Builder who failed to pay payroll taxes wins appeal for reduced sentence

A builder who was sentenced to over two years in prison for failing to pay taxes from his employees' wages has successfully appealed his sentencing.

The New Zealand Court of Appeals granted the appeal sought by Stephen Foley to reduce his two years and eight months of imprisonment sentence.

Foley was found guilty in 2021 of 28 charges of aiding and abetting two companies to withhold Pay As You Earn (PAYE) tax. The companies failed to pay PAYE tax of $365,132.18 over a period of approximately two and a half years.

The judge initially adopted a starting point of three years' imprisonment for Foley's sentence, but later accepted a 10% discount to the sentence for his prior good conduct and health issues.

Foley's appeal of sentence

The builder, however, later appealed, saying that the three-year starting point adopted was excessive, and an appropriate starting point would be between two and two and a half years.

He also said that the judge erred for rejecting his application for a discount based on his background and prior good character.

The judge also erred for not considering the employment opportunity identified by Foley, he said, as well as his offer of reparation to the unpaid tax.

According to the appeal, Foley also claimed that the judge granted an "insufficient discount" for his health conditions.

Appeal granted

The New Zealand Court of Appeals accepted that the three-year starting point in the original sentencing was excessive, noting that the punishment also took into consideration Foley's previous role as a director of insolvent companies that failed to meet tax liabilities.

"Foley's previous conduct should not have been taken into account when determining an appropriate starting point: the focus should have been on the offending for which he was being sentenced," the decision read.

"Focusing solely on the offending, as we must, we consider that a starting point of two and a half years would be appropriate."

The court, however, agreed with the original ruling about discounts on Foley's background and good character.

"We agree with the judge that a discount of 15% for good character was not justified," the court said. "The judge did not err in awarding a discount of 5%."

The Court of Appeals added that they are "not persuaded that the discount for health issues should have been greater than five per cent."

It still ruled that the appeal is allowed, and the sentence imposed in the District Court is set aside.

"The proceeding is remitted to the District Court for sentencing," the Court of Appeals ruled.