R v Bracken - [2021] NZHC 1032

IN THE HIGH COURT OF NEW ZEALAND GISBORNE REGISTRY

I TE KŌTI MATUA O AOTEAROA TŪRANGANUI-A-KIWA ROHE

CRI-2019-016-1336

[2021] NZHC 1032

THE QUEEN

v

JOHN RICHARD BRACKEN

Hearing: 11 May 2021

Appearances:

M Mitchell for Crown Defendant appears in person

A M Simperingham as standby counsel

Judgment:

11 May 2021

SENTENCING REMARKS OF LANG J

Solicitors:
Elvidge & Partners Lawyers, Napier Woodward Chrisp Solicitors, Gisborne

R v BRACKEN [2021] NZHC 1032 [11 May 2021]

[1] Mr Bracken, you appear for sentence having been found guilty on 39 charges of dishonestly and without claim of right using goods and services tax returns with the intention of obtaining a pecuniary advantage.1 The returns in question spanned a period from August 2014 until July 2018. The maximum penalty on each charge is seven years imprisonment.

[2] You were found guilty in verdicts I delivered on 26 March 2021.2 The factual findings made in that decision provide the basis on which you are now to be sentenced.

The offending

[3] At all times material to this proceeding you were the sole director of a company called Bracken Enterprises Limited (Bracken Enterprises). This company carried on two forms of business. First, it operated a sheep and beef dry stock farming business on land situated near Matawai, to the west of Gisborne. Secondly, it operated a business involving the sale and purchase of plywood and other timber products. It also exported goods of this type to customers in the Pacific Islands along with other products such as kitset houses, milk, honey and bottled water.

[4] Bracken Enterprises initially filed GST returns every two months on what is known as a payments basis. This requires GST to be calculated in accordance with payments the registered person has made and received during the relevant period. In February 2016, Bracken Enterprises began accounting for GST on an invoice basis. This required it to account monthly for GST on transactions for which it had either invoiced debtors or been invoiced by creditors during the previous month.

[5] You and your wife engaged the Gisborne accounting firm Bain & Sheppard Limited (Bain and Sheppard) to act as the tax agent for Bracken Enterprises. At the end of each month you or your wife would provide Bain and Sheppard with copies of bank statements and invoices that recorded the sales and purchases of product Bracken Enterprises had made during the previous month. Bain and Sheppard would then reconcile the company’s bank statements with the invoices to calculate whether

1 Crimes Act 1961, s 228(1)(b).
2 R v Bracken [2021] NZHC 609.

Bracken Enterprises was required to pay GST or was entitled to a GST refund. Determination of that issue depended on whether the input tax Bracken Enterprises claimed for product that it purchased equalled or exceeded the output tax it was required to pay on taxable supplies made to its customers.

[6] Each month during the period covered by the charges Bracken Enterprises received a refund. This occurred because it claimed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading R v Bracken

Details

AGLC: R v Bracken [2021] NZHC 1032
Case: [2021] NZHC 1032
Decision Date: 11 May 2021

CaseChat Overview and Summary

Mr Bracken was found guilty on 39 charges of dishonestly using goods and services tax returns to obtain a pecuniary advantage, with each charge carrying a maximum penalty of seven years imprisonment. The offending occurred over a period from August 2014 until July 2018, during which Bracken Enterprises Limited, of which Mr Bracken was the sole director, engaged in a scheme to obtain substantial tax refunds to which it was not entitled. This was achieved through the creation of false invoices and circular payments through the company’s bank account, resulting in a fraudulent gain of approximately $17.3 million. The court had to determine the appropriate starting point for sentencing, taking into account the nature and consequences of the offending, and compare it to similar cases to find a suitable benchmark. The court found several aggravating factors, including the scale of the fraud, its duration, the level of sophistication involved, and Mr Bracken’s failure to cooperate with the Inland Revenue Department’s investigation. The court also considered mitigating factors such as Mr Bracken’s previous good character and the absence of any offer of restitution. Ultimately, the court determined that an eight-year, six-month imprisonment sentence was appropriate, with no minimum term of imprisonment necessary. The effective sentence, taking into account concurrent and cumulative sentencing on specific charges, amounted to eight years and six months imprisonment.

Orders