Zheng v R
| Jurisdiction | New Zealand |
| Judge | Collins J |
| Judgment Date | 09 November 2023 |
| Neutral Citation | [2023] NZCA 551 |
| Court | Court of Appeal |
| Docket Number | CA657/2022 CA659/2022 |
IN THE COURT OF APPEAL OF NEW ZEALAND
I TE KŌTI PĪRA O AOTEAROA
French, Collins and Wylie JJ
CA657/2022
CA658/2022
CA659/2022
R L Thomson and A Y H Young for Appellant H Zheng
R J Katz KC, B H Dickey and N J Small for Appellant Y Zhang
P E Dacre KC and D Lye for Appellant S Zheng
P F Wicks KC and K E Hogan for Respondent
Criminal Sentence — appeals against conviction and sentence — obtaining a benefit by deception — political donations — whether the appellants obtained a personal benefit — meaning of “benefit” — Crimes Act 1961 — The Electoral Act 1993
The appeals were allowed. The convictions were quashed.
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A Hengjia Zheng's appeal against his conviction in respect of charge 5 is allowed. The conviction is quashed. No retrial is ordered. Hengjia Zheng's appeal against his conviction in respect of charge 7 is dismissed. The sentence imposed in relation to his conviction for charge 7 remains in place.
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B Yikun Zhang's appeal against his conviction in relation to charge 5 is allowed. The conviction is quashed. No retrial is ordered. Yikun Zhang's appeal against sentence is dismissed.
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C Shijia Zheng's appeals against his convictions in relation to charges 3 and 5 are allowed. The convictions are quashed. No retrial is ordered.
(Given by Collins J)
Following a judge-alone trial the appellants were convicted of obtaining a benefit by deception contrary to s 240(1)(a) of the Crimes Act 1961. 1 We explain s 240 of the Crimes Act at [70] to [75]. Four other defendants were tried with the appellants. The charges against them were dismissed by Gault J. 2
The convictions stemmed from the appellants' roles in a strategy that hid the true source of donations to the National Party in 2017 and 2018. Mr Hengjia (Joe) Zheng was also convicted of providing false or misleading information to the Serious Fraud Office (SFO), which is an offence under s 45 of the Serious Fraud Office Act 1990 (the SFO Act). 3 The appellants were sentenced by Gault J, the trial judge, to community-based sentences. 4
The appeal challenges all convictions and also the sentence imposed on Yikun Zhang. In his sentence appeal, Mr Zhang argues he should have been discharged without conviction. As we are allowing Mr Zhang's appeal against conviction, it is not necessary for us to deal with his sentence appeal. Nor is it necessary for us to consider the grounds of appeal challenging a pre-trial decision directing that the appellants be tried by judge-alone.
Seven charges were set out in the Crown charge notice. Six of those charges alleged various defendants breached s 240(1)(a) of the Crimes Act. The seventh charge concerned Joe Zheng's breach of s 45 of the SFO Act.
The obtaining of a benefit by deception charges concerned three tranches of donations to political parties:
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(a) Charges 1 and 2 arose from donations made in March 2017 to the Labour Party. In addition to the appellants, C, H and W 5 were charged in relation to these donations. All defendants were found not guilty of the two Labour Party donations charges. 6
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(b) Charges 3 and 4 arose from donations made to the National Party in June 2017. Mr Zhang, Mr Shijia (Colin) Zheng and Mr Jami-Lee Ross were charged in relation to these donations. Colin Zheng was found guilty in relation to charge 3. No verdict was entered for Colin Zheng in relation to charge 4. Mr Zhang and Mr Ross were found not guilty in relation to charges 3 and 4. 7
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(c) Charges 5 and 6 arose from donations made to the National Party in June 2018. Mr Zhang, Colin Zheng, Joe Zheng, and Mr Ross were charged in relation to these donations. The three appellants were convicted in relation to charge five. Mr Ross was found not guilty of charge 5. Charge 6 was laid as an alternative to charge 5. No verdict
was entered in respect of the appellants in relation to charge 6. Mr Ross was found not guilty in respect of charge 6. 8
The principal question raised by the appeals concerning the convictions for breaching s 240(1)(a) of the Crimes Act is whether the appellants could be convicted when it was accepted they did not receive, directly or indirectly, a benefit for themselves from the donations. Instead, before us, the SFO argued the National Party was the victim and correspondingly, the beneficiary of the same deceptive transaction. As we shall explain, at trial, the SFO alleged the National Party was the beneficiary of the transaction and the Electoral Commission and/or the National Party Secretary were deceived.
