R v Ludlow - [2012] NZHC 360

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CRI-2008-004-20412 [2012] NZHC 360

THE QUEEN

v

TREVOR ALLAN LUDLOW

Hearing: 26 January 2012

Counsel: S Symon for Crown
D Collecutt for Prisoner

Judgment: 26 January 2012

SENTENCING NOTES OF TOOGOOD J

Solicitors: Meredith Connell, P O Box 2213, Auckland 1140
G Collecutt, P O Box 105-270, Auckland 1143

R V LUDLOW HC AK CRI-2008-004-20412 [26 January 2012]

[1] Trevor Allan Ludlow, you appear for sentence having pleaded guilty upon arraignment on 13 December 2011 to eight counts in the indictment presented against you and two alleged co-offenders. The first count alleged that you had approved a registered prospectus containing untrue statements, contrary to s 58(3) Securities Act 1978. You are liable to a maximum of five years imprisonment on those charges or a fine of no more than $300,000 on that count.

[2] You also pleaded guilty to seven counts under s 51 of the Financial Reporting Act 1993, alleging that, with respect to a document required by that Act, you made or authorised the making of a statement in that document that was false or misleading in a material particular, knowing the statement to be false or misleading. On those counts you are liable to imprisonment for a period not exceeding five years or a fine of $200,000.

[3] Your alleged co-offenders have yet to be tried on these charges.

[4] The circumstances which brought you here were these. You were a director and the sole shareholder of National Finance 2000 Limited, a company now in liquidation, which was incorporated in 1999, predominantly to offer finance to car buyers through licensed motor vehicle dealers. The loans were generally made to purchasers who had poor credit ratings or low incomes, the vast majority of them being made to people who had purchased vehicles from companies controlled by you, the Payless group of companies. National Finance also made loans to motor vehicle dealers, a significant number of such loans being made to companies in the Payless group. You were the sole director and shareholder of all of the companies in that group so you stood to benefit personally, in the long run, from the facilitation of the purchases of vehicles from companies in the group.

[5] In promoting National Finance to prospective investors you held yourself out as having a wide and varied experience in business, particularly in the motor vehicle industry. You traded on your knowledge and experience of the industry to hold National Finance out as a company which was successful and which provided

attractive investment, offering what was said to be a good spread of risk, competitive yield, and a significantly better than market return.

[6] In September 2005, National Finance issued a prospectus for the issue of secured debenture stock and subordinated unsecured notes which were signed by you in your capacity as a director. In December 2005, the prospectus was extended for nine months by an extension certificate.

[7] The prospectus contained several untrue statements; the…

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 Ludlow

Details

AGLC: R v Ludlow [2012] NZHC 360
Case: [2012] NZHC 360
Decision Date: 26 January 2012

CaseChat Overview and Summary

Trevor Allan Ludlow appeared for sentencing having pleaded guilty to eight charges in an indictment, including charges under the Securities Act 1978 and the Financial Reporting Act 1993. Ludlow was the director and sole shareholder of National Finance 2000 Limited, a company that offered finance to car buyers through licensed motor vehicle dealers. He pleaded guilty to approving a registered prospectus containing untrue statements and to making false statements in a document required by the Financial Reporting Act. The court considered the harm caused to investors, who lost a total of over $14 million. The court also considered aggravating factors, such as Ludlow's position of trust and the deliberate dishonesty involved in making misstatements.

The court assessed the gravity of the offending and the need for accountability, responsibility, and deterrence. The court compared Ludlow's case to similar cases, such as the Nathans Finance and Five Star Consumer Finance cases, and determined that a starting point of four years imprisonment was appropriate. The court also considered personal factors, such as Ludlow's age, family responsibilities, previous good character, expressions of remorse, and cooperation with receivers and liquidators.

Taking into account the totality principle in sentencing and the fact that Ludlow was already serving a substantial term of imprisonment for related charges, the court determined that a total period of imprisonment for all related offending of six years and four months was appropriate. The court imposed sentences on the charges before it, which were considerably lighter than the three years imprisonment that would have been imposed if the charges had been treated on their own. The sentences were to be served concurrently with each other but cumulatively upon the period of imprisonment Ludlow was currently serving.

Orders