R v Rose [2016] NZHC 1109 (25 May 2016)

Last Updated: 25 May 2016

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2014-004-008108 [2016] NZHC 1109

THE QUEEN

v

PAUL KENNETH ROSE AND

_{JANE CLARE ROSE}

Hearing:	25 May 2016
Counsel:	N R Williams and N R Greive for the Crown R S Reed for the Defendant, P K Rose M E Goodwin and S M Kilian for the Defendant, J C Rose
Sentence:	25 May 2016

_{SENTENCE OF EDWARDS J}

Counsel: R S Reed, Auckland

M E Goodwin, Auckland

Solicitors: Meredith Connell, Auckland Serious Fraud Office, Auckland Kilian and Associates, Auckland

R v ROSE and ROSE [2016] NZHC 1109 [25 May 2016]

Introduction

[1] Paul Kenneth Rose, Jane Clare Rose, you appear for sentence today having been found guilty of charges of obtaining by deception under s 240 of the Crimes Act 1961.

[2] Mr Rose, you were convicted and are for sentence on 10 representative charges relating to offending in 2006 and from 2010 to 2012. Mrs Rose, you were convicted and are for sentence as a party to the offence on nine representative charges for offending from 2010 and 2012.

[3] The maximum penalty for obtaining by deception is seven years imprisonment.¹

[4] I turn to the facts giving rise to the charges.

Facts

[5] Mr Rose, you were a long-standing and trusted employee of Mighty River Power and prior to that, the Natural Gas Corporation. You were first employed at Southdown Power Station in November 2001.

[6] Penrose Electrical Services Ltd was incorporated in 2006 whilst you were employed at Mighty River Power. The original director of that company was your former partner. Penrose Electrical supplied goods to Mighty River Power, and you were convicted in relation to payments made by Mighty River Power for those goods.

[7] Aero Automation Ltd was incorporated in 2010. By this time, Mr Rose, you were an electrical engineer at Mighty River Power.

[8] Your employment contract required you to disclose any activity or association that could be considered a conflict of interest with your role at

¹ Section 241(a).

Mighty River Power. You did not disclose any connection to either Penrose Electrical or Aero Automation. You deliberately did not do so in order to deceive Mighty River Power into making payments to both companies. You were convicted in relation to payments totalling around $2.2m.

[9] Mrs Rose, you were charged as a party to the offending. You were in a relationship with Mr Rose when Aero Automation was incorporated. You were the sole shareholder and director of that company and responsible for the day to day running of the business. The jury found you guilty of assisting Mr Rose in his deception of Mighty River Power in order to obtain payment for goods supplied, and you were found guilty of assisting Mr Rose in relation to payments totalling around

$1.8m.

Sentencing process and principles

[10] In sentencing you both I am required to take into account the purposes and the principles of the Sentencing Act 2002. The purposes that are particularly relevant in your case are:

• to hold you accountable for your offending;

• to provide for the interests of the victims of the offending;

• to denounce your offending and deter others from committing the same or similar offending; and

• to promote a sense of responsibility for, and an acknowledgement of the harm caused by the offending.

[11] Your offending is not victimless. The victim impact statements from Mighty River Power make it clear that your offending has had a very real impact on those employed at Mighty River Power and on those who considered you both to be close friends.

[12] I have received a victim impact statement from Mr Hastie who was a manager at Mighty River Power and also a close personal friend of the both of you. He describes feeling sadness, frustration and anger at the betrayal of what he regarded as a special bond between you.

[13] Mr Griffin, another manager at Mighty River Power, describes how your offending has brought the work achieved at Mighty River Power during that period into disrepute. The investigations that followed your offending placed pressure on him and others at Mighty River Power and created a strained atmosphere of mistrust.

[14] Finally, Mr Hoerler, a risk assessment officer at Mighty River Power, also confirms the negative impact the investigation which followed discovery of your offending had on the culture at Southdown. Mr Hoerler also describes the reputational impact of your offending both before and after Mighty River Power’s high profile listing on the share market.

[15] The quantum of any loss caused and benefit gained is relevant in your sentencing today and I will return to that later on, but it is clear from these victim impact statements that your offending, and in particular yours, Mr Rose, affected many of those at Mighty River Power very deeply.

