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High Court of New Zealand Decisions |
Last Updated: 30 November 2018
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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
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CRI-2018-404-246
CRI-2018-404-247 [2018] NZHC 2935
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BETWEEN
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THE QUEEN
Appellant/Cross-respondent
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AND
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EE KUOH (AUGUSTINE) LAU
Respondent/Cross-appellant
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CRI-2018-404-293
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BETWEEN
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THE QUEEN
Appellant
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AND
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JIAWEN MAO
Respondent
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Hearing:
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29 October 2018
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Counsel:
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S Symon and D J Collins for Crown
M Dyhrberg QC and A Kashyap for Mr Lau L Burns for Ms Mao
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Judgment:
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15 November 2018
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JUDGMENT OF WHATA J
This judgment was delivered by me on 15 November 2018 at 4.30 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date: ...............................
Solicitors: Meredith Connell, Auckland
Aaron Kashyap Law, Auckland
R v LAU [2018] NZHC 2935 [15 November 2018]
Introduction
[1] Mr Lau managed several residential properties in contemptuous disregard for planning or building regulation or enforcement authorities. After a sentencing indication, he pleaded guilty to 16 offences (many of them representative) under the Resource Management Act 1991 (RMA), 10 offences under the Building Act 2004 (BA) and one offence under the Companies Act of operating a “phoenix company”.1 He was sentenced by Judge Thompson to 24 months’ imprisonment for this offending. The Crown appeals against his sentence as manifestly inadequate. He appeals that it was manifestly excessive.
Background
[2] In a sentencing indication, Judge Thompson described the offending as follows:
[13] In respect of the property at 387 Ormiston Road, Mr Lau managed the development and the use of that property. In terms of the relevant District Plan, one single dwelling was permitted. Mr Lau converted the existing home of one dwelling into three, and a barn on the property was converted into two dwellings. Two former classrooms and a relocated weatherboard house were also moved into the property and used as dwellings – so there was a total of eight where the rules said one.
[14] Of significance, four of those dwellings were connected to the existing sewerage disposal system which was thus overloaded. The other four were connected to a newly constructed system which was almost completely inadequate. They discharged, as the agreed summary records, almost raw sewerage to a slope above a stream which was contaminated by the discharge. The discharge area was immediately next to the houses, raising health risks and unpleasant odours.
[15] There were interim enforcement orders issued. They were completely ignored. Enforcement orders to remediate the non-compliant housing and waste water were also completely ignored. The Council had to intervene and remedy matters at its own cost. The charges are set out in the agreed summary.
[16] In respect of 88 Fairburn Road, that was owned by a company, Chen Hong Company Limited of which Ms Mao was the director; it was managed by Mr Lau. Nine hundred cubic metres or more of earthworks were undertaken. They created an unstable and unsafe situation; they were done without preparation or compaction and without consent.
[18] For the property at Paremoremo Road, that had a single house and garage on it. Mr Lau took over management of the property. It was not owned by him. Again the permitted maximum use was one dwelling and one minor dwelling, but the original house was developed into three dwellings, the garage into a further one and a relocated weatherboard house was moved onto the property and converted into five dwellings, making the total nine.
[19] He contested an abatement notice which was issued to him and then ignored it. Again, almost raw sewerage from a constructed system was discharged onto land where it could have entered a stream. All enforcement proceedings were ignored.
[20] I think that is sufficient to give a picture of what occurred. The other properties perhaps were not quite as outrageous as those but they were at Mt Albert Road, at Weranui Road, and Albany Highway.
[3] The egregious nature of Mr Lau’s offending was also aptly noted:
[27] In terms of the history of non-compliance with warnings by the regulator I have to say that Mr Lau’s position is the worst I have known of. He has completely ignored risks identified by others. The offences he has committed in these instances were committed for financial gain. They were premeditated, he knew exactly what he was setting out to do and he knew that what he was doing was unlawful. He continued to do it nevertheless.
[4] And further:
[30] There can be no doubt that in every set of these offences on the six sites in question Mr Lau was the prime mover. Equally there can be no doubt that he knew full well that he was breaching the law and in what he did on the properties, his actions were profit-driven and contemptuous of the law and the effects that he was imposing on the environment, the tenants of the properties, and the neighbours of those properties.
