Jukich v The Queen
[2012] NZCA 231
•6 June 2012
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA786/2011 [2012] NZCA 231 |
| BETWEEN MATE JUKICH |
| AND THE QUEEN |
| Hearing: 16 May 2012 |
| Court: Randerson, Winkelmann and Keane JJ |
| Counsel: J H A Wiles for Appellant |
| Judgment: 6 June 2012 at 3.00 pm |
JUDGMENT OF THE COURT
The appeal is dismissed.
REASONS OF THE COURT
(Given by Keane J)
On 3 November 2011, following trial, Mate Jukich was sentenced in the District Court, Auckland, to imprisonment for two and a half years for 23 offences of tax evasion in the financial years 2003 - 2007, as a result of which the loss to the Inland Revenue Department was $516,713. Mr Jukich appeals that sentence as manifestly excessive.
In this appeal against sentence, Mr Jukich contends that the trial Judge, Judge J P Gittos, adopted a starting point of two and a half years imprisonment which was too high, and that he wrongly declined to impose home detention. The Judge assumed that only a sentence of imprisonment would be deterrent. He gave no weight to Mr Jukich's depressive illness and in questioning Mr Jukich's remorse, he overstated Mr Jukich's claim to have relied on professional advice. Mr Jukich only claimed to have acted on advice when he elected to delay filing his returns. The Judge also erred in failing to recognise that in 2009 Mr Jukich had returned from the United States to face up to his responsibility.
Investigation and prosecution
Mr Jukich's offending came to light in late 2003, when the Inland Revenue Department noted that, though he was a beneficiary, he was regularly trading in his cars for later models, each time making large cash payments to do so.
Inland Revenue surveyed the retail banks and discovered that Mr Jukich was making cash deposits and receiving direct credits at two, the Bank of New Zealand and the ASB Bank. It found that he was trading through two companies, Raven Developments Limited, which was not GST registered and was using the number of an unrelated company, and Raven Buildings Limited.
In early 2004 Mr Jukich learned of the inquiry and made contact with Inland Revenue. Over the years that the investigation then took, Mr Jukich was interviewed a number of times, at first with different accountants, and then with a lawyer. He supplied Inland Revenue with a return of income for the year ended 31 March 2003 supported by business and financial records. By exercising statutory access to Mr Jukich's home the Inland Revenue obtained more, including computer records. It concluded that amongst the records disclosed to it, or obtained by the search, those concerning relations with sub‑contractors, were fictional.
In 2007, before Mr Jukich was charged with the offences that were expressed finally in the indictment, he went to the United States on a working holiday for two years. He believed that because he had not then been charged, he was free to go. In 2009, on his lawyer's advice, he returned and was charged and went to trial.
At trial the jury found, and it is undisputed on this appeal, that in three instances Mr Jukich filed tax returns claiming deductions for expenses paid to sub-contractors supported by fictitious invoices. In seven instances, with intent to evade tax, he failed to file income tax and GST returns for himself and his two companies. In 13 instances he misapplied PAYE deductions.
The resulting loss to Inland Revenue was $516,713 which remains outstanding. Mr Jukich has never made any attempt to repay any part of it or to file the returns outstanding. Both his companies had been liquidated by the date of the sentence.
Sentence under appeal
On sentence, the Judge said Mr Jukich had offended over some two years[1] in a “quite complex pattern of deception”. The worst of his offences had involved:
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 ... using a false GST number and at one stage an unregistered company.
He had also failed to account for numerous PAYE deductions that he had put to his own use.
[1]In fact, it was for a longer period (2003-2007).
The Judge noted that the trial had taken three weeks and had been complex. The evidence had been so clear that the jury had found unanimity without difficulty. He had no doubt that their verdicts were correct. In submissions on sentence, Mr Jukich's own counsel accepted without demur that Mr Jukich had been serially fraudulent. The Judge then identified the aggravating matters on which the Crown relied, and with which he agreed, which shaped the sentence he eventually imposed:
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...
