H Stanke & Sons Pty Ltd v Parkes - [2010] SASC 263

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Criminal)
H STANKE & SONS PTY LTD v PARKES
[2010] SASC 263
Judgment of The Honourable Justice White
9 September 2010
PRIMARY INDUSTRY - FISH - OFFENCES - OTHER OFFENCES
CORPORATIONS - MANAGEMENT AND ADMINISTRATION - AUTHORITY, RIGHTS AND POWERS OF OFFICERS OF CORPORATION - AUTHORITY - OF DIRECTORS
The appellant, a corporation, held a licence to fish for rock lobsters, which was sub-licensed to a family trust - an employee of the trust failed to comply with regulations imposing reporting obligations on the employee and the appellant - the appellant appealed against the recording of convictions contending that: all reasonable steps had been taken by the appellant to ensure compliance with the Regulations; knowledge which led to a charge being aggravated was improperly attributed to the company; and the effect of the recording of convictions on its arrangement with its financier constituted extenuating circumstances warranting the Court refraining from recording convictions.
Held: the learned Magistrate had not erred in recording convictions - whilst knowledge was inappropriately attributed to the company, this did not effect the appropriateness of recording convictions - no sufficient extenuating circumstances existed.
Fisheries Management Act 2007 (SA) s 70; Fisheries Management (Rock Lobster Fishers) Regulations 2006 reg 22, reg 23, referred to.
R v Reiner (1974) 8 SASR 102; R v Godfrey (1993) 69 A Crim R 318; R v D (1997) SASR 413; Markarian v The Queen (2005) 228 CLR 357; Hemming v Lukin (1996) 67 SASR 248; Hemming v Neave (1989) 51 SASR 427; Piva v Brinkworth (1992) 59 SASR 92; City of Salisbury v Ahrens Group Pty Ltd [2010] SASC 254; Hemming v Mundy (2001) 213 LSJS 453; Lamattina v Gould (2009) 103 SASR 587; State of New South Wales v Fahy (2007) 232 CLR 486; Tesco Supermarkets Ltd v Nattrass [1972] AC 153; JC Houghton & Co v Nothard, Lowe and Wills Ltd [1928] AC 1; Beach Petroleum NL v Johnson (1993) 43 FCR 1; Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500; Farrow Finance Co Ltd (in liq) v Farrow Properties Pty Ltd (in liq) (1997) 26 ACSR 544; Director of Public Prosecutions Reference No 1 of 1996 (1998) 3 VR 352; Director-General, Department of Education and Training v MT [2006] NSWCA 270; AAPT v Cable Wireless Optus Ltd [1999] NSWSC 509; North Sydney Council v Roman [2007] NSWCA 27; Chappell v A Ross & Sons Pty Ltd [1969] VR 376; R v Olbrich (1999) 199 CLR 270, considered.

H STANKE & SONS PTY LTD v PARKES
[2010] SASC 263
Magistrates Appeal

WHITE J: The fishing for rock lobster in the Southern Zone Rock Lobster Fishery in South Australia is heavily regulated. Amongst other things, commercial fishers must be licensed, use only a registered boat skippered by a registered master, use no more than the number of pots authorised by their licence, and catch no more than the quota of lobster authorised by their licence.
The Fisheries Management Act 2007 (SA) and the Fisheries Management (Rock Lobster Fisheries) Regulations 2006 (the Regulations) contain these requirements. In addition, they impose obligations on commercial fishers with a view to facilitating the monitoring and enforcement by the Department of Primary Industries and Resources of compliance with the regulatory requirements.
Regulation 22 contains two such obligations in relation to the Southern Zone. First, the licence holder or the registered master of a boat which has taken rock lobster must ensure that the Director of Fisheries is given at least one hour’s notice before any rock lobster is removed from a boat. This obligation is known colloquially in the industry as the “prior reporting” obligation and is contained in reg 22(1).
Secondly, the licence holder or the registered master must, before removing any part of a rock lobster catch from a boat, make a record in a designated form of specified particulars of the catch, then take the catch immediately to a “certification station” where each lobster is to be weighed, and then enter further detail on the designated form. A copy of the completed record must then be delivered to the Director. These records are known as the “Catch and Disposal” records. These obligations are contained in reg 22(3) of the Regulations.
The appellant pleaded guilty to three contraventions of the prior reporting obligation, committed on 9, 14 and 27 May 2008. The maximum penalty for each contravention was a fine of $5,000.