[5] And further still:
[35] There was flagrant and contemptuous ignoring of attempts by the Council to stop the activities. There has been considerable cash cost to the community. It is very difficult, I must add, to conceive of a more serious series of offences against this legislation. Considered as a cumulative whole, it is very difficult to choose any one offence, or even any property, as being the most serious or a “lead” offence. I am inclined to agree though with the Crown’s submissions that the offences at Ormiston Road, Fairburn Road, and Paremoremo Road, are probably the worst.
[6] No mitigating factors were identified. The Judge also rejected a late plea at sentencing to mental health impairment based on a diagnosis of ADHD, and did not discount in relation to an offer of $100,000 reparation from Mr Lau’s mother. The Judge was sceptical about the impact of any ADHD based on the calculated nature of the offending, and was circumspect about the reparation offer given Mr Lau’s bankruptcy.2 He anticipated that if the offer of reparation was legitimate, then it might feature at a Parole Board hearing.
[7] The Judge then approached sentence on a totality basis, noting that a cumulative sentence could conceivably be in the order of 34 years (I note however, the Judge made this assessment as the result of a Crown submission that there were 17 RMA charges, when in fact there are only 16). He acknowledged that a sentence of imprisonment must be imposed only when, having considered all available alternatives, there is no other appropriate outcome.3 Even so, the Judge indicated a starting point of two years and six months’ imprisonment would be appropriate, based on 18 months for the offending at the Ormiston Road, Fairburn Road and Paremoremo Road properties and 12 months for the offending at the other properties. This was reduced at sentencing by 20 per cent for guilty plea. A sentence of nine months for the Companies Act offending, to be served concurrently with the other offending, was also imposed.
Jurisdiction
[8] An appeal will be successful only if the appellant can point to an error, either intrinsic to the Judge’s reasoning, or because of additional material submitted on appeal, which vitiates the sentencing decision of the Court below.4 Unless there is a material error in sentence, for example, that it is manifestly excessive, manifestly inadequate, or wrong in principle, an appellate court will not intervene.
Crown’s submissions
[9] Mr Symon for the Crown submits, in summary:
2 R v Lau DC Auckland CRI-2016-004-010786, 10 July 2018 at [5]-[7] and [8]-[10].
3 R v Lau DC Auckland CRI-2016-004-010786, 22 May 2018 at [38]. [Sentencing indication]
4 Tutakangahau v R [2014] NZCA 279 at [29]- [31].
(a) The offending was the worst of its kind in RMA history; 5
(b) The offending at each of the properties should have been approached cumulatively – they are not part of the same “spree” of offending, but distinct separate criminal acts, over a two-year period, affecting different persons and causing distinctly separate harm, including in some cases potential harm to the public, environmental damage, and a remedial and legal cost of over a million dollars;
(c) A separate starting point should have been fixed for the “phoenix company” offending, and a cumulative sentence imposed;
(d) A discount of 20 per cent for guilty plea was not available – the guilty plea was given more than 12 months after the charges were laid and only after Mr Lau sought (and failed) to sever the prosecution into 47 trials and opposed various applications by the Crown.6
Mr Lau’s submissions
[10] Ms Dyhrberg QC submits, again in summary:
(a) The sentence is the longest in RMA history;
(b) The totality principle was properly applied by the Judge;
(c) The guilty plea discount was within range;
(d) The Judge did not consider time served in relation to prior offending (as he foreshadowed he would at the indication); and
(e) The sentence is, in fact, excessive because the Judge did not include a discount to reflect the offer of reparation, Mr Lau’s ADHD, or the hardship a sentence of imprisonment poses for his children.
5 Sentencing indication, above n 3, at [27].
6 Citing Auckland Council v Lau and Ors [2017] NZDC 2682.
Sentencing framework in environmental cases
[11] Sentences of imprisonment for environmental offences are relatively unusual. In general, a non-custodial sentence is regarded as a real and effective alternative to imprisonment.7 But this should not be elevated to a presumption. The proper application of the Sentencing Act framework may justify a custodial sentence in appropriate cases.8 Importantly, the purpose, principles and scheme of the RMA assist a sentencing Judge to identify the aggravating and mitigating factors of the offending and the offender. In this regard, aggravating factors include:9
(a) Deliberate or reckless conduct, including flagrant and repetitive disregard for planning rules and enforcement;
(b) The vulnerability or importance of the affected environment, with reference to the matters listed at ss 6 and 7 of the RMA and/or environments subject to the protection of national environmental standards or national or regional policy statements;
(c) Significant environmental effects, including any lasting or irreversible harm and/or effects with high potential impacts, including on the public;
(d) Deliberate breach for commercial profit;
(e) Refusal or failure to correct non-compliance or remediate environmental harm; and
(f) Significant remediation cost to the public.
