Lindup v Inland Revenue Department HC Nelson CRI 2008-442-000013

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CRI 2008-442-000013

BETWEEN DAVID JOHN LINDUP Appellant

ANDINLAND REVENUE DEPARTMENT Respondent

Judgment: 20 October 2008

SUPPLEMENTARY JUDGMENT OF WILD J

[1] In my judgment of 16 July I said:

[46] I would rather see repayment of funds to the IRD maximised, and Mr Lindup’s term of imprisonment shortened by allowance of a 33% sentencing discount, than dismiss this second aspect of the appeal now. To that end, I adjourn this aspect of the appeal to Friday 17 October 2008. If, by that date, memoranda received by me from counsel satisfy me that Mr Lindup has done everything practicable to maximise repayment to the IRD, then I intend allowing this aspect of the appeal and substituting a 33% (1 year 10 months) sentencing discount, for the 27% (1½ years) allowed by the Judge.

[2] I am grateful to counsel for their comprehensive memoranda: Ms Bonifant’s for the IRD of 14 October; Mr Vesty’s for the appellant of 15 October.

[3] The available information indicates that the likely total recovery will be about

$100,000. Mr Lindup defrauded the Revenue of $866,773.82. I again emphasise that that $866,773.82 was money actually paid out by IRD to Mr Lindup in GST refunds falsely claimed by him.

[4] That level of recovery is approximately 11.5%, or 9.3% if interest and penalties are added to the sum defrauded, bringing the total to $1,071,239. I outline

LINDUP V INLAND REVENUE DEPARTMENT HC NEL CRI 2008-442-000013 20 October 2008

that to emphasise the sad end to this sorry tale of deceitful greed, and the very substantial loss that will result to the Revenue, and thus to all New Zealanders.

[5] Nevertheless, the information in counsel’s memoranda satisfies me that Mr Lindup, through his attorneys, has done everything he reasonably can to cooperate and assist in maximising the recovery to the Revenue. The available assets have had to be sold on depressed and falling markets, in one case by a mortgagee sale the result of which could only be described as disastrous.

[6] Accordingly, I allow Mr Lindup’s appeal to the extent that the sentencing discount to reflect his guilty plea and other mitigating factors is increased from 1½ years (27%) to 1 year 10 months (33%). To give effect to this I quash the sentence of 4 years imprisonment imposed on Mr Lindup and substitute a sentence of 3 years and 8 months imprisonment.

Solicitors:
Zindels, Nelson for the Appellant
Crown Solicitor, Tasman for the Respondent

CaseChat Overview and Summary

The case of David John Lindup versus the Inland Revenue Department was heard in the High Court of New Zealand at Nelson. The dispute centred on the appropriate sentencing of Lindup, who had defrauded the Inland Revenue Department of a substantial sum, and the extent to which Lindup had cooperated with efforts to recover the defrauded funds. The court was tasked with determining whether Lindup had done everything practicable to maximise the recovery of funds to the department, and if so, whether this warranted an adjustment to his sentence.

The court had to decide whether Lindup's cooperation and efforts to repay the defrauded funds warranted a reduction in his sentence. Specifically, the court needed to assess whether Lindup's actions in facilitating the recovery of funds were sufficient to merit a greater sentencing discount than that initially awarded. The court's decision hinged on the information provided by both parties regarding the recovery efforts and the assets available for sale to repay the defrauded amount.

In the supplementary judgment, Wild J found that Lindup had, through his attorneys, done everything reasonably possible to cooperate and assist in maximising the recovery to the department. Despite the challenging market conditions under which the assets were sold, the court was satisfied with Lindup's efforts. Consequently, the court increased the sentencing discount from 27% to 33%, resulting in a revised sentence of 3 years and 8 months imprisonment. The court emphasised the significant loss to the department and the public, but acknowledged Lindup's cooperation in mitigating the impact of his actions.

The court ordered the substitution of the original 4-year imprisonment sentence with a new sentence of 3 years and 8 months imprisonment, reflecting the increased sentencing discount. The court also acknowledged the efforts of both parties' counsel in providing comprehensive memoranda that assisted in reaching the decision.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established