In respect of each of the two offences committed on 9 and 14 May 2008, the Magistrate imposed fines of $1,350. Had it not been for the appellant’s guilty pleas, the fines would have been $1,500 for each offence. In respect of the offence committed on 27 May 2008, the Magistrate imposed a fine of $2,700. This was a reduction of $300 from his starting point of $3,000, by reason of the appellant’s guilty plea. The Magistrate rejected a defence submission that he should exercise his powers under s 16 of the Criminal Law (Sentencing) Act 1988 (SA) (CLSA) and refrain from recording convictions.
The appellant appeals against the Magistrate’s decision to record convictions. It does not appeal against the fines.
The Requirement for Prior Reporting
Regulation 22(1) which contains the obligation for prior reporting is in the following terms:
Subject to subregulation (2), if rock lobster is taken under a South Australian licence, the holder of the licence or the registered master of the registered boat from which the rock lobster was taken must ensure that—
(a)at least 1 hour before the rock lobster is removed from the registered boat from which it was taken, the Minister is notified by telephone of—
(i)    the name of the person making the telephone call; and
(ii)    the number of the licence under which the rock lobster was taken; and
(iii)     the certification station at which the rock lobster is to be weighed; and
(iv)the estimated time of arrival of the rock lobster at that certification station; and
(v)whether any rock lobster is to be stored on board a registered boat used under the licence after the boat is landed; and
(b)the Minister is notified of any change in the estimated time of arrival of the rock lobster at the certification station if it appears likely to the holder of the licence or the registered master that the rock lobster will arrive at the certification station earlier than the estimated time previously notified to the Minister or more than 30 minutes after that time.
It can be seen that the licence holder or the registered master of the boat from which rock lobster was taken must ensure that the Director is notified, at least one hour before the rock lobster is removed from the boat, of specified information.
The purpose of the prior reporting obligation is plain. It means that Fisheries Officers will have sufficient notice so as to be able to attend, if they wish, at the places where lobster is brought ashore in order to monitor catches. Further, the awareness that a Fisheries Officer may carry out a physical inspection of the catch operates as a deterrent to those licence holders or masters who may be tempted to engage in some form of illegal activity in relation to the catch or to under-report the number and weight of the catch. The prior reporting obligation has therefore an important role in the protection and preservation of the rock lobster resource.
Sub-reg (2) provides that the prior reporting obligation does not apply “if the rock lobster is to be weighed at a certification station nominated by the Director by notice in the Gazette between the hours specified in the notice”. The effect of sub-reg (2) is that the prior reporting obligation is not applicable if the lobster are landed at a location during the period in which Fisheries Officers will be present at a certification station.
The Director of Fisheries published a notice in the Gazette on 13 September 2007. The effect of this notice, in conjunction with reg 22(2), was to indicate that the prior reporting obligation did not apply in respect of lobster to be weighed at the certification station at Robe between the hours of 10.00 am and 4.00 pm in the period 1 October 2007 until 31 March 2008 (because the certification station would be staffed by Fisheries Officers at those times). In respect of lobster landed before 10.00 am or after 4.00 pm in the period 1 October 2007 until 31 March 2008, the prior reporting obligation still applied. Similarly, in respect of any lobster landed before 1 October 2007 or after 31 March 2008, the prior reporting obligation still applied.
Regulation 22(1) imposes the obligation concerning prior reporting on the licence holder or the registered master. However, by sub-reg (4) it is the holder of the licence who commits the offence in the event of any non-compliance with the prior reporting obligation. Given that it is the licence holder who commits the offence, it is plainly in the interests of the licence holder to ensure compliance by a boat master with the prior reporting obligation.
Another matter to note is that the obligation imposed on the licence holder or the registered master by sub-reg (1) is that they “must ensure” that the prior report is made. Neither the licence holder nor the registered master is obliged to make the report in person. They are obliged only to ensure that a prior report is made by someone by no later than the prescribed time, and giving the prescribed information.
Background Circumstances
For many years members of the von Stanke family have engaged in the business of rock lobster fishing from Carpenter Rocks. Initially, three brothers (Fred, Jack and Bob) carried on business in partnership but, in 1965, the appellant and another company (Cape Banks Processing Company Pty Ltd (CBP)) were incorporated. Since 1990, the appellant and CBP have carried on business in partnership under the name “Stanke Ociana Seafoods”.
The Boards of Directors of the appellant and CBP are identical. Each Board contains seven persons, five of whom are sons of one or other of Fred, Jack and Bob, one of whom is a grandson of Fred and one of whom is, as I understand it, a non-family member. Two of the directors are John von Stanke and his cousin Ian von Stanke (Ian).