8 At [65].
[12] Conversely, mitigating factors include:10
(a) Previous good history of compliance;
(b) Inadvertent conduct;
(c) Efforts to immediately remediate any environmental harm done;
(d) Any infrastructural or other precautions taken to prevent the effects;
(e) Co-operation with enforcement authorities;
(f) Offers of reparation; and
(g) Remorse.
[13] The outcomes in Conway (No 1) and Conway (No 2) are helpfully illustrative of the application of this sentencing framework. The Court of Appeal in Conway (No 1) said:11
- [71] The sentencing goals of accountability, denunciation and deterrence could not have been met in this case by a sentence other than imprisonment. Further, we are satisfied that the policies underlying the Act could not have been given effect without such a sentence. This was a serious case, involving persistent offending over a lengthy period with significant environmental damage to important waterways. In addition, Mr Conway and the two companies deliberately flouted the authority of both the Council and the Environment Court while continuing their unlawful activities. Even now relevant resource consents have not been obtained, yet the business continues from the site.
[72] In some cases the fact that a guilty plea has been entered (particularly if entered early) and remorse shown may make a sentence of imprisonment inappropriate. But a late plea of guilty, particularly one entered on the eve of trial, with an absence of remorse may make a sentence of imprisonment more appropriate than community work.
10 See cases cited above n 9.
11 R v Conway, above n 7, at [71]-[72].
[14] Subsequent offending by Mr Conway was addressed in Conway (No 2).12 This sentencing judgment was, with respect, a careful one and I think a useful reference point for present purposes.13
[15] Mr Conway and Ms Down conducted a scrap business without resource consent at two locations (Bairds Road and Tidal Road) over two distinct periods. There were unlawful discharges of contaminants to a sensitive receiving environment (though there was no direct evidence of actual contamination). Enforcement orders made in relation to the Bairds Road property were ignored. Mr Conway had a previous conviction for RMA offending. However, remediation of environmental damage was eventually undertaken. A starting point of six months was adopted by the sentencing Judge, uplifted by one month to account for Mr Conway’s prior conviction.
Analysis
[16] While the Crown and Mr Lau alleged specified sentencing errors, the central issue on appeal is whether the sentence was manifestly excessive or inadequate. I therefore commence my analysis by addressing this issue, applying orthodox sentencing steps:
(a) Identify starting points for the offending;
(b) Identify any personal aggravating or mitigating factors; and
(c) Identify a discount for guilty plea.
Individual starting points
[17] Given the Judge’s very extensive experience in environmental matters, I readily accept his characterisation of the offending: there was flagrant and contemptuous disregard of the attempts by the Council to stop Mr Lau’s activities, there has been considerable cost to the community, and it is very difficult to conceive of a more serious series of offences against the RMA.
12 R v Conway (No 2) DC Auckland CRI-2008-004-19495, 18 December 2009.
13 It was also affirmed by the Court of Appeal in Conway v R, above n 9.
[18] I have found it necessary, however, to establish clear starting points for the individual sets of offending (that is, property by property). This is needed to transparently establish the proper frame for evaluating the gravity of the individual offending and Mr Lau’s culpability. Consideration can then be given to whether cumulative or concurrent sentences should be imposed. Whatever the outcome, the totality principle demands close examination of the significance of the overall offending.
The RMA offending
[19] Turning then to the five sets of RMA offending:
(a) Ormiston Road: The Ormiston Road property had resource consent for one dwelling. Mr Lau converted the existing dwelling into three dwellings, converted a shed on the property into two dwellings, and relocated three additional dwellings onto the property. Council officers found that all three of the wastewater systems at the property were non- compliant (and in fact prohibited under the Unitary Plan) and wholly inadequate, and two were discharging primary effluent onto a slope above a stream. Testing in August 2016 found very high levels of ammonia, phosphorous, and raw sewage. Mr Lau ignored enforcement orders to address the public health risk caused by the discharges, and to remediate the noncompliant housing and wastewater arrangements. Mr Lau was charged with two counts of using or permitting breaches of rules in district plans, regional plans, or national environmental standards, one charge of permitting discharges of a contaminant, and three of breaching enforcement orders. He also faced two charges under the Building Act.
