Carol Braithwaite sentenced

National Finance 2000 director Carol Anne Braithwaite will be punished at home for her part in the collapse of ex-husband Trevor Ludlow’s vehicle finance company.

Justice Pamela Andrews sentenced Braithwaite to 10 months' home detention and ordered her to do 300 hours of community work in a penalty handed down at Auckland High Court.

Braithwaite was found guilty by a majority jury verdict on July 27 on one charge of signing the failed finance company's 2005 prospectus containing an untrue statement.

The charge was brought by the Financial Markets Authority and she was the only person in the series of recent finance company director trials to have a jury trial.

Braithwaite, in her fifties, faced a maximum penalty of five years’ imprisonment or a fine of up to $300,000.

She was instructed to return to her home on Queens Parade, Devonport immediately and await arrival of the electronic monitoring unit.

Justice Andrews told her she was to abstain from use of alcohol or drugs througout the duration of the sentence and attend counselling as directed by the probation officer.

The judge had set a starting point for sentencing of two years', eight months imprisonment.

She took into account Braithwaite's family circumstances, that she is sole caregiver for her autistic child, in awarding an eight-month discount on that term.

She also accepted Braithwaite could not make any payment in reparation because she had no money, dependent children, and receives a welfare benefit.

Braithwaite has been on bail at her Devonport home awaiting sentencing and is the last of four National Finance directors to face prosecution.

Her defence was she didn't know anything about managing investor funds and relied on the knowledge of other directors, including her former husband Ludlow, when she signed the 2005 prospectus for National Finance. The couple separated in 2008.

Braithwaite's lawyer Arlin Arman said an appropriate starting point for sentence was 2 to 2.5 years' imprisonment, causing it to be a case where home detention was suitable.

He said Braithwaite's offending fell into the lower-end of the spectrum – a crime of ignorance and not one of intent.

"It would be a stretch to hold her equally culpable as some other finance company directors when she comes from a background when not even aware of the standards.

"Gross negligence requires extra element of knowing better."

But the Crown argued Braithwaite's offending did amount to gross negligence and sought a starting point of three years' imprisonment.

Crown lawyer Stephen Symon said it was possible Braithwaite would not be facing sentencing today if the prospectus had made clear she did not know how to do the job.

Braithwaite was described in the prospectus as having a wide range of skills that equipped her to be a director, and her marriage to Ludlow was not disclosed.

"The investors that lost money didn't know that she didn't know how to do the job," Mr Symon said.

Money Braithwaite and Ludlow had used to buy luxury apartments in Fiji was obviously related party lending, and certainly not a loan to a motor vehicle dealer, he said.

Ludlow is serving a six-year, four-month jail sentence after being found guilty in October of false accounting and theft by a person in a special relationship. 

Director Anthony Banbrook, who was to be tried alongside Braithwaite, entered a last-minute guilty plea to the charge. His sentencing was delayed last month because he disputed facts in the summary of facts before Justice Tim Brewer. 

The matter is now likely to be explored during a disputed facts hearing.

National's accountant, John Gray, pleaded guilty to theft by a person in a special relationship and one charge of false accounting in November 2010 and was sentenced to a term of 18 months' imprisonment, later reduced after an appeal to nine months' home detention.

National Finance invested deposits received from the public into car loans through dealers or the related Payless Cars business. It went into receivership in May 2006 owing $24.8 million to about 2000 investors.

gbond@nbr.co.nz