The business of the appellant and CBP includes the ownership and use of seven rock lobster fishing licences and the ownership and operation of a rock lobster processing plant at Carpenter Rocks. This plant employs approximately 55 people, many of whom are also members of the von Stanke family.
The appellant sub-licences its fishing licences to members of the von Stanke family. A sub-licence in respect of licence No S207 has been granted to a family trust of which Ian is the sole trustee.
In the 2007‑08 fishing season (which included May 2008), Ian employed his son Jamahl and a deckhand to use the sub-licence on a boat named “Indian Breeze owned by the family trust. As at May 2008, Jamahl had been a rock lobster fisherman for approximately 17 years, and had held a master’s licence for about eight years.
On each of 11 and 12 May 2008, Jamahl was detected using the Indian Breeze to fish for rock lobster in a protected sanctuary. These were contraventions of s 70 of the Fisheries Management Act. In addition, Fisheries Officers noted that, although the Indian Breeze had landed rock lobster at Robe on each day in the period from 3 to 5 May 2008 (both dates inclusive), and in the period 7 to 14 May 2008 (both dates inclusive) there had been no compliance with the prior reporting obligation on those days. In 10 cases, there had been no prior report at all. On the remaining day, there had been a prior report, but this was only 11 minutes before the lobster catch was landed.
Two Fisheries Officers interviewed Jamahl on 20 May 2008. Jamahl said that he understood that he was required to ensure the making of a prior report in May 2008 only if he landed before 10.00 am or after 4.00 pm. For the reasons given earlier, this was a mistaken understanding. The Fisheries Officers reminded Jamahl that a prior report was necessary in respect of all landings of rock lobster during the month of May, and reminded him of the “One on One” discussions which he had had with a Fisheries Officer at Carpenter Rocks on 27 September 2007 in which, amongst other things, the prior reporting obligation had been discussed.
Immediately after interviewing Jamahl, the Fisheries Officers interviewed Ian. Ian identified himself as a director of the appellant; said that he “ran” licence No S207; said that he was able to speak on behalf of the appellant in relation to the licence; and said that he employed Jamahl and deckhand. He claimed to have the same mistaken understanding of the prior reporting obligation as had Jamahl. The Fisheries Officers pointed out to him that there had been no prior reporting at all of the catches of the Indian Breeze during the month of May, to which Ian responded: “I’ll make sure he does”.
The Indian Breeze, with Jamahl as skipper, again landed catches of rock lobster at Robe on 21, 23, 24 and 27 May 2008. Again, there was no compliance with the prior reporting obligation. On two of those days (21 and 27 May 2008) there was no prior report at all. On the other two days, reports were made only four minutes and 21 minutes respectively before the catches were landed.
The appellant was charged with only three of the 15 contraventions of the prior reporting obligation outlined above. Jamahl was charged on the same information with two contraventions of s 70 of the Fisheries Management Act. He pleaded guilty to those offences and was sentenced by the Magistrate at the same time as the appellant. It was not suggested that the sentence imposed on Jamahl was in any way relevant to the sentencing of the appellant.
The Magistrate’s Decision
The Magistrate noted first that each of the offences occurred as part of a course of conduct, and that the three counts were said to be representative. The appellant was, of course, to be sentenced only for the offences to which it had pleaded guilty and was not to be punished for the uncharged conduct.[1] However, the appellant was not entitled to any leniency on the basis that the offences were isolated instances of non‑compliance.
[1] R v Reiner (1974) 8 SASR 102 at 105; R v Godfrey (1993) 69 A Crim R 318 at 322-3; R v D [1997] SASC 6350; (1997) 69 SASR 413 at 419.
The Magistrate regarded the appellant’s conduct in relation to the offences committed on 27 May 2008 as being more culpable than its conduct in relation to the offences committed on 9 and 14 May 2008. This was because the offence on 27 May 2008 was committed after both Jamahl and Ian had been interviewed by the Fisheries Officers, and after Ian’s assurance that he would make sure that Jamahl complied with his prior reporting obligations. In this respect, the Magistrate noted that Ian participated in the interview in his capacity as a director of the appellant and, accordingly, that his knowledge of Jamahl’s conduct derived from the meeting was to be attributed to the appellant. The Magistrate said that the third offence had to be considered separately from the first and second.