(b) Fairburn Road: Mr Lau undertook some 300 m2 of earthworks at the site without the necessary resource consents. The filled area was unstable and included construction debris and rubbish. The top layer of fill contained asbestos materials. These works involved a breach of a national environmental standard. Interim enforcement orders were
issued requiring the site to be secured, the installation of erosion controls, and cessation of earthworks. These were not complied with and in fact a pile including asbestos was flattened onto the site. Mr Lau was charged with three counts of breaching enforcement orders and one of using or permitting a breach of a rule in a district plan, regional plan, or national environmental standard.
(c) Paremoremo Road: Mr Lau relocated a house onto this property and converted it into some five dwellings. He was issued with an abatement notice requiring him to remove it, which he contested unsuccessfully then ignored. He also replaced the original wastewater disposal system with his own system which discharged almost raw sewage to land where it might enter a stream. Mr Lau was charged with one charge of breaching an abatement notice, one charge of using or permitting a breach of a rule in a district plan, regional plan, or national environmental standard, and one charge of permitting discharges of a contaminant. He also received four charges under the Building Act in relation to this property.
(d) Mount Albert Road: The relevant district plan for this property limited the number of residential units at the property to a maximum of two. In breach of this, Mr Lau converted the single dwelling on the property into five units and created a sixth unit in the garage. He unsuccessfully contested and then ignored an abatement notice requiring disestablishment of the additional units. Mr Lau was charged with two charges of using or permitting breaches of rules in district plans, regional plans, or national environmental standards. He also received one charge under the Building Act after failing to comply with a dangerous building notice.
(e) Weranui Road: The relevant district plan for this property permitted only one dwelling. Mr Lau undertook extensive earthworks and vegetation removal, then arranged for three relocated weatherboard houses to be established on the property. He converted the first house
into three residential units. After the offending, he obtained a resource consent for one residential unit in each house; no consent has been obtained for the multiple dwellings in the first house. Mr Lau has been charged with one count of using or permitting breaches of rules in district plans, regional plans, or national environmental standards in relation to this property, in relation to breach of dwelling limits. He also received one Building Act charge.
[20] Mr Lau also offended at an Albany Highway property, where he undertook extensive vegetation removal, illegally relocated dwellings, and installed an unconsented wastewater system. Although he has not been prosecuted under the RMA in relation to this property, he has received two charges under the Building Act when the dwellings were found to have inadequate sanitary facilities.
[21] Overall, Mr Lau’s offending spanned three years and resulted in some 26 illegal dwellings across six properties. These insanitary and unsafe dwellings were tenanted by vulnerable people. Mr Lau permitted dangerous discharges of wastewater; polluted with (among other things) coliform bacteria and ammonia. These breaches of the RMA and Building Act were undertaken for commercial gain; it is estimated the rental monies paid by tenants of the properties could have been $240,420 a year. He ignored notices requiring him to stop and in some cases actively took steps to obfuscate the Council’s investigation of him. The remediation costs and legal costs to the ratepayer across the six properties have totalled a million dollars.
[22] As is evident from the foregoing summary, the following aggravating features are present in relation to all sets of offending:
(a) Deliberate/flagrant non-compliance and disregard for planning rules and enforcement;
(b) Breach of rules for commercial gain;
(c) Refusal or failure to correct non-compliance or remediate environmental damage; and
(d) Significant potential adverse effects on tenants (including ejectment from tenancies).
[23] The offending at the Ormiston, Fairburn and Paremoremo properties included the following additional aggravating factors:
(a) Significant potential harm to the environment, including high potential impacts on human health and contamination of the environment;
(b) High remediation costs to the public (in respect of the Ormiston and Fairburn properties).
[24] The offending at Weranui Road involved significant environmental effects with the large scale unlawful removal of native bush (though any uplift for this factor can be moderate only, as Mr Lau was not facing charges specifically for this).