[16] In terms of the principles of sentencing, those which assume particular importance in your case are:

• The need for the sentence to reflect the gravity of the offending, including the degree of your individual culpability;

• The requirement to take into account the seriousness of the type of offending as indicated by the maximum penalty of seven years prescribed for the offending; and

• The need for consistency in sentencing, and there are two aspects to this. The first is the need for similar sentences to be imposed on people who commit

like offences. The second is the need to consider the sentences which reflect the varying degrees of culpability that you each have in the offending.

[17] Other principles which are relevant are:

• The need to take into account the effect of the offending on the victims;

• The need for a proportionate response on behalf of the community; and

• The need to impose the least restrictive outcome in the circumstances. [18] The process I have followed in fixing your sentence today is to:

• First, fix a starting point to reflect the seriousness of your offending; and

• Second, adjust that starting point having regard to aggravating and mitigating factors personal to each of you; and

• Finally, consider the overall sentence in light of totality principles. [19] I propose to sentence you first Mr Rose.

Mr Rose

Starting point

[20] As I have said, the first step is to fix a starting point for your offending. There is no established benchmark for cases of this kind. The Court of Appeal has confirmed that culpability is to be assessed by reference to factors such as the magnitude and sophistication of your offending; the impact on victims; the amounts involved; any losses suffered; the duration of the offending; and the seriousness of

_{the breach of trust.}²

² R v Varjan CA97/03, 26 June 2003 at [22]; and Arnott v R [2015] NZCA 236 at [8].

[21] You were convicted as the principal offender in respect of 10 representative charges. Each charge related to payments made by Mighty River Power on invoices rendered by either Penrose Electrical or Aero Automation. You were convicted on a total of 174 payments.

[22] The jury found you not guilty in relation to two payments the subject of the charge relating to Penrose Electrical. Your involvement in obtaining those two payments was less obvious as you were not the party to have receipted the goods in those instances. You were also found not guilty on a further charge relating to offending by another company of which your former partner was also a director. Faced with a bank record for this company the jury must have had doubts about the extent of your connection or interest in this company, and again I consider the jury afforded you the benefit of a reasonable doubt for that charge.

[23] Your counsel suggests that the jury’s verdicts are consistent with you only being connected with the companies, rather than having an interest in them. She suggests your culpability is less than if you had a direct interest in those companies. I do not agree. The jury must have decided that your connection or interest in the companies was sufficient to trigger the legal duty to disclose. It is the failure to disclose, with an intent to deceive Mighty River Power, that lies at the heart of the jury’s verdicts and is a relevant marker of your culpability.

[24] I have considered your role in the offending compared to that of your co- offender, Jane Rose. Your counsel characterises your offending in relation to Aero Automation as you hiding your connection so that your partner and then your wife could obtain a benefit, being the profits of the company. That characterisation significantly underplays your role in the offending. Although your partners at that time undertook the day to day administrative tasks, the essence of each business was the supply of electrical parts and services to a power station. Neither of your partners had the requisite skill, knowledge or experience to operate such a business. You, of course, did. Not only did you have the necessary technical skills, but, by virtue of your employment, you had knowledge of the particular requirements and the needs of the Southdown power station. But for your employment at Southdown, neither Penrose Electrical nor Aero Automation would have conducted business with

Mighty River Power. You had the legal obligation to disclose your involvement with those companies but you did not. I consider you to be at the centre of the offending, Mr Rose, and significantly more culpable than your co-offender.

[25] I also consider your offending to be pre-meditated and sophisticated in nature. It involved the incorporation of companies; the approval of those companies as vendors to Mighty River Power; the placement of purchase orders; rendering of invoices; and receipt of payment. You exploited deficiencies in the processes and systems set up at Mighty River Power for your personal gain. The scheme set up for Penrose Electrical was essentially replicated for Aero Automation. Your offending took place over a three year period, although there were periods during that timeframe where no invoices were rendered and no payments were made. Your deception was repeated in relation to each invoice placed and each payment received. I consider the deliberate and repetitive nature of your offending over this

period to be an aggravating feature of your offending.³

[26] Another aggravating feature is the extent of the abuse of trust involved.⁴

First, there is the breach of the obligation to your employer. You held specialist skills and knowledge of the processes and operations of Mighty River Power. You were described as the “go to guy” by fellow employees; technically capable and having specialist knowledge. Instead of using those skills and that knowledge to further the interests of Mighty River Power, you used them to funnel business to companies from which you ultimately benefited.

