Blake v R [2018] NZCA 204 (20 June 2018)

Last Updated: 28 June 2018

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA658/2017 [2018] NZCA 204

	BETWEEN	DAVID BLAKE Appellant
	AND	THE QUEEN Respondent

Hearing:	22 May 2018
Court:	French, Ellis and Woolford JJ
Counsel:	R A A Weir for Appellant J E Mildenhall for Respondent
Judgment:	20 June 2018 at 12.30 pm

JUDGMENT OF THE COURT

1. The appeal against sentence is allowed.
2. The concurrent sentence of 24 months’ imprisonment in relation to the Q Technology Ltd participation charge is quashed and a concurrent sentence of 20 months’ imprisonment is substituted.

100. The sentence of reparation is quashed.

____________________________________________________________________

REASONS OF THE COURT

(Given by Ellis J)

[1] Following a jury trial Mr Blake was convicted on three charges under the Companies Act 1993, namely:

• (a) one charge of acting as a promoter of a company (Hygiene Foundation Ltd) between 1 December 2011 and 7 October 2012 whilst prohibited and without leave of the Court to do so;
• (b) one charge of participating in the management of a company (Hygiene Foundation Ltd) between 8 October 2012 and 25 October 2013 whilst prohibited and without leave of the Court to do so; and
• (c) one charge of participating in the management of a company (Q Technology Ltd) between 8 October 2012 and 21 March 2013 whilst prohibited and without leave of the Court to do so.

[2] On 17 November 2017, he was sentenced to concurrent sentences of two years and four months’ imprisonment and two years respectively for the two management charges, and two years and two months’ imprisonment for the promoting charge.^[1] He was also directed to make good on an offer of $20,000 reparation by 1 December 2017.^[2]
[3] Although he initially filed an appeal against both conviction and sentence, the appeal against conviction has been formally abandoned. And as regards the sentence appeal, his only concern is with the concurrent sentence of two years’ imprisonment imposed for the management charge relating to Q Technology Ltd.
[4] We observe at the outset that a successful appeal in relation to his sentence on that charge would not result in a change to the final sentence but would have a positive effect on his parole date. We return to that point later.

Background

[5] On 10 February 2010, Mr Blake was prohibited from being a director or promoter of, or in any way, whether directly or indirectly, being concerned in or taking part in the management of, a company, for a five-year period, unless he first obtained the leave of the Court.^[3] That prohibition flowed from his conviction on five charges under the Insolvency Act 1967 and the Insolvency Act 2006 for taking part in the management of a business while he was an undischarged bankrupt (between 2006 and 2008).^[4] Self-evidently, the prohibition expired in February 2015.
[6] In late 2011, the Companies Office became aware that Mr Blake was registered as a director of a company called Znntek Business Ltd. A Senior Investigator for the Ministry of Business Innovation and Employment (MBIE) wrote to Mr Blake on 8 November 2011, reminding him of the prohibition and asking him to resign as a director of Znntek Business Ltd. Mr Blake resigned a few days later.
[7] Hygiene Foundation Limited was incorporated in October 2012.^[5] Its business was to involve certifying the hygiene standards of businesses operated by its subscription-paying customers. The named directors of Hygiene Foundation Ltd included Lance Ryan (who was convicted together with Mr Blake as a party to his offending) and Mr Blake’s wife.
[8] In her sentencing notes, Judge Ryan described Mr Blake’s role in the company as very much “front of house”; he was involved in significant decision-making about promoting, setting up and marketing the company as well as its day-to-day management.^[6] He hired and instructed staff and made financial commitments to them, engaged a company to buy advertising space and engaged a contractor to create advertisements. Mr Blake determined what strategy the business would adopt without consulting anybody else. He found suitable premises for Hygiene Foundation Ltd in the Auckland CBD and personally guaranteed the lease.
[9] Q Technology Ltd was incorporated on 8 October 2012. Its directors were Mr Ryan and Mr Gavin Greaves. While, again, Mr Blake was not a director or shareholder, it was he who liaised with Mr Spence of Prime Property Group in Wellington, to procure it office space. The evidence was that he told Mr Spence that “his” company was looking to rent the space, and “his” staff would be liaising further. When the lease was entered into, Mr Ryan signed on behalf of Q Technology Ltd but, again, Mr Blake provided a personal guarantee. Q Technology Ltd defaulted on the lease and ended up owing around $4000 in arrears. That sum remains unpaid.
[10] Judge Ryan noted that, but for Mr Blake, neither company would have come into being and those employed and procured by him, would not have been procured and employed by the company.^[7]