[25] There are no discernible mitigating factors to the offending. However, the type of environmental effects caused by Mr Lau’s illegal activities while substantial, are not the worst of their kind.
[26] Turning then to the ss 7-9 Sentencing Act factors relevant to the starting points.14 The purposes of denunciation,15 deterrence,16 promotion of responsibility17 and protection of the community18 are strongly engaged. The gravity of Mr Lau’s offending is high.19 While not the worst of its kind, the offending at Ormiston and Fairburn Roads is very serious, while the other offending is reasonably serious.20 The extent of the harm (including cost to the public purse) is also an aggravating factor.21
[27] Given the foregoing, I am satisfied a starting point for the offending at each of the Ormiston and Fairburn Road addresses could have been in the order of 10-12
14 I address the rehabilitative purpose and mitigating factors below in the discussion on discounts.
15 Sentencing Act 2002, s 7(1)(e).
16 Section 7(1)(f).
17 Section 7(1)(b).
18 Section 7(1)(g).
19 Section 8(a).
20 Section 8(d).
21 Section 9(1)(d).
months, which considering the number and combination of aggravating factors, is markedly more serious than the Conway (No 2) offending. The Paremoremo offending is also worse than the Conway (No 2) offending and attracts a starting point in the range of 8-10 months. The other offending is similar in seriousness to, or slightly less serious than, the Conway offending and individually could attract a start point sentence in the order of two to four months.22 The outcome of this analysis is that approached cumulatively, the combined starting point for the offending could be in the order of 32 months (two years eight months) to 42 months (three years six months) comprised of the following:
(a) Ormiston Road: 10 - 12 months;
(b) Fairburn Road: 10 – 12 months;
(c) Paremoremo Road: 8 – 10 months;
(d) Mt Albert Road: 2 - 4 months; and
(e) Weranui Road: 2 - 4 months.
[28] For completeness, little attention was given to the Building Act breaches in submissions. I have therefore approached the assessment on the basis that those breaches simply form background aggravating facts.
The Companies Act offending
[29] Mr Lau set up Jesus Co Ltd in 2006. Among other things, it managed the tenancies at the Ormiston, Paremoremo, and Mt Albert properties. It was placed into liquidation by the Inland Revenue Department in February 2016. At about the same time, Jesus (2016) Company Ltd was set up. Mr Lau admits it was a “phoenix company”, taking over where Jesus Co left off. About $39,000 is owed by the company and a further “potential” claim of $120,000 has been signalled.
22 See also Woolley v R, above n 7, at [69], where significant destruction of vegetation (absent the illegal dwellings here) warranted four months’ imprisonment (albeit commuted to home detention).
[30] There is little authority dealing with this type of offending. In Anderson, a starting point of two years was adopted, but in that case the defendant had been told what he was doing would be illegal and he carried on in any event.23 In Mitchell, a starting point “somewhat less than two years” was adopted (without specifying what it was) with an end sentence of community service.24 It is also evident, as Ms Dyhrberg noted, the relatively few sentencing precedents available have led to non-custodial sentences.25 However, I am not persuaded that a non-custodial start point should be assumed for offending of this type. Cases involving a clear premeditated attempt to avoid creditors and other obligations, with substantial losses to those affected, demands a stern starting point for sentence.26
[31] In the present case, the level of proven debt left behind was relatively modest at $39,000. However, an aggravating factor is that Jesus Co was dealing with vulnerable tenants, who were left without remedy.27 In my view, this could fairly attract a starting point in the order of 6-10 months.28 That this offending formed part of a scheme of illegality, culminating in a substantial loss to the public in the form of unrecoverable remediation cost is another aggravating factor, pointing to a substantially higher starting point if this was to be treated as the lead offence. But I prefer to address this factor as part of the overall cumulative / concurrent / totality assessment.
[32] Accordingly, were I to adopt a strictly cumulative starting on all offending, this would be in the range of 38 months (three years two months) or 52 months (four years, four months).
