(Given by Asher J)
Introduction
[1] On 4 November 2011 the appellant Susan Bourton was arraigned on 81 counts of fraudulent offending over a nine and a half year period. Ms Bourton had worked first as an insurance broker and consultant and later as a business banking manager at Westpac Bank. In the course of this she had been involved in a number of transactions that gave rise to the various charges. A useful summary of the facts relating to the offending can be found at [9] to [37] of the trial Judges sentencing notes,[1] and a more extended version in his reasons for verdicts.[2]
[2] Without notice Ms Bourton entered a number of guilty pleas on arraignment on the first day of trial before Judge Connell sitting alone. She was found guilty and convicted of the remaining charges. The counts can be summarised as follows:
(a) accessing a computer system and thereby dishonestly or by deception, and without claim of right, obtaining either a benefit, service or pecuniary advantage, or causing loss (x 42);
(b) theft in a special relationship (x 2);
(c) theft of property valued over $1,000;
(d) using a document to obtain a pecuniary advantage (x 9);
(e) using an altered document to obtain a pecuniary advantage; and
(f) using a forged document as if it were genuine.
[3] Ms Bourton was sentenced to seven and a half years imprisonment for all the offending with a minimum period of imprisonment of three years. She has appealed her convictions and sentence.
Decision on conviction appeal
[4] Mr Weir, who appeared as counsel on the appeal but had not appeared at the trial, raised three grounds on the conviction appeal. The first ground related to the denial of a right to trial before a jury. However, when certain further uncontested facts were revealed at the outset of the hearing of the appeal, Mr Weir elected not to pursue that ground of appeal.
(a) Propensity evidence
[5] The first of the remaining two grounds of appeal before us was that the Judge erred in placing undue weight on propensity evidence which was led in determining the issues at trial. Mr Weir, after having made some general submissions on the correct approach, argued in effect that there should have been separate trials for the different transactions. Mr Weir submitted that the Judge should not have taken into account the evidence that related to the counts where pleas of guilty had been entered.
[6] The charges and evidence constituted a sequence of different transactions over the nine and a half year period. The evidence was that over the nine year period of offending Ms Bourtons fraudulent actions had represented a continuum. In broad terms, Ms Bourtons offending involved fraudulently taking money from one person, and then to avoid her dishonesty becoming apparent, she would steal from another person. She œrobbed Peter to pay Paul?. The amounts stolen escalated.
[7] By this process, through a lengthy period of making false applications and statements and abusing the trust that various persons and institutions had placed in her, Ms Bourton stole large sums of money. The evidence can be characterised as propensity evidence in that it shows a tendency on her part to use her senior financial positions and the trust in which she was held to steal.
[8] Mr Weir did not attempt to particularise the way in which the propensity evidence worked illegitimately and we can see no basis for the submission that it should not have been admitted. While propensity evidence, the evidence also forms part of the continuing story which can only be told effectively as an ongoing narrative. In this regard its relevance is not primarily for coincidence reasoning purposes, but rather as background and motive evidence.[3] We agree with the Judges identification of the significance of the admitted evidence as follows:
(a) the evidence relating to the matters on which Ms Bourton pleaded guilty assisted in terms of the determination as to her motivation for subsequent offending; and
(b) the features of Ms Bourtons admitted offending while employed at Westpac Bank were such that the remaining offending demonstrated a œfamiliar pattern? which was compelling evidence as to Ms Bourtons state of mind.
[9] It would have been entirely artificial to attempt to distinguish various categories of offence, such as to separate out the counts on which guilty pleas were entered. The transactions on which these counts were based occurred at various times through the period of offending. We agree with the Judges assessment:[4]
The Crown case is that Ms Bourtons behaviour followed a discernible modus operandi and a clear pattern sufficient to allow the Court to consider that pattern to be admissible propensity evidence supporting the strong likelihood of Ms Bourton committing other offences, although they were not always necessarily factually related. The second aspect of the evolving pattern over the ten year period is that the offending was often factually linked between the offences by the need for Ms Bourton to conceal the offending that predated it. A third aspect of an evolving pattern of offending, if accepted as such by the Court, is its assistance in determining the issue of Ms Bourtons intention in relation to the many financial transactions undertaken by her. Having had close regard to all of the evidence heard by the Court over a four week period, it is apparent that there is for many of the transactions, a factual linking which may well assist the Courts determination as to the alleged dishonesty or otherwise of each individual transaction.
