Golden King (Australia) Pty Ltd v Dietman
[2014] SASC 183
•8 December 2014
SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Criminal)
GOLDEN KING (AUSTRALIA) PTY LTD v DIETMAN
[2014] SASC 183
Judgment of The Honourable Justice Stanley
8 December 2014
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
PRIMARY INDUSTRY - FISH - REGULATION - PERMIT OR LICENCES
CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE - GROUNDS FOR INTERFERENCE - GENERALLY
Appeal against sentence.
The appellant pleaded guilty to four counts of contravening s 62(1) of the Fisheries Management Act 2007 (SA).
Section 62(1) prohibits a person from acting as a fish processor unless he or she is registered as a fish processor under the Act.
A magistrate convicted the appellant on all four counts. The magistrate ordered the forfeiture of the rock lobster the subject of the offending which had a wholesale value of $12,215.04. He imposed a fine of $10,000 as well as an additional penalty of $61,075.20 pursuant to s 110 of the Act together with prosecution costs of $400 and Victims of Crime levies of $640.
The appellant appeals on three grounds. First, that the magistrate erred as a matter of law in imposing an additional penalty pursuant to s 110 of the Act as that provision had no application to contraventions of s 62. Secondly, that the magistrate erred in failing to apply the provisions of s 13 and s 17 of the Criminal Law (Sentencing) Act 1988 (SA) in fixing the amount of the fine and additional penalty. Thirdly, that the fine and additional penalty were manifestly excessive.
Whether s 110 of the Fisheries Management Act 2007 applied. Whether s 13 and s 17 of the Criminal Law (Sentencing) Act 1988 applied. Whether the fine and the additional penalty were manifestly excessive.
Held (allowing the appeal):
1. The possession or control of fish is an essential ingredient of fish processing as defined in the Act. A person cannot process, store, transport or deal with fish without possessing or, at least, controlling the fish (at [19] - [26]).
2. The evidence does not meet the threshold condition for the exercise of the power conferred by s 13 of the Criminal Law (Sentencing) Act 1988 (SA) (at [32] - [37]).
3. In exacting the full penalty prescribed by s 110 the sentence was not a reasonable reflection of the total degree of criminality involved in the offending. There existed good reasons to reduce the additional penalty pursuant to s 17 of the Criminal Law (Sentencing) Act 1988 (SA) (at [45] - [51]).
4. The magistrate failed to reduce the fine he was otherwise disposed to impose by reason of the appellant’s guilty pleas. This is the sole error demonstrated in the exercise of the magistrate’s sentencing discretion in imposing the fine of $10,000 (at [56]).
Fisheries Management Act 2007 (SA) s 3, s 52-53, s 62, s 70-74, s 76, s 78-79, s 110, s 120; Criminal Law (Sentencing) Act 1988 (SA) s 13, s 17, s 18A, s 70; Fisheries Act (1982) (SA) s 34, s 66, referred to.
Cutting v Glover (1987) 135 LSJS 35; Glover v Zouroudis (1990) 54 SASR 200; Hemming v Neave & Neave (1989) 51 SASR 427; IW v City of Perth (1997) 191 CLR 1; Nilant v Macchia (2000) 104 FCR 238; Hemming v Perkins; Hemming v Stemberger (1999) 74 SASR 307; Glover v Hazeldine (1990) 48 A Crim R 118; Glover v Romanowcyz (1991) 55 SASR 524; Feast v Hemming (1993) 169 LSJS 135; Hemming v Droulias (2000) 206 LSJS 389; Julius v Bishop of Oxford (1880) 5 App Case 214 ; Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106; Mitchell v The Queen (1996) 184 CLR 333 ; Leach v R (2007) 230 CLR 1; Bendikov & Anor v Parkes [2008] SASC 248; Walker v Eves (1976) 13 SASR 249; R v Clarke (2008) 186 A Crim R 40; Jarrett v The Queen (1992) 58 SASR 457; Markarian v The Queen (2005) 228 CLR 357; R v Shannon (1979) 21 SASR 442; R v Slater (1984) 36 SASR 524; R v Place (2002) 81 SASR 395, considered.
WORDS AND PHRASES CONSIDERED/DEFINED
"fish processor” and “extenuating circumstances"
GOLDEN KING (AUSTRALIA) PTY LTD v DIETMAN
[2014] SASC 183Magistrates Appeal
STANLEY J:
Introduction
This is an appeal against sentence. The appellant pleaded guilty to four counts of contravening s 62(1) of the Fisheries Management Act 2007 (SA) (the Act).
Section 62(1) prohibits a person from acting as a fish processor unless he or she is registered as a fish processor under the Act. For a body corporate the maximum penalty is a fine of $50,000.