23 Ministry of Business, Innovation and Employment v Anderson DC Nelson CRI-2014-042-000893, 21 August 2014.
24 Ministry of Economic Development v Mitchell DC Auckland CRI-2011-004-002063, 18 July 2012.
25 See also Ministry of Business, Innovation and Employment v Anderson, above n 23, at [1].
26 While not directly analogous, sentences for management of companies without leave of the Court attract stern starting points, particularly where they involve substantial losses to creditors. See Blake v R [2018] NZCA 204. In that case the unlawful management charge leading to losses of
$300,000 attracted a start point sentence of 18 months.
27 A victim impact statement was provided by one of Mr Lau’s tenants describing the constant problems with her unit (including electrical and plumbing failures, security issues, and rubbish), as well as her inability to get her bond back due to Jesus Co’s liquidation.
28 Compare Anderson, above n 23, Mitchell, above n 24.
Cumulative or concurrent?
[33] The full picture of the offending is complicated. The RMA offending is similar in kind across all five properties and largely spans the same period. But the “phoenix” company, while part of this wider scheme of illegality, is a distinct form of offending. Furthermore, the offending is not a “connected series of offences”. This is not like a “spree” of burglaries over a brief period. Rather, the offending comprises clearly deliberate distinct unlawful acts, affecting different properties and persons, over a lengthy period with distinct planning impacts and significant and potentially harmful environmental effects. It is more akin to a criminal enterprise undertaking multiple unlawful revenue generating activities. Cumulative sentences or a combination of cumulative and concurrent sentences are therefore available in this context.
[34] However, as the Court of Appeal stated in R v Xie, with multiple offences the sentence must reflect the totality of the offending.29 A strictly cumulative approach at the higher end of the available range would produce a disproportionate result. The present offending is not like violent offending as Mr Symon submits. The requirement for denunciation and deterrence is not the same, as the maximum sentences for violent offending clearly show. It is necessary to keep this firmly in mind when dealing with regulatory breaches of the present kind. Furthermore, individual sets of offending with very low starting points would not normally attract a sentence of imprisonment in the result. A strict arithmetic approach to a cumulative start point could be unduly punitive.
[35] This does not mean that a light-handed approach is necessary. But a cumulative or combined starting point at the lower end of the range for the RMA offending of two years eight months, together with an uplift of six months for the phoenix offending, properly reflects the totality of the offending.
Personal aggravating or mitigating factors
[36] Judge Thompson did not uplift Mr Lau’s sentence to account for his previous conviction. Rather, the sentencing indication noted that the present sentence would be
29 R v Xie [2006] NZCA 201; [2007] 2 NZLR 240 (CA).
served concurrently with the existing sentence. That conviction related to damage to seven native trees at a different Weranui property. The same aggravating factors present in the current offending were on full display in this offending also; that is, environmental damage with contumelious disregard for the law or authority. He was sentenced to a term of imprisonment of two months and two weeks, from a start point of three months.
[37] Ordinarily prior offending of the same kind will attract an uplift to reflect the Court’s concern about a defendant’s disregard for the law. But in this case, the offending occurred shortly prior to the current offending and Mr Lau was only recently convicted of it. Furthermore, part of the sentence for the earlier offending involved recognition of the present offending. The proper response therefore to this is not to uplift for this factor, but instead to settle on a start point within the available range for the present offending.
[38] I consider a modest discount for Mr Lau’s diagnosed ADHD is appropriate. There is no evidence to suggest that the ADHD was directly causative of the offending. But Mr Lau’s difficulties with ADHD provide a partial explanation of the offending and as it may be capable of treatment, the prospect of rehabilitation is enhanced.30 It also means that Mr Lau finds prison life more difficult than prisoners who do not share his condition. A discount of five per cent is warranted.31
[39] I also disagree with the Judge’s approach to reparation. I consider the offer of reparation is a relevant discounting factor. Section 10 mandates that the Court must take such an offer into account. Apparent concerns about the source of the reparation (Mr Lau’s mother) are largely speculative. As to quantum of discount, while the offer is large in monetary terms, it represents only a fraction of the cost of Mr Lau’s offending to the community. I also remain doubtful that Mr Lau is remorseful. A modest discount of five per cent properly reflects the significance of the offer.
30 This is based on the report of Dr Caleb Armstrong who diagnosed Mr Lau as having ADHD which has manifested itself in ongoing conflict with authority figures throughout his life. Dr Armstrong recommends access to rehabilitative treatments as soon as possible.
