Pearce v Police

[2015] NZHC 3104

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CRI-2014-442-000021 [2015] NZHC 3104

BETWEEN

ANTHONY ROBERT PEARCE

Appellant

AND

NEW ZEALAND POLICE Respondent

Hearing:	8 December 2015 (via AVL in Wellington)
Counsel:	C P Stevenson for Appellant A L Mills for Respondent
Judgment:	8 December 2015

JUDGMENT OF COLLINS J

Introduction

[1]      I am dismissing Mr Pearce’s appeal from a sentence imposed in relation to four representative counts of evading payment of tax.1   Mr Pearce was sentenced to four months’ home detention, 120 hours of community work and $45,000 reparation by Judge Zohrab in the Nelson District Court on 17 August 2015.

[2]      On 18 August 2015, Mr Pearce was granted bail pending his appeal against sentence.

[3]      Mr Pearce appeals on the basis that the sentence of home detention was manifestly excessive and a community based sentence is more appropriate in his

circumstances.  He takes no issue with the community work and reparation.

1      Tax Administration Act 1994, s 143B.  Maximum penalty of five years’ imprisonment and/or

$50,000.

PEARCE v NEW ZEALAND POLICE [2015] NZHC 3104 [8 December 2015]

[4]      Mr  Stevenson,  counsel  for  Mr  Pearce,  advances  two  reasons  why  the sentence of home detention should be quashed and replaced with a further sentence of community work:

(1)The inevitability of Mr Pearce losing his job if he is required to complete a sentence of home detention.

(2)Mr  Pearce  has  voluntarily  completed  more  than  the  term  of  the community work sentence imposed by Judge Zohrab.

Background

[5]      Between 1 April 2007 and 31 March 2012 Mr Pearce carried on roofing work as a contractor either as a sole trader or via a company called JAK Holdings Ltd.  In November 2011 the Commissioner commenced an investigation into the tax affairs of Mr Pearce and JAK Holdings Ltd.

[6]      During the investigation it was established that Mr Pearce had worked as a roofing contractor for Contour Roofing Limited and Ultimate Roofing Ltd.   He initially worked as a sole trader and then later contracted his services through JAK Holdings Ltd.

[7]      Mr Pearce registered both himself and JAK Holdings Ltd for GST and was charging GST on services provided to Contour Roofing Ltd and Ultimate Roofing Ltd.  Both Mr Pearce and JAK Holdings Ltd were required to file income tax and GST returns accounting for the income that they had received.

[8]      Mr Pearce had not filed income tax returns for the periods ending 31 March

2008 and 31 March 2009.  He had not filed GST returns for the periods ended 30

September 2007, 31 March 2009, 30 September 2009 and 31 March 2010.

[9]      JAK Holdings Ltd had not filed income tax returns for the periods ending

31 March 2010, 31 March 2011 and 31 March 2012.   JAK Holdings Ltd had not filed GST returns for the periods ending 31 January 2010, 31 March 2010, 31 May

2010, 31 July 2010, 30 September 2010, 30 November 2010, 31 January 2011,

31 March 2011, 31 July 2011, 30 September 2011, 30 November 2011, 31 January

2012 and 31 March 2012.

[10]     Mr  Pearce  knew  he  was  required  to  file  income  tax  and  GST  returns accounting for the income that he and JAK Holdings Ltd had received.   He took steps to make it appear as if he was not self-employed and had no association with JAK Holdings Ltd (a company that he had full control of), by arranging for his son to incorporate the company and list himself as the director.

[11]     In total, tax amounting to $92,807.02 was evaded.

Judge Zohrab’s decision

[12]     Mr  Pearce  pleaded  guilty  to  four  representative  charges.    Judge  Zohrab adopted a starting point of 18 months’ imprisonment.  He also had regard to similar cases.2     Judge Zohrab considered this type of offending highlighted the need for deterrence and to send a message to other taxpayers concerning their obligations to pay tax.

[13]     Judge Zohrab identified the following aggravating factors:

(1)       the five year period over which the offending took place; (2)  the duplicity inherent in Mr Pearce’s offending; and

(3)       the amount evaded was significant.

[14]     Judge Zohrab noted that the 18 months’ imprisonment starting point was “probably stern but not out of the ordinary”.   He gave Mr Pearce a 25 per cent discount for an early guilty plea and a further discount of a month and a half for personal circumstances.  He noted that Mr Pearce has no previous convictions of any kind.   However, Judge Zohrab considered that a sentence of community detention

would not send the right message to the community.

2      Prakash v Commissioner of Inland Revenue [2012] NZHC 2275 and James v R [2010] NZCA

206, (2010) 24 NZTC 24,271.

[15]     Judge  Zohrab  considered  that  in  the  usual  circumstances  he  would  have imposed a sentence of six months’ home detention, but reduced it to four months to be coupled with 120 hours of community work.  He also made the reparation order for $45,000.

Legal principles governing an appeal

[16]     Section 250 of the Criminal Procedure Act 2011 governs sentence appeals from the District Court to the High Court.  Section 250(2) of the Criminal Procedure Act 2011 provides:

(2)      The first appeal court must allow the appeal if satisfied that—

(a)      for any reason, there is an error in the sentence imposed on conviction;  and

(b)      a different sentence should be imposed.

Analysis

[17]     It  is  well-established that  an  appellate  Court  should  not  interfere  with  a sentence imposed by a District Court Judge unless the sentence is manifestly excessive or wrong in principle.3    In particular, the Court should not substitute its own opinion for that of the sentencing Judge.4    Whether a sentence is manifestly excessive is to be considered by reference to the sentence imposed rather than the process by which the sentence was reached.5

[18]     I can see no error in Judge Zohrab’s analysis:

(1)       The offending took place over a considerable period of time.

(2)       Mr Pearce’s conduct involved a large degree of deceptiveness and

concealment of facts from the IRD.

(3)       The amount owing is a significant sum of money.

3      R v Brooks [1950] NZLR 658 (CA) at 659; R v Radich [1954] NZLR 86 (CA) at 87.

4      Wells v Police [1987] 2 NZLR 560 (HC) at 565.

5      R v MacCulloch [2005] 2 NZLR 665 (CA) at [50].

[19]     In my assessment, Judge Zohrab carefully considered an appropriate starting point  and  had  regard  to  the  relevant  case  law.    He  was  entitled  to  reach  the conclusion that a sentence of home detention, community work and reparation was the appropriate outcome.   He made no error when imposing the end sentence on Mr Pearce.

[20]     To his credit, Mr Pearce has performed his community work to a level that was beyond what was required of him.  He has also successfully complied with his bail conditions.  I also accept the sincerity of Mr Pearce’s determination to pay the reparation ordered by Judge Zohrab and the sentiments expressed in his letter to the Court.

[21]     However,  these  are  not  reasons  that  impact  upon  the  correctness  of  the sentence  Judge  Zohrab  imposed.    Mr  Pearce’s  excellent  compliance  with  his sentence of community work may be a reason that would support an application under s 80F of the Sentencing Act 2002 to have his sentence of home detention cancelled and substituted with an increased sentence of community detention.  That, however, is a matter for the sentencing Judge, who could reconsider his sentence notwithstanding the outcome of this appeal.

[22]     The appeal against sentence must be dismissed because I am satisfied there was no error in that sentence.

Conclusion

[23]     The appeal is dismissed.

D B Collins J

Solicitors:

Crown Solicitor, Nelson for Respondent