A magistrate convicted the appellant on each count. The magistrate ordered the forfeiture of the rock lobster the subject of the offending which had a wholesale value of $12,215.04. He imposed a fine of $10,000 as well as an additional penalty of $61,075.20 pursuant to s 110 of the Act together with prosecution costs of $400 and Victims of Crime levies of $640.
In addition, Adam Leung, the sole director and shareholder of the appellant, was convicted of the same four counts of contravening s 62 of the Act pursuant to s 120 which confers criminal liability on the director of a body corporate guilty of a prescribed offence unless the director proves that he or she could not, by the exercise of due diligence, have prevented the commission of the offence.
Mr Leung was fined the sum of $2,000. The Court ordered him to pay Victims of Crime levies of $640 and prosecution costs of $400. There is no appeal by Mr Leung.
There are three grounds of appeal. First, the magistrate erred as a matter of law in imposing an additional penalty pursuant to s 110 of the Act as that provision had no application to contraventions of s 62. Secondly, the magistrate erred in failing to apply the provisions of s 13 and s 17 of the Criminal Law (Sentencing) Act 1988 (SA) (the Sentencing Act) in fixing the amount of the fine and additional penalty. Thirdly, the fine and additional penalty were manifestly excessive.
Circumstances of the offending
On 18 October 2012 Mr Leung, on behalf of the appellant, went to Port MacDonnell and purchased in total 254.4 kg of southern rock lobster from four fishermen in four discrete transactions. The appellant took possession of the rock lobster. The purchases were for the purpose of selling the rock lobster to restaurants, predominantly in Melbourne. The Act defines “fish processing” as the processing, storing, transporting or dealing with fish or other aquatic resources for a commercial purpose. The magistrate found that the appellant undertakes a substantial commercial operation. It is a business with a $4 million annual turnover, although it operates on a small profit margin, employing a number of people. The magistrate found that the taxable income derived by Mr Leung from the business was modest. At the time of the offending Mr Leung had only recently acquired control of the appellant company from his father. The magistrate found his offending resulted from his ignorance of the necessity to be registered under the Act. Nevertheless the magistrate observed that his ignorance could easily have been cured by a simple inquiry of PIRSA and it was incumbent upon the appellant, which operated in a number of States, to ensure the company operated within the law. It failed to do so.
The magistrate sentenced the appellant on the basis that it had no prior convictions.
The magistrate imposed a single fine in respect of all four counts pursuant to s 18A of the Sentencing Act. He fixed the additional penalty based on a wholesale value of the rock lobster at the price it was sold to a fish processor, namely, $12,215.04.
Section 110
Section 110 of the Act provides:
110—Additional penalty based on value of aquatic resources
(1) Subject to subsection (2), this section applies to an offence against this Act involving the taking, sale or purchase, or possession or control, of aquatic resources.
(2) This section does not apply to an offence against section 78(1).
(3) If a person is convicted of an offence to which this section applies, the court must, in addition to imposing any other penalty prescribed by this Act, impose a penalty equal to—
(a) 5 times the amount determined by the convicting court to be the wholesale value of the aquatic resources at the time at which the offence was committed; or
(b) $100 000,
whichever is the lesser amount.
(4) For the purposes of this section, aquatic resources taken in contravention of this Act or a corresponding law will be taken to have a wholesale value equivalent to that of aquatic resources of the same class taken lawfully.
Mr Henchliffe, counsel for the appellant, submits that the magistrate erred in applying s 110 and imposing the additional penalty prescribed pursuant to s 110(3). There is no complaint that the calculation of the additional penalty prescribed by s 110(3)(a) resulted in the sum of $61,075.20.
The appellant submits that s 110 only applies to offences against the Act where the taking, sale or purchase, or possession or control, of aquatic resources is an essential ingredient of the offence. It submits that s 62(1) is not such an offence. Section 62 prohibits a person from acting as a fish processor unless registered under the Act. A “fish processor” is defined in s 3(1) of the Act to mean “a person who, for a commercial purpose, processes, stores, transports or deals with fish or other aquatic resources”. The Act defines “aquatic resources” to mean fish or aquatic plants. The appellant submits that the taking, sale or purchase, or possession or control, of aquatic resources is not an essential ingredient of the offence of processing, storing, transporting or dealing with fish for a commercial purpose without being registered as a fish processor under the Act.
The appellant seeks to rely on two earlier decisions of this Court which considered the cognate provision in the predecessor legislation to the Act, namely, s 66(1) of the Fisheries Act 1982 (SA) (the Fisheries Act). Section 66(1) was in substantially similar terms to s 110(1) and (3) of the Act.