31 E(CA689/10) v R [2011] NZCA 13 provides a 12 – 30 per cent discount is warranted where an offender’s mental illness materially contributes to the offending; a lesser reduction is warranted to reflect mental health issues not causative of offending, see for example Nelson v R [2014] NZCA 121, R v Palmer [2016] NZHC 1962 at [64]- [66].
Guilty plea
[40] As to guilty plea, it avoided a very large and potentially difficult trial. However, the plea on the main offending was not made at the first opportunity, and indeed Mr Lau took an active step, via a pre-trial application, to defend the main charges. Accordingly, a discount of 15-20 per cent (at most) was available.
Outcome of fresh analysis
[41] Given the foregoing, were I to sentence afresh I would impose a sentence of 27 months (or two years three months) comprised of a starting point of 38 months (three years two months), less four months (10 per cent) for the offer of reparation and Mr Lau’s mental health issues, and further seven months (20 per cent) for guilty plea.
Manifestly wrong?
[42] Plainly the sentence handed down was not manifestly excessive. Mr Lau’s appeal against sentence is dismissed. The starting point for sentence adopted by Judge Thompson was, in my view, inadequate, given that on my analysis, an end sentence of 27 months is benchmarked against what I consider to be the bottom end of an available cumulative range. However, it remains the settled practice of this Court to increase sentence on appeal only in clear cut cases.32 This is a sentence with many moving parts, each potentially affecting the outcome. Most relevantly, a minor variation to the totality assessment combined with a more generous approach to the discount for mental health and rehabilitation could reasonably bring the end sentence materially closer to the end sentence imposed by the Judge. While a substantially greater sentence was available, by a slim margin, I refuse to allow the appeal.
Jiawen Mao
[43] Ms Mao was sentenced on the following charges:
(a) Ms Mao faced one charge under the Building Act and four under the RMA in relation to the Ormiston Road property; and
[44] The pertinent facts as they relate to Ms Mao’s offending are these:
(a) Ms Mao was the primary person with legal control of the Fairburn Road and Ormiston Road properties. She was the sole director of the company which owned the Fairburn property and is the New Zealand based representative of the owner of the Ormiston property through a power of attorney.
(b) Three enforcement orders were issued against her in relation to the Fairburn Road property, requiring her and her company (which owned the property) to take immediate steps to remedy the building site contaminated with asbestos, construction materials, and rubbish.
(c) Three further enforcement orders were issued against her in relation to the Ormiston Road property. These required her to secure leaking wastewater systems. The final order also required her to remove illegal dwellings from the site.
(d) Ms Mao took no steps to comply with the orders issued against her.
(e) At the sentencing indication, Judge Thompson considered a Crown submission that she was more than a bystander, because she enabled Mr Lau’s offending at the two worst properties and failed to take steps to comply with the enforcement orders. He concluded:33
As between the two – that is Mr Lau and Ms Mao – I of course am not in a position to know the real circumstances of their relationship and who, if either, was the controlling party but I think I must in fairness approach things on the basis that Ms Mao was significantly the less involved in the actual work. What she might have done to persuade other outcomes, I simply do not know, but I do bear in mind that Mr Lau’s history of completely ignoring directions from authorities such as the Council would suggest to me that once he had decided upon something, that was what he was going to do whether she had any
33 Sentencing indication, above n 3, at [3].
attempt to persuade him otherwise or not. So I think, as I say, in fairness I must regard her, if not necessarily a simple mute bystander, but as a much less culpable person.
(f) At sentencing Judge Smith had this to say on Ms Mao’s culpability:34
I have considered the question very carefully. I agree with Mr Burns that your:
(a) Acquiescence in the actions of Mr Lau;
(b) Willingness to sign documents put in front of you by him; and
(c) Taking positions that he told you to adopt, often orally before this Court,
Placed you in a very difficult position. I recognise that you had a young child at the time, and the relationship I suspect was not an easy one. I understand you had your mother living in your home at Ormiston Road at that stage as well.