[27] Your offending also involved a breach of the trust reposed in you by family and friends. You involved your mother in your deceit by asking her to become a director of Penrose Electrical. Your mother had no reason to be director of a company supplying parts to a power station. The only possible purpose in asking her to be involved was to disguise your connection to that company. You also betrayed the trust of Richard Hastie, a friend and fellow co-worker at Mighty River Power, and I have already referred to the impact your betrayal has had on him.

[28] The quantum of any loss caused, or benefit gained as a result of your offending is relevant in fixing a starting point, and measuring loss and benefit has been a matter of some complexity in your case and I do need to spend some time addressing both those factors.

[29] In terms of loss, there is both intangible and tangible loss caused by your offending.

[30] The intangible loss includes the serious effect your offending has on the community. Crime such as yours undermines the confidence that is essential to commercial life. Lord Cooke observed in an earlier case sharing the same name as yours that numerous systems within society cannot function without placing trust in employees for the management and handling of money.⁵ When those in senior positions of trust abuse that trust, the very basis for successful corporate life is undermined.

[31] There can be no doubt in this case that your offending has also harmed Mighty River Power and those working there. The victim impact statements I referred to earlier confirm the cultural, reputational and other forms of harm suffered by Mighty River Power. It also lost the opportunity to decline to do business with either Penrose or Aero Automation. That intangible harm is not to be regarded as any less important simply because a price tag cannot be assigned to it.

[32] The quantification of any tangible loss caused by your offending is hotly contested in your case. The Crown must prove any disputed aggravating fact beyond reasonable doubt for the purposes of sentencing.⁶

[33] Although you were convicted on payments totalling approximately $2.2m, that sum does not represent a loss to Mighty River Power. That is because both companies provided goods and services in return for the payments received. It is the net loss to Mighty River Power which I consider is the appropriate measure of any direct financial harm caused by your offending.

[34] The Crown has not proved net loss on an invoice by invoice basis. It was not necessary for the jury to find that there was overcharging in order to find you guilty and that is not the way the case was presented. Nevertheless, the Crown says Mighty River Power has suffered loss in the range of $200,000 to $800,000. Mr Williams submits to me today that that is a conservative estimate of loss. That loss relates to investigative costs, payments made for services, and payments made for parts, and I deal with each of these heads of loss in turn.

[35] There is no dispute that the investigative costs incurred by Mighty River Power following the discovery of your offending may be properly categorised as a loss to Mighty River Power. Those costs amount to approximately $203,000 and are at the bottom of the range posed by the Crown. Your counsel disputes the reasonableness of some of these costs. I am unable to determine the reasonableness or otherwise of those costs in the context of your sentencing and I do not think it appropriate to do so. For the purposes of assessing your culpability, I take into account that Mighty River Power has incurred costs of around $203,000.

[36] As to the second head, the Crown says that Mighty River Power has also suffered loss in respect of the payments it made to Aero Automation for services. Those payments are about $200,000 also. I consider all of those services were provided by you, Mr Rose. You had the necessary skills and capability to perform those services. There was no evidence of any external contractors afforded access to Mighty River Power to allow those services to be performed. The irresistible inference from the evidence at trial is that it was you who signed in and out as Tony Mitchell around the same time as Mr Piper. This aspect of your deception places the gravity of your offending towards the higher end of the spectrum in my view.

[37] I have no doubt that Mighty River Power would not have paid you or Aero Automation had it known that you were undertaking the services. However, based on the evidence adduced at trial, I cannot be sure that Mighty River Power would not have made the same payments to another third party supplier to carry out those services. In terms of loss therefore, I am not satisfied beyond reasonable doubt that Mighty River Power has suffered loss on the payments made for services.