In Cutting v Glover[1] Olsson J, in reasons which were obiter, rejected a broad construction of s 66 which would have construed nearly all offences under the Fisheries Act as offences involving the taking of fish. Instead, he concluded that the use of the word “involving” necessarily implied that the section attached only to offences an integral feature or element of which is the actual taking of fish in contravention of the statute. His Honour said:[2]
When that section speaks of “an offence … involving the taking of fish” I construe it as meaning an offence a necessary and integral element of which is the taking of fish.
[1] (1987) 135 LSJS 35.
[2] Cutting v Glover (1987) 135 LSJS 35 at 43 – 44.
While the reasoning of Olsson J in Cutting v Glover was obiter, those reasons were adopted by this Court as part of the ratio in Glover v Zouroudis.[3]In that matter the respondent was charged upon complaint with a breach of s 34(2) of the Fisheries Act which alleged that he permitted a boat to be engaged in a fishing activity (as defined) without that boat being in the charge of a person who was licensed as a master under the Fisheries Act. The respondent pleaded guilty. The appeal was, in part, against the magistrate’s refusal in that case to order the additional penalty stipulated by s 66 of the Fisheries Act. In dismissing the appeal, Jacobs J said:[4]
I am not persuaded that s 66 of the Fisheries Act speaks to this offence at all. It only seeks to impose an additional penalty when a person is convicted of an offence “involving the taking of fish”, and for the reasons stated earlier, the taking of fish is not an essential ingredient of the offence with which the respondent is charged. He would have been equally guilty of the offence charged if the vessel had put to sea for the purpose of fishing and had returned empty handed. I entirely agree with the reasoning of Olsson J in Cutting v Glover that the draconian penalties provided by s 66 are only to be exacted when the taking of fish is an essential ingredient of the offence, as, for example, offences under ss 42 and 44 of the Act. There are many offences under the Act which are committed whether or not fish are taken, and the present offence is an example of that. The words “involving the taking of fish” in s 66 should be strictly construed and should not be extended to cover every “fishing activity” as defined.
(Footnote omitted).
[3] (1990) 54 SASR 200.
[4] (1990) 54 SASR 200 at 204.
The appellant submits that this Court should adopt a corresponding construction of s 110 of the Act. It submits that the taking, sale or purchase, or possession or control of aquatic resources are not essential elements or ingredients of a contravention of s 62(1). It contrasts s 62 with other provisions of the Act which create offences, an essential ingredient of which is the taking, sale or purchase, or possession or control of aquatic resources. Accordingly, it submits s 110 did not apply in this case. The appellant’s submission depends on a textual analysis of the Act.
Dr Manetta, counsel for the respondent, submits that s 110 does apply to a contravention of s 62 because s 62 involves the possession or control of aquatic resources.
In my view, the respondent’s submission must be accepted.
The possession or control of fish is an essential ingredient of fish processing as defined in the Act. As I have observed earlier, the Act defines a “fish processor” to mean “a person who for a commercial purpose, processes, stores, transports, or deals with fish”. Necessarily, a person cannot process, store, transport or deal with fish without possessing or, at least, controlling the fish. To put it another way, the possession or control of fish is the necessary precondition to processing, storing, transporting or dealing with the fish.
While it is the case that s 62 in terms does not refer to possession or control of fish or other aquatic resources, that does not mean that the possession or control of fish is not an essential ingredient of the offence created by the section. The appellant contends that s 110 only applies to those provisions of the Act which expressly make it an offence to take, sell, purchase, possess or control fish. True it is that some provisions in the Act expressly use the language of “taking”, “sale and purchase” and “possession or control” or other tenses thereof. For example, ss 52, 53, 70, 76(b) and 79(9)(a) make it an offence to “engage in a fishing activity” in particular circumstances. “Fishing activity” is defined in s 3(1) to mean the act of “taking” an aquatic resource; s 71(1)(a) makes it an offence to “take” an aquatic mammal; s 74(1)(a) makes it an offence to “traffic” in a commercial quantity of fish. “Traffic” is defined in s 74(2) to include, inter alia, selling and taking fish for sale, but I note the definition of “traffic” also includes the receipt and processing of fish; s 72(1) makes it an offence for a person to sell or purchase an aquatic resource in particular circumstances; s 72(2) makes it an offence for a person to sell or purchase or have possession or control of an aquatic resource in particular circumstances; s 73(1) makes it an offence for a person to have in his or her “possession” an excessive quantity of fish; s 74(1)(b) makes it an offence for a person to have “possession or control” of a commercial quantity of fish of a priority species; s 78(1) makes it an offence to sell or purchase or have possession or control of aquatic resources of a noxious species without a permit;[5] and s 79(9)(b) makes it an offence for a person to have possession or control of aquatic resources in particular circumstances. However, I do not consider that it is only offences which expressly refer to the taking, sale or purchase, or possession or control, of aquatic resources, which have those factors as an essential ingredient of the particular offence. On the contrary, it seems clear that the legislative purpose of the statute would be undermined if that was the case. The Act is regulatory legislation. Its purpose is the protection of the fishing industry[6] and the conservation and maintenance of fish stocks sufficient to preserve the long-term viability of both commercial and recreational fishing. The fishing industry is highly regulated. The imposition of substantial penalties for contraventions of the Act reflect a policy of both specific and general deterrence, where offending can be difficult to detect and the potential profits to be made from contraventions of the Act can be attractive. To that end, the Parliament in enacting s 110 clearly chose to impose an additional fine where an offence involves the taking, sale or purchase, or possession or control of, aquatic resources. Neither logic, the text of the statute nor its context, supports the appellant’s submission. For example, s 74 provides:
[5] Although s 110(2) provides that s 110 does not apply to an offence against s 78(1).
