome of the forfeiture proceedings. He submitted the offer of $100,000 was significant, particularly in the circumstances of this case where no direct loss had been incurred, and demonstrated Mr Rose intent to make amends. It was submitted that a further discount of 10 per cent should have been extended to him.
[43] The Judge acknowledged the Sentencing Act 2002 required her to impose a sentence of reparation if she was lawfully entitled to do so.[13] However, the Judge considered there were special circumstances which made a sentence of reparation inappropriate. Firstly, she noted that any reparation would have to come from assets which were currently being restrained, and that the Commissioner of Police had not consented to release those restrained assets to allow reparation to be made. Secondly, the Judge considered that Mighty River Power had other avenues available to it to pursue relief. Because of the complexities in calculating loss, the Judge considered civil action provided a preferable route to recovery.[14]
[44] The fact that assets from which a proposed reparation payment is sought to be made are currently restrained is not an impediment to making a reparation order. The Criminal Proceeds (Recovery) Act expressly provides for the prioritisation of the payment of reparation by the Official Assignee upon the discharge of assets and profit forfeiture orders.[15] However, it does not follow that the Judge was wrong not to order reparation.
[45] In considering the issue of reparation, the Judge noted the possibility of Mighty River Power taking civil proceedings against Mr Rose. Her observations regarding any award of reparation having to come from restrained property may well have been directed more at civil action providing a better means to achieve compensation than having to await the finalisation of forfeiture proceedings, rather than any mistaken view that reparation could not ultimately be paid from forfeited property.
[46] The Judge could not be sure to the criminal standard of proof as to whether Mighty River Power had suffered loss beyond its investigative costs. However, the Judge recognised the company may be able to establish substantial losses as a result of Mr Rose’s deceit and that it would be free to pursue any claim by taking civil proceedings. The Judge considered, that because of the complexities of calculating loss in the circumstances of this case, that would be the preferable means to obtain compensation.[16]
[47] We consider the Judge was on firm ground in declining to impose a sentence of reparation for those reasons. The prospect of civil proceeding in a case such as the present, where there is an issue as to the existence or extent of a company’s losses and where proof of loss was not an element of the charge upon which the defendant has been convicted, may be better resolved by that means. We consider such a factor as being capable of constituting a special circumstance that may make it inappropriate to impose reparation.
[48] That does not dispose of the point. In sentencing an offender, a sentencing court must take into account any offer to make amends, including financial compensation, when determining the appropriate sentence.[17] The Judge specifically acknowledged the need to consider a further discount to reflect the offer made by Mr Rose. She considered that any discount which might otherwise have been appropriate was subsumed within the discount that she had afforded for remorse.
[49] The Judge allowed a discount of three months to reflect Mr Rose’s remorse.[18] That credit may be considered generous when regard is had to the observations made in the pre-sentence report of Mr Rose’s deep sense of entitlement and limited insight into his offending. The report suggested that Mr Rose’s expression of remorse may not be genuine. The only tangible demonstration of remorse was a recently received written apology by Mr Rose for the harm he had caused to Mighty River Power and an expression of regret.
[50] We consider the approach taken by the Judge to the offer of reparation was one that was available to her. Ultimately, the question of whether a sentence is manifestly excessive is to be examined against the sentence imposed, rather than the approach taken to achieve the final sentence and its component parts. We are satisfied the end sentence of three years and two months’ imprisonment was within the available range for Mr Rose’s offending.

Ms Rose’s appeal against her convictions

[51] Ms Rose relied upon two grounds in support of her appeal:

Response to jury question

[52] The jury asked a question regarding charge 13, which alleged that Ms Rose had been a party to Mr Rose’s offending in the period between March 2010 and November 2011. In the course of her summing up, the trial Judge provided a question trail in relation to that charge which relevantly provided:
  1. In relation to payments made for each invoice that you have found Paul Rose “guilty” on in the charge 5 schedule, are you sure that:

(a) Jane Rose helped, encouraged or assisted Paul Rose in the commission of the offence in relation to that invoice payment?

(b) that Jane Rose intended to help, encourage or assist Paul Rose in the commission of the offence in relation to that invoice payment?

...

[53] The jury’s question sought clarification of issues 2(a) and 2(b):

Does helped, encouraged or assisted mean practical involvement in the dayto-day running of the business?

[54] The trial Judge answered as follows:

Now, when you come to 2(a) and 2(b) in the question trail, what you have to find in 2(a) is that Jane Rose did some act to help, encourage or assist Paul Rose to obtain payment by deception. And what you have to find in paragraph 2(b) of the question is that Jane Rose intended to help, encourage or assist Paul Rose in obtaining payment by deception. Now, whether or not the practical involvement in the day-to-day running of the business satisfies those two elements is obviously a matter for you, and that is a matter that I and counsel cannot answer for you. That is your role and function in this trial, so, thank you, members of the jury. I will let you go back to your deliberations.

