Elliott v Anstie
[2006] TASSC 17
•10 April 2006
[2006] TASSC 17
CITATION: Elliott v Anstie [2006] TASSC 17
PARTIES: ELLIOTT, Terence John Clement
v
ANSTIE, Philip David
INSOLVENCY & TRUSTEE SERVICE
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: APPELLATE
FILE NO/S: LCA 25/2005
DELIVERED ON: 10 April 2006
DELIVERED AT: Launceston
HEARING DATE: 20 March 2006
JUDGMENT OF: Underwood CJ
CATCHWORDS:
Bankruptcy – Offences – Particular offences – Sentence - Obtaining credit by fraud – Obtained finance for a car and two credit cards – Total loss to creditors $27,209.
Bankruptcy Act 1966 (Cth), s265(5)(b).
R v Maslen (1995) 79 A Crim R 199; Ponsford v Wynwood [1999] TASSC 21 followed. R v Halls [2002] NSWCCA 55; R v Issaac [2005] NSWCCA 86, discussed.
Aust Dig Bankruptcy [667]
REPRESENTATION:
Counsel:
Applicant: C J Gibson
Respondent: I M Arendt
Solicitors:
Applicant: AT Legals
Respondent: Commonwealth Director of Public Prosecutions
Judgment Number: [2006] TASSC 17
Number of paragraphs: 31
Serial No 17/2006
File No LCA 25/2005
TERENCE JOHN CLEMENT ELLIOTT v PHILIP DAVID ANSTIE
INSOLVENCY & TRUSTEE SERVICE
REASONS FOR JUDGMENT UNDERWOOD CJ
10 April 2006
Introduction
The Bankruptcy Act 1966 (Cth), s265(5)(b), provides:
"(5) A person who, after the presentation of a petition on which, or by virtue of the presentation of which, he or she becomes a bankrupt:
(a)…
(b)in incurring any debt or liability, obtains credit by fraud;
is guilty of an offence and is punishable, upon conviction, by imprisonment for a period not exceeding 3 years."
The applicant was made bankrupt on 6 March 2001. He was subsequently charged with committing three breaches of s265(5)(b). He pleaded guilty on 11 October 2005, was later convicted on each charge, and ordered to serve 12 months' imprisonment. The learned magistrate also ordered that after eight months, the applicant be released from custody upon him entering into a recognisance in the sum of $5,000 that he be of good behaviour for three years.
The applicant seeks a review of the orders upon the grounds that they are manifestly excessive and that the learned magistrate failed to give due weight to the fact that a term of imprisonment would cause severe hardship to his family and dependents.
The circumstances of the applicant
According to a probation report obtained by the learned magistrate, the applicant was aged 42 at the time he was made bankrupt. He was born in New Zealand but transferred by his employer to Melbourne in 1998. The employer agreed to pay the applicant's relocation expenses and rent for accommodation for an agreed period of time. However, after a while, the employer went into receivership and the applicant was left with a debt of $7,000 for rent. In result, a sequestration order was made in 2001.
The applicant was ashamed of being made bankrupt and did not tell his wife for some time. The probation report states that when he did tell his wife about the bankruptcy, it caused the marriage to break down and the applicant's wife and son returned to New Zealand.
In 2002, the applicant entered into a relationship with his present wife. She has five children to her previous husband, but he has custody of them. There is now one child of the union between the applicant and his present wife. From his curriculum vitae handed to the learned magistrate, it appears that for most of his adult life the applicant has worked in the business of human resources and employment recruitment.
In 2002, the applicant and his wife moved to Tasmania because the latter's parents and brother live here. They remained in Tasmania until returning to Melbourne in June 2005. The applicant was unable to find work while in Tasmania, except between August 2004 and January 2005, when he worked for a recruitment agency.
On his return to Melbourne, the applicant took up a position as manager of Ellayess Pty Ltd, the recruitment arm of an engineering company. He is still so employed. His salary is $48,000 per annum. He is also provided with a furnished rental property and a living away from home allowance to the value of $30,000.
The applicant has some debts and pays monthly maintenance to support his son in New Zealand. The probation report states that the applicant described the last four years as a difficult time in his life. He experienced the deaths of his father and father-in-law. He was unemployed for long periods. He was angry with his former wife. His present wife was embroiled in family law disputation with her former husband. The applicant started drinking heavily, but the report states that he is no longer consuming alcohol to excess. The applicant has no previous convictions.
The circumstances of the offences
After coming to Tasmania in 2002, the applicant "transferred" his Victorian driver's licence to a Tasmanian licence. He supplied the correct relevant information when making the application, but the licence he received showed an incorrect date of birth.