[6] Hemming v Neave & Neave (1989) 51 SASR 427 at 428.
74—Unauthorised trafficking in fish of priority species prohibited
(1) A person must not, unless authorised to do so under this Act—
(a) traffic in a commercial quantity of fish of a priority species; or
(b) have possession or control of a commercial quantity of fish of a priority species.
…
(2) In subsection (1)—
traffic in fish includes—
(a) sell fish; and
(b) take fish for sale; and
(c) receive fish; and
(d) process fish; and
(e) engage in any act preparatory to an act referred to in a preceding paragraph.
Section 74(1)(b) makes it an offence to have possession or control of a commercial quantity of fish of a priority species. Section 74(1)(a) makes it an offence to traffic in a commercial quantity of fish of a priority species. Trafficking is defined to include selling fish and taking fish for sale as well as receiving and processing fish. Acceptance of the appellant’s submission would have the consequence that the contravention of s 74(1)(a) or s 74(1)(b) would attract the application of s 110 but, in the case of s 74(1)(a), only where the accused was trafficking by reason of selling fish or taking fish for sale but not where the accused was processing or receiving fish. Yet it would be an essential ingredient of a contravention of both s 74(1)(a) and s 74(1)(b) that the contravener have possession or control of the fish in order to take, sell, receive or process it.
The proposition finds further support in considering the provisions of s 78(1). Section 78(1) provides:
78—Unauthorised activities relating to exotic organisms or noxious species prohibited
(1) A person must not, except as authorised by a permit issued by the Minister—
(a) bring, or cause to be brought, into the State; or
(b) sell, purchase or deliver; or
(c) have possession or control of,
aquatic resources of a noxious species.
Maximum penalty:
(a) in the case of a body corporate—$250 000;
(b) in the case of a natural person—$120 000.
Section 110(2) provides that s 110 does not apply to an offence against s 78(1). Implicitly s 78(1) must have been within the operation of s 110(1) otherwise there would have been no work for s 110(2) to perform. Accordingly, while s 110 does not apply to an offence against s 78(1), the appellant’s proposition can be tested by a consideration of the terms of s 78(1).
Section 78(1)(b) makes it an offence to sell, purchase or deliver aquatic resources of a noxious species without a permit. Section 78(1)(c) makes it an offence to have possession or control of aquatic resources of a noxious species without a permit. Section 78(1)(a) makes it an offence to bring, or cause to be brought, into the State, aquatic resources of a noxious species without a permit. Acceptance of the appellant’s submission would have the consequence that a contravention of s 78(1)(b) involving a person selling or purchasing aquatic resources of a noxious species without a permit would attract the application of s 110 but a contravention of s 78(1)(a) would not, but for the operation of s 110(2). However, a contravention of s 78(1)(b) involving a person delivering aquatic resources of a noxious species without a permit would not attract the application of s 110. Likewise, a contravention of s 78(1)(c) would attract the application of s 110 but a contravention of s 78(1)(a) would not, but for the operation of s 110(2). Yet it is an essential ingredient of the offence of delivering aquatic resources of a noxious species that the person contravening s 78(1)(b) have possession or control of that resource. Likewise, it is an essential ingredient of the offence created by s 78(1)(a) of bringing, or causing to be brought, into the State, aquatic resources of a noxious species that the person contravening that provision have possession or control of that resource.
Furthermore, s 110(1) provides that the section applies to offences against the Act involving the taking, sale or purchase, or possession or control, of aquatic resources (emphasis added). As Dr Manetta submits, the provision does not refer to offences specifying the taking, sale or purchase, or possession or control, of aquatic resources (emphasis added). The expression “involving” means, in this context, including or entailing, not specifying, the taking, sale or purchase, or possession or control, of aquatic resources.[7] As Olsson J said in Cutting, the use of the word “involving” necessarily implies that the section attaches only to offences an integral feature or element of which is the actual taking etc of fish in contravention of the statute.[8]
[7] The Concise Oxford Dictionary.