Mr Zhang first came to New Zealand from China in about 2000, and moved here permanently with his family in 2011. He does not speak English, and he maintains close connections with the Teochew community, which comprises immigrants from the eastern part of Guangdong Province in China. Mr Zhang was the first chairman of the Chao Shan Association in Auckland, which serves the Teochew community.
Mr Zhang is a successful and wealthy businessman. Prior to his conviction, he was a director of multiple companies, 9 and he remains a shareholder in a number of companies.
Colin Zheng came to New Zealand as a secondary school student. He was also prohibited from managing companies following his conviction, but was granted leave
Colin Zheng has also been highly involved with the Chao Shan Association, including serving as the chairman in 2017.
Joe Zheng is the twin brother of Colin Zheng. He also came to New Zealand as a student and has lived in this country for more than 20 years. He currently works for KCC Construction. 10
The Electoral Act is integral to New Zealand's constitutional arrangements. 11 In addition to regulating the way parliamentary elections are conducted the Electoral Act provides for the registration of electors and political parties. It also governs, amongst other matters, the way donations can be lawfully made to political parties.
A cornerstone of the law governing donations to political parties is the process which enables the public to learn the identity of persons who make donations in excess of a specified statutory threshold, presently $5,000, to a political party in any one year. 12 At the time of the donations in this case the threshold for public disclosure was $15,000. 13
There are different timeframes for reporting donations above the $5000 threshold to the Electoral Commission depending on the amount donated. When a political party receives in one year a donation greater than $5,000 from a single donor, the secretary of the party must inform the Electoral Commission of that donation in
When a political party receives a donation that exceeds $20,000 from a single donor during the election year, the party's secretary must file a return with the Electoral Commission within 10 days of the donation being received. The return must identify, amongst other matters, the name and address of the donor (if known). 15 At the relevant times, the single donation threshold was $30,000. 16
The information provided by political parties about donors is able to be made publicly available by the Electoral Commission, whether it is provided in an annual report or a special report made under s 210C. 17
A political party secretary who unwittingly fails to comply with the provisions we have summarised at [14] and [15] commits an offence and is liable on conviction to a fine not exceeding $40,000. 18 If a return is filed that is false in any material particular and the party secretary knew about it, then they may be liable on conviction to a fine not exceeding $100,000. 19
Section 207E of the Electoral Act concerns the transmission of donations via an intermediary. It provides:
207E Identity of donor to be disclosed by transmitter, if known
(1) When a transmitter transmits a donation to a candidate or party secretary on behalf of the donor, the transmitter must disclose to the candidate or party secretary-
(a) the fact that the donation is transmitted on behalf of the donor; and
(b) the name and address of the donor; and
…
(2) Where a transmitter does not disclose, or is unable to disclose, the information required by subsection (1), then the donation must be treated as an anonymous donation.
The failure of a transmitter to comply with s 207E with the intention of concealing the identity of the donor commits an offence and is liable on conviction to a fine not exceeding $40,000. 20
The Electoral Act also regulates anonymous donations, but none of the donations in this case were anonymous. 21
The SFO concluded it was unable to charge any of the defendants with committing offences under the Electoral Act. The inability to charge the defendants with offences under the Electoral Act exposes a significant weakness in the offence provisions of that Act.
We now set out the facts underlying the charges. As we have explained at [5], the only convictions under s 240(1)(a) of the Crimes Act concern the donations made to the National Party in June 2017 and June 2018. It is, however, helpful to complete the scene by briefly describing the allegations concerning the donations to the Labour Party.
Charges 1 and 2 arose from these donations.
In early 2017, Mr Zhang was preparing an application on behalf of the Chao Shan...
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