The Judge had regard to three cases that he considered “broadly comparable”: Eade v Police,[2] where there were 14 charges of tax evasion and fraud, the loss was $240,000 and a three and a half year sentence was upheld on appeal; Clemm v Commissioner of Inland Revenue[3] where a solicitor's defalcations amounted to $272,000 and a two and a half year sentence was sustained on appeal; and R v Smith,[4] where unpaid taxes came to $570,000 and a two and a half year sentence imposed on the principal offender was also upheld.
[2] Eade v Police (2009) 24 NZTC 23,789 (HC).
[3] Clemm v Commissioner of Inland Revenue (2005) 22 NZTC 19,495 (HC).
[4] R v Smith [2008] NZCA 371, (2009) 24 NZTC 23,004..
Offending involving lesser sums had attracted sentences of less than two years but in no case cited to him had home detention been imposed. Such a sentence had been considered insufficiently deterrent and in Mr Jukich's case the features aggravating his offending could only be answered by a sentence of imprisonment.
Mr Jukich had made no attempt to make reparation. He had not even attempted to file correct income tax and GST returns. He claimed to be remorseful. He continued to assert that he had acted on professional advice, but no professional adviser would ever have advised him to deceive the Inland Revenue as he had. His deceit had continued throughout the years he was investigated. At trial, he had not advanced any defence beyond his claim to have relied on professional advice. Had he been more realistic, there would have been no need for the trial at all.
Mr Jukich's offences all attracted a maximum sentence of imprisonment of five years and the Judge accepted the Crown's submission that he should impose on Mr Jukich concurrent sentences for them all, taking a global starting point of two and a half years imprisonment. That starting point appeared to him to be the least that he could adopt.
The Judge recognised that, ordinarily, a sentence of imprisonment in excess of two years ruled out a sentence of home detention. He accepted, however, that Mr Jukich's offending lay in the niche identified in R v Hill,[5] where home detention could be imposed for offences warranting a sentence of imprisonment in excess of two years. Nevertheless, the Judge considered the specific circumstances that surrounded Mr Jukich's offending and concluded that these could only be answered by imprisonment.
[5] R v Hill [2008] NZCA 41, [2008] 2 NZLR 381.
The Judge accepted there were no aggravating features calling for any uplift to the starting point. Conversely, he also found no mitigating circumstances despite expressing some sympathy for Mr Jukich, noting that he had been unemployed and that his health had not been good.
Conclusions
In sentencing Mr Jukich to imprisonment for two and a half years, and in declining to impose home detention, the Judge made no error of principle or discretion.
The starting point the Judge took for sentence, his end point as it turned out, accurately reflected the specific features pertaining to Mr Jukich's offending that the Judge had identified: the level of deceit he had practised that extended throughout the investigation, the amount of tax he had evaded, and his inability to make reparation.
These features of Mr Jukich's offending, as the Judge said, made it "broadly comparable" with the offending in the three cases he identified. The starting point the Judge took was half the maximum penalty for Mr Jukich's 23 offences. We consider it could have been higher. We consider the Judge was equally justified, for essentially the same reasons, in declining to commute that sentence to one of home detention.
The Judge may have overstated Mr Jukich's reliance on professional advice. Mr Jukich did not rely on advice to excuse his entire conduct. He claimed only to have delayed filing his returns because he had been advised that he should not do so until his liability was agreed with Inland Revenue. The Judge may also not have credited Mr Jukich with returning from the United States in order, as it turned out, to be charged. But even if the Judge had taken these two factors into account he would still have been entitled to conclude, for the reasons he gave, that Mr Jukich did not display any real remorse and thus no adjustment of the final sentence was necessary.
Mr Jukich's depressive illness during the years he was investigated was not so acute as to call for any lesser sentence either. It was founded on the briefest of medical certificates and the period during which Mr Jukich had been found to have been depressed coincided with the Inland Revenue investigation. To that extent it was unsurprising.
We affirm the sentence imposed and dismiss the appeal.
Solicitors:
Meredith Connell, Auckland for Respondent
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