[8] (1987) 135 LSJS 35 at 43.
In my view, there is nothing in the authorities of Cutting or Zouroudis which would support the construction for which the appellant contends. If anything, those authorities support the submission of the respondent.
Sections 13 and 17 of the Sentencing Act and the totality principle
The appellant submits that the sentencing magistrate erred in failing, reasonably and correctly, to apply s 13 and s 17 of the Sentencing Act and the principle of totality in fixing the amount of the fine and the additional penalty.
Section 13 of the Sentencing Act provides:
13—Order for payment of pecuniary sum not to be made in certain circumstances
(1) The court must not make an order requiring a defendant to pay a pecuniary sum (other than a VIC levy) if the court is satisfied that the means of the defendant, so far as they are known to the court, are such that—
(a) the defendant would be unable to comply with the order; or
(b) compliance with the order would unduly prejudice the welfare of dependants of the defendant, amount).
(and in such a case the Court may, if it thinks fit, order the payment of a lesser amount).
(2) Subject to subsection (3), the court is not obliged to inform itself as to the defendant's means, but it should consider any evidence on the subject that the defendant or the prosecutor has placed before it.
(3) In considering whether the defendant would be able to comply with the order, the court should have regard to—
(a) the fact that the defendant could enter into an arrangement under Part 9 Division 3; and
(b) any information available to the court as to other pecuniary sums that have been paid, or are payable, by the defendant.
Section 17 of the Sentencing Act provides:
17—Reduction of minimum penalty
Where a special Act fixes a minimum penalty in respect of an offence and the court, having regard to—
(a) the character, antecedents, age or physical or mental condition of the defendant; or
(b) the fact that the offence was trifling; or
(c) any other extenuating circumstances,
is of the opinion that good reason exists for reducing the penalty below the minimum, the court may so reduce the penalty.
There can be no doubt that in fixing the amount of the fine and the additional penalty, the magistrate had regard to s 13 and s 17 of the Sentencing Act. He expressly said so in his sentencing remarks. The issue is whether the sentencing magistrate applied those provisions correctly.
It is convenient first to address s 13.
Section 13(1) of the Sentencing Act confers a power on a court to refrain from ordering the payment of a pecuniary sum (other than a VIC levy) where the court is satisfied that the defendant’s means are such that the defendant would be unable to pay the sum ordered or compliance with the order would unduly prejudice the welfare of dependants of the defendant. In these circumstances, the court is empowered, where it thinks fit, to order the payment of a lesser amount. In considering whether the defendant is unable to comply with the order, the court should have regard, first, to the fact that the defendant could enter into an arrangement under Part 9 Division 3 of the Sentencing Act, and, secondly, any information available to the court as to other pecuniary sums that have been paid, or are payable, by the defendant. Section 70 is found in Part 9 Division 3 of the Sentencing Act. Section 70 permits a defendant who is subject to an order to pay a pecuniary sum to enter into an arrangement as to the manner and time of payment of that pecuniary sum, including payment by instalments.
By reason of the provisions of s 13(3)(b) of the Sentencing Act, the magistrate was obliged to consider whether the appellant would be unable to comply with the orders to pay the sum of $71,075.20, being the aggregation of the fine and the additional penalty.
On appeal, an issue arose as to whether the magistrate was obliged to consider whether compliance with the orders would unduly prejudice the welfare of dependants of the appellant. The respondent submits that this consideration does not arise in this case because a corporate defendant cannot have dependants. I accept this submission. Section 13 is a beneficial provision. In accordance with the established canons of interpretation, it should be given a broad and generous construction.[9] Nonetheless, a corporate entity cannot have dependants in the way a natural person can. A corporate entity will have shareholders and may have employees. They may be, to one extent or another, financially dependent upon the corporate entity. However, to my mind, they are not encompassed within the concept of a dependant as used in s 13. Had the Parliament intended to include employees or shareholders as persons whose welfare must be considered for the purposes of the provision, it would have been a simple matter to say so expressly. I consider the reference to “dependants” in s 13 is to be understood as referring to persons who are financially dependent upon a defendant who is a natural person. I am reinforced in this view by the history of the provision. In Hemming v Perkins; Hemming v Stemberger[10] Martin J undertook a contextual analysis of the provision. He said that in enacting s 13 Parliament was concerned with the undesirable consequences of offenders who were unable to pay fines being incarcerated. Clearly such a consideration would have had no application to corporate offenders. Accordingly, the only threshold question the court had to consider, if the power conferred by s 13 was to be enlivened, was whether the appellant would be unable to comply with the orders that required it to pay the sum of $71,075.20. In considering that matter, the court had to have regard to the fact that the appellant could enter into an arrangement for payment by instalments.
