Businessman fined

Press, 14 September 1988, Page 29

Businessman fined

A Christchurch businessman and importer, Kevin Francis Meates, was fined $15,000 when he appeared for sentence in the District Court yesterday for a breach of the Sales Tax Act, involving $36,207. The breach related to the importation in 1984 of 197,020 promotional toy cars, called Burger Buggies, for the McDonald’s chain of hamburger restaurants.

Judge Noble imposed the fine after having found Meates guilty, in a reserved judgment of 32 pages, of having conspired with two persons in Hong Kong to import toy components of Burger Buggies on false documentation.

An alternative charge under the Sales Tax Act was that, being a director of Julius Harper Ltd, he consented to the importation of toy components upon false documentation, thus enabling Julius Harper Ltd to evade pay-' ment of sales tax of $36,207. Upon the guilty finding on the other charge, this charge was withdrawn yesterday at the request of the Crown. The Judge in his

reserved decision, had dismissed three other charges under the Customs Act.

These were of conspiring with two persons in Hong Kong to import toy components, which were declared on false documentation, and that being a director of Julius Harper Ltd, he consented to the production of invoices (two charges) in which the consignment of toy components was under-valued.

The hearing of what had been termed a com- ■ plicated prosecution began in October last year, and resumed in May and June this year, occupying in all nine days of hearing witnesses’ evidence and counsel’s submissions. Some witnesses were from overseas.

During the hearing, Mr D. J. L. Saunders appeared for the Customs Department and Mr C. B. Atkinson, Q.C., appeared for Meates, who pleaded not guilty to the charges. The department had contended at the hearing that the system of importing the toy components completely knocked down, in three shipments to three different consig-

nees, at undervalues was designed by Meates to defraud the department of customs duty and sales tax. The department alleged that the shipments were under-declared for customs duty on importation so that duty of $15,050 was evaded. A further $36,207 in sales tax was later alleged to have been evaded on the assembled buggies sold by Julius Harper Ltd to McDonald’s. Meates was the managing director and principal shareholder of Julius Harper Ltd. In submissions yesterday in mitigation of penalty, Mr Atkinson sought a modest fine. He said the whole regime of sales tax and import licensing no longer existed, and there was no need for a deterrent penalty.

To a question from the Judge about Meates’s means to pay a fine, Mr Atkinson said the Court of Appeal was to hear an appeal by Meates against a judgment made in favour of Westpac Bank for $500,000, over a guarantee of indebtedness of a company. If Meates did not succeed in. this appeal he would be insolvent. Mr R. E. Neave, who appeared for the depart-

ment yesterday, said Julius Harper Ltd was now in receivership. Mr Neave said the department had been involved in a costly investigation into the charges, and a hearing occupying a number of days during nearly a year, which included witnesses brought from Hong Kong. The Judge said he took the view that Meates was a businessman highly experienced in importing products, particularly toys and toy components. He was managing director of the company which arranged these transactions.

The Judge said he could not accept that Meates overlooked or did not advert to the need to pay the sales tax due. He viewed the matter as serious, and calling for more than a nominal penalty. In fixing the penalty of $15,000, the Judge said he took into account factors including Meate’s financial situation, the cost of the investigation, and the fact that the prosecution had succeeded against him only in part. After yesterday’s sentencing, Meates said, in the presence of his counsel, that he proposed to appeal against his conviction on the sales tax charge.