Minimal fines for company director

Press, 9 March 1988, Page 14

Minimal fines for company director

Although charges brought by the Customs Department against a wholesale company and its director provided for “Draconian" penalties, Judge Erber in the District Court yesterday said he imposed minimal fines because of their financial difficulties. He imposed fines of $lOO on each of two charges against William Francis Ginivan, aged 39, and fines of $5O on each of eight charges against Ginivan Industries, Ltd. The charges related to the understating of sales tax incurred on the importation of more than 2000 Unidare nightstorage heaters. All charges had been denied. The case had been heard during three days last month and the Judge had entered convictions on all charges when he gave a reserved decision last week. The charges were then adjourned to yesterday for sentence to be imposed. The Customs Department, for which Mr D. J. L. Saunders appeared,

contended that Ginivan defrauded . sales I tax revenue by creating I false invoices to evade payment of full sales! tax. When entering the convictions, the iJudge! said these were in relation to sales tax on the heater kits only (the, body and element of the heaters) and not -on the firebrick inner component of the heaters. ' j L i The amount pf sales tax defrauded thus was held to be less thaij the figure alleged by j the department. I J Mr D. J. R. j Holderness appeared for Ginivan. The company was j not represented by counsel, | ' In submissions in mitigation of ! penalty; Mr Holderness said that Ginivan and his wife, “not to mention the company,” were in what appeared to be a hopeless financial position. He referred in particular to the demands which had been served by the Bank of New Zealand. The company’s means must be taken into account. Mr Holderness ) said Ginivan’s means had de-

teriprated since a statement of means had been completed last November. He - had had no income since then and had realised several assets listed in the statement; These amounted to only!$2000. Realistically, Ginivan’s home which hej owned jointly with his wife was his (only asset and this would be available “only so long as the Bank of New Zealand allows that situation to continue.” Counsel said that virtually; all Ginivan’s assets were invested in! a company, Unidare Engineering,; Ltd, which had been put ! in receivership late last) year. The Judge said the debts shown were a very large sum. Mr Holderness said that was the demand from the ! Bank of New Zealand. Judge Erber: It was a seven-figure sum.’ Mr Holderness said Ginivan’s wife’s learnings provided the day-to-day income of the family and J that would not be much in i the future. He sought the imposiI tion of a small fine, con-

sistent with Ginivan’s and the company’s adverse financial situation. The Judge said he accepted immediately that most of the sales tax had been paid; it was paid after the investigations began. He said the enterprise that Ginivan embarked on had resulted in total financial disaster for him and his family. This was something the Court must bear in mind. The fine must be one which Ginivan could pay, not a fine to be met by his wife or children. The penalties provided in the act were Draconian but they could only apply if Ginivan had the means now or within a reasonable time. The disaster which had befallen Ginivan would take a very long time to recover from and a small fine was justified in these circumstances, the Judge said. He said the small fine did not mark approval of Ginivan’s conduct. It was a realistic assessment of his position.