[9] IW v City of Perth [1997] HCA 30, (1997) 191 CLR 1; Nilant v Macchia [2000] FCA 1528 at [42], (2000) 104 FCR 238 at 247.
[10] [1999] SASC 212 at [89], (1999) 74 SASR 307 at 327.
While Mr Leung gave evidence that if a fine in excess of $50,000 was imposed he would seriously have to consider whether the business could continue to run, this evidence did not address directly the relevant issue posed by s 13, namely, whether the appellant would be unable to pay the sum of $71,075.20 over time by instalments.
The evidence before the magistrate demonstrated that the appellant was profitable. In the 2013 year it made a net profit of $50,000 after payment of salaries and expenses. In addition it paid franked dividends to its shareholders of some $19,500 for the 2013 year after payment of wages, including Mr Leung’s salary of $60,000. There was no evidence that the appellant would be unable to pay the sum of $71,075.20 if it were paid in accordance with an arrangement under Part 9 Division 3 of the Sentencing Act.
That conclusion is fatal to the appellant’s submission based on s 13. The submission fails in limine. The evidence does not meet the threshold condition for the exercise of the power conferred by s 13.
I now turn to consider s 17.
There is no issue that the magistrate had to consider the provisions of s 17. The Act is a special Act which in s 110 fixes a minimum penalty in respect of the offence. This Court has previously held that s 17 applied to the provisions of s 66 of the Fisheries Act, the predecessor provision to s 110.[11] The respondent accepted that the effect of s 110 is to impose a “minimum penalty” within the meaning of s 17. Accordingly, notwithstanding the mandatory nature of the terms of s 110, s 17 could operate to reduce the prescribed penalty. On the other hand, s 17 cannot operate to reduce the fine imposed pursuant to s 62. Section 62 does not fix a minimum penalty.
[11] Glover v Hazeldine (1990) 48 A Crim R 118; Glover v Romanowcyz (1991) 55 SASR 524; Feast v Hemming (1993) 169 LSJS 135; Hemming v Perkins; Hemming v Stemberger [1999] SASC 212; (1999) 74 SASR 307; Hemming v Droulias [2000] SASC 33, (2000) 206 LSJS 389.
Section 17 confers a power upon the court to reduce the minimum penalty below the prescribed minimum where it is satisfied of the matters set out in the provision. If so satisfied, the court is obliged to exercise the power.[12] The power conferred by s 17 is conditioned upon a determination by the court that it considers good reasons exist for reducing the penalty below the minimum, solely having regard to the factors stipulated in s 17(a) to (c). The use of the word “may” does not evince an intention to confer a discretion upon the court. The word “may” is used to confer power and the power must be exercised if the circumstances are established which call for its exercise. If the evaluation of those factors led to the conclusion that good reason existed to reduce the penalty below the minimum, the magistrate was bound to exercise the power conferred and do so. If the evaluation of those factors failed to lead to that conclusion, there was no basis upon which the magistrate could exercise the power conferred. Accordingly, on appeal, the issue is whether by reason of those factors, and those factors alone, it was open to the magistrate to conclude that good reason existed for reducing the penalty below the minimum.
[12] Julius v Bishop of Oxford (1880) 5 App Case 214 at 222 – 223; Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106 at 134 – 135; Mitchell v The Queen [1996] HCA 45, (1996) 184 CLR 333 at 345 – 346; Leach v R [2007] HCA 3 at [38], (2007) 230 CLR 1 at 17 – 18.
The appellant submits that by reason of its character and antecedents as well as other extenuating circumstances, the Court should have found that good reason existed for reducing the penalty below the minimum. The appellant submits that it has no record of prior offending and is otherwise a good corporate citizen, and that the extenuating circumstances in this matter are that the appellant, acting through the mind and will of its director, Mr Leung, believed that its actions in processing the rock lobster were lawful. There is no suggestion the offending was trifling.
The respondent submits that s 17(a) has no application to a corporate defendant. He contends this is apparent from its terms which only apply to a real person.
I do not accept the respondent’s submission. While reference to the age or physical or mental condition of the defendant can only refer to a personal defendant, I have no difficulty accepting that a corporate defendant can have antecedents. Like any defendant, a corporate defendant can have a prior criminal history or not. Further, I am satisfied that a corporate defendant can have a character. Separate from its criminal antecedents, it may or may not be a good corporate citizen and reference can be made to its acts to demonstrate or contradict this proposition.
