R v Huirua
| Jurisdiction | New Zealand |
| Judge | Gendall J |
| Judgment Date | 27 May 2022 |
| Neutral Citation | [2022] NZHC 1262 |
| Docket Number | CRI-2019-083-1508 |
| Court | High Court |
[2022] NZHC 1262
Gendall J
CRI-2019-083-1508
IN THE HIGH COURT OF NEW ZEALAND
WHANGANUI REGISTRY
I TE KŌTI MATUA O AOTEAROA
WHANGANUI ROHE
Criminal Sentence — sentencing following guilty pleas to using a forged document (x6) and carrying on business fraudulently — breach of trust — duration of offending — Crimes Act 1961 — Companies Act 1993
M M Wilkinson-Smith and N Turner for Crown
J Waugh for Defendant
Mr Te Whitinga Mark Huirua, you appear for sentencing today following your guilty pleas on six charges of using a forged document and one charge of carrying on a business fraudulently. The charge of using a forged document relates to s 257(1)(a) of the Crimes Act 1961 and has a maximum penalty of 10 years' imprisonment. The charge of carrying on a business fraudulently relates to ss 380(1) and 373(4) of the Companies Act 1993 and has a maximum penalty of five years' imprisonment.
The facts of your offending, Mr Huirua, are said to be broadly unique and generally are as follows.
On 27 November 2003, Ngaa Rauru Kiitahi, as one of eight generally recognised iwi of Taranaki, entered into a Deed of Settlement of their Treaty of Waitangi grievances with the Crown. As part of that settlement, the iwi received $32 million in redress.
Te Kaahui o Rauru (Te Kaahui) is a charitable trust established as a governance entity for Ngaa Rauru Kiitahi. Mr Huirua is a director of Te Pataka o Rauru Ltd (Te Pataka), which was the company heading the investment arm for the iwi. Its directors, (Pookai Aronui), are responsible to ensure that the funds of the iwi are appropriately invested and managed for the benefit of members of the iwi.
Mr Huirua invested funds that belonged to his iwi, Te Kaahui in his role as a director of the investment arm Te Pataka. The fraudulent business charge generally arose in part from an attempt to keep the nature of of the direct investments that Mr Huirua was making hidden from certain staff members of Te Kaahui who would have disagreed with his investment methods, despite the fact he may have been authorised to make direct investments of this type.
Mr Huirua's forgeries arose broadly it appears out of an attempt to hide the losses and means by which the funds had been lost. As to the Te Pataka investments, on Mr Huirua's advice that the company diversified more into “direct investment” of funds. For the purposes of these investments, Mr Huirua created two companies, “Society One New Zealand Ltd” and “Imdabradaz Capital Ltd” to receive the funds he would invest. The first of these was so-called to mirror the name of a large Australian financial institution to avoid detection of his method and strategy of investing from members of Te Kaahui. In fact, Mr Huirua was a director and sole shareholder of both companies.
Between 4 May 2018 and 29 May 2019 Mr Huirua caused a total of $3.1 million to be transferred from Te Kaahui to these companies, which Mr Huirua then invested through brokers. Of this, $2.6 million was lost in trading and Mr Huirua used a further $500,000 for personal expenditure.
Mr Huirua did not advise Te Kaahui of the losses. In fact, Mr Huirua then attempted to hide the losses and the way in which the funds had been lost from the auditors and from Te Kaahui through forged documents, including letters and emails from fictionalised people.
The losses were eventually discovered because of auditing difficulties and a hui was held on 2 November 2019 between Mr Huirua and members of Te Kaahui. When Mr Huirua was asked about the offending, he stated that he acted alone and was investing on behalf of the iwi. He said he believed Te Pataka had invested the money on the basis of its reliance on him and his knowledge and he had operated and implemented “trading strategies” with which he believed he had a run of bad luck.
It is important to note here that Mr Huirua is not for sentence for theft of any money from the victims or for the direct loss of these funds. It is not a crime to make a poor investment decision. He is primarily for sentence for the panicked and dishonest actions he took following his realisation that the money entrusted to him by the iwi had gone. There is, as I understand it, no guideline judgment for this type of offending.
Turning now to the submissions advanced before me, I address first the Crown submissions.