(Emphasis added).
[10] The decision to admit the evidence must be seen in the context that Ms Bourton flatly denied any dishonesty on her part. The Judge went on to hold that there was a pattern to Ms Bourtons offending and her modus operandi provided compelling propensity evidence, showing Ms Bourtons dishonesty through each phase of the offending as alleged by the Crown.[5]
[11] The Judge properly reminded himself of the need to consider each count, and the evidence relating to it, separately.[6]
[12] We are satisfied that the Judge correctly determined the Crown was admitting propensity evidence, but that it was properly admissible under s 43 of the Evidence Act 2006 and that its probative value outweighed any illegitimate prejudice. This ground of appeal fails.
(b) Disclosure
[13] As the second ground of the conviction appeal, Mr Weir submitted that some of the non-party disclosure received did not comply with Court orders, and that some disclosure was received late, and on the first day of the trial. He claimed this meant Ms Bourton was not able to prepare her defence for trial properly.
[14] In the end, despite his undoubted endeavour, Mr Weir was unable to point to specific documents that should have been disclosed and were not. There was an adjournment of the trial start date of some three days because of some late third party disclosure. Otherwise, there was full disclosure well before the trial. Significantly, there were no specific complaints from experienced counsel about non-disclosure during the trial itself. We also note none of the Crown witnesses were cross-examined on the existence of further relevant documentation that had not been disclosed.
[15] Mr Weir in his submissions appeared to focus on material that was in the hands of third parties; in particular Westpac. We observe that it was not the Crowns responsibility to provide disclosure of all that material. In any event, it would appear that copies of all relevant documents were in the material received by Ms Bourtons advisers prior to trial. This ground of appeal cannot be made out.
Miscarriage of justice
[16] Later in this judgment we refer to a letter prepared by Ms Bourton and handed by her counsel to the Judge on sentencing. In this letter she expresses shame for her actions, and apologises to all persons who were adversely affected. We are satisfied that this letter is an admission of wrongdoing. Given the admissions, should there have been any sustainable points on the conviction appeal, it is unlikely that Ms Bourton would have been able to establish any miscarriage of justice.
Decision on sentence appeal
[17] The extent of Ms Bourtons offending, having been ongoing and involving many payments and withdrawals, is hard to quantify. It seems that the losses included:
(a) a loss to Elders of $1,030.13;
(b) a loss to Westpac of $858,292.57 (following a lengthy period of unauthorised fund movements);
(c) a theft of cash from James Harris of $82,000; and
(d) a theft of cash from Jason Campbell of $50,000.
[18] It was a remarkable feature of Ms Bourtons offending, given that it involved her seeking funds from reputable institutions, that she endeavoured to set up a number of further fraudulent transactions while on bail. These included a funding proposal submitted to Kiwibank and ASB where she sought $1.5 million; a funding proposal prepared by NZ Merchant Finance Group for $322,000; and a request for a loan from Adams Corporate Solicitors of $17,000. These attempts to commit fraud while on bail were unsuccessful.
[19] While the exact amount of the loss cannot be quantified, it can be safely said that in all circumstances the losses exceeded a million dollars, with Westpac being the primary victim in monetary terms.
[20] The victim impact statements provided to the Court showed that individuals who had been affected had suffered obvious distress and harm. While many of the bank customers may have obtained reimbursement from the bank, the fact is that they went through a traumatic ordeal, having discovered that they had been defrauded and were, for a period, entirely out of pocket. It would seem that at least two of the bank customers who were defrauded lost homes and were forced into changes of lifestyle as a consequence of the fraud. The damage that had been done had serious consequences for victims, which in terms of emotional and psychological consequences can be compared to those of serious physical attacks. These factors placed Ms Bourtons offending in a category of high culpability.
