R V ROLLERSON HC AK CRI 2009-004-1314 [2009] NZHC 96 (11 February 2009)

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
                                                              CRI 2009-004-1314



                                       THE QUEEN



                                            v



                        
 DOUGLAS LESLIE ROLLERSON



Charges:        Secret Commissions (2)

Plea:           Guilty

Appearances: David Jones QC and Anita
Killeen for Crown
             John Haigh QC for Prisoner

Sentenced:      11 February 2009
                Convicted and discharged
on both counts



                      SENTENCING NOTES OF HARRISON J




_________________________________________________________________________________

SOLICITORS
Serious Fraud Office (Auckland) for Crown
Short & Partners (Auckland) for Prisoner

COUNSEL
John Haigh QC; David PH Jones
QC


R V ROLLERSON HC AK CRI 2009-004-1314 11 February 2009

Introduction


[1]     Mr Rollerson, you appear for sentence today
following your pleas of guilty to
two charges under the Secret Commissions Act 1910. The maximum penalty on
each is two years imprisonment
or a fine of $1,000. Originally, as Mr Haigh QC has
emphasised for you today, you were charged with more serious offences under the
Crimes Act 1961. In due course they were amended downwards. I am satisfied that
the charges correctly and accurately reflect your
criminality.


[2]     The Crown accepts that a sentence of imprisonment or home detention is
unnecessary. The only issue for me
today is to decide whether or not to discharge
you without conviction, as Mr Haigh has submitted, or to enter convictions and
impose
additional penalties, whether by way of fine or a sentence of community
work, as Mr Jones QC submits is appropriate.


[3]     Before
dealing with the formal parts of the sentencing, Mr Rollerson, I wish
to acknowledge the members of your family and friends who have
attended in Court
today to give you support. I understand the reason for your wife's absence. I wish
also to acknowledge the assistance
I have received from the submissions made by
Mr Jones and Mr Haigh.


Facts


[4]     I must deal first, in a summary way, with the
facts. The decision on the
appropriate penalty will largely be determined by them.


[5]     You were at all materials time the Chief
Executive Officer of the North
Harbour Rugby Football Union. You were appointed to that post in November 1997.
Before that you had
enjoyed a distinguished career in business. The operational part
of the Union was Team Harbour Ltd. It was part of your responsibility
to administer
its affairs. A critical part of your role was in obtaining funding for the Union
including of course receiving grants
from gaming trusts.

[6]    You knew two gentlemen who operated bars in the Auckland area. Those
establishments were associated
with gaming trusts. Gaming machines were present
on the premises and used by patrons. The proceeds were paid to the trusts and grants
to sporting bodies and other community groups were then made by the trusts
principally on applications through the bars. Both counsel
have confirmed today that
the owners of the bars were in a position, not in any inherently sinister way, to
influence the result
of the allocations made by the trusts.


[7]    In early 2000 you met with the two other gentlemen. You entered into an
arrangement
in this form. It was that any successful funding applications made
through the bars operated by them would yield those two gentlemen
together about
50% of the total grants made. The arrangement was secret. It was not disclosed by
you to your employer.


[8]    The
summary of facts, to which you have pleaded guilty, records that the
effect was to halve the net take to the Union from the grants.
That arose because the
roughly 50% to be paid to the other two was met on payment of false invoices for
non existent services such
as consultancy speaking arrangements, training fees,
functions, building or contracting work. The Crown says they, the false invoices,
were effectively a mechanism for the other two men to achieve kickbacks in return
for the grant of gaming funds. That is a colloquial
reference to what were illegal
payments, to which they had no lawful entitlement, Mr Rollerson.                  Other
intermediaries
were involved.


[9]    Over a period of four years, between May 2000 and March 2004, these two
gentlemen issued false invoices to
the Union for about $1 million. Those sums were
met out of total receipts from grants to the Union of $1.9 million. You approved
the
false invoices, knowing that they were false and that the other two gentlemen would
receive the financial benefits. It is beyond
dispute that you did not receive a cent for
yourself. That offending is the subject of count 1, the most serious charge.


[10] 
 Count 2 is of much less severity. In effect, as Mr Haigh says, it involved a
total sum of some $28,000 owing by sponsors but never
paid. You devised a secret

mechanism for wiping the unpaid debt from the Union's books of account. Nobody
lost any money and you
again received no gain.


[11]      The serious elements of the offending on count 1 are apparent. I merely
emphasise them. First,
the other two gentlemen were able to obtain for their own
benefit substantial and unlawful payments by providing false invoices.
         Those
documents were designed to deceive and to benefit the recipients. They had that
effect.


[12]      Second, as you
now understand by your guilty pleas, your role was central to
the success of this fraudulent scheme. Without your agreement to approve
the
invoices the scheme would never have worked.


[13]      Third, the fraudulent scheme was sustained over a lengthy period; in
other
words, it was not isolated offending ­ it encompassed some four years.


[14]      Fourth, strictly speaking, the Union was
deprived of about $1 million through
the bogus invoices. However, I accept that but for the scheme, and for the reasons
outlined
by Mr Jones this morning, the net take to the Union would have been much
less; in other words, it would not have received grants
anywhere near approaching
that level of $1.9 million. Moreover, most of the $1 million wrongfully obtained has
been repaid. Mr Haigh
has identified the figure as about $800,000; Mr Jones does
not demur or differ. Additionally, of course, the Union has incurred costs
of its own
in dealing with these events. The Serious Fraud Office, of course, has incurred
substantial costs.