The Crown submits here that what is really bordering on a form of misappropriation of Treaty of Waitangi settlement funds effectively has added injustice to what was previous injustice the iwi in this case had suffered. The Crown submits Mr Huirua's forgery and fraudulent business offending is deceitful and manipulative and points to this offending as an absolute breach of trust of Mr Huirua's iwi, and an abuse of his position. The Crown contends that Mr Huirua's offending has brought shame to his iwi and will continue to cause harm to the iwi for generations.
For Mr Huirua, Mr Waugh, his counsel suggests that, due to Mr Huirua's poor investment decisions and mismanagement of the funds, this did result in a total of $3.1 million effectively being lost. Mr Huirua however was authorised to make direct investments of the type he did and making poor investment decisions in itself, as I note, is not a crime. Rather, he points out, Mr Huirua appears for sentence primarily for what he describes as panicked and dishonest actions Mr Huirua took when he realised that the money entrusted to him by the iwi had gone. Although Mr Huirua invested funds that belonged to his iwi it seems legitimately, in his role as director of the investment arm of the iwi, the fraudulent charges arose out of his attempts to keep hidden the losses that were made as well as the nature of the direct investments he was making, with which he knew members of his iwi would have disagreed.
Mr Waugh also submits that this Court must determine an appropriate sentence that will adequately hold Mr Huirua accountable and promote in him a sense of responsibility and acknowledgement of the harm he has caused. He submits however that an appropriate punishment for this offending can be achieved without a sentence of imprisonment and suggests home detention should be imposed. Mr Waugh goes on to submit here that a sentence of imprisonment, if the Court was considering imposing one, would be disproportionately severe when considering Mr Huirua's circumstances, including in particular the impact the offending has had on him personally as well as his position within his own community. Mr Waugh says the least restrictive sentence that would meet the principles and purposes of sentencing here is a combination sentence he suggests of nine months' home detention and 250 hours' community work.
I will come to my sentence calculation shortly.
The Court has received a number of reports to assist me in sentencing Mr Huirua.
From the Department of Corrections a Provision of Advice to this Court has been provided. In this Mr Huirua's risk of offending is assessed as being low, but his risk of further harm to others is assessed as medium. The report says Mr Huirua has accepted his offending and expressed remorse. However the report writer notes that Mr Huirua also showed features of manipulation, and what is described as a high sense of entitlement. The writer says Mr Huirua went on to exhibit what are described as poor problem-solving skills and impulsiveness. Ultimately, the report recommended as the appropriate sentence here a sentence of imprisonment.
There is also before me a 29 April 2022 restorative justice memorandum. The memorandum details that Mr Huirua was willing to engage in a restorative justice process but a conference was not convened as Te Kaahui declined to engage in the process.
Finally, the Court has also received a detailed apology letter written by Mr Huirua. In the letter, Mr Huirua has expressed the guilt, shame and humiliation he indicates he has felt as a result of his actions. He expresses regret at misleading members of his iwi in not being transparent and in losing their money. He says it is crushing that he is no longer part of his iwi and cut off from his whakapapa. Mr Huirua in the letter does accept that his actions could have a negative impact on many generations to come and that there is likely to have been significant loss of mana and trust in his iwi as a result of his actions.
Also before me are two rather chilling victim impact statements. I have read them both carefully and thank the writers for providing them.
The first victim impact statement is written on behalf of the 4,400 registered iwi members of Ngaa Rauru Kiitahi, the 24 designated paepae members and the employees both past and present of Te Kaahui. The victim impact statement describes the heavy burden that is felt by all the iwi, and the anger and disappointment felt by them as a result of Mr Huirua's actions here. It says too that the credibility of Te Kaahui, as an organisation, has been tarnished by Mr Huirua's actions and the iwi have been left carrying the whakama.
The second victim impact statement was written by the previous Pookai Aronui of Te Pataka. This was the financial management group which the defendant chaired up until 2019. The members of the Pookai Aronui stated that they were shocked at the level of Mr Huirua's deceit and manipulation and that he will never be able to restore the trust they had in him or the millions of dollars they contend he has taken from future generations.
I turn now to the case law relating to this matter. On this there is no general guideline judgment for dishonesty offending of this type, and I refer to the...
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Huirua v R
...maximum penalty of 10 years' imprisonment. 2 Companies Act 1993, ss 380(1) and 373(4)(f); maximum penalty of five years' imprisonment. 3 R v Huirua [2022] NZHC 4 Mr Huirua lived in Australia at that time. 5 These six emails form the basis of the six charges of using a forged document. 6 Cr......