Hamish Fletcher

Business reporter for the NZ Herald

Brewer bankruptcy breach sentence appeal dismissed

Mark Brewer. Photo / NZ Herald
Mark Brewer. Photo / NZ Herald

A Crown appeal against the sentence of a businessman who avoided home detention for breaching the conditions of his second bankruptcy has been dismissed by a High Court judge.

Mark Raymond Brewer was bankrupted for a second time in March 2010 and one of the Official Assignee bankruptcy conditions is no involvement in the direct management of a company.

Brewer year admitted breaching those conditions by taking part in the control or management of a computer software company, Intervest Global (NZ), which sold horse race betting software and was placed in liquidation in 2011.

While Justice Stephen O'Driscoll had earlier indicated home detention was appropriate, when sentencing Brewer the in Auckland District Court last October he instead ordered the offender to pay a $5000 fine and provide $190,000 in reparations.

This reparation was loaned to Brewer by his associate David McEwen on the condition the discharged bankrupt could travel overseas for "business purposes".

The $190,000 loan allowed for Intervest, the victim of Brewer's offending, to be paid a full reparation.

Brewer has since moved to Ireland, where he works at a newly set-up Irish software business that McEwen is associated with.

This week the Ministry of Business, Innovation and Employment appealed Brewer's sentence and instead suggested a sentence of home detention combined with the payment of reparation.

According to Justice John Fogarty, who heard the appeal in the High Court at Auckland, MBIE essentially contented that imposing a sentence allowing for a victim to be repaid in full was less important than punishing a guilty person to deter others from offending.

"It became plain that the Crown's submissions were attacking the very structure of a sentence, any sentence, which put the order of reparation as the principal penalty ahead of a fine or some form of imprisonment. This is not reparation paid on the offender's behalf. It is a loan to him [Brewer] which he will have to repay. It is clearly a penalty," Justice Fogarty said.

MBIE submitted that the court would be sending the wrong message encouraging a discharged dbankrupt to borrow funds to "meet a substantial reparation" from someone like McEwen who had "vested interest" in Brewer's "role as a sales manager in a new company".

The Crown argued such a sentence "may encourage further financial mismanagement", Justice Fogarty said.

"I find that submission particularly unmeritorious", the judge said in his decision, released yesterday afternoon.

Justice Fogarty said the appeal failed and he was "quite satisfied" there was no error in principle made by Judge O'Driscoll who he called a "very experienced sentencing judge".

McEwen, who loaned Brewer the reparation funds, part-owns the parent company of Phoenix Forex, a now-liquidated firm which sold controversial foreign exchange trading software and which employed Brewer as a senior salesperson. The firm was subject of a Financial Markets Authority warning last year.

During the appeal, Brewer's lawyer Brent O'Callahan referred to documents from McEwen saying that Brewer was a "key element" in the new Irish business, called Paymark Autotrader.

Paymark Autotrader's website says the company "offers a variety of software designed to help people trade a multitude of markets".

McEwen had deposed that if Brewer was required to return to New Zealand to serve a sentence here, the business was likely to fail, O'Callahan said.

McEwen had already advanced $135,000 of the reparation but put other payments on hold while the appeal was heard.

In his sentencing decision, Justice Fogarty said it was a "very material concern" that McEwen had acted in good faith on the back of the District Court judgement and given effect to the reparation order.

Before dismissing the Crown's appeal, the judge said:

"If this sentence is overturned and the reparation order withdrawn, the funder faces not only loss of the amount he has already advanced, but also the risk of losing the investment he has made in Ireland in the new business."

Read the full judgement here:

- NZ Herald

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n4 at 18 Sep 2014 07:46:12 Processing Time: 533ms