Esau v R [2014] NZHC 997 (14 May 2014)

Last Updated: 26 May 2014

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CRI-2014-409-000025 [2014] NZHC 997

BETWEEN	TINA EMMA ESAU Appellant
AND	THE QUEEN Respondent

Hearing:	1 May 2014
Appearances:	A J McKenzie for Appellant K Kasire for Respondent
Judgment:	14 May 2014

_{JUDGMENT OF GENDALL J}

Introduction

[1] The appellant appeals the sentence imposed upon her in the District Court by His Honour Judge Callaghan on 12 March 2014 following her conviction on five charges of theft by a person in a special relationship, contrary to ss 220 and

223 Crimes Act 1961. A sentence of four years three months imprisonment was imposed on 12 March 2014 with an order for $100,000 in reparation suspended while she was in prison. The incidents in question involved $1,142,280.34 which she stole from her employer at the time over a period between 2009 and 2013.

District Court Judgment

[2] In sentencing Miss Esau in the District Court, Judge Callaghan set out details of the offending. This was basically that she was under a trust obligation to account to her employer for business funds that were given to the business to pay onto people who were entitled to tax refunds. Ms Esau stole the funds for her own benefit and

_{explained this as being mainly due to a gambling addiction she had.}

ESAU v R [2014] NZHC 997 [14 May 2014]

[3] The pre-sentence report noted that 60% of the money stolen by Ms Esau had been spent on gambling with the rest being used for holidays overseas for herself and her family. The victim, a small family company involving the Hegarty family it seems could not understand how Ms Esau their friend and employee could afford to be living at such a high level when it was a style of life that they did not have access to.

[4] Ms Esau was a first time offender and said that she was sorry and wished to apologise to the Hegarty family. The Judge questioned however why it had not been done earlier.

[5] Counsel had referred a number of decisions to the Court. Judge Callaghan decided the most useful case for sentencing here was the High Court decision in Singh v Serious Fraud Office.¹ In this case theft from Fonterra consisting of

$1,348,000 was involved plus about $90,000 of offending in respect of benefit fraud. The District Court in that case had decided on a starting point of six years imprisonment. On appeal to this Court, Andrews J, having considered all the circumstances, came to the view that neither this nor the end sentence of four and a half years could be considered excessive.

[6] Judge Callaghan noted that the offending in Singh, although somewhat different, was in many ways similar to the offending in the instant case. In Singh, there were 84 instances where accounting software had been manipulated to enable the offender to steal the $1,348,000. Judge Callaghan noted that in the present case, far more events occurred being 488 occasions of theft over a period of offending of over four years from 5 November 2009 through to 4 December 2013.

[7] The Judge noted that in the Singh decision, $900,000 of the $1.348 million was actually recovered through the sale of properties. The actual loss to the complainant Fonterra there was between $400,000 and $500,000, although $90,000 to Work and Income was still outstanding. In that case, as I have noted, a starting point of six years was considered appropriate and an end sentence of four and a half

_{years upheld.}

¹ Singh v Serious Fraud Office HC Auckland, CRI-2008-404-361, 4 March 2009.

[8] In the present case, Ms Esau and her employers had developed a close relationship and even a friendship. She was seen as more than a trusted employee. The Judge found that this issue of trust however was an ingredient of the offence, so the trusting relationship with the employer was not an aggravating feature. He noted that the amounts involved, the slim likelihood of reparation, the number of transactions, the period during which the offending occurred, the effects on the victim, and the breach of the familial type relationship over and beyond the breach of the business relationship, were all factors here

[9] Judge Callaghan considered an order for reparation of $100,000 was appropriate. He noted that it would be recoverable in civil proceedings in the future if the defendant became wealthy.

[10] He noted submissions from Mr McKenzie for the accused that this was not a situation where the complainants or the victims could not continue to live and operate their business. The Judge considered that the loss of just over $1.1 million must have had a substantial effect on what he gleaned was predominantly a family business set up which had done relatively well. Whilst this loss might not have stopped the Hegarty family from being able to live, there was significant emotional and psychological trauma as a result of Ms Esau’s theft.

[11] The Judge found that there had been significant effects on the family, and noted that cases involving similar amounts had looked at sentences in the region of six or seven years as starting points. He adopted a starting point of six and a half years imprisonment.

[12] Judge Callaghan gave a discount for the fact that Miss Esau was a first offender and that she went to the police and admitted her actions from an early point. He considered this needed to be recognised and accordingly he reduced the starting point from six and a half years to five years and nine months.

[13] The Judge considered that Miss Esau was entitled to the full 25% discount for her guilty plea amounting to 18 months. This brought the sentence down to four years and three months. And, the reparation order for $100,000 was made.

Submissions for appellant

[14] Submissions advanced for the appellant here contend that the sentencing Judge fell into error in his assessment that as to a starting point the appellant’s case was worse than that of Singh v Serious Fraud Office.² The amount stolen in that case was higher ($1.348 million) and the defendant in that case also faced charges of benefit fraud and passport forgery offences, which offending was not present in this case.