[38] I also have a reasonable doubt about loss suffered in relation to the third head of loss – payments made for the supply of parts. I am not sure that Mighty River Power would have sourced all of the parts supplied directly from the supplier, rather than going through another intermediary. Although there was evidence that the mark-up on some of the invoices for parts was well above market, I cannot be sure that an excessive mark-up was charged in relation to each and every invoice. For that reason, I do not consider it safe to rely on an approximation of loss based on figures derived from the financial statements for Aero Automation. Again, I am not satisfied to the requisite standard that Mighty River Power suffered direct loss in relation to payments made for services or parts, based on the evidence adduced at trial.

[39] I also need to take into account the evidence at trial which was that Aero Automation supplied parts having a value of $143,000 which were not paid for by Mighty River Power. The original supplier of those parts to Aero Automation was left out of pocket. When that figure is taken off the investigative costs, it reduces the net loss to Mighty River Power to approximately $60,000.

[40] This does not mean that Mighty River Power has not suffered loss beyond this sum. It may be able to prove substantial losses as a result of your deceit in civil proceedings. It is of course free to pursue that course if it so wishes. However, for the purposes of sentencing, I must apply the criminal standard of proof, and on that basis, I cannot be sure that Mighty River Power has suffered loss beyond the sum of

$60,000.

[41] I now turn to consider the benefit gained as a result of your offending. Loss suffered does not necessarily equate to benefit gained. I consider the benefit obtained for an offence of obtaining by deception to be a better indicator of culpability. The evidence suggests that you did derive a substantial benefit as a result of your offending.

[42] There are no financial documents from which Penrose Electrical’s profitability might be ascertained. Any benefit derived from that offending cannot therefore be quantified.

[43] The financial statements for Aero Automation show that it was a profitable business. Your counsel has calculated the maximum total benefit to Aero Automation as being around $618,000. That figure takes into account the total net profit for the business of $222,750, and the salary drawn by Mrs Rose over three years of operation, totalling $339,254. Although I do not agree with all the calculations by which the total figure has been derived, I nevertheless adopt the end figure of $618,000 for the purposes of this sentencing. That figure represents the total benefit which accrued to Aero Automation as a result of your deception.

[44] In terms of the benefit which you personally derived, it is clear that Aero Automation profits were used to fund a lifestyle that both you and Mrs Rose shared in together. Drawings were made on Aero Automation’s account for home and lifestyle stores, restaurants, bars, entertainment and other purchases of a personal nature. Aero Automation funds were used to make a deposit payment on a house. There was also evidence of direct payments being made by Aero Automation to eight different bank accounts operated by you, Mrs Rose and a joint consulting company you both owned. The net effect of that flow of funds is payments from Aero Automation to those accounts in a total sum of around $628,000. You had access to a substantial portion of those funds by virtue of being a signatory to six of the eight bank accounts into which the funds flowed.

[45] Although I cannot determine the precise figure by which you personally benefited from Aero Automation’s profits, it is nevertheless clear from this evidence that you shared, in a substantial way, in the ill-gotten gains from your offending. Indeed that was the whole purpose of deceiving Mighty River Power into making the payments. You would hardly have continued had it not been profitable for you to do so. I reject any suggestion that this was offending to support your partner’s business aspirations. The motivation for your offending, Mr Rose, was greed.

[46] In setting a starting point, I have carefully considered the large number of cases referred to me by counsel. I consider three of those cases to be of direct assistance in assessing a starting point. Each of these three cases involved employees setting up companies which were then used to supply goods and services

to their employer. The failure to disclose involvement with the companies was a key element of the fraud in each case.

[47] In Serious Fraud Office v Ellis, the two offenders set up companies to provide goods and services to the company of which they were long-standing employees.⁷ The offending occurred over the course of two years and resulted in a direct gain to the defendants of $460,000. The offenders accepted that there had been overcharging. A starting point of five years imprisonment for the obtaining by deception charges was adopted in that case.

[48] In R v Yin Ming Miu, Mr Miu supplied IT equipment to his employer through a company he set up over a six year period.⁸ Overcharging was involved in this case also, and a loss of approximately $385,000 was established. A starting point of four years imprisonment was adopted.