[21] As defalcations go, the breaches of trust were serious. As a bank manager at Westpac she was given great responsibilities, which she cleverly abused over a considerable period of time.
[22] There is no tariff case for the sentencing in fraud offences. However, as was observed in R v Varjan:[7]
[22] Culpability is to be assessed by reference to the circumstances and such factors as the nature of the offending, its magnitude and sophistication; the type, circumstances and number of the victims; the motivation for the offending; the amounts involved; the losses; the period over which the offending occurred; the seriousness of breaches of trust involved; and the impact on victims.
[23] It is in the assessment of culpability that comparison with other cases is to be undertaken. Matters of mitigation such as reparation, co-operation with investigators, plea, remorse and personal circumstances necessarily must be assessed in each particular case.
...
[25] The authorities clearly indicate that in cases of major defalcations, misappropriations, schemes dishonestly to obtain money or property or where recidivism indicates the need to protect the community, imprisonment is appropriate.
[23] We have not found it easy to extract the exact sentence calculation of the Judge. It would appear the Judge adopted a starting point of four years and uplifted this by two years for the most serious charge.[8] To this the Judge then added two cumulative sentences of one year[9] and then six months[10] to arrive at an end sentence of seven and a half years. It would have been helpful if an overall starting point and a collective discount for the guilty pleas had been set out, at least by way of end summary.
[24] However, we are satisfied that the overall sentence of seven and a half years imprisonment reached by the Judge following the various discounts for guilty pleas was within the appropriate range. This offending went on for nine years, and appears to have been driven by greed. It was reasonably sophisticated and involved the abuse of a senior position of trust, with obvious harm ensuing to the victims. We pay particular regard to three cases.
[25] In R v Rose an employee stole several million dollars from his employer over five years by falsifying company cheques.[11] On a Solicitor-Generals appeal, this Court commented that in cases of serious breaches of trust the starting point should be between seven and eight years imprisonment. An end sentence of four years was imposed in light of mitigating factors.
[26] In R v Wallnutt the offender misappropriated funds given to him for investment purposes by forging and altering documents.[12] The offending spanned seven years and a total of about $1.5 million was stolen. This Court upheld a starting point of eight years and imposed a final sentence of seven years imprisonment, commenting that although this was a stern sentence, it was justifiable.
[27] In R v Coburn a solicitor fraudulently obtained money from various lending institutions and used funds from his practices trust account for personal use.[13] About $1.8 million was misappropriated over five years and dishonesty continued while the practice was being investigated. This Court upheld a starting point of eight years imprisonment, with an end sentence being five and a half years.
[28] Taking into account these decisions and the observations in R v Varjan we consider that a starting point in the vicinity of eight and a half years imprisonment was within the range. A discount of one year for the guilty pleas and remorse (which we discuss below) was, on the material before the Judge, appropriate.
The letter to the Court
[29] We consider the discounts applied by the Judge in relation to the late guilty pleas on certain charges to be appropriate. However, there is one significant issue that arises. The Judge deducted three months from the totality of the sentence as an acknowledgement of the belated apology and remorse that came by way of a letter sent to the Court by Ms Bourton. In the letter Ms Bourton stated that there was not œa moment? of her day when she did not feel œcomplete disgust, shame and remorse for [her] actions?. She repeated that she was in no doubt about her wrongful actions and apologised to her victims. She repeated her apology to œeach and every person? who had been adversely affected by her actions.
[30] At the outset of the sentencing hearing the Judge noted the complete contrast of the position taken in the letter to that which she had adopted through the trial.[14] As a matter of fairness and to preserve her legal rights, he gave her an opportunity to talk to counsel concerning the implications of her statement. After he raised the matter there was an adjournment and Ms Bourtons counsel spoke to her. When the Court resumed her counsel informed the Judge that the letter of apology was to remain before him on Ms Bourtons instructions. The Judge clearly considered that in providing the letter Ms Bourton was foregoing her right to appeal, and he regarded this as œnot insignificant?[15] and that it added weight to the veracity of her acknowledgement of offending and her apology.
