Commissioner of Inland Revenue v Jefferson [2016] NZDC 4393 (11 March 2016)

Last Updated: 10 August 2016

IN THE DISTRICT COURT AT HUTT VALLEY

CRI-2015-096-003704 [2016] NZDC 4393

COMMISSIONER OF INLAND REVENUE

Prosecutor

v

PAUL DOUGLAS JEFFERSON

_Defendant

Hearing:	11 March 2016
Appearances:	T Lancaster for the Prosecutor B Sheehan for the Defendant
Judgment:	11 March 2016

_{NOTES OF JUDGE P J BUTLER ON SENTENCING}

[1] Mr Jefferson, you are 38 and for sentence today on 23 charges of aiding and abetting a company called A J Roofing (2010) Limited of misapplying some

$115,160 of PAYE deductions. This offending occurred between May 2013 and April 2015. Each charge carries a maximum penalty of five years’ imprisonment and/or a $50,000 fine. Some of the misappropriation has been repaid but the balance outstanding as at today is $90,810.

[2] We have had some discussions during sentencing submissions about the reparation order and you have offered to pay reparation at $150 per week. Just to settle that issue now, I am going to order you to pay reparation of $39,000. I reach that figure by calculating $150 per week over a period of five years. That is not the end of it, as you will probably appreciate. You owe the Department and the taxpayer more than that and I expect that they will still seek to pursue you for the balance of

what is outstanding. My reparation order does not prevent them from doing that and they are quite entitled to do so.

[3] The facts were that you were the sole director and shareholder in the company which I have named. The company provided roofing services and as an employer you were required to make deductions from employee’s earnings during each month by the 20th of the following month. The company failed to account for the tax deductions for 23 monthly periods between the period I have indicated. The total amount of core tax deductions, excluding interest and penalties, which the

company failed to pay by due date was $115,160 and $90,810 of that sum remains outstanding.

[4] You have no previous convictions. You have certainly none for defrauding the Department. You had two minor driving charges in 1998 and 2002 and two minor other matters in 1994 and 1995. Really, as far as you are concerned, I treat you as a first offender before the Court.

[5] The pre-sentence report contains some background material. You told the author of the pre-sentence report that you felt you lacked the management ability to properly conduct your own business. You priced jobs poorly in the hope of getting more work and you intended to trade your way out of the debt before the axe fell. You are remorseful and you want to pay the outstanding balance back to the Department. That is part of the discussion we have been having today.

[6] The recommendation of the report is a sentence of community detention and community work. This combination of sentences would leave open a work opportunity which you have, and which you have taken up I am told, and the opportunity to commence repayments to the Department.

[7] You are assessed at being able to pay reparation at the rate of $150 per week. Roofing work, such as you do, is not compatible with a sentence of home detention because with that sort of sentence there is a constant need to know where you are during each 24 hour period.

[8] The purposes I adopt for sentencing are to hold you accountable for harm done to the taxpaying community, to provide reparation for that harm done, and to denounce your conduct. As to the principles of sentencing I have regard to ss 8,

10A, 15 and 16. A sentence of imprisonment is, in my view, not the outcome to achieve the purposes of sentencing which I have identified.

[9] The Department’s submissions call for a sentence of

18 months’ imprisonment, commuted to home detention and community work plus a reparation order. The Department submits, and I agree, that a fine is not appropriate and the Department submits that community detention does not hold you sufficiently accountable. The Department submits that the aggravating features of your offending were the extent of the loss to the community; that there were, on some 14 out of the 23 month period sufficient funds to meet the PAYE obligations, the offending had to be to an extent premeditated. I have also directed to the duration of the offending, some 23 months as I have been mentioning, and PAYE theft is theft from the community, that is to say it is a breach of trust.

[10] The Department acknowledges your early guilty plea is a mitigating factor which would entitle you to a full discount of 25 percent and you were co-operative with the investigating officers throughout the investigation.

[11] I have chosen the combination of community detention and community work over a sentence of home detention for the following reasons. Reparation is available from you at a good weekly rate and you can begin payments immediately. That would not be the case with a sentence of home detention because you would have to serve that sentence before you could work, that would be a sentence of at least six months, so your employment would be put on hold, as would your contribution to reparation.

[12] The community detention sentence I intend to impose is for the maximum six months and community work sentence is severe, 240 hours, being equivalent to what was formerly called six months periodic detention.

[13] I order reparation of $39,000 to be paid at the rate of $150 per week with the first payment commencing seven days from now.

[14] So the outcome is a sentence of community detention for six months to be served at [address deleted]. That would start 14 March and you will be subject to a daily curfew between the hours of 7.30 pm and 5.30 am the following morning; 240 hours’ community work and reparation as discussed.

P J Butler

District Court Judge