The Magistrate took into account in the appellant’s favour in relation to the offences of 9 and 14 May 2008 the steps which the appellant had taken before May 2008 to ensure compliance by sub-licensees and their boat masters with applicable legislative and regulatory requirements. I will refer to these previous steps in more detail shortly. However, because the appellant, despite being aware through Ian of Jamahl’s previous non-compliance, had done nothing after 20 May 2008 to ensure his compliance, the Magistrate was not prepared to attach much mitigatory significance to the previous steps taken by the appellant when sentencing for the third offence. In respect of this offence, the Magistrate sentenced on the basis that the appellant had not taken real or reasonable steps to prevent non-compliance.
Section 16 of the CLSA
Section 16 of the CLSA provides:
Where a court finds a person guilty of an offence for which it proposes to impose a fine, a sentence of community service, or both and the court is of the opinion—
(a)     that the defendant is unlikely to commit such an offence again; and
(b)     that, having regard to—
(i)    the character, antecedents, age or physical or mental condition of the defendant; or
(ii)    the fact that the offence was trifling; or
(iii)     any other extenuating circumstances,
good reason exists for not recording a conviction, the court may impose the penalty without recording a conviction.
The Magistrate was satisfied that the appellant was unlikely to contravene reg 22(1) again and was also satisfied that, as a corporation, it was of good character. Although it had been in the fishing business since 1990, the subject offences were its first. The appellant did not suggest that the offences were trifling but did submit that the potential effect of convictions being recorded upon the attitude of its financier did constitute extenuating circumstances for the purposes of s 16(b)(iii). It submitted that if convictions were recorded, the financier may withdraw its current lending facilities to the appellant, or at least, not renew them at their expiry. In support of this submission was an affidavit of John von Stanke, who swore to the fact that, following a conversation with his bank manager, he had concerns as to the consequences of a conviction upon the renewal of financing for the appellant. The appellant also tendered a copy of the Deed of Fixed and Floating Charge into which it had entered with the bank. The Magistrate did not accept that submission and said that he was not satisfied that good reason existed for not recording convictions.
Appellant’s Submissions on Appeal
On the appeal, the appellant recognised that the Magistrate’s decision not to invoke s 16 of the CLSA was a discretionary judgment. It recognised therefore that the approach to be adopted by this Court on the appeal was that stated by the majority in Markarian v The Queen[2] as follows:
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". (Citations omitted)
[2] [2005] HCA 25 at [25]: (2005) 228 CLR 357 at 370-1.
The appellant submitted that the Magistrate’s decision with respect to the recording of convictions was affected by two errors of the kind referred to in Markarian. First, it was said that the Magistrate had erred by attributing to the appellant the knowledge gained by Ian of Jamahl’s repeated non-compliance in May 2008 of the prior reporting obligation. Although Ian was a director of the appellant, he was not, so it was submitted, authorised to speak for, or to receive information on behalf of, the appellant at the interview. This was said to be an error of law, or perhaps an error of both law and fact.

Secondly, the appellant submitted that the Magistrate had erred in his consideration of the effect on the appellant’s financier of the recording of convictions, and had failed to take into account the effect on the appellant and those dependent upon its businesses when reaching his decision. This was said to be an error of fact.
Before addressing these submissions, it is appropriate to refer to the approach taken by this Court in relation to the recording of convictions for regulatory offences of the present kind.
Section 16 and Regulatory Offences
At one time, this Court took the view that the power in s 16 not to record convictions should be invoked only rarely in the case of regulatory offences.[3] However, in Hemming v Lukin[4] Doyle CJ expressed caution about applying such statements too literally.[5] In that case, Doyle CJ suggested that, in relation to an offence like the present which can be committed with or without fault or intent, the Court should look, as a basis for leniency, to evidence of any positive attempts directed to preventing or avoiding the commission of the offence.[6] He then said:
I do not suggest that the test is whether the respondent did things which would, in fact, have ensured that the offence was not committed or were likely to ensure that, but what one would look for is real efforts, bearing in mind the regulatory nature of the regime over s 69, to ensure that the law was complied with.[7]
As Bleby J observed in City of Salisbury v Ahrens Group Pty Ltd, the Chief Justice was referring to efforts to prevent or avoid the commission of the offence in question, not to steps taken afterwards to avoid the commission of future offences.[8]
[3] Hemming v Neave (1989) 51 SASR 427 at 428-9; Piva v Brinkworth (1992) 59 SASR 92 at 96.
[4] (1996) 67 SASR 248.
[5] Ibid at 251.
[6] Ibid.
[7] Ibid. See also Hemming v Mundy [2001] SASC 105 at [37]-[38]; (2001) 213 LSJS 453 at 461; Lamattina v Gould [2009] SASC 130 at [34]; (2009) 103 SASR 587 at 595.
