R v Easton

[2013] NZHC 478

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CRI-2011-041-001510 [2013] NZHC 478

THE QUEEN

v

STUART DAVID EASTON

Hearing:                   1-5 July 2013

Counsel:                  K S Grau and A H Instone for Crown

C R Carruthers QC and R P Harley for Accused

Reasons:                  11 July 2013

Verdicts:                  12 July 2013

REASONS FOR VERDICTS OF COLLINS J

TABLE OF CONTENTS

Introduction .................................................................................................................................. [1] Context .......................................................................................................................................... [3] Ingredients of the charges ............................................................................................................ [7] Did the companies’ deduct PAYE from employees’ wages and salaries? ............................... [16] Did the companies fail to pay the PAYE deductions in question to the Commissioner? ...... [18] Commissioner’s application of payments ................................................................................ [26] Date for payment ..................................................................................................................... [33]

Did the companies knowingly fail to pay the PAYE deductions in question to the

Commissioner? ........................................................................................................................... [38]

24 April 2008 meeting ............................................................................................................. [39]

The companies’ financial circumstances.................................................................................. [42] The companies’ compliance ..................................................................................................... [48] Mr Easton’s admissions to the IRD.......................................................................................... [50] Mr Easton’s evidence ............................................................................................................... [57] Mr Bickerstaff ’s evidence ........................................................................................................ [59]

Analysis ....................................................................................................................................... [64] Mr Easton’s role in the companies........................................................................................... [66] Mr Easton’s admissions ........................................................................................................... [68]

Did Mr Easton aid and abet the companies when they knowingly failed to pay the PAYE deductions in question to the Commissioner? .......................................................................... [73] Conclusion ................................................................................................................................... [84]

R v EASTON [2013] NZHC 478 [12 July 2013]

Introduction

[1]      The ultimate question I have answer is whether Mr Easton is guilty of aiding and abetting three companies who are alleged to have knowingly failed to pay PAYE deductions to the Commissioner of Inland Revenue (the Commissioner).

[2]      The  answer  to  that  question  depends  on  the  answers  to  the  following subsidiary questions:

(1)Did the companies deduct PAYE from salaries and wages of its employees during the relevant periods?  If so,

(2)       Did the companies fail to pay the PAYE deductions in question to the

Commissioner?  If so,

(3)Did the companies knowingly fail to pay the PAYE deductions in question to the Commissioner?  If so,

(4)Did Mr Easton aid and abet the companies when they knowingly failed to pay the PAYE deductions in question to the Commissioner?

Context

[3]      Mr Easton and his wife owned and managed six companies and entities (the Easton group).   This case concerns the three companies described in paragraphs [3](1), (2) and (3), (the companies). The Easton group comprised:

(1)East Quip Ltd (EQL), a light engineering business that employed approximately 20 people.   EQL was incorporated on 12 May 2000 and became registered as an employer with the Inland Revenue Department (IRD) on 1 July 2000.  EQL was placed into liquidation on 10 July 2009.  Mr Easton was the sole director of EQL.  He and Mrs Easton each owned 50 per cent of the shares in that company.

(2)Hooked  on  Rigging  Ltd  (HORL)  which  was  in  the  business  of installing  poles  and  towers  for  electricity and  telecommunciations

companies.  HORL employed approximately 40 people.  HORL was incorporated  on  24  November  1994  and  at  that  time  became registered as an employer with IRD.  Mr Easton was the sole director of HORL.  He and his wife…