Paul Brian James Hickey was yesterday sentenced in the Dunedin District Court to five months’ community detention and 200 hours’ community work after pleading guilty to eight charges under the Tax Administration Act. Hickey was a director of Pinnacle Steel Ltd, which was incorporated in April 2012 and continued business until June 2016, when it went into liquidation.
Between September 2015 and May 2016, the company made PAYE deductions from staff wages and correctly filed returns with the Inland Revenue Department (IRD).
However, during those eight months, Pinnacle Steel did not actually pay the tax owed.
By the end, it had racked up a bill of more than $245,000 — a figure which Judge John Macdonald said had since ballooned with penalties and other fees.
Of that figure, the court heard the 25 employees were out of pocket for $11,552 in KiwiSaver contributions.
Defence counsel David More said Hickey was now subject to bankruptcy proceedings and was in no position to resist them.
His client was married with three young children and Mr More said the failure of the business was a sad situation.
"It’s just a tragedy for the defendant, his company and its employees," he said.
Problems came to a head when one of Pinnacle Steel’s major debtors defaulted on a $300,000 payment.
"It seemed you hoped things might get better, but that never happened," Judge John Macdonald said.
Mr More emphasised while there may have been poor business management, there was no suggestion of embezzlement or the cash being spent frivolously.
Other such cases before the court regularly told of company directors frittering away money on gambling or personal expenses but that was not the situation here, he said.
Hickey, he said, had also been upfront with the IRD and there had been no attempt to deceive them over the tax debt.
The judge noted the defendant had no previous convictions and had made contributions to the wider community.
While Hickey had found a job since his company’s collapse, he had no significant assets, the court heard.
Judge Macdonald ordered him to pay reparation of $11,552 to cover the staff’s missing KiwiSaver funds.
Mr More said it could be paid within a month as Hickey was being helped by a family member.