The first offence was committed when the applicant successfully applied to G E Automotive Financial Services Pty Ltd for a loan of $7,913.60 to buy a car. The applicant did not disclose that he was an undischarged bankrupt and fraudulently used the Tasmanian driver's licence to disguise that fact. The complaint alleges that this offence was committed on 4 March 2003, but the prosecutor told the learned magistrate that it was committed on 11 February 2003. Suffice to say that it was committed about two years after the applicant was made bankrupt. The applicant did not keep up the repayments. The car was repossessed and sold at a net loss of $6,779. The learned magistrate made a reparation order for that amount.
The second offence was committed very shortly after the first. Although the particulars corruptly plead that the offence was committed "between 9 May 2003 and 9 March 2003", the prosecutor told the learned magistrate that the relevant date was 9 May 2003. The applicant made a successful application to the Commonwealth Bank for a credit card. The applicant used the same driver's licence, and as before, falsely stated that he was not an undischarged bankrupt. The card had a credit limit of $10,000. Within a matter of weeks, the applicant had passed his credit limit and the amount owing totalled $11,375.80. The bank stopped the account on 19 April 2004 when the total amount owing was $12,410. There is a judgment debt for that sum.
The last offence was committed almost a year later. Again, the applicant made an application to the Commonwealth Bank for a credit card. Again, the driver's licence was produced. The applicant also falsely told the bank that he had an equity of about $9,000 in some real estate and that he was not an undischarged bankrupt. This time the credit limit was $5,000. A little more than two months after the account was opened, the amount owing was $6,020.
The overall losses totalled $27,209.76.
The proceedings in the court of petty sessions
Before the learned magistrate, the applicant was self-represented. It is clear from the transcript of proceedings that he acquitted himself well and made clear, relevant submissions that he had prepared beforehand. He said that he did not intend to avoid meeting his liabilities, but frankly admitted that he deliberately lied to present himself as "credit worthy when [he] was not". The applicant then detailed his personal circumstances which I have already set out. He said that he lost his Tasmanian employment because of the commission of these offences, and that his bankruptcy had been extended to 2009. He said that the money was not used to create a lavish lifestyle. He told the learned magistrate that his child was 2 years old, but said nothing about whether his wife had a capacity to earn income, nor if she did, whether she was utilising it. He did say that he would lose his job if sent to prison and that imprisonment would create hardship for his wife and child. The applicant placed reliance upon the fact that he had co-operated with the bankruptcy authorities and pleaded guilty.
In his comments on passing sentence, the learned magistrate referred to what he had been told and noted that in excess of $27,000 remained owing. It is clear from his comments that the learned magistrate accepted what the applicant told him at the sentencing hearing and what was contained in the probation report. He then, appropriately, said:
"However the provisions of the bankruptcy laws are not designed to punish individuals who are not able to pay their debts, they are designed to protect the community from persons who have demonstrated an inability to manage their finances to avoid financial loss to themselves and to others and to enable those in the community to deal with bankrupts and to make their risk assessments of doing so on an informed basis.
In doing what you did you totally ignored your obligations to the community and placed your own priorities uppermost."
Was there error?
Ground 2 is not made out. Actual imprisonment almost always imposes hardship on the prisoner's family. Exceptional hardship may be relevant, but the circumstances need to be extreme or exceptional. See R v Maslen (1995) 79 A Crim R 199; Ponsford v Wynwood [1999] TASSC 21. There was no material before the learned magistrate to indicate that the applicant's family would suffer hardship more extreme than that visited upon the family of any prisoner who is sent to prison and loses his job.
Success on the remaining ground of appeal depends upon the applicant establishing that, properly instructed as to the law and acting reasonably, no magistrate would have made the impugned order so that some indefinable error must have occurred. See House v R (1936) 55 CLR 499.
Ms Gibson, counsel for the applicant, properly conceded that the imposition of a global penalty of 12 months' imprisonment did not reflect undefined error, but the failure to suspend the execution of the whole, or more than eight months, of that sentence of imprisonment was an undefined error.
Authoritative statements of principle applicable to sentences for a breach of the Bankruptcy Act, s265(5)(b), are hard to find. However, the views expressed by the learned magistrate in this case were also expressed by Buddin J (with whose reasons the other members of the Court of Criminal Appeal agreed) in R v Halls [2002] NSWCCA 55.
Colleen Halls was sentenced to 15 months' imprisonment with a recognisance release order to commence after having served 10 months of that sentence. Like the applicant, Colleen Halls had no previous convictions. However, her criminality exceeded that of the applicant's. She pleaded guilty to three breaches of s269(1)(ab), entering into a hire purchase agreement for more than $3,000 without disclosing her bankruptcy, two breaches of s269(1)(a), obtaining credit over $3,000 without making disclosure, and four breaches of s265(5), obtaining credit by fraud.