[55] We do not consider any error was made by the trial Judge in the way she answered the jury’s question. The question trail clearly distinguished between the act of assistance and the intention to assist, and this was reinforced by the Judge in her answer. The Judge’s answer correctly advised that whether practical involvement in the day-to-day running of the business satisfied those two elements was for the jury to assess. The trial Judge could not have directly answered the question as it was framed by the jury; rather, and we consider appropriately, the Judge reinforced to the jury the two separate elements, as set out in the question trail, to which the question potentially related.
[56] Contrary to the submission made on behalf of Ms Rose, we consider the trial Judge’s answer clearly drew the distinction between an act of assistance and the requisite intention which the Crown was required to prove. We do not consider there was any risk from the way the trial Judge answered the question of the jury being left in doubt as to their need to separately consider whether Ms Rose intended to help, encourage or assist her husband in the commission of the offence to which that charge related.

Fresh evidence

[57] Ms Rose sought leave to admit evidence of a forensic accountant and electronic forensic investigator, Ms Tina Payne, regarding her post-trial examination of Ms Rose’s computers which she used for the purpose of Aero Automation’s business.
[58] In support of her application to admit this evidence, Ms Rose swore her own affidavit. She explained that her relationship with Mr Rose was turbulent and they separated for a period between November 2010 and late 2011. Ms Rose deposed that during this period Mr Rose operated Aero Automation without her assistance. During their separation, a computer technician discovered that a “keylogger” had been installed on Ms Rose’s computer.
[59] A “keylogger” is a type of monitoring software which can be used to remotely monitor and record each keystroke typed on a computer’s keyboard and can produce screenshots of the activity on a computer. The technician removed the keylogger, and Ms Rose confronted Mr Rose about its presence on her computer. He acknowledged that he had installed it.
[60] Ms Rose claimed the issue of the keylogger was not raised at her trial because she believed only one keylogger had been installed which, at the time of her trial, she understood had been successfully removed. Ms Rose deposed that after her trial she discovered evidence that indicated to her that a second keylogger had been installed. Ms Rose maintained this second keylogger would have allowed Mr Rose unimpeded access to her computers. As a result, Ms Payne was engaged to carry out a forensic analysis.
[61] Ms Payne concluded from her forensic analysis that it is likely that what she describes as “simplekeylogger” and “webwatcher” software were installed on Ms Rose’s computer. From her forensic analysis she surmises that Mr Rose used Ms Rose’s computer to access his Mighty River Power email account, and opines that data relating to Ms Rose logging into her Yahoo account was viewed by Mr Rose on Mighty River Power’s computer system. Ms Payne noted that once a password for a login has been obtained it can be used by the holder to access the account indefinitely.
[62] Of particular relevance was the identification by Ms Payne of evidence relating to the use of “keyloggers” and emails which used the name “Tony Mitchell”. Two documents of May 2012, purporting to have been written by “Tony Mitchell”, appear to have been edited on the Mighty River Power computer system, and emails purportedly from “Tony Mitchell” were sent from the Aero Automation email account via a web-based email login.
[63] The name “Tony Mitchell” is a pseudonym which was used in communications between Aero Automation and Mighty River Power and with other companies that supplied Aero Automation with parts for it to on-supply to Mighty River Power. As the trial Judge observed in her sentencing remarks, the use of the name, at least in relation to five of the charges, was key evidence, demonstrating they had sought to keep their connection with Aero Automation a secret from Mighty River Power.
[64] Ms Sellars on behalf of Ms Rose submitted that because the evidence formed such a critical part of the Crown case, this new evidence which casts doubt on the authorship of emails in the name of “Tony Mitchell” might reasonably have led to Ms Rose being acquitted on the charges she faced. It was further submitted that the evidence was relevant to the nature of the relationship between the two defendants and whether or not there was collusion or collaboration in relation to any deception of Mighty River Power, and the role Ms Rose played in the concealment of Mr Rose’s involvement with Aero Automation.
[65] The credibility of Ms Payne’s forensic analysis is not in dispute. However, there is some issue as to whether the evidence is sufficiently fresh, and whether it could not with reasonable diligence have been led at trial. Ms Payne gave evidence at trial as a forensic accounting expert, but not in relation to the matters included in the affidavit sought to be admitted on Ms Rose’s appeal.
[66] Ms Rose acknowledged in her affidavit that she was aware prior to trial that a keylogger had been installed on her computer by Mr Rose. If, as she claims in her own affidavit, when interviewed by the Serious Fraud Office, she did not recognise or could not remember some of the emails that were referred to her by investigators, it is surprising that her knowledge of such malware having been previously installed on her computer did not alert her to that being a possible explanation for why she did not recognise some of these emails. That would have allowed further investigations to be made prior to trial.
[67] It is not necessary for us to come to any concluded view as to whether the proposed evidence is fresh because we are satisfied that its content does not give rise to any risk of a miscarriage of justice.[19]
[68] Ms Rose, in her affidavit filed in support of her appeal, states that in her role at Aero Automation she would use the pseudonym “Tony Mitchell” at “minimal times” in her dealings with suppliers to Aero Automation due to perceived sexism in the industry. However, she claims not to be able to recall using the name in correspondence with Mighty River Power. It is difficult to reconcile Ms Rose’s explanation of her selective use of the pseudonym with the content of a statement produced at trial that she prepared at the request of Mr Rose’s solicitors in December 2012 in response to Mighty River Power’s employment investigation. In that statement Ms Rose advised:
  1. I understand that one of MRP’s concerns relates to Paul indicating that AA was operated by Tony Mitchell.
  2. I can confirm that I use the name Tony Mitchell in communications relating to AA. This is due to my perception that there is sexism in operation in the sector that I deal in. I have found that by using a male Christian name instead of Jane, that my queries seem to be dealt with quickly and more efficiently. This is a name that I commonly use in association with the company, not for any intention to mislead. Paul is aware that I use this name in association with the company.