[31] On the face of it, the letter was an unconditional acceptance of wrongdoing on Ms Bourtons part. The Judge with appropriate caution interpreted it as such. In his sentencing notes the Judge stated:[16]
I cannot disregard it all together. I do not doubt at this point that there is remorse by Ms Bourton. I do not adopt a cynical view that it is simply said at this time to avoid imposing lengthy terms of imprisonment. As I read the letter in its entirety I accept she has probably reached a point where she has some understanding of her need to apologise, but it is indeed very, very late. The trouble is that she has to accept such a late apology cannot be given a great deal of weight when we look at what has happened, particularly for the victims in this case, who would have been so greatly relieved had there been a much earlier acknowledgement.
...
I deduct nonetheless ... three months considering the totality of the sentence and a further three months as some small acknowledge[ment] of the belated apology and remorse that has come by way of letter to the Court today.
[32] Ms Bourtons appeal against conviction and the submissions made are inconsistent with the remorse apparently exhibited in the letter. Ms Bourton has sought to have the convictions of the charges she defended quashed. She has provided no satisfactory explanation for her change of position. When this reversal of her position became apparent, we raised the issue with Ms Bourtons counsel and invited a consideration of the implications of pursuit of the appeal. Following the hearing we issued a minute in which we sought further comment from counsel.
[33] We have received a response from Mr Weir. He submitted that the letter was not a full expression of guilt, and that given an overly high starting point to the sentence there should be no increase in sentence. We cannot accept these submissions. The letter was an unconditional acceptance of guilt, and the Judge quite properly went out of his way to explain the implications of the presentation of the letter. Then when the Judge sentenced her, he set out how that letter influenced him. There was no suggestion by Ms Bourton that he had misconstrued her position in the letter in the course of sentencing.
[34] The lack of any explanation as to the change of position leads us to the conclusion that Ms Bourton deliberately misled the Court in her letter and that she did not genuinely feel remorse for her actions. This is a serious matter. It debases the plea of mitigation process and involves a deliberate misleading of the Court. If we had found that the sentence was arguably manifestly excessive, we would have taken the three months discount, in hindsight wrongly granted, into account before reducing the assessment.
[35] Further, if the Crown had applied for leave to cross-appeal against the sentence on the basis of the reversal of Ms Bourtons claimed remorse, we would have granted leave and increased the sentence by deducting the three months credit given for remorse. However the Crown, while now submitting that Ms Bourton should not receive the benefit of the discount and that a three month uplift to the end sentence is appropriate, did not take this course. Therefore, we will go no further than to dismiss the sentence appeal.
Result
[36] The appeal was filed eight days out of time. There being no objection from the respondent, we extend time.
[37] The appeal against conviction is dismissed.
[38] The appeal against sentence is dismissed.
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[1] R v Bourton DC Hamilton CRI-2009-019-6496, 28 June 2012 at [9]“[37].
[2] R v Bourton DC Hamilton CRI-2011-019-3476, 27 April 2012.
[3] Mahomed v R [2011] NZSC 52, [2011] 3 NZLR 145 at [50]“[58].
[4] R v Bourton, above n 2, at [1].
[5] At [72].
[6] At [72].
[7] R v Varjan CA97/03, 26 June 2003.
[8] R v Bourton, above n 1, at [71].
[9] At [72].
[10] At [73]. The starting point was one year, but the Judge gave a discount of three months for totality and then a further three months for remorse.
[11] R v Rose [1990] 2 NZLR 552 (CA).
[12] R v Wallnutt CA182/93, 8 August 1993.
[13] R v Coburn CA133/03, 30 September 2003.
[14] R v Bourton, above n 1, at [2].
[15] At [2]
[16] At [42] and [73].