Mayer v R

• Jurisdiction: New Zealand
• Judge: Harrison J
• Judgment Date: 29 May 2015
• Neutral Citation: [2015] NZCA 206
• Docket Number: CA100/2014
• Court: Court of Appeal
• Date: 29 May 2015

Between

Malcolm Duncan Mayer

Appellant

and

The Queen

Respondent

[2015] NZCA 206

Court:

Harrison, Fogarty and Dobson JJ

CA100/2014

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal against conviction on the grounds of prosecutorial misconduct — the appellant alleged that that the prosecutor deliberately misled both the Court and defence counsel when advising that the Crown was unaware of the whereabouts of the appellant's co-accused who had left New Zealand before trial — prosecutor had been advised that co-accused was in Singapore at a particular address but doubted the veracity of the information — considered that disclosure was not required given that the co-accused had not been interviewed and s13(3)(c) Criminal Disclosure Act 2008 (CDA) (the name and … the address of any person interviewed by the prosecutor … whom the prosecutor does not intend to call as a witness) therefore did not apply — further if the information was accurate it was likely the Crown would apply for extradition and then s16(1)(a) CDA (disclosure of the information is likely to prejudice the maintenance of the law, including the prevention, investigation, and detection of offences) would apply — first trial was aborted due to appellants ill-health — on the day before trial the prosecutor received another tip that the co-accused was in London — a day later he was placed in Texas but no address was given — prosecutor again told Court the Crown had no knowledge of co-accused's whereabouts as he doubted the veracity of these tips — whether there had been prosecutorial misconduct which was sufficiently egregious to justify a retrial — alternatively whether there had been misconduct which raised the risk of a miscarriage of justice.

Counsel:

P Dale for Appellant

T Simmonds for Respondent

JUDGMENT OF THE COURT

• A The appeal against conviction is dismissed.

• B The appeal against sentence is dismissed.

REASONS OF THE COURT

(Given by Harrison J)

Introduction

1 Malcolm Mayer was found guilty following a five week trial before Judge Gibson sitting without a jury in the Auckland District Court on 16 counts of dishonesty using document and 10 counts of using a forged document. 1 He was convicted and sentenced to six years imprisonment with a minimum period of imprisonment of three years. 2

2 Mr Mayer appeals against both his conviction and sentence. His counsel, Mr Dale, who did not appear at trial, accepts that the Judge had an adequate evidential foundation for returning guilty verdicts on all charges. He does not assert that the Judge erred in fact or law. Instead, Mr Dale submits that the prosecutor deliberately misled both the Court and defence counsel when advising that the Crown was unaware of the whereabouts of Mr Mayer's co-accused, Simon Turnbull, who had left New Zealand before trial. He says that the prosecutor's misconduct was sufficiently egregious to justify a retrial. Alternatively, he says that it raises the risk of a miscarriage of justice.

3 Mr Mayer appeals against the finite sentence on the ground that it was manifestly excessive and against the minimum period on the ground that it was inappropriate.

Facts

4 While the trial lasted for five weeks, the essential facts were not in material dispute.

5 The charges against Mr Mayer fell into three categories or tranches as they were called. In the first group he was charged alone with seven counts of fraud. In the second and third groups he and Mr Turnbull were charged jointly with 29 counts of fraud. 3

6 The charges arose from Mr Mayer's financial relationship with Trustees Executors Ltd (TEL), which is and was a second tier financier. Its policy was to lend a maximum of 80 per cent of a property's registered value or $4 million in total to one borrower or an associated entity or entities. On 26 occasions between December 2003 and August 2007 Mr Mayer applied successfully to TEL for loans for himself or other entities, some of which were fictitious. False documents were tendered in support of all applications.

7 Mr Mayer's modus operandi was simple but crude. He practiced what is known as price hydraulicing. In the first category of transactions a fictitious party created by Mr Mayer would enter into an agreement to purchase property from a genuine vendor. The fictitious purchaser immediately entered into a second agreement to on sell the property to Mr Mayer or an associated entity at an inflated price. Mr Mayer then submitted the second or bogus agreement, but not the first or genuine agreement, to TEL in support of a financing application. In the result, TEL advanced Mr Mayer 80 per cent of the inflated purchase price. The loan equalled or exceeded the actual price paid under the first agreement. By this means Mr Mayer was able to secure 100 per cent financing to purchase seven properties. TEL loaned him just under $6 million on these transactions.