[69] In that statement Ms Rose confirmed that Aero Automation had significant dealings with Mighty River Power, that she incorporated Aero Automation, and used the name “Tony Mitchell”. Ms Rose stated that Mr Rose has no interest in the company and receives no financial benefit from it.
[70] The December 2012 statement seeks to convince that Aero Automation’s business is entirely her own operation. This was the defence that both defendants presented at trial. That defence is completely at odds with what Ms Rose is now attempting to suggest on her appeal by relying upon Ms Payne’s evidence that unbeknownst to her Mr Rose was conducting Aero Automation’s business with Mighty River Power using the name “Tony Mitchell”, presumably without her knowledge.
[71] Ms Payne deposes that Ms Rose’s computer contained over 100 recovered web-based emails between February and September 2012 which contained references to “Tony Mitchell”, including emails both from and to this person via Aero Automation’s email address. Apart from one prospective client, Aero Automation’s only business was with Mighty River Power. It has not been explained how Ms Rose would not have been aware of this email traffic having regard to her admitted day-to-day involvement in the company. It is also an extraordinary coincidence that the same fictitious name was used by both Mr Rose and Ms Rose unless they had colluded to use this pseudonym to conceal their involvement with the company from Mighty River Power.
[72] We find the proposed evidence to be inconsistent with the defence Ms Rose ran at trial that she operated Aero Automation and that it was solely her business which she ran independently from Mr Rose. Even if the new evidence is capable of demonstrating that Mr Rose may have been the author of a number of the “Tony Mitchell” emails which he sent without Ms Rose’s knowledge, that activity is consistent with the Crown’s case that Mr Rose was the central and directing figure behind Aero Automation’s supply of parts and services to Mighty River Power which had to be concealed from his employer. The Crown in its closing address expressly referred to the possibility that Mr Rose, by sending emails to “Tony Mitchell”, may well have been sending emails to himself.
[73] Ms Rose’s day-to-day running of Aero Automation’s business, which was exclusively to service Mighty River Power’s needs, was critical to the fraudulent scheme. It is unrealistic for Ms Rose to suggest on her appeal that while she was immersed in one half of the business, sourcing parts and services using the name “Tony Mitchell” for the purpose of on supply to Mighty River Power, she was ignorant of the other half of the business which involved contact with Mighty River Power and the actual supply and invoicing of that company by use of the same pseudonym.
[74] For these reasons, we do not consider the proposed evidence affects the safety of her convictions.

Conclusion

[75] We grant Mr Rose an extension of time to bring his appeal. However, his application to admit fresh evidence is declined and his appeal against conviction and sentence is dismissed.
[76] We grant leave to admit Ms Rose’s new evidence. However her appeal against conviction is dismissed.






Solicitors:
Crown Solicitor, Auckland for Respondent

[1] Lundy v R [2013] UKPC 28, [2014] 2 NZLR 273 at [120].

[2] Crimes Act 1961, s 240(2)(b).

[3] R v Rose [2016] NZHC 1109 at [24].

[4] Sentencing Act 2002, s 24; R v Connelly [2008] NZCA 550 at [14]; R v Heti (1992) 8 CRNZ 554 (CA) at 555–556; and R v Harrison [2008] NZCA 514 at [16].

[5] R v Rose, above n 3, at [24].

[6] At [25].

[7] At [35].

[8] At [38].

[9] At [39].

[10] Serious Fraud Office v Ellis HC Auckland CRI-2005-404-15827, 18 July 2006; R v Yin Ming Miu DC Auckland CRI-2010-004-12448, 5 May 2014; and R v Taylor HC Auckland CRI-2006-092-1488, 6 July 2007.

[11] R v Rose, above n 3, at [50].

[12] R v Taylor, above n 10.

[13] Sentencing Act 2002, s 12.

[14] R v Rose, above n 3, at [62].

[15] Criminal Proceeds (Recovery) Act 2009, ss 82 and 83.

[16] R v Rose, above n 3, at [62].

[17] Sentencing Act, s 10.

[18] R v Rose, above n 3, at [57].

[19] R v Bain [2003] NZCA 294; [2004] 1 NZLR 638 (CA) at [22]; and Lundy v R, above n 1, at [120].

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