Bankrupt
Christchurch rebuild contractor John Clancy had an Inland Revenue reparations
order overturned but faces further jeopardy.
The High Court signalled his ten month’s home detention for tax offences
could be reviewed if suitable reparations are not possible following a
rehearing as to his financial position.
John Edward Clancy left
a trail of angry creditors after the 2015 collapse of his company: Hanguk
Business Investments One Ltd. His
company failed to account for PAYE deductions, Kiwisaver deductions, student
loan repayments and superannuation cash contributions totalling just over
$456,000. Payments made late reduced the
amount outstanding to $369,500. Contractors went public with their complaints
about non-payment by Clancy-owned companies.
Clancy pleaded guilty to tax offences in aiding and abetting Hanguk
Business’ failure to forward required tax deductions to Inland Revenue. The
High Court was told Clancy had been the director of 34 companies since 2005 of
which seven had gone into liquidation owing Inland Revenue over $2.2 million.
On the aiding and
abetting charge, Clancy was sentenced to ten months home detention and ordered
to pay $150,000 reparation at the rate of $225 per week. Repayments would take thirteen years. Clancy had initially offered to pay
reparations at $58 per week.
Clancy appealed the
reparations order. Reparations imposed
must be realistic, given an offender’s financial resources, Justice Gendall
said. While a reparation report need not
always be prepared for the sentencing judge, he said, a report should have been
made available before sentence in this case.
He referred the question of reparations back to the District Court for
reconsideration. It is possible, said
Justice Gendall, the remainder of the sentencing package may have been
influenced by the prospect of Mr Clancy paying a significant amount by way of
reparations. That may require
reconsideration, he said. The maximum
penalty for aiding and abetting is five years imprisonment and a $50,000 fine.
Clancy
v. Inland Revenue – High Court (23.08.17)
17.106