The sentence was imposed on each of the first five breaches, all to be served concurrently. On each of the breaches of s265(5), a fixed term of nine months' imprisonment was imposed. These terms were ordered to be served concurrently with each other and with the other sentences, as the sentencing judge regarded the breaches of s265(5) as being the fraudulent means by which the first five offences were committed.
Over a period of about 18 months, Colleen Halls bought two BMW cars, a Toyota 4 wheel drive, and obtained a credit facility and a bank loan. Credit to the total value of $182,000 was obtained and at the time of sentencing, $90,000 was owed. Colleen Halls did not appeal on the ground that the sentence was manifestly excessive, but relied upon three specific alleged errors. Her appeal failed.
Colleen Halls' husband, Francis Halls, pleaded guilty to one count of entering into a hire purchase agreement for more than $3,000 without disclosing that he was bankrupt. He committed this offence jointly with his wife when the first BMW was bought on hire purchase. He received the same sentence as his wife. The Court of Appeal set that sentence aside on the grounds of parity, but expressed the view that it was not manifestly excessive. With respect to this, Buddin J said, at par24:
"It would appear that the sentence which was imposed upon this applicant fell comfortably within [the] range. The sentencing judge characterised the offence as being serious, as it undoubtedly was. His Honour placed emphasis upon the fact that offences created by the Bankruptcy Act are designed to protect credit providers. His Honour said that the commission of the various offences 'represent a total and utter disregard of the Bankruptcy Act and the requirements it places on bankruptcy'. A little later his Honour said that it is necessary to 'deter by sentences of imprisonment those who fraudulently obtain credit whilst bankrupt. Without clear statements from these courts the Bankruptcy Act would be set at nought, to the detriment of a great number of debtors and creditors alike'. I endorse the sentiments expressed by the sentencing judge."
The Court of Criminal Appeal substituted a sentence of 12 months' imprisonment with a recognisance release order after serving eight months of that sentence, viz, a sentence identical to the one imposed upon the applicant. The BMW sedan that was taken on hire purchase by Mr and Mrs Halls cost $38,000 and the total amount to be repaid on the hire purchase agreement was $52,242.40. The car was repossessed and sold, and there was a shortfall of $13,072.
Bell J wrote the judgment of the court in R v Issaac [2005] NSWCCA 86. The appellant in that case was convicted of two counts of obtaining credit without disclosing he was a bankrupt and two counts of obtaining credit by fraud. Like this case, the appellant was a middle-aged man without prior conviction. With respect to each charge of obtaining credit by fraud, the order was 12 months' imprisonment, and with respect to each charge of obtaining credit without disclosing he was a bankrupt, the order was nine months' imprisonment. All sentences were ordered to be served concurrently with each other. The amount involved was in the vicinity of $30,000.
In addition to the foregoing, Mr Issaac pleaded guilty to dishonestly obtaining a financial advantage, viz, the Newstart allowance, by a deception. He did not disclose his earnings from his employment and obtained social security benefits of almost $20,000 to which he was not entitled. For this crime, a sentence of 2½ years' imprisonment was imposed, with a recognisance release order after 18 months. The bankruptcy sentences were ordered to be served concurrently with that sentence. There was no appeal on the ground that any of the orders of sentence were manifestly excessive.
The cases to which I have referred show that the sentence of 12 months' imprisonment was a proper exercise of the sentencing discretion. That leaves only one question: did error occur in ordering that the applicant not be released until he had served eight months of that sentence?
Given his age and absence of prior convictions, the answer to that question calls for a balancing of the need to impose a sentence of general deterrence against the steps that the applicant has taken to rehabilitate himself since the commission of the last offence. Those steps are significant. The appellant is in permanent, well paid, employment, doing work that he has done all his working life and he will lose that employment if he is sent to prison. He is settled in a house with his second wife and child. He has brought under control his excessive consumption of alcohol. He is remorseful. If kept out of prison, the prognosis for the future is good.
When weighing up these matters, it is important to remember that the issue on the motion to review is manifest error, not what sentence I would have imposed had I been dealing with the matter at first instance. Having regard to the observations of the New South Wales Court of Criminal Appeal in the two cases to which I have referred, I do not think that it can be said that ordering an actual custodial sentence of eight months reflected an error in the exercise of the sentencing discretion. The sentence is at the higher end of appropriate sentences, but not to the extent of being erroneous. The steps that the applicant has taken towards rehabilitation speak strongly in his favour, but general deterrence is an important factor when imposing sentence for bankruptcy fraud. The orders in respect of which a review is sought are plainly in line with the sentencing discretions reviewed by the Court of Criminal Appeal in New South Wales.
Error is not made out. The motion to review is dismissed.
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