[49] In R v Taylor, payments totalling $634,000 were made to companies in which Mr Taylor had an interest over a two year period. Mr Taylor’s personal benefit was estimated to be $113,000. Overcharging was established in that case also. A starting point of three years imprisonment was adopted on charges of using a document with intent to defraud.⁹

[50] These cases establish a range of three to five years imprisonment as an appropriate starting point for offending analogous to yours. Overcharging was an aggravating feature in all three cases. I consider the absence of that aggravating feature in your offending justifies a starting point towards the lower end of this range. However, the amounts involved in your offending are substantially higher than those in R v Taylor, the duration of your offending is longer and the number of payments made also higher. Those factors justify a starting point greater than the

_{three years adopted in that case, in my view.}

⁷ _{Serious Fraud Office v Ellis HC Auckland, CRI 2005-404-015827, 18 July 2006.}

⁸ _{R v Yin Ming Miu DC Auckland, CRI-2010-004-012448, 5May 2014.}

⁹ R v Taylor HC Auckland CRI 2006-092-1488, 6 July 2007.

[51] Taking into account all these factors, I consider a starting point of three years, eight months imprisonment reflects the gravity of your offending in all the circumstances.

Personal factors

[52] I now turn to consider whether any adjustment should be made to that starting point for personal aggravating and mitigating factors.

[53] You are 44 years of age. You are currently employed and are well supported by your current employer who is aware of your offending. You have four children: a

17 year old and a 14 year old from your first relationship, an eight year old from your second relationship, and an 18 month old son with your current partner. Your partner is currently expecting another child. You have had extensive involvement with your local soccer club over a number of years and the references I have read indicate you are a devoted and committed family man.

[54] In terms of aggravating features, I note that you do have previous convictions, but these are historic and they do not bear any relevance to the offending. I therefore do not take them into account in sentencing you. There are no other personal aggravating features requiring an uplift from starting point.

[55] In terms of mitigating factors, I take into account your extensive community involvement with the soccer club over a lengthy period of time. I also take into account your family circumstances. The references I have received indicate you have a deep commitment to your children and family members. They are innocent in all of this and will suffer greatly if a sentence of imprisonment is imposed.

[56] However, the extent of any credit allowed for these factors must be modest in light of your prior historical convictions and the repetitive nature of your offending over a number of years. I allow a three month deduction for your community involvement and your personal circumstances.

[57] The pre-sentence report raises matters of concern. It records that you have a deep sense of entitlement, and limited insight into your offending behaviours. You are stated to have a high risk of re-offending. That report suggests your expression of remorse may not be genuine. However, a letter from you received very recently apologises for the harm that you have caused, accepts responsibility for the impact on Mighty River Power, and expresses regret for your actions. I consider a discount for remorse is appropriate, although given the pre-sentence report and the very late expression of regret, only modest credit should be afforded. I allow a further discount of three months for remorse.

[58] Finally, I note that you have offered reparation from assets currently restrained under the Criminal Proceeds (Recovery) Act 2009. I do not consider a further discount is required to reflect such an offer. Any discount which might be otherwise appropriate is subsumed within the discount afforded for remorse.

[59] The discount for personal circumstances brings your sentence to three years and two months.

Totality

[60] The final step is to stand back and consider the sentence in totality to ensure that it responds to the principles and purposes of sentencing which I mentioned at the outset.

[61] The extent of the abuse of trust, the premeditated and repetitive nature of your offending, and the amounts involved, require strong denouncement and deterrence in my view. A sentence of imprisonment is the only appropriate response to the gravity of your offending.

[62] I note here also that I have turned my mind to the question of reparation. The Crown seeks a sentence of reparation today, and the Sentencing Act 2002 requires me to impose such a sentence if I am lawfully entitled to do so, subject to certain exceptions. I consider there are special circumstances which make a sentence of reparation inappropriate in this case. First, any reparation would come from assets

which are currently restrained under the Criminal Proceeds (Recovery) Act. The Commissioner of Police has not consented to release from those restrained assets to allow reparation to be made. I understand that an application to forfeit those assets is pending and that any such application will be contested. Fixing reparation in those circumstances is difficult. Second, as I have already noted, Mighty River Power has other avenues available to it to pursue relief. Given the complexities in calculating loss, I consider those avenues are preferable routes to recovery. For these reasons, I have concluded that a sentence of reparation is not appropriate in the special circumstances of this case.

