Home detention sought in Lombard case
Wednesday 6 Mar 2013 8:22 p.m.
The Lombard four
The Crown will argue for home detention to be imposed to the existing community service sentences of former Lombard Finance directors Sir Doug Graham, Bill Jeffries, Lawrie Bryant and a sterner sentence for executive director Michael Reeves.
Colin Carruthers QC and lawyer Dale La Hood are representing the Crown at the Court of Appeal hearing where the directors are appealing against their conviction and the Crown is seeking tougher sentences.
The appeal over sentencing is due to be heard on Thursday but Mr Carruthers told Justices Anthony Randerson, John Wild, and Christine French today that the Solicitor-General was seeking "home detention be imposed in addition to community work".
"That's certainly put forward for [Graham, Jeffries and Bryant] but the Crown takes Mr Reeves' case into a more serious category than that," he said.
Graham and Bryant each received 300 hours community service and were required to pay $100,000 each in reparation, while Jeffries and Reeves were sentenced to 400 hours community service last year.
They had been found guilty of making untrue statements in investment documents and advertisements in late 2007 and early 2008 and the Crown had initially sought jail terms.
The 4400 Lombard Finance investors were owed $127 million at the time of the receivership in April 2008. The failed company's major asset was a property loan book of 27 loans with a book value of $136.8 million, mostly for bare land subdivisions or development properties. Of the 27, only nine were first ranking security.
The directors' lawyer, Jim Farmer QC, today outlined the lengths they went to in seeking advice on Lombard's loan book and also the way the prospectus characterised the risks.
He agreed with the court that conditions in the finance sector were worse in 2007 than 2006 "but still not of the magnitude that created the sort of panic of 2008".
Mr Carruthers said the appellants had mounted what was "effectively a rerun of the arguments at trial which were carefully considered by the judge".
He had argued that there had been "a disconnect" between company documents, which showed Lombard's cash position and liquidity deteriorating, and statements in the prospectus.
"That cash trend needed to be captured in the prospectus," he said.