R v Jukich DC Auckland CRI-2008-090-010680 [2011] NZDC 1815 (3 November 2011)

Last Updated: 11 January 2018

IN THE DISTRICT COURT AT AUCKLAND

_{CRI-2008-090-010680}

THE QUEEN

v

_{MATE JUKICH}

Hearing: 3 November 2011

Appearances: R Willox for the Crown

J Moroney for the Prisoner

Judgment: 3 November 2011

_{NOTES OF JUDGE J P GITTOS ON SENTENCING}

[1] Mate Jukich you appear for sentence today having been found guilty by a jury some time ago now on a total of 23 counts of tax evasion, which relate to various types of evasion of tax and, in particular, evasion of personal income tax payable by yourself, GST payable by yourself and tax, GST and PAYE deductions made, not accounted for in relation to companies that you were running, Raven Developments Limited and Raven Buildings Limited.

[2] The total of tax evaded as calculated is some $690,000 but the total for sentencing purposes has been fixed by the Crown, having regard to the presumption in your favour that some of these payments were in fact made (although the evidence certainly does not very strongly support that in some circumstances) but on that basis

_{reduces the overall loss to the tax payer of $516,713 in all, which is a significant}

R V JUKICH DC AK CRI-2008-090-010680 3 November 2011

figure. That is a total loss. Nothing has been repaid. There is no prospect of anything being paid. You are unemployed and reported upon as having no assets.

[3] These offences were carried out over a period of some two years in a quite complex pattern of deception that you engaged upon in relation to the management of a building business that you were involved with. And in essence much of the worst of the offending related to your using false identities, raising invoices for payments allegedly made to contractors who were either non-existent or to whom no such payments had been made, raising GST credits for yourself on that, using a false GST number and at one stage an unregistered company.

[4] The PAYE deductions were in respect to monies received from, or deducted from the payments of people who were working for you and which were not accounted for to the Inland Revenue Department.

[5] The trial was complex and took some three weeks with all issues really being at large, and in the end it says something about the clarity of the evidence against you that the jury followed through this tortuous process and had no difficulty in reaching unanimous verdicts of guilty in relation to all 23 counts that you faced.

[6] I have no doubt that their verdicts are correctly based, and there is indeed no challenge to that is raised by your counsel who accepts on your behalf that these falsehoods were in fact perpetrated by you.

[7] The Crown raises as matters of aggravation in relation to this the sheer amount of tax evaded, the complexity and planned patterns of deception that were engaged upon to bring about that outcome, and the lack of any recovery or any acknowledgement really, or remorse, on your behalf in relation to this offending.

[8] I have had the opportunity of reading in advance of this morning’s hearing very detailed written submissions from the Crown and from your counsel, both of whom have put forward for my consideration quite a number of previously decided authorities, both in this Court and in the higher courts and in particular, matters that

have gone to the Court of Appeal on sentencing issues in respect to cases involving substantial tax evasion such as this.

[9] In particular, the Crown have drawn to my attention some authorities which have been the subject of appellate consideration on sentencing issues, which the Crown suggests are broadly comparable to the situation confronting me today. Amongst those is Eade v Police (2009) 24 NZTC 23, 789 where the amount evaded over some 14 charges of tax evasion and charges of fraud was some $240,000. A sentence in that case of three and a half years on appeal was upheld.

[10] Similarly in the case of Clemm v Commissioner of Inland Revenue (2005)

22 NZTC, 19,495 defalcations there of some 272,000 resulted in a sentence of imprisonment for two and a half years, which was sustained on appeal.

[11] Other similar cases, R v Smith [2008] NZAC 371, a two and a half years’ sentence was upheld for offending involving some $570,000. Those are cases that have some similarities with this.

[12] Also at a lower level of culpability where lesser sums have been involved there are a number of cases cited to me where the Court, while imposing a sentence of less than 2 years’ imprisonment, has nevertheless refused to consider home detention on the basis that the deterrent effect of the sentence would not be adequately served by such a sentence.