Sentencing

[11] At sentencing, Mr Blake continued to claim that his offending was unintentional; he maintained that he did not at any time think his actions were in breach of the prohibition. But Judge Ryan noted the warning he had received from MBIE in November 2011, and evidence given at trial of a further conversation he had had with an MBIE official in January 2012.^[8] She found that Mr Blake must have known what conduct constituted management and promotion and that he deliberately tried to conceal the extent of his involvement.^[9]
[12] The Judge noted that, overall, losses of around $300,000 were attributable to Mr Blake’s conduct and that this quantum was also relevant to an evaluation of his culpability.^[10] By and large, the losses were suffered by a variety of what the Judge called “little people”.^[11] The losses incurred by Q Technology Ltd were limited to the loss of rent noted earlier.
[13] The Judge regarded Mr Blake’s offending as serious. She observed that it was designed to circumvent the prohibition, that it caused significant financial and emotional harm, and involved an element of taking advantage of vulnerable people. She declined to place any real weight on his letters of support or on a psychological report.^[12]
[14] After considering a number of authorities, Judge Ryan took the management charge relating to Hygiene Foundation Ltd as the lead offence and adopted a starting point of 18 months’ imprisonment.^[13] There were then uplifts of:

• (a) four months for the management charge in relation to Q Technology Ltd;
• (b) six months for the promotion charge relating to Hygiene Foundation Ltd; and
• (c) three months for Mr Blake’s previous offending.

[15] In terms of mitigating personal factors, the Judge said:

[115] ... I note the offer of $20,000 made by Mr Blake’s father on his behalf and that the offer raises some difficulties. Ms Hu submits that firstly such money should go to the Official Assignee and to the previous creditors and secondly, you should not benefit by a discount for that offer reparation in this sentence, when it should be going to the Official Assignee.

[116] There is nothing in the Act which prevents me from accepting $20,000 as a legitimate offer to financially imperilled victims. Ms Hu however notes that the amount has not been paid and there is no bank cheque today for immediate payment if I make an order.

[117] Mr Heaslip submitted in October that a seven day wait would be needed to make that payment. He submitted today that a similar time frame is still required. Although there is no bank cheque today, Mr Heaslip submits that I can still make directions about reparation and take it into account at sentencing.

[16] And she returned to the topic later on:

[143] I take into account your offer of reparation and I take into account the impact on your family. At the same time, I must balance that against the quite correct analysis of Judge Glubb, that when there is recidivist offending or offending of this nature, personal circumstances pale into insignificance. Nonetheless Mr King went straight out and re-offended and was subject to a sentence at the time whereas you were not.

[144] I consider that there is an impact on your family members who are both innocent victims of your offending and that I can direct $20,000 to go some way to making payment to the victims. So I am going to deduct 10 percent as a discount or three months and I come to an end sentence of 28 months, a sentence therefore of two years and four months’ imprisonment.

[17] As well as the 28-month sentence on the lead management charge in relation to Hygiene Foundation Ltd, the Judge sentenced Mr Blake to concurrent sentences of:^[14]

• (a) two years’ imprisonment for managing Q Technology Ltd; and
• (b) two years and two months’ imprisonment for promoting Hygiene Foundation Ltd.

[18] As is commonplace, no specific explanation was given for those sentences.
[19] As noted earlier, it is only the sentence relating to Q Technology Ltd that is the subject of the present appeal.

Discussion

[20] The starting point is necessarily s 85 of the Sentencing Act 2002, which provides that where a court is sentencing for more than one offence, each individual sentence imposed must reflect the seriousness of the offence to which it relates. Mr Blake’s appeal was therefore advanced on this “in principle” basis; he acknowledged that a successful appeal would not make a difference to Mr Blake’s end sentence.
[21] That said, however, it became apparent at the hearing that a successful appeal would make a difference to Mr Blake’s parole eligibility date. That is because s 20 of the Parole Act 2002 relevantly provides:

20 Parole eligibility date

(1) The parole eligibility date of an offender who is subject only to 1 or more sentences imposed on or after the commencement date is the date on which the offender—

(a) has finished serving the non-parole period of every long-term sentence to which he or she is subject; and

(b) has passed the release date of every short-term sentence to which he or she is subject.