[8] [2010] SASC 254 at [27].
Section 16 can be invoked by courts when sentencing for regulatory offences such as reg 22(1). However, in order for a court to find “good reason” to invoke s 16, it must pay proper regard to the purpose and effect of the recording of convictions, particularly in achieving both personal and general deterrence, and to the importance of regulatory offences in the implementation of legislative schemes promoting public safety, preservation of natural resources, and maintenance of proper occupational standards. Of course, s 16 cannot be invoked without the Court being satisfied, as a minimum, that the defendant is unlikely to commit the offence in question again and without regard to the elements specified in s 16(b).
Absence of Reasonable Steps
The first error which the appellant imputed to the Magistrate was the attribution of Ian’s knowledge to the appellant. However, in my respectful opinion, this submission overlooked that the Magistrate considered that there was insufficient reason to invoke s 16 even in the absence of the attribution of Ian’s knowledge.
As already noted, the Magistrate recorded convictions for all three offences. He used the attribution of Ian’s knowledge to the appellant only when considering the sentence for the third of the three offences. It led to the imposition of the higher fine for the third offence, a penalty of which the appellant does not complain. The Magistrate could not reasonably have concluded that there was insufficient reason to invoke s 16 in relation to the first two offences but that there was good reason to do so in relation to the third. Accordingly, when it is understood that the Magistrate did not rely on any attribution of Ian’s knowledge in his decision regarding the first two offences, it can be seen that the error of law concerning attribution of Ian’s knowledge which the appellant imputed to the Magistrate is immaterial, and does not provide a ground for this Court to interfere with the Magistrate’s decision.
The Magistrate addressed the facts relating to the first and second counts separately from those relating to the third. He noted that the third count, by reason of the fact that it was committed after the interview with the Fisheries Officers on 20 May 2008, had “a different factual context and so has to be considered separately”.
The appellant referred, as it had before the Magistrate, to a system which it said had been in place for many years before May 2008 “of training, supervision and control of skippers involved in the business” to prevent contraventions of the present kind. It contended that its system was efficacious, as evidenced by the fact that there had been no previous contraventions over a period of about 25 years.
The system was said to comprise a number of elements. The appellant sub‑licensed its licences only to those family members who met the board’s criteria of experience, qualifications and good standing in the local community; boat skippers had to serve a period of at least five years as a deckhand on a boat before being considered for a skipper’s position, during which period they received training; each prospective skipper had to undergo formal training as a master through the Australian Maritime College; even after qualifying, junior skippers received further informal training from senior skippers within the appellant’s businesses; the appellant required all of its skippers to attend the “One on One” sessions conducted by officers of the Department of Fisheries with skippers which were designed to keep them up-to-date with current regulatory requirements; and, the sub-licence issued to Ian on 27 September 2007 included a requirement that “you continue to comply, and ensure that your employees, agents and contractors comply, with all applicable laws relating to fishing using a Fishing Licence, including the Fisheries Act 1928 (SA)”, specifying that a breach of any such law would result in immediate forfeiture of the use of the licence.
The Magistrate was not satisfied that this “system” indicated real efforts by the appellant to ensure compliance with reg 22(1). In my opinion, he was correct to regard the “system” in that way. Much of the so-called “system” amounted to no more than the sub‑licensing of licences to persons who could be regarded as experienced, responsible and qualified and who were familiar with their obligations as skippers. It was not directed to requirements such as reg 22(1). The One on One sessions conducted by Fisheries Officers were an initiative of the Department of Fisheries, and not of the appellant. Like Doyle CJ in Hemming v Lukin,[9] I do not attach very much weight at all to the conditions inserted by the appellant in the sub-licence. Doyle CJ said:
To my mind, such a provision in an agreement, allowing someone else to use an important and valuable asset like a licence, is a routine and obvious precaution to take and is by no means indicative, to my mind, of exertions on the part of the licence holder entitling her to favourable treatment.
A provision such as this, in my opinion, is the minimum provision which one would expect to find in such an agreement as a matter of self-protection.[10]
[9] (1996) 67 SASR 248 at 250.
[10] Ibid at 250.
In short, none of the steps of the so-called “system” were specifically directed to the prior reporting obligation, or to obligations of a similar kind, and there was no evidence that the appellant had at any stage turned its mind to its obligations under reg 22(1).
Counsel for the appellant submitted that there was no practicable way to monitor, audit or enforce its compliance with reg 22, and that any finding compelling it to do so would be overly onerous.[11] I do not accept this submission.