[13] The issue for me today really is whether I can properly impose a sentence of home detention for this offending which your counsel contends would be appropriate. There are some difficulties there, I think, Mr Jukich. I have to give some regard to the Crown’s submissions here that there are some serious aggravating matters that can be identified.

[14] There has been, even at this stage, no attempt to make reparation and I acknowledge you are probably not in a position to do that, but there has been no attempt even to file the returns that were required. Although your counsel says that you are remorseful it is difficult to reconcile that statement with the submission that

is also made, both through your counsel to me and to the probation officer, that you considered at that time that you were acting in accordance with professional advice.

[15] I accept that you did have professional advisers who gave evidence at the trial, but it is clear that they were not being given the full picture of what you were doing and it would be trite to say that no professional adviser, legal or accounting, would advise any client to deceive the Inland Revenue Department by the preparation and tendering of false invoices, the use of a false GST number and devices of that nature, which were done evidently without their knowledge.

[16] And it is the case that while this investigation was ongoing over a period of years, you continued to give such false information to the Inland Revenue Department, most particularly in respect to B J Khan and the company said to be associated with him, which was something that was clearly an invention on your part and used to get taxation advantage.

[17] So I have some reservations about whether there is any real remorse here and if this matter had been grappled with realistically then a very lengthy, and no doubt expensive, trial could have been avoided. Here at the end of that process, while you do not challenge the verdict in any way, you still say that somehow you were not responsible for what happened that you were relying on professional advice. Well that submission really does not run, Mr Jukich; it does not square with the facts at all.

[18] So on the basis of the gravity of the offending, the length of time it has gone on, the amount concerned and the methods by which you set about deceiving the Inland Revenue Department, it is plain that a sentence of some substance needs to be imposed. The maximum penalty for any one offence of this kind is five years’ imprisonment. The Crown does not ask that I accumulate the sentences to come to a larger figure, but the start point which the Crown contends for is something upwards of two and a half years.

[19] And I do not think that realistically Mr Moroney could argue that a start point of much less than that would adequately reflect the seriousness of the offending.

That immediately takes it presumptively out of the level at which a sentence of home detention could be properly applied, because home detention is only available where the start point sentence is two years or less.

[20] There is however an anomalous exception to that general rule, which is available in this case, in that the offending took place at a time when it was open to the Court to apply home detention for a sentence of over two years. And the only authority for that proposition really is the case of Hill which your counsel has referred to. That was the case which made the point that at that particular time home detention in certain circumstances would be available for a sentence of over two years. That case was appealed and that point was made. The legislation was subsequently altered to close that gap, but you are still a person who is entitled to call the decision of Hill in aid if it is appropriate to do so.

[21] The difficulty in that is that the decision in Hill was somewhat confined to its own facts. That was a drug offending case and the motivation of the Court in imposing home detention there was to recognise that there were very strong rehabilitative initiatives in place in relation to this man’s addiction-driven offending, and they were such that he was unlikely to present as a repeat offender.

[22] I can accept that because of your present circumstances there is no present likelihood of you offending in this way again, at least in the near future, but that is where the similarities with Hill really run out.

[23] And I think Mr Jukich, while I can be sympathetic to you personally and to the factors that are raised on your behalf in that respect in counsel’s submissions, and in the testimonials that I have from your family members, and I recognise that you have not enjoyed good health; the proceedings have been very stressful for you and that has kept you in a situation of unemployment really, and on medical treatment, nevertheless, in my judgment the offending is of a type and gravity that really requires that it be recognised by a custodial penalty.

[24] I strike a start point of two and a half years, which I think is the bottom of the range that I can reasonably adopt. The Crown does not seek any uplift in respect to

your previous offending and I think that is realistic and appropriate. That is in the past. It is of a different character and need not be revisited in considering this sentence.

[25] The aggravating factors that I have identified I think are adequately covered in a start point of two and a half years. I find no mitigating factors available to reduce the sentence below that level. In the end result the sentence on these matters is one of two and a half years’ imprisonment.

J P Gittos

District Court Judge