[63] I do note that had I made a sentence of reparation, I would not have adjusted the term of imprisonment otherwise imposed, and that is because on the information available to me, any reparation would have been made from the restrained assets. That is akin to the involuntary reparation discussed by the Court of Appeal in R v

Patterson.¹⁰ An offender gets little or no credit for reparation of that kind, as it does

little to mitigate the culpability of the offending. In short, Mr Rose, even if I had decided to impose a sentence of reparation, you would still remain a fraudster, and I would not consider further discount from the starting point to have been appropriate.

[64] The sentence that I intend to impose is solely one of imprisonment.

Sentence

[65] Mr Rose, please stand.

[66] On each of the 10 representative charges of obtaining by deception, I

sentence you to imprisonment of three years, two months.

[67] The sentence is to be served concurrently on each of the charges. [68] Mr Rose, please stand down.

¹⁰ R v Patterson [2008] NZCA 75; leave to appeal refused by Patterson v R [2008] NZSC 70.

Jane Rose

Starting point

[69] Mrs Rose; I now turn to the relevant factors in your offending for the purposes of setting a starting point.

[70] As I have already described, you were the sole director and shareholder of Aero Automation and were responsible for the day to day running of the business. This included liaising with customs and freight agents, issuing invoices, liaising with suppliers, and managing the financial side of the business. Your involvement lent the business the appearance of legitimacy. In reality, it was a business built on the back of a deceit.

[71] You were found guilty of assisting Mr Rose in relation to $1.8m of payments made to Aero Automation. Your offending spanned 19 months, over a period of two years. In order to find you guilty, the jury had to be sure that you knew that Mr Rose had a duty to disclose his connection to Aero Automation and that he deliberately did not do so in order to deceive Mighty River Power into making the payments to Aero Automation. Key evidence against you was the use of the name Tony Mitchell during the period of time covered by charges 16 to 20. Using this name assisted Mr Rose to keep his connection to Aero Automation a secret from Mighty River Power and ensured payments continued to be made.

[72] The jury found you not guilty on a number of payments made on invoices which were issued between 22 November 2010 and 3 October 2011. That period reflects a time when you and Mr Rose were separated, with you only becoming involved with the business again when you became an authorised signatory to the Aero Automation bank account in October 2011. I consider this verdict reflects the jury’s view that you played a secondary role to that of Mr Rose in the offending and your culpability is to be assessed accordingly.

[73] Your offending did not involve a breach of trust to the same degree as Mr Rose. Unlike Mr Rose, you owed no legal duty of disclosure to Mighty River Power. You were not an employee there and you were not in a position of trust and confidence. This is also significant in distinguishing your culpability from that of Mr Rose.

[74] In terms of the quantum of your offending, you were found guilty of assisting Mr Rose to obtain payments amounting to $1.8m. For reasons already explained in relation to Mr Rose, I do not consider the $1.8m figure accurately reflects your culpability in the offending.

[75] The Crown suggests that as you have been found guilty in relation to percentage of the Aero Automation offending, you should be held accountable in relation to that same percentage in relation to the total loss sustained by Mighty River Power. I do not consider that approach to be an accurate measure of your role and culpability in the offending either. The investigation costs incurred by Mighty River Power relate to an employment investigation following the discovery of Mr Rose’s offending. You were not an employee at Mighty River Power. I have already found that loss on payments for services cannot be established beyond all reasonable doubt. I note that, unlike Mr Rose, you were not involved in actually providing those services. I also note that you were found not guilty in relation to a number of invoices for services the subject of charge 15. I have not found any proof of loss to the requisite standard in respect of payments made for parts, and so applying a percentage to the total loss suffered does not accurately reflect your culpability, in my view.

[76] It is clear from the evidence that you derived a substantial benefit from the offending. I have already noted that Aero Automation was a successful business. It afforded you a considerable salary over a number of years. As I have already noted in relation to Mr Rose, funds channelled through Aero Automation were used to place a deposit on a property, and to fund a lifestyle that you enjoyed together with Mr Rose. It was a lifestyle which you could not have enjoyed had you not assisted Mr Rose with his deception of Mighty River Power. Clearly, you gained a direct and substantial benefit from your offending.

