A former trustee of Far North Māori fund who was jailed for a $1 million fraud he perpetrated with his sister has been denied a Supreme Court appeal over "cultural shame".

Stephen Henare and Margaret Dixon virtually bled the Parengarenga 3G (P3G) Trust dry to pay for gambling and luxuries, such as a corporate box at rugby league games.

Both were prosecuted by the Serious Fraud Office (SFO) and on day four of Henare's High Court trial last May, he pleaded guilty to five charges of theft by a person in a special relationship and one count of perverting the course of justice.

The 62-year-old was later sentenced to five years and two months' imprisonment by Justice Matthew Muir, a term he unsuccessful challenged in the Court of Appeal this year.

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Despite dismissing Henare's efforts, the Court of Appeal said in an appropriate future case the courts may be able to "explore the possibility of treating whakamā as a unique mitigating factor when sentencing a Māori defendant."

So, Henare took the case to New Zealand's highest court with an application for a second challenge to his sentence. His sole intended ground of appeal was the effect of whakamā, a form of cultural shame for Māori, should have been recognised as a personal mitigating factor in his sentencing.

A cultural report for Henare's sentencing did read he "has expressed a disconnection with his wider whanau".

As part of the report, his daughter also said in a statement her father's crimes had seen him become an outcast.

"Our mana has been stripped, our tikanga value is gone ... We as a whanau, we are broken," she said.

Henare also argued his sentence "has impacted on all the bloodline connections past present and future and to the land itself".

In its judgment released today, the Supreme Court said it accepted the relevance and potential effect of whakamā in sentencing is a matter of general or public importance.

However, it was not satisfied the issue arises from Henare's case.

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When sentencing Henare, Justice Matthew Muir did refer to the "humiliation" felt by current and former trustees and the wider community of owners as a result of Henare's offending.

The Supreme Court bench of Justice Joe Williams, Justice Ellen France and Justice Mark O'Regan said whakamā was "clearly in [Justice Muir's] contemplation".

"But the logic in the suggestion that Mr Henare should receive a discount because of the whakamā his offending caused to others is not immediately obvious," the decision reads.

"Even more to the point however is that there is little evidence that Mr Henare himself is afflicted with whakamā," the court said, dismissing the application.

Margaret Dixon was sentenced to home detention for her part in the fraud. Photo / Sam Hurley
Margaret Dixon was sentenced to home detention for her part in the fraud. Photo / Sam Hurley

A Department of Corrections' report also recorded that despite his guilty plea, Henare maintained he has fulfilled his obligations in his role and did not steal the funds from the PG3 Trust.

Justice Muir found Henare harboured a sense of entitlement to the funds for property he claimed had been "illegally taken from his grandmother and others".

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Henare's crimes began after he was appointed a trustee of P3G with his sister and five other people in June 2012.

The trust, which helped underprivileged people, managed more than 500ha forest block on Māori land in Tai Tokerau District.

Henare and Dixon took control of P3G with about $1.08m in cash assets in August 2012, but by January 2014 there was only $13.41 left in the accounts.

As a result of the depleted funds, there was a devastating financial, social and emotional impact on the 400 current and future beneficial owners of P3G, which could no longer afford to maintain its forests.

The problems plaguing P3G had been taken to the Māori Land Court in January 2013 after an application was made by one of the trustees to remove Henare from his position.

But at the court hearing Henare perverted the course of justice by lying when asked about the health of the trust's account, claiming there was just under $1m in the accounts.

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Still a trustee, he walked away and went on to steal the remaining $400,000.

Dixon, who was due to give evidence for the SFO during her brother's trial, was convicted and sentenced to home detention for her part in the fraud.

The court heard at her sentencing that her personal gain was $130,836.

The siblings have been removed as trustees of P3G.

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