R v Easton - [2013] NZHC 1683

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CRI-2011-041-001510 [2013] NZHC 1683

THE QUEEN

v

STUART DAVID EASTON

Counsel:

K S Grau and A H Instone for Crown

C R Carruthers QC and R P Harley for Prisoner

Sentence:

9 August 2013

NOTES ON SENTENCING OF COLLINS J

[1] Mr Easton, as you know you are now to be sentenced on 22 counts of aiding and abetting three companies which knowingly failed to pay PAYE deductions to the Commissioner in 2008 and 2009.

[2] All three companies were placed into liquidation in 2009. The amount that was not paid as I determined it on the basis of the evidence at your trial was:

(1)East Quip Ltd $ 50,416.61

(2)Hooked on Rigging Ltd $ 90,216.77

(3)Napier Equity Ltd $ 63,579.65

Total $204,213.03

R v EASTON [2013] NZHC 1683 [9 August 2013]

I note, however, that the Crown says the amount of PAYE not paid by the three companies was slightly less than this combined figure. The Crown says the amount of PAYE that remains unpaid is $199,292.98.

[3] The three companies to which the charges relate were part of the Easton group which for many years was a successful and diverse business enterprise in the Hawke’s Bay. Other entities in the Easton group included:

(1)Galvanising (HB) Ltd;

(2)Hooked on Transport Ltd; and

(3)Easton Property Trust.

[4] In 2007 the companies in the Easton group began to experience significant financial challenges. I have explained those challenges in the reasons for my verdicts and I need not repeat the evidence which I primarily relied upon when explaining the financial challenges faced by you and the companies.

[5] I am satisfied that you genuinely believed you did all you thought you could at the time to keep the companies afloat. You did so because you wanted to ensure that you and the companies met their liabilities. To a large extent you succeeded as evidenced by the fact that:

(1)Hooked on Transport Ltd met all of its tax liabilities.

(2)Galvanising (HB) paid $643,695 to the IRD.

(3)You paid $150,351 to the IRD.

(4)Mrs Easton paid $66,412 to the IRD.

[6] I am also aware that you and members of your family injected approximately
$2 million in capital into the companies. That sum appears to have been unsecured. In addition, you and your companies offered to settle all outstanding debts to the

IRD. I am informed the offer was $900,000. Likewise, you and your wife took significantly reduced drawings from the companies during the period of the financial hardship faced by the Easton group.

[7] However, I am also very satisfied that you were fairly and clearly warned of your responsibilities to ensure PAYE was paid when you met with Ms Lancaster on 24 April 2008. Notwithstanding that warning she gave you, during the following five months and later in July 2009 you consciously and knowingly allowed the companies to use PAYE deductions as a short term measure to assist the companies’ liquidity crises. You…

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 Easton

Details

AGLC: R v Easton [2013] NZHC 1683
Case: [2013] NZHC 1683
Decision Date: 9 August 2013

CaseChat Overview and Summary

In the High Court of New Zealand, Collins J sentenced Stuart David Easton on 22 counts of aiding and abetting three companies that failed to pay PAYE deductions to the Commissioner in 2008 and 2009. The total amount of unpaid PAYE was determined to be $204,213.03, although the Crown suggested it was slightly less at $199,292.98. The three companies involved were part of the Easton group, which faced significant financial challenges in 2007. Despite these challenges, Easton was found to have genuinely attempted to keep the companies afloat and ensure they met their liabilities, as evidenced by various payments made to the IRD.

The primary legal issue the court had to decide was the appropriate sentence for Easton, considering his role as a first offender with otherwise good character, the financial crisis faced by his companies, and his intent to meet the companies’ debts. The court also had to determine the appropriate amount of reparation to be paid to the IRD, considering the potential financial recovery from the liquidation of the companies and the need to ensure the IRD received no more in reparation than was owed in outstanding PAYE.

Collins J decided that fines would be the appropriate punishment, given Easton's otherwise good character, his intent to meet the companies’ debts, and the financial crisis faced by his companies. The court imposed a total fine of $66,000 and ordered Easton to pay $140,000 in reparation to the IRD, subject to review if the IRD received more than $60,000 from the liquidation process. The reparation order would not take effect until the liquidation of the three companies was completed.

Orders