Paul Lambert Clarke (45) appeared in the Dunedin District Court in July, where he was convicted of two charges of using altered documents with intent to deceive and one of producing false documents, fined $30,000 and sentenced to six months’ community detention.
As a result, he was automatically prohibited from managing or being a director of any company for five years, under the Companies Act.
However, he challenged that in the High Court at Auckland earlier this month.
Justice Edwin Wylie overturned the ban, saying he was confident barring Clarke as director would mean the total collapse of his businesses.
‘‘If leave were to be declined, Mr Clarke would have little option but to close down the companies, with the result that both stock and plant would go to a ‘fire sale’,’’ the judge said.
‘‘Mr Clarke’s business history indicates a hardworking man who has enjoyed considerable success in recent years ... Mr Clarke is clearly critical to the success of the companies. They are classic ‘one-man bands’.’’
Justice Wylie noted that the businessman now employed
33 people and had an annual wage bill of $1.3million.
While Clarke’s lengthy fraud involved him underpaying more than $1.3million in tax, calculations showed he would have only benefited by up to $15,000 because of GST refunds.
The company obtained a cashflow advantage over its competitors, Justice Wylie said, but the public was not directly impacted by the offending.
The defendant’s business, P.L. Clarke Ltd, was involved in the importation of heavy machinery, which he would repair through another of his companies and lease out.
In May 2019, a Customs audit found financial irregularities and officers swooped on the firm’s Kaikorai offices, as well as Clarke’s homes in Mosgiel and Cromwell, seizing a trove of documents.
They uncovered a rudimentary scheme whereby importation forms had words and values obscured by white-out marker and others had small strips of paper glued on to hide the original value of the goods.
The fraudulent invoices meant the imported machinery would be undervalued.
‘‘The offending was not an aberration,’’ Justice Wylie said
‘‘It was premeditated and over a prolonged period.
‘‘Further, Mr Clarke does not have a trouble-free past. He has been convicted of a number of other offences.’’
In court this month, neither Customs nor the Registrar of Companies opposed Clarke’s application.
The directorship prohibition was lifted, subject to a range of conditions, many of which gave a chartered accountant oversight of his dealings.
If Clarke breached any of the conditions, Justice Wylie said, the ban would be reinstated.