[15] It was also submitted in the present case that overreliance had been placed on the issue of lack of reparation. This was on the basis that reparation/recovery of some of the money stolen was available in Singh, which left an outstanding amount of approximately $600,000.00.

[16] Ms Esau’s contention is that the stolen monies here did not really occasion major financial hardship to the victims, and the victim impact statements speak primarily of a breach of friendship as the greatest harm.

[17] It was submitted that the offending here was actually less serious than Singh. A start point of no more than six but more appropriately five to five and a half years imprisonment was suggested as appropriate.

[18] It was accepted that the Judge did take into account the absence of previous convictions and Ms Esau’s cooperation with the Police. It would seem that counsel for the appellant thought a higher discount of around 10-15% for this was warranted. With a notional start point of five years and nine months, a discount on this basis of approximately 9 months was available bringing the revised start point to under five years. The full 25% discount (which was allowed here) would then reduce the sentence to one of three years and nine months.

Submissions for respondent

[19] The Crown’s overall submission is that no error in the sentence imposed here has occurred and that the appeal should be dismissed.

² Singh v Serious Fraud Office HC Auckland CRI-2008-404-361, 4 March 2009.

[20] Ms Basire for the Crown also set out the background to the offending and emphasized the fact that the transactions involved numbered in the hundreds.

[21] Judge Callaghan’s sentence it was noted also meant that, by virtue of the Judge “rounding the figures off”, a slightly greater discount than 25% was given for the guilty plea.

[22] As to the appellant’s position that the alleged error in this case was that the Judge adopted a starting point that was too high and that the sentence was manifestly excessive, the Crown position was that the final sentence was well within the range open to the Judge and he had relied upon appropriate case law in considering the starting point and available credits.

[23] It was noted that the authorities cited by Andrews J in Singh v Serious Fraud Office indicated that for offending by an employee on a similar scale to the present, a starting point of six to seven years was common.

[24] Aggravating factors which justified the starting point of six and a half years were seen to include the number of theft transactions, the lengthy period of time involved for the offending, and the victim impact and the extreme breach of trust, given the familial type relationship between the appellant and her previous employers.

[25] Reference was also made to the reparation which in Singh meant the total loss there was only about $600,000. Judge Callaghan noted that in the present case there was no money recoverable to permit any reparation at all.

[26] The Crown also submitted that very generous discounts were applied to the Judge’s starting point. Ms Esau was treated as a first offender and received credit for her cooperation with the police. A credit of 9 months could be viewed as generous in the circumstances, given the period of time over which offending occurred and the overwhelming evidence against the appellant.

[27] For all these reasons, the Crown considered that there was no error in the sentence at all and the appeal should be dismissed.

Legal principles and my decision

[28] Section 250 Criminal Procedure Act 2011 applies to this appeal. That section provides that the appellant must show that there was an error in the sentence, and that a different sentence should be imposed.

[29] The offending with which Ms Esau has been convicted carries a maximum penalty of seven years imprisonment.

[30] As I have noted, the case of Singh v Serious Fraud Office was relied on by the District Court here. In that case the end sentence of four and a half years (being three months longer than the end sentence in the present case) was upheld on appeal. The starting point in Singh was six years imprisonment for offending involving fraud of about $1,300,000 over a period of 14 months, but reparation brought the loss down to $600,000.

[31] In Singh, as I have already noted, offending included also the creation of false passports and benefit documents and false income certificates that were provided to loan providers for the purchase of several properties. It might be argued that the offending in Singh was more serious than the present case. However, the loss in Singh was about the same amount prior to any consideration of reparation. Substantial reparation was available in Singh but is highly unlikely here.

[32] As I see the position, the starting point of six and a half years although at the high end of the scale, in the circumstances of this case was appropriate. As the District Court Judge properly noted, there were a number of aggravating features of the offending that justified the six and a half year starting point. It is clear Judge Callaghan properly took these features into account in setting the starting point.

[33] Of note were the “huge” number of transactions involved, and the fact that the offending had extended over a lengthy period with serious victim impacts. In addition, a substantial breach of trust had occurred, which was over and above that

which was implicit in a charge of the kind faced by Ms Esau, given the familial type relationship that existed between her and her previous employers.

[34] The learned Judge also noted that, unlike the Singh case, there was no money recovered here to permit any reparation at all. On that analysis, which was appropriate to make, the Singh decision resulted in a final loss of no more than

$600,000.

[35] Finally, in my view a generous discount was applied to the starting point here. That was a nine month discount for co-operation with the police and for Ms Esau being treated as a first time offender. The 25% discount for the guilty plea was the maximum available. And the suspended $100,000 reparation order was also appropriate in the circumstances here.

[36] I consider that, while the final sentence was a stern one, with a start point at the upper end of the range, it was an entirely appropriate sentence for this offending. I do not see any error with the end sentence of four years and three months in this case.

[37] Accordingly, this appeal is dismissed.

...................................................

Gendall J

Solicitors:

Andrew McKenzie, Christchurch

Raymond Donnelly & Co, Christchurch