Vintners Stephen and Wendy Parkes were convicted of selling product in breach of the Customs and Excise Act after their Sentry Hill winery in Taranaki was wound up insolvent. They had no valid grounds to assume any legal right to sell, the High Court ruled.
Lepperton winery Sentry Hill (2006) Ltd was put into liquidation by Customs in 2016 for unpaid excise duty totalling $281,800. Mr Parkes agreed to help the liquidator continue operations. Selling Sentry Hill as a going concern would get a better price. Mr Parkes later took issue with the liquidator’s refusal to pay him for his time or to pay rent to a family trust owning the site. He took legal advice and was told he could seize product and hold it as a lien against payment. Mr Parkes told the liquidator of plans to do so and to sell the product to recover money he claimed was owed. The liquidator responded: no lien could be claimed and Sentry Hill owned the excise licence; only the company could sell. Mrs Parkes applied for an excise licence. Her application was refused; Sentry Hill held a licence for the site.
Mr and Mrs Parkes were prosecuted after a customs official saw Sentry Hill product for sale at liquor outlets in Waitara and Bell Block. They admitted selling Sentry Hill wine, claiming legal justification for the sales.
Convicted of defrauding the revenue and each fined $1000, they could not rely on their legal advice as grounds to avoid conviction, the High Court ruled. Taxpayers are presumed to know the law. The Parkes’ legal advice related only to the alleged possibilities of claiming a lien. It did not canvas the legalities of any sales. They knew an excise licence was needed, given their involvement in the industry. The liquidator had specifically reminded them Sentry Hill held the licence. The Parkes were also ordered to pay personally $13,670 excise duty evaded with their unauthorised sales.
The High Court dismissed their appeal that conviction was disproportionate. They said a conviction would prejudice their current jobs. Mr Parkes now works as a process manager for Fonterra; a job involving overseas travel, he says. Mrs Parkes is employed in a pharmacy.
Parkes v. R – High Court (24.10.18)
18.207