[11] T261.5.
On the basis of the materials before the Magistrate, there are a number of things which the appellant could have done. It could have issued to its sub‑licensees and to its skippers regular reminders of the obligations such as the prior reporting obligation. It could have inspected copies of the records prepared by skippers under reg 22(3) and compared those with the records maintained by the Department (apparently readily available to it) of the times at which prior reports had been made, and thus in effect have itself audited compliance with the prior reporting obligation. It could itself have arranged to contact each of the seven boats using its licence at the approximate time that they were expected to return to port, reminding them of the prior reporting obligation. It is conduct of these kinds which could more aptly be described as “real efforts” by the appellant for the purposes of s 16 of the CLSA.
I am conscious of the caution given by Gummow and Hayne JJ in State of New South Wales v Fahy[12] in relation to the determination of breaches of duty in the law of negligence. They said that the inquiry must be forward looking to identify what a reasonable person would have done, not backwards to identify what would have avoided the injury.[13] However, even keeping that caution in mind in the present circumstances, it is plain that the appellant could have made real efforts to ensure Jamahl’s compliance with the prior reporting requirements.
[12] [2007] HCA 20; (2007) 232 CLR 486.
[13] Ibid at [57]-[58], 505-6.
Given the absence of evidence of such real efforts, the Magistrate’s decision to record convictions for those offences was appropriate. The Magistrate could hardly have reached any different decision in relation to the third offence, even if he had not attributed Ian’s knowledge to the appellant.
Attribution of Knowledge
Given the view I have just expressed, it is not strictly speaking necessary to address the appellant’s submissions concerning the Magistrate’s attribution to it of Ian’s knowledge of Jamahl’s contraventions. However, in case this matter goes further, I will state my views briefly.
The appellant submitted first that Ian was not its directing mind and will, so that it could not be said that his mind, including his knowledge, was the mind of the company. He was one of only seven directors and not the “embodiment” or “alter ego” of the company in the sense explained by Lord Reid in Tesco Supermarkets Ltd v Nattrass.[14]
[14] [1972] AC 153 at 170-1.
Secondly, the appellant submitted that Ian was not its agent at the time of the interview and that he did not have authority from the board to “receive” information on its behalf. It referred in this respect to the statement in John von Stanke’s affidavit:
As to Ian’s assertion that he was entitled to speak on behalf of the company, I say on behalf of the company that he was not so authorised and would not have been authorised in the absence of a resolution of the Board’s providing that authority. I have attended all Board meetings of [the appellant] and at no time up to the giving of that interview nor since that time has Ian been authorised to speak on behalf of [the appellant].
Thirdly, and in the event that one or both of the first two propositions failed, the appellant submitted that this was a case in which Ian was affected by a conflict of interest, making it inappropriate for attribute his knowledge to it. The conflict was said to arise from both Ian’s interest in protecting the continued sub‑licensing of licence S207 to the family trust of which he was trustee and from his interest in protecting his son, Jamahl. The terms of the sub-licence permitted the appellant to terminate it on account of Jamahl’s non-compliance with the prior reporting obligation and his fishing in prohibited waters. Ian’s interest in protecting the continuation of sub‑licence, and his son, conflicted, it was said, with his interest and duty in reporting to the appellant the conduct of Jamahl which affected licence S207. The appellant referred in this respect to the cases concerning the so-called fraud exception to the attribution to a company of a director’s knowledge.
In JC Houghton & Co v Nothard, Lowe and Wills Ltd,[15] Viscount Sumner said that what directors know or ought to know in the course of their duty may be the knowledge of the company, but that when directors who had engaged in delinquent conduct in relation to their company failed, in breach of duty, to inform the other directors of their conduct, it would be contrary to justice and commonsense to treat the knowledge of the delinquent directors as the knowledge of the company. In Beach Petroleum NL v Johnson,[16] von Doussa J reviewed many of the authorities in relation to civil proceedings concerning the imputation of a director’s knowledge to the company and said:
These authorities indicate that if a company is to be imputed with the conduct and knowledge of a director, the director must be acting within the scope of his or her authority, that is, within the scope of his or her actual or apparent authority. The scope of the authority of a director may vary widely from company to company and according to the circumstances of the case. In many instances a director might not be formally appointed by resolution of the board to act on the company’s behalf for a particular purpose, but may assume that role without dissent from those who customarily run the company, perhaps even assume the role of managing director … Provided that the director is acting within the scope of his or her authority, in civil proceedings the state of mind of a director ordinarily will be attributed to the company where there is a duty on that director to communicate his or her knowledge to the company. The exception to this rule is where the director is acting totally in fraud of the company, that is, where all the directors’ activities are directed against the interests of the company, and not partly for the benefit of the company. If the director is guilty of fraudulent conduct which is not totally in fraud of the corporation, and by design or result of fraud partly benefits the company, the knowledge of the director in the transaction will be attributed to the company.[17]
[15] [1928] AC 1 at 19.
