Ministry of Business Innovation and Employment v Clarke [2019] NZDC 4645

Published 12 July 2019

Sentencing — concealing — fraudulently removing property — failing to answer questions from the Official Assignee — failing to keep or preserve a record of transactions — increasing the extent of the insolvency by unjustified or extravagant expenditure — failing to file a statement of affairs — whilst an undischarged bankrupt took part in the management of a business — Insolvency Act 2006 — R v Holt [2006] DCR 669 (CA) — R v Varjan CA97/03, 26 June 2003 — R v Raymond CA183/01, 9 October 2001 — R v Rippin CRI-2012-0042-5351 — Rippin v R [2014] NZCA 177 — MED v Papa CRI-2009-092-014907 — Raymond v R CA183/01, 9 October 2001 — MBIE v King CRI-2014-092-002517. The defendant appeared for sentencing after pleading guilty to seven charges: one of concealing and one of fraudulently removing property, one of failing to answer questions from the Official Assignee, one of failing to keep or preserve a record of transactions, one of increasing the extent of the insolvency by unjustified or extravagant expenditure, one of failing to file a statement of affairs and, finally, one of taking part in the management of a business whilst an undischarged bankrupt. Over the course of five years he had failed to comply with his obligations in regards to an Official Assignee, hidden his assets in a number of companies and spent extravagantly in an attempt to hide his resources. The Judge looked at case law for similar offending and decided the appropriate starting sentence was 28 months' imprisonment for the lead charges of concealing and fraudulently removing property. Six months uplift was given for the charges of failing to answer questions from the Official Assignee and failing to keep or preserve a record of transactions. A further uplift of six months was given for the extravagant spending (which included over $1600 per week going on food and drinks). An uplift of eight months was given for the defendant managing an accounting business whilst he was adjudicated bankrupt. Looking at the principle of totality, the Judge concluded 48 months' imprisonment was out of proportion with the offending and drew the sentence back to 40 months. There were no mitigating factors justifying a reduction in the sentence, especially as the defendant showed no remorse. A ten per cent reduction was given for the defendant's guilty plea, which was entered at a late stage but still saved the community the cost of taking him to trial. The final sentence was 36 months' (three years') imprisonment. Judgment Date: 12 March 2019.