(g) Judge Smith made the following orders:
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Property
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CRN
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Reparation
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Fine
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Fairburn Road
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1468
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$120,000
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$24,000
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Ormiston Road
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1113
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$35,000
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$30,000
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Ormiston Road (Building Act)
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4961
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$10,000
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|
|
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$155,000
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$64,000
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Submissions
[45] The Crown submits that the fine of $64,000 and reparation of $155,000 was manifestly inadequate, highlighting that:
(a) Ms Mao had legal control over both the Fairburn and Ormiston properties (the two worst sites) and was an occupant of the Ormiston Road property;
34 R v Mao [2018] NZDC 17092 at [24]. At [13], Judge Smith also said: “there is no doubt, and counsel are agreed on this, that Mr Lau was the major actor and that [Ms Mao was] under his influence throughout.”
(b) She was subject to enforcement orders in respect of those properties and denied any responsibility for compliance;
(c) There is nothing in the summary of facts to support a finding that Ms Mao did not comply with the orders because she was under Mr Lau’s control; instead, she had a financial incentive to not comply;
(d) A fine of $64,000 and $155,000 reparation is irreconcilable with approach taken in respect of Mr Lau, who faced the same charges in relation to the Ormiston and Fairburn Road properties;
(e) The District Court did not fix a starting point;
(f) Ms Mao failed or refused to provide a declaration as to financial capacity. Reparation should not have been fixed without a declaration; and
(g) An alternative sentence to a fine should have been imposed.
[46] Ms Mao submits that:
(a) She did not in fact hold a comprehensive power of attorney in relation to the Ormiston Road property;
(b) Judge Smith gave effect to the sentencing indication as he was obliged to do;
(c) Judge Thompson, in the sentencing indication, did fix a starting point – a fine;
(d) A fine will normally be the appropriate remedy in environmental cases;
(e) Judge Thompson clearly recognised she was less involved;
(f) The Court was entitled to rely on submission when setting the fine.
Assessment
[47] I can deal with this appeal summarily. It was plainly available to Judges Thompson and Smith to find Ms Mao had a secondary role only in offending at two properties. As the Crown put it at the sentencing indication – Ms Mao was effectively a “facilitator” of the illegal development at the Ormiston and Fairburn properties who “abdicated” any responsibility for complying with the enforcement orders. The Crown also characterised her offending in these terms on the critical issue of her role: “what is the least restrictive sentence, capable for capturing her role in assisting Mr Lau to commit egregious RMA/BA offending...”.35 It also said she played a “much less active role.”
[48] While the Crown is not bound by its submissions at first instance, the sentencing Judges can hardly be criticised for adopting a similar view to those expressed by the Crown. Her failure to intervene in the properties she had legal control over, knowing the illegality, is an aggravating factor. However, as is evident from the very detailed summaries of facts, her limited role is to be drawn in stark contrast to Mr Lau’s role – he was plainly the controlling force and most actively involved in all aspects of the illegality across six properties and the phoenix company.
[49] In this regard, the Courts regularly discount starting points to reflect the role of the person in the offending.36 It follows it was available to the Judges to impose a non-custodial sentence, depending on their view of the facts. Ideally, the Judges should have identified a starting point given the seriousness of the offending at Ormiston and Fairburn Roads. But, in any event, it was available to them to adopt a starting point of substantially less than two years, given Ms Mao’s secondary role, opening the prospect of a community or fine based sentence.
[50] As to quantum, while again a declaration should have been obtained, it is not a statutory pre-condition. In any event, reparation in the sum of $155,000 together
35 Emphasis added.
36 R v Lawson [1982] NZCA 67; [1982] 2 NZLR 219 (CA) at 223. See also R v Agu [2018] NZCA 147 at [23], where the Court held that “the actions taken by each person in connection with the offending must be closely assessed by the sentencing judge to determine the extent of the offender’s involvement in and responsibility for the criminal enterprise...”
with a fine of $64,000 is not manifestly inadequate having regard to the range of sentences available for Ms Mao’s offending.
[51] Finally, I also consider Ms Mao’s personal circumstances paint a compelling picture for a non-custodial sentence. She is the primary caregiver of the children, including a son who is autistic. This is a strong reason to impose an alternate, non- custodial sentence.
[52] The Crown’s appeal is dismissed.
Result
[53] Mr Lau’s appeal is dismissed.
[54] The Crown (and MBIE’s) appeal against Mr Lau’s sentence is dismissed.
[55] The Crown’s appeal against Ms Mao’s sentence is dismissed.
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URL: http://www.nzlii.org/nz/cases/NZHC/2018/2935.html