[77] I am mindful that quantification of the benefit according to the salary you derived, or drawings on your shareholder account is more straightforward in your case as those figures are shown in the financial accounts. But relying on those figures alone risks overstating your culpability in my view. That profit, and your salary, was derived as a result of payments made by Mighty River Power which were obtained as a result of Mr Rose’s deception. I consider Mr Rose to be the primary offender in this case, not you, despite what the financial figures may show.

[78] It follows from what I have said that I consider your culpability in the offending to be substantially less than what the Crown has submitted. The starting point of 4.5 to 5.5 years imprisonment which the Crown proposes is too high in my view.

[79] Your counsel suggests your culpability is akin to offending involving benefit fraud where a party has failed to disclose a particular aspect of their relationship in order to receive a benefit. I consider that to be a good analogy in your case. Starting points of two years imprisonment have been applied in relation to welfare fraud in sums around the $80,000 mark, and with 15 months adopted for offending totalling

$51,000.¹¹ The total amounts involved in your offending are considerably more than

these sums and justify higher starting points. On the other hand, your offending may be considered to be less serious than in these cases as it did not involve a direct theft by you.

[80] Taking into account all these factors, I consider a starting point of two years and two months imprisonment appropriately reflects your culpability in the

_offending.

¹¹ Whitelaw v R [2012] NZCA 438; Heta v R [2011] NZCA 267; and Winsterstein v Housing

New Zealand Corporation [2012] NZHC 723.

Personal factors

[81] I now turn to consider whether there are any adjustments to be made for personal factors.

[82] Soon after the offending was discovered by Mighty River Power, you permanently separated from Mr Rose. You are a single mother having primary custody and care of your three children aged 16, 13 and nine.

[83] As a result of your conviction, you have lost your employment and you currently have no alternative form of employment. This has placed you in a difficult situation, particularly in terms of support of your children.

[84] There are no personal aggravating factors which would require an uplift. There are, however, a number of personal mitigating factors which would justify a discount.

[85] You have no previous convictions. You have received a significant level of support from both friends and family and your employer who all speak very highly of you. You deserve credit for that. However, any discount for your previous good character must be tempered by the fact that your offending is repetitive in nature and over the course of a number of years. That justifies a lesser discount than might otherwise be afforded. I consider a discount of three months is appropriate to reflect your previous good character.

[86] The pre-sentence report records you as expressing regret and remorse for your actions. You accepted that you had omitted to disclose material which identified your relationship with Mr Rose. In contrast somewhat to the position with Mr Rose, I consider your remorse to be genuine from the start. I consider a further discount of four months is appropriate in the circumstances.

[87] That reduces the starting point to 19 months imprisonment. That brings you within the range for consideration of a home detention sentence.

[88] The sentence of home detention is the second most restrictive sentence next to imprisonment. It is not a soft option and brings with it a considerable measure of deterrence and denunciation.

[89] Taking into account your personal circumstances, and the directive to consider the least restrictive sentence possible, I do not consider imprisonment in your case to be necessary to respond to the relevant sentencing purposes. I therefore consider a sentence of home detention to be appropriate in all the circumstances.

[90] A sentence of home detention must be served in full and it is not equivalent to a sentence of imprisonment. Standing back and considering the end sentence in accordance with totality principles, I consider a sentence of nine months home detention to be appropriate in your case.

Sentence

[91] Mrs Rose, please stand.

[92] On the nine representative charges of obtaining by deception, I sentence you to nine months home detention.

[93] The sentence of home detention is to be served at the address that is referred to in the pre-sentence report.

[94] The standard conditions applying to a home detention sentence will apply, but otherwise there are no special conditions necessary and no post-sentence conditions are to apply.

[95] Mrs Rose, please stand down.

Postscript:

[96] Following the sentence, it was brought to my attention that the number of charges upon which Mr Rose and Mrs Rose had been sentenced was incorrect. I had sentenced them to 10 and nine charges respectively. In fact, the number of

representative charges was nine and eight respectively. The change in the number of charges does not alter the sentence in any way. Mr and Mrs Rose were brought back

_{into open Court and re-sentenced on the correct number of charges.}

Edwards J