[16] (1993) 43 FCR 1.
[17] Ibid at 31-2. See also Farrow Finance Co Ltd (in liq) v Farrow Properties Pty Ltd (in liq) [1997] 26 ACSR 544 at 587.
Thus Beach Petroleum confirmed the fraud exception in relation to fraudulent conduct of a director, from which the company had not benefitted.
However, in an influential judgment in Meridian Global Funds Management Asia Ltd v Securities Commission,[18] Lord Hoffman explained that the question of whether conduct or knowledge of a person is to be imputed to a company is to be determined by consideration of the company’s rules of attribution. The primary rules of attribution are usually found in the company’s Articles of Association and they are supplemented by the general rules of attribution which are equally available to natural persons, namely the principles of agency, estoppel, ostensible authority and vicarious liability.[19] It is a question of construction in each case as to whether the particular rule of attribution requires that knowledge by a person that an act has been done, or the state of mind with which it was done, should be attributed to the company.[20] The purpose for which conduct or knowledge is to be imputed to a company is important in the resolution of the issues of construction involved.[21]
[18] [1995] 2 AC 500.
[19] Ibid at 506.
[20] Ibid at 511.
[21] Ibid at 512.
In Director of Public Prosecutions Reference No 1 of 1996,[22] Callaway JA, with whom Phillips CJ and Tadgell JA agreed, said of Lord Hoffman’s analysis that:
It does not tell us the rule of attribution … It merely provides a framework for analysis and dispels the notion that, for all offences, the person with whom a corporation is identified must be its directing mind and will.[23]
[22] (1998) 3 VR 352.
[23] Ibid at 355.
In Director-General, Department of Education and Training v MT,[24] Spigelman CJ noted the importance of the particular features, and the purpose, of the legislative scheme under consideration in determining whether conduct or knowledge of one person is to be attributed to a company. In this respect, the protective nature of the statutory regulation is an important consideration.[25] Austin J in AAPT v Cable Wireless Optus Ltd[26] also emphasised the importance of the legislative policy to the question of construction involved.
[24] [2006] NSWCA 270.
[25] Ibid at [22]. See also North Sydney Council v Roman [2007] NSWCA 27 at [28]-[39].
[26] [1999] NSWSC 509 at [91]; [1999] 32 ACSR 63 at 88.
The circumstances of the present appeal do not provide a very suitable basis for detailed consideration of the applicable rules of attribution in the case of the appellant. The parties placed relatively little of the necessary material before the Magistrate. John von Stanke’s affidavit referred to above indicated only that Ian had not been expressly authorised by the appellant to attend the meeting with the Fisheries Officers on 20 May 2010.
Strictly speaking, Ian’s authority to speak on behalf of the appellant could not be proved by evidence of Ian’s own statements in the interview on 20 May 2008.[27] However, as counsel for the respondent submitted, there were other indicia. It was undisputed that the appellant had issued a sub‑licence in respect of licence S207 to Ian. It had thereby placed him in a position in which it would have appeared to Fisheries Officers that he had authority to speak in relation to licence S207. Given the detailed supervision by the Department of Fisheries of rock lobster licences in the Southern Zone, it is reasonable to infer that the Department would have been aware of the sub-licence. However, as already noted, the material before the Magistrate on these topics was scant.
[27] Chappell v A Ross & Sons Pty Ltd [1969] VR 376.
The Magistrate used the knowledge of Ian acquired in the interview on 20 May as a matter aggravating the offence committed on 27 May. That being so, the onus of adducing the relevant material was on the complainant.[28]
[28] R v Olbrich [1999] HCA 54 at [27]; (1999) 199 CLR 270 at 281.
Although I consider that there is much to be said for the proposition that the knowledge which Ian acquired on 20 May 2008 should be attributed to the appellant, I conclude that the material before the Magistrate at the time of sentencing (at which this issue was in dispute), was insufficient for an attribution of the knowledge for which the complainant contended. Accordingly, if it had been necessary to do so, I would have concluded that it was not permissible for the Magistrate to have taken into account Ian’s knowledge when deciding not to invoke s 16 of the CLSA in relation to the offence committed on 27 May.