...

[22] In Mr Blake’s case, he has been sentenced to:

• (a) a “long-term sentence” of 28 months’ imprisonment, for which he is eligible for parole in June 2018 having served a little over nine months (one third);^[15] and
• (b) a “short-term sentence” of 24 months’ imprisonment, for which his statutory release date is in September 2018, the half-way mark.^[16]

[23] So, Mr Blake finds himself in a slightly paradoxical situation whereby it is the shorter of his two sentences will potentially see him remain longer in prison.
[24] Importantly, however, it was no part of Mr Weir’s case that Judge Ryan should have taken this into account. He said the question of parole for the long-term sentence was for the Parole Board. We do not therefore propose to take that matter further. We turn instead to the question of whether, assessed in the ordinary way, the two-year sentence for the Q Technology conviction can be said to be manifestly excessive.
[25] It is important to note at the outset that Mr Weir accepts that the 28-month sentence on the Hygiene Foundation Ltd “management” charge was within the available range. He submitted, however, that the “management” offending in relation to Q Technology Ltd was much less serious. He stressed the relative size of the losses caused ($300,000 compared to $4000) and the fact that the sole action taken by Mr Blake in relation to Q Technology Ltd was his guarantee of the lease. Mr Weir contended that the numerous cases cited by Judge Ryan supported his submission that the two-year sentence was outside the available range.
[26] We are inclined to agree with that submission. The respective seriousness of the two management charges does seem to be materially different. Although some of the aggravating background features necessarily remain the same across both,^[17] the duration of the Q Technology Ltd offending and the losses caused by it were considerably less than in relation to the equivalent Hygiene Foundation Ltd charge. On straightforward relative basis, it would seem difficult to justify a discrete sentence of any more than 18 months’ imprisonment for the lesser offending.^[18]
[27] But that is not the end of the matter. As we have noted, the 28-month sentence on the lead charge took account of a three-month discount for the anticipated reparation payment.^[19] No such payment has been made and Mr Weir advised us that despite the offer, Mr Blake’s father was not, and had never been, in a position to make it.
[28] Without that discount, the end sentence on the lead charge would have been 31 months’ imprisonment, and the concurrent sentence on the Q Technology Ltd charge should also have been two months (around 10 per cent) higher. So an 18-month sentence would become a sentence of 20 months’ imprisonment. But that would still represent a 17 per cent reduction from the sentence actually imposed and suffices, we think, to render the sentence of 24 months’ imprisonment outside of the available range.

Result

[29] In our view, therefore, the sentence appeal should be allowed.
[30] The concurrent sentence of 24 months’ imprisonment on the Q Technology Ltd charge is quashed and a sentence of 20 months’ imprisonment is substituted.
[31] The sentence of reparation is quashed.

Solicitors:
Crown Law Office, Wellington for Respondent

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^[1] R v Blake [2017] NZDC 28774.

^[2] At [152].

^[3] Companies Act 1993, s 382(1).

^[4] He received a sentence of community work.

^[5] The company was placed into liquidation on 25 October 2013.

^[6] R v Blake, above n 1, at [12].

^[7] At [28].

^[8] At [86]–[87].

^[9] At [88].

^[10] At [90].

^[11] At [14].

^[12] At [121]–[123] and [129].

^[13] At [139].

^[14] At [150].

^[15] Parole Act 2002, s 84(1).

^[16] Parole Act, s 86(1).

^[17] Namely the fact that Mr Blake had been twice bankrupted and twice warned and (as the Judge found) deliberately flouted or circumvented the prohibition.

^[18] We have not found the other cases referred to by the sentencing Judge to be of any great assistance; all turn on their different facts.

^[19] Although that discount was also said to recognise the circumstances of Mr Blake’s family, the comments of the Judge suggest that she regarded this as more or less de minimis. As she said, personal circumstances of that kind can carry little weight in sentencing for offending of this nature: see [143].