Lombard directors battling detention

HAMISH MCNICOL
Last updated 05:00 12/02/2014

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The directors of failed Lombard Finance and Investments have asked that their sentences be reduced, saying their offending was a misunderstanding of the law.

The four directors, including former justice ministers Sir Douglas Graham and Bill Jeffries, yesterday appealed against their sentences in the Supreme Court.

It was argued their failure to disclose information to investors was not deliberate but a misunderstanding of the law, and therefore less serious than similar instances of finance company offending.

The directors said their sentences of home detention imposed by the Court of Appeal should be reduced to the community service sentences and fines given in the High Court.

But they remain free to leave their homes pending the appeal, after the Supreme Court yesterday reserved its decision.

Wellington-based Lombard collapsed in April 2008, leaving about 3600 unsecured investors $111 million out of pocket.

In March, 2012, the four directors were convicted in the High Court of misleading investors in the lead-up to the company's collapse, by omitting details from a December 2007 prospectus about late loan repayments and falling cash reserves.

The Supreme Court in October dismissed an application by the directors to appeal against their convictions.

But it also ruled it would allow Graham, Jeffries, fellow director Lawrence Bryant and chief executive Michael Reeves to appeal against their sentences.

Graham and Bryant were originally sentenced to 300 hours' community work and ordered to pay $100,000 reparation. Reeves and Jeffries were sentenced to 400 hours' community work, though last July the Court of Appeal described these sentences as "manifestly inadequate".

Graham's sentence was increased to six months' home detention, allowing for an hour-long walk each day for his health.

Yesterday's appeal was based on whether the Court of Appeal erred in allowing the solicitor-general's appeals for harsher penalties than those handed down by the High Court.

Appellant lawyer James Farmer, QC, questioned whether imprisonment had been an appropriate starting point for sentencing. It was important because of the characterisation of the Lombard offending, versus that of other failed finance companies, Farmer said.

Chief Justice Dame Sian Elias said Farmer was building it to say the error was a misunderstanding of law.

Farmer sought for the directors' sentences to be restored to those given in the High Court.

Crown lawyer Colin Carruthers, QC, said it was a "hollow submission" to suggest imprisonment as a starting point for sentencing did not reflect the seriousness of the offending.

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"There was no room for a misunderstanding of what was required."

WHO GOT WHAT?

Sir Douglas Graham

The High Court said: 300 hours' community work, $100,000 in reparation.

The Court of Appeal said: Six months' home detention, 200 hours' community work and $100,000 in reparation.

Bill Jeffries

High Court: 400 hours' community work.

Court of Appeal: Eight months' home detention, 250 hours' community work.

Michael Reeves

High Court: 400 hours' community work.

Court of Appeal: Nine months' home detention, 250 hours' community work.

Lawrence Bryant

High Court: 300 hours' community work, reparation of $100,000.

Court of Appeal: Six months' home detention, reparation of $100,000. Community work was not reimposed because of Bryant's health. 


- BusinessDay

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