In any event, the respondent submits that the appellant has failed to demonstrate any error in the approach of the magistrate. It has not established that good reason existed for reducing the penalty below the minimum.
In considering whether good reason existed for reducing the additional penalty, consideration must be given to the purpose of s 110 of the Act and the purpose of s 17 of the Sentencing Act. The purpose of s 110 informs the factors to which the court must have regard in forming an opinion as to whether good reason exists.[13]
[13] Bendikov & Anor v Parkes [2008] SASC 248 at [49]
Section 110 was enacted by the Parliament as part of a regulatory scheme. As I said earlier, its purpose is deterrence. The imposition of substantial penalties for contraventions of the Act reflect a policy of both specific and general deterrence, where offending can be difficult to detect and the potential profits to be made from the contravention of the Act can be attractive. The rationale for the imposition of penalties of this kind were discussed in Walker v Eves[14] where Bray CJ said:[15]
The total fine appears enormous, but that is the result of the deliberate policy of Parliament in s. 74. It makes the penalty proportionate to the number of individual animals involved. No doubt Parliament thought that the trade was a lucrative one and one hard to detect and that it should be made unprofitable to those minded to engage in it by a penalty proportionate to the magnitude of the enterprise. In cases like this I think that the deterrent aspect of punishment is paramount.
[14] (1976) 13 SASR 249.
[15] (1976) 13 SASR 249 at 253.
On the other hand, while considerations of deterrence are paramount, it is relevant to distinguish between matters of personal and general deterrence. The very mechanism created by s 110 establishes a direct link between the quantity and value of the fish unlawfully processed and the additional penalty imposed. This mechanism emphasises the deterrent effect. However, considerations of personal deterrence must attract less weight where an offender is ignorant of the wrongfulness of its conduct. Deterrence remains an important element of the sentence in those circumstances, particularly general deterrence, but personal deterrence is a less important consideration in the case of an offender who did not intend to engage in unlawful conduct.[16] Plainly, as the magistrate found, that was the case here. In addition, it is relevant that the primary offence against s 62 is not concerned with the unlawful taking of fish, but with their processing. The imposition of the additional penalty in these circumstances is not necessary to protect the fish stocks. The rock lobster in this case were lawfully taken. I am satisfied these are all extenuating circumstances within the meaning of s 17(c).[17]
[16] R v Clarke [2008] SASC 173 at [27] – [36], (2008) 186 A Crim R 40 at 47 - 50; Bendikov & Anor v Parkes [2008] SASC 248 at [49].
[17] As to this see the discussion of the meaning of “extenuating circumstances” in s 17 by Martin J in Hemming v Perkins; Hemming v Stemberger [1999] SASC 212 at [70] – [80], (1999) 74 SASR 307 at 323 – 325.
Against this background it is helpful to bear in mind that the purpose of s 17 of the Sentencing Act is to provide for amelioration of an injustice arising from minimum pecuniary penalties in special Acts.[18]
[18] Hemming v Perkins; Hemming v Stemberger [1999] SASC 212 at [50], (1999) 74 SASR 307 at 319.
Further, as was said by Olsson J in Cutting v Glover[19] in considering the operation of provisions such as s 110, great care needs to be taken to ensure that in totality the penalty imposed constitutes a reasonable reflection of the total degree of criminality involved in the offending.
[19] (1987) 135 LSJS 35 at 42.
In my view, the magistrate, while acknowledging that the offending was the result of ignorance rather than the deliberate flouting of the law, fell into error in failing to give due weight to that fact, together with the appellant’s good record, in imposing the penalty prescribed by s 110.[20] The magistrate’s reasons in relation to the application of s 17 are opaque. He says no more than that he had regard to it. In my view, however, in exacting the full penalty prescribed by s 110 the sentence was not a reasonable reflection of the total degree of criminality involved in the offending. The imposition of the full penalty prescribed was unnecessary given that specific deterrence is a matter of considerably reduced importance in circumstances where the appellant’s offending was not the product of a calculated exercise in running the risk of contravening the Act in the hope of profiting from the contravention without detection. In addition, the consideration of specific deterrence looms small given that, in my view, it is unlikely the offending will be repeated.
[20] Jarrett v The Queen (1992) 58 SASR 457 per King CJ at 459.
I am satisfied that the magistrate should have found the existence of good reason to reduce the additional penalty. His failure to do so discloses that his exercise of the sentencing discretion miscarried. Before considering the extent to which the additional penalty should be reduced, it is necessary to consider the third ground of the appeal, namely, that the fine and penalty were manifestly excessive.
Manifestly excessive?