[15]      Against
that, and perhaps most importantly, is the point I have already
identified. You did not make any money for yourself. Your motivation
was to obtain
money for the Union's advantage. There was, as Mr Jones says, an indirect benefit
to you in the sense that the improved
financial health of the Union reflected
favourably upon you and the performance of your functions as Chief Executive
Officer. I do
not put too much weight on that factor. What is to your credit, and
what will never be disputed, is that the so-called kickbacks
did not yield you any
money at all.

[16]   It is correct, as Mr Jones submits, that the mischief or evil in this type of
offending
is that it involves deception of an employer, however much it may be to
the employer's benefit, and breaches the relationship of
trust and confidence which
is at the heart of the association between a Chief Executive Officer and the
employing organisation. It
is properly labelled a corrupt practice because others
have been able to influence you to mislead your employer for their financial
benefit.
But I emphasise again, the key element that is present in so many other cases is
lacking here: the secretive practice yielded
you no financial benefit and was designed
for the Union's gain.


[17]   All these things, Mr Rollerson, are known to you. It is
to your credit that you
have entered pleas of guilty. At 55 years of age you have suffered a monumental fall
from grace. I suspect
that when you took employment with the Union you never
anticipated that you would be standing in the dock of a courtroom facing sentence on
charges of this nature.


[18]   The financial consequences
have been truly devastating.        You lost your
employment. Your chances of obtaining comparable work have gone. You enjoyed
a
salary of about $170,000. That avenue of income has disappeared. Your financial
and emotional difficulties have been compounded by
your subsequent investment in
a failed franchising operation. Mr Haigh has outlined your responsibility as personal
guarantor for
debts advanced to a company operated by three people. You were the
only one who stood behind your liabilities personally. As a result
I accept your
evidence, Mr Rollerson, that you have lost a family home worth about $900,000, a
beach house worth around $1 million,
shares, a family boat and, perhaps most
distressing for you, a modest but important inheritance from your parents.


[19]   In a
sense, as Mr Haigh submits, you have already paid the penalty,
Mr Rollerson. What happens formally today is not going to alter things.
That
penalty is all the more severe because of who you are, your public persona, your
reputation and your service to the community.
It is appropriate to acknowledge
those qualities today. These events are of truly tragic proportions for you and your
family. It
is a credit to you and to them that the unit has stayed intact. All of them
support you today.

[20]   It is, though, Mr Rollerson
a rare privilege for me as a Judge of this Court,
exercising a criminal jurisdiction, to see into the life of somebody who has made
a
contribution of your nature. You have enjoyed a distinguished career in sports and
sports administration. You represented New Zealand
as an All Black. Subsequently,
as I noted before, you have enjoyed a successful career in business. You are man
who in all respects
has been of impeccable character. If it is of some assistance to
you, Mr Rollerson, I doubt that what has happened will detract from
your standing in
the eyes of many members of the New Zealand community.


[21]   I have been moved by those who have written in your
support.            It is
appropriate to briefly acknowledge them. Among them, Mr Rollerson, are Professor
Hugh Blair of Massey University.
He played rugby with you at representative and
national level. He describes you as a devoted family man. He says that you have
been
a great participant in the community. You have made a huge input. He
recommends you in the strongest possible way as a valuable member
of our society.
He says you have made a significant contribution to rugby while providing a
wonderful family environment.


[22]
  Mr Graham Mourie, a former All Black captain, has written. You have been
friends and team mates for over 35 years. He speaks of
your loyalty, your sense of
fair play, your generosity and your commitment to the wellbeing and welfare of
others. Mr Laurie Margrain,
who is the Chair of the North Harbour Rugby Football
Union, also writes. He speaks in similar ways about you. He says, and this is
a
measure of his respect for you, that he would employ you again despite what has
happened. Very few members of our society, Mr Rollerson,
enjoy such a deep,
genuine and widespread degree of respect in the community.


[23]   All this is a precursor to the sentence I
impose. It sets the background in
every way.     I have given the question of your sentence anxious and careful
consideration. Mr
Haigh acknowledges that the issue of whether or not you should
be discharged without conviction involves a delicate weighing of a
number of
factors. On one side of the equation is the nature and seriousness of the offending;
on the other side are the effects
on you personally.

[24]   After undertaking that exercise, Mr Rollerson, I am not satisfied that I should
discharge you without
conviction. The nature and extent of your wrongdoing and its
underlying abuse of trust disqualifies that remedy; I am not satisfied
that convictions
would be disproportionate to the offending. In this case the most likely effect of
convictions would be on your employment. However, if and
when you applied for
work with another organisation you would be duty bound to disclose fully what has
happened. Furthermore, the
community knows of your convictions. In my judgment
the existence of convictions would have no bearing on whether or not you obtain
employment again. In that respect, Mr Rollerson, you will always be able to refer
others to a copy of my sentencing notes.


[25]
  What then is the appropriate penalty? You are financially and emotionally
destitute. There is no point in imposing a fine. Nor
is there any point in ordering
you to pay costs. Nor, Mr Rollerson, in my view, is there any point in sentencing
you to a term of
community work. You have, as I have said, paid the penalty; you
have paid a much greater price than others would for the same offending.
You have
also, as I have attempted to outline, served the community with great distinction and
success, loyalty and commitment.


[26]   Accordingly, Mr Rollerson, I enter convictions and otherwise discharge you
on the two counts. I hope that that act brings
an end to a very unhappy episode of
your life. Also I hope that it enables you to look forward in a positive way now, to
draw on
the same characteristics that have served you so well in the past, to rebuild
your life. I wish you well. Please stand down.




                                      ______________________________________
                                      Rhys Harrison
J