8 In the second category of transactions were five properties which Mr Mayer or an associated entity agreed to sell to a company in which he was the sole shareholder and director. Mr Mayer immediately agreed to on sell the properties to Mr Turnbull or an associated entity. A further four properties were sold directly from one of Mr Mayer's entities to one of Mr Turnbull's entities. Again, Mr Mayer submitted the second or bogus agreements but not the first or genuine agreements to TEL in support of finance applications, allowing Messrs Mayer and Turnbull to obtain 100 per cent financing for their acquisitions..

9 In some cases Mr Mayer also submitted deeds of lease to demonstrate a sufficient rental income flow to service mortgage outgoings. But no rental was ever paid. TEL advanced funds to the companies under Messrs Mayer and Turnbull's control of $20.248 million secured over these nine properties.

10 In the third category of transactions were ten properties which either Mr Mayer or a Turnbull associate purchased from a genuine vendor. As with the other two categories, successive but contemporaneous sale and purchase agreements were then entered into between the first Mayer or Turnbull associated entity and a second Mayer or Turnbull associated entity. Again, only the second or false agreements were submitted by Messrs Mayer and Turnbull to TEL in support of each finance application. So too were false lease agreements. By this means Messrs Mayer and Turnbull were again able to obtain 100 per cent financing for their purchasers, to a total of $21.629 million secured over ten properties.

11 In total Mr Mayer either on his own or jointly with Mr Turnbull obtained advances from TEL of $47.845 million. Judge Gibson found that TEL's net losses as a result of the fraud, allowing for sums recovered in exercising its mortgagee's powers, were $19.146 million.

12 In a subsequent interview with a weekly newspaper Mr Mayer essentially admitted his deception of TEL. As Judge Gibson noted:

[38] Mr Nottingham [a real estate agent engaged by Mr Mayer] arranged for a reporter, Mr A B Wall, to interview Mr Mayer on 5 September, 2009. Mr Wall was a reporter for the Sunday Star-Times and a story about Mr Mayer based on the interview was published in that paper on 6 September, 2009. Mr Mayer accepted he was aware of the TEL limit of lending per entity and insofar as the use of ‘dummy’ purchasers identified as members of his wife's family or staff members, or members of Ms de Magalhaes and her husband's family, he said that TEL was aware there were family members and there was a linkage but they did not ask and he did not tell, saying “As Dermott has pointed out to me that I didn't think at the time there was anything significantly wrong in that but as Dermott has pointed out to me as well, there was obviously poor judgement on my part.”

[39] Mr Mayer also said he was aware TEL held him in high regard and trusted his judgement. He also agreed the agreements for sale and purchase shown to TEL were entered into using persons who would not have a beneficial interest in the property but so they could borrow from TEL without its $4 million cap not seen to be breached. He said he was guilty of omission in relation to the future settlement agreements with Mr Turnbull by not disclosing them to TEL and overall saw his actions as “crimes of omission” He accepted he had misled TEL but said that at the time he did not think it was significant or hurtful to anyone.

[40] He accepted that he represented to TEL that deposits were paid on the transactions for which agreements were disclosed but admitted knowing that they had not been and tacitly agreed with the comment that TEL would think the applicant was contributing cash to the purchase, when in fact that never occurred.

Defence

13 Mr Mayer gave extensive evidence at trial. His defence was apparently based upon a claim of right. In defending the first category of offending Mr Mayer relied in particular on the factors that (a) all the purchases in the first tranche or category were supported by current market valuations; (b) he was attempting to use equity which had been achieved by purchasing a property at a price substantially lower than the current market valuation; and (c) there was no evidence that TEL had advised him of its loan to value ratios. In defending the second and third category of charges he relied on the fact that he was the vendor of properties with an equity of about $11 million which he could have sold on the open market; and that he had no obvious motive for defrauding TEL. Mr Turnbull was the real beneficiary. On three occasions, he asserted, Mr Turnbull had actually forged his signature.

14 However, a compelling inference of dishonesty was available from Mr Mayer's admission that he had prepared and presented to TEL a series of fabricated documents for the apparent purpose and with the invariable effect of persuading it to advance loans to himself and his associated entities for amounts in excess of its...