However, for the reasons already given, the Magistrate could not reasonably have come to different conclusions regarding the recording of convictions for the three offences. The factors which led him to record convictions for the offences committed on 9 and 14 May 2010 indicate that it was appropriate that a conviction should also be recorded for the 27 May 2010 offence.
Accordingly, no error in the Magistrate’s decision has been shown.
Effect on Financial Arrangements
The appellant contended that the Magistrate had failed to take into account in an appropriate way the serious risk of termination by Rabobank of the funding facilities which it provides to the appellant, in the event that convictions are recorded. It submitted that if the funding facilities were withdrawn, the entire businesses conducted by it and CBP would be jeopardised, with the potential for closure and consequent serious effects on the employment and livelihood of many von Stanke family members.
This was a matter upon which the appellant carried the evidential onus. For this purpose, it relied upon the Deed of Fixed and Floating Charge into which it had entered with Rabobank on 11 July 2008. By cl 1 of that Deed, the appellant undertook to Rabobank that it would ensure that its business continued to be carried on in “a good, proper and efficient manner” and that it would comply with all legislation relating to the business.

The Deed also provided that if an “event of default” occurred, the appellant must immediately repay the borrowed monies to Rabobank. The expression “event of default” was defined to include an event which, in the opinion of Rabobank was likely to effect materially and adversely “the ability of [the appellant] to comply with its obligations” under the Deed. The appellant submitted that the recording of convictions would be an event of this kind.
This submission cannot be sustained. The appellant’s Deed with Rabobank does not distinguish between a finding of guilt, on the one hand, and the formal entry of a conviction, on the other. Further still, the submissions of the appellant did not demonstrate how the recording of convictions could reasonably be understood by Rabobank as likely to effect materially and adversely its ability to comply with its obligations under the financing arrangement.
Faced with that difficulty, the appellant then sought to rely upon a passage in the affidavit of John von Stanke:
Having spoke with the local manager of Rabobank, I can say that I am seriously concerned about the consequences of a conviction, not only for [the appellant], but also for the seven von Stanke family businesses involved. … I am concerned that the recording of a conviction may be a substantial factor leading to the non‑renewal of finance when that issue comes up for consideration. Such a consequence would have catastrophic consequences not only on the business of [the appellant] and CBP and all of its employees but also on the seven family fishing businesses that rely upon [the appellant] for essential aspects of their business support.
The Magistrate declined to attach much significance to this evidence. He said:
I accept that the financier has a contractual “trigger”, as it was put to me, to withdraw the borrowing but it seems to me that the likelihood of that occurring is highly speculative. I appreciate it is a matter for the Bank providing the loan but for my part I can hardly see why the commercial lender, who seems content up till now to provide borrowings based on adequate security and re‑payment to a substantial group of legal entities would now revoke what has been a profitable commercial agreement beneficial to the borrowers and customers in these circumstances. Furthermore I fail to see why a commercial lender would draw a distinction between, on the one hand, a customer who has pleaded guilty to the subject offending and has a formal order that the charge was found proved and a fine imposed without recording a conviction and, on the other hand, the same orders made where a conviction was recorded. I just do not see the distinction between the two in terms of the likelihood of the use of the financial trigger as it is called.
The Magistrate went on to say that he did not ignore the perceived risk of withdrawal of financial facilities but thought that the weight which could be attached to it was slight.
The Magistrate’s conclusion has not been shown to be wrong and, for what it is worth, I agree with it. In the submissions on the appeal, the appellant could not explain why Rabobank, acting reasonably, would choose not to renew funding because convictions had been recorded, but would take a different view if convictions were not recorded. There is no suggestion that the Department of Fisheries will, on the entry of convictions, revoke licence S207 which, no doubt, forms part of the security provided to Rabobank; John von Stanke did not depose in any detail to his discussion with the local manager of Rabobank; the extent of the knowledge or understanding of that manager of the subject offences is not known; there was no attempt to prove the general policies applied by Rabobank when one of its customers commits a regulatory offence in the course of its business; there was no evidence of who it is within Rabobank who may make such a decision; nor was there any evidence of the matters which such a person may take into account.
The Magistrate was entitled to apply commonsense and general experience in his evaluation of the limited material which the appellant chose to put before the Court.
In my opinion, no error has been shown in the Magistrate’s consideration of the potential impact of the recording of convictions on the appellant’s financial facilities.
Conclusion
For the reasons given above, none of the errors which the appellant attributes to the Magistrate have been made out. Accordingly, I dismiss the appeal.