The principles governing when an appellate court will interfere with a sentence on the basis that it is manifestly excessive or manifestly inadequate are well known. In Markarian v The Queen[21] Gleeson CJ, Gummow, Hayne and Callinan JJ set out these principles in the following terms:[22]
As with other discretionary judgments, the inquiry on an appeal against sentence is identified in the well-known passage in the joint reasons of Dixon, Evatt and McTiernan JJ in House v The King, itself an appeal against sentence. Thus is specific error shown? (Has there been some error of principle? Has the sentencer allowed extraneous or irrelevant matters to guide or affect the decision? Have the facts been mistaken? Has the sentencer not taken some material consideration into account?) Or if specific error is not shown, is the result embodied in the order unreasonable or plainly unjust? It is this last kind of error that is usually described, in an offender’s appeal, as “manifest excess”, or in a prosecution appeal, as “manifest inadequacy”.
[21] [2005] HCA 25, (2005) 228 CLR 357.
[22] [2005] HCA 25 at [25], (2005) 228 CLR 357 at 370 – 371.
On the hearing of the appeal the appellant conflated the argument on ground 3 into its submission on ground 2.
In my view, subject to the question of a discount for the guilty pleas, the fine of $10,000 was not manifestly excessive in the circumstances. The maximum penalty for a contravention of s 62 by a body corporate is a fine of $50,000. The appellant pleaded guilty to four counts of contravening s 62. Whether I would have imposed a fine in this amount is irrelevant. An appellate court is not to substitute its own opinion merely because it would have exercised its discretion in a manner different from the manner in which the sentencing magistrate exercised his discretion.[23]
[23] Markarian v The Queen [2005] HCA 25 at [28], (2005) 228 CLR 357 at 371.
I consider a fine of $10,000 in these circumstances was within the range that could be imposed by a court for four counts of contravening s 62 involving as it did a substantial quantity of rock lobster, namely, 254.4 kg, in the context of the conduct of a commercial operation.
Finally, in the context of the submission that the penalty imposed was manifestly excessive, the appellant contended that the magistrate failed to make any allowance for its pleas of guilty. The appellant did enter early guilty pleas. The magistrate does not refer expressly to any percentage reduction in the fine imposed by reason of that fact. The magistrate utilised s 18A of the Sentencing Act in imposing the fine of $10,000 in respect of the four counts of contravening s 62. In my view, the magistrate did not allow for any reduction in sentence on account of the guilty pleas. I am satisfied that the magistrate overlooked this matter. This Court has emphasised on many occasions the appropriateness of a reduction in a sentence which would otherwise have been fixed when a defendant pleads guilty.[24] The magistrate should have reduced the fine he was otherwise disposed to impose by reason of the guilty pleas. In my view this is the sole error demonstrated in the exercise of the magistrate’s sentencing discretion in imposing the fine of $10,000. The proceedings were instituted after 11 March 2013. Accordingly, the provisions of s 10B of the Sentencing Act apply. The appellant pleaded guilty at the first appearance in court. Section 10B(2)(a) permits the court in these circumstances to reduce the sentence it would otherwise have imposed by up to 40 per cent. The appellant not only entered guilty pleas at the earliest opportunity but, through Mr Leung, cooperated fully in the investigation of the offences. In the circumstances I consider that a 40 per cent discount should have been made on account of the appellant’s pleas of guilty. Accordingly, I would set aside the fine of $10,000 and in lieu thereof substitute a fine of $6,000.
[24] R v Shannon (1979) 21 SASR 442; R v Slater (1984) 36 SASR 524; R v Place [2002] SASC 101, (2002) 81 SASR 395; Bendikov & Anor v Parkes [2008] SASC 248. See also the statutory requirement in s 10(1)(g) of the Sentencing Act.
Turning to the additional penalty imposed by the magistrate, I consider it unnecessary to undertake a discrete exercise of evaluating whether the imposition of the additional penalty was manifestly excessive given the conclusion I have reached in relation to s 17 and the additional penalty.
Resentencing
As White J noted in Bendikov, the amount of any reduction to be made pursuant to s 17 is very much a matter of judgment. In this case that judgment must include the need for general deterrence. I am satisfied that a reduction in the additional penalty to an amount of $40,000 will constitute a reasonable reflection of the balance to be achieved between properly reflecting the total degree of criminality involved while maintaining general deterrence in the context of a regulatory offence.
Conclusion
I would allow the appeal. I would set aside the fine of $10,000. In lieu thereof I would substitute a fine of $6,000. I would set aside the additional penalty of $61,075.20 and substitute in lieu thereof an additional penalty of $40,000. I would not interfere with the costs order or the Victims of Crime levies. I will hear the parties as to the costs of the appeal.
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