The former directors of failed finance company Lombard have had their home detention overturned in favour of their original sentences of community work.
The decision regarding former Justice Ministers Sir Douglas Graham and Bill Jeffries, former chief executive Michael Reeves and Lawrence Bryant were heard in the Supreme Court this morning by Chief Justice William Young.
The four had earlier sought to have their convictions for making false statements in company documents overturned in the Court of Appeal, but failed. However, their sentences were increased to home detention, with the court saying the original sentences of community work didn't reflect the gravity of the offending.
Graham and Bryant were re-sentenced to six months' home detention and fined $100,000 each.
Jeffries was re-sentenced to eight months' home detention and 250 hours' community work and Reeves given nine months' home detention and 250 hours' community work.
The group then took the case to the Supreme Court, which refused them leave to appeal their convictions, but allowed them to challenge the harsher sentences.
During the appeal, the lawyers for the four argued the directors didn't mean to deliberately mislead, but it was a result of their ignorance to disclosure requirements.
The Crown argued the harsher penalty was deserved because the directors should have known, and given the impact the company's collapse.
However, the Supreme Court today ruled Justice Dobson's original High Court sentences should stand, meaning Reeves and Jeffries will receive 400 hours' community work, Graham and Bryant were each given 300 hours' community work and ordered to pay $100,000 in reparations.
Justice Young said in his decision the crux of the Supreme Court appeal was whether the offending warranted a prison sentence or not. It would only be if imprisonment was a possibility that home detention could be imposed.
The court did not think the offending warranted a prison sentence and unanimously allowed the appeal.
The court agreed with Justice Dobson, saying the four were "honest men who took their responsibilities seriously, nonetheless, by reason of misjudgements made in circumstances of pressure, were responsible for issuing of a prospectus which was untrue as to liquidity".
Almost 4000 investors were owed $111 million when the company collapsed in 2008.
Justice Young says the losses suffered by investors were "less than those in other comparable cases and the principles of consistency supports the approach taken by Justice Dobson".
In February, the Financial Markets Authority abandoned civil action against the directors after reaching a $10 million settlement with receivers.
The settlement meant a return of 9c in the dollar for Lombard investors, which is on top of the 13c already paid out.
3 News
source: newshub archive
