Kassem v The Queen

[2015] NSWDC 217

District Court

New South Wales

Medium Neutral Citation:	Kassem v R [2015] NSWDC 217
Hearing dates:	30 June 2015
Date of orders:	30 June 2015
Decision date:	30 June 2015
Jurisdiction:	Criminal
Before:	Neilson DCJ
Decision:	Sentences passed by Trad LCM at Sutherland Local Court on 14 April 2015 set aside  In respect of each of the 7 offences, without proceeding to conviction, appellant discharged upon his giving security in the sum of $1,000 by way of recognisance to be of good behaviour for a period of 2 years
Catchwords:	APPEAL – Severity appeal – Failing to deliver all books and records of a company in possession of a director to a liquidator
Legislation Cited:	Corporations Act 2001 (Cth) Crimes Act 1914 (Cth)
Category:	Principal judgment
Parties:	Ammar Steve Kassem (Appellant) Regina (Respondent)
Representation:	Mr I Todd (Appellant) Mr J Emmet (Respondent)
File Number(s):	2014/00354439; 2014/00354448; 2014/00354456; 2014/00354462; 2014/00354473; 2014/00354481; 2014/00354488
Publication restriction:	No
Decision under appeal	Court or tribunal: Local Court at Sutherland Jurisdiction: Criminal Date of Decision: 14 April 2015 Before: Trad LCM File Number(s): 2014/00354439 2014/00354448 2014/00354456 2014/00354462 2014/00354473 2014/00354481 2014/00354488

Judgment

1. HIS HONOUR: This is an appeal against the severity of a sentence passed by Magistrate Trad sitting in the Local Court at Sutherland on 14 April 2015. The appellant was charged with seven offences contrary to s 530A of the Corporations Act 2001 of the Commonwealth of Australia. The maximum penalty for that offence is a fine of $8,500 and/or imprisonment for 12 months. The offence can be shortly described as failing to deliver all books and records of a company in the possession of a director of a company to a liquidator.

2. The appellant had, after completing his university studies, commenced a business which can be shortly described as “Pram Warehouse”. The primary vehicle for carrying on that business was Babysave Pty Limited which had been incorporated in the State of Queensland. There were a number of related or subsidiary companies namely Pram Warehouse Ballarat Pty Limited, Pram Warehouse Ipswich Pty Limited, Pram Warehouse Loganholme Pty Limited, Pram Warehouse Morayfield Pty Limited, Pram Warehouse Northside Pty Limited, Pram Warehouse Robina Pty Limited and Pram Warehouse Toowoomba Pty Limited. On 29 May 2004 a liquidator was appointed to each of the seven Pram Warehouse companies which I have just described. The liquidator was Amanda Arnautovic of Jirsch Sutherland. Ms Arnautovic was appointed pursuant to a creditor’s voluntary winding up of each of the seven Pram Warehouse companies, that voluntary winding up being sought by the appellant himself. The appellant told me on oath the reason for appointing the liquidator was to rationalise the company structure of his business. At the time of the appointment of the liquidator the appellant was the sole director of each of the seven Pram Warehouse companies.

3. On 2 June 2014 notices were sent to the appellant at his residential address from the office of the liquidator requiring the completion of a report as to the affairs of each of the companies and requiring him to deliver up the company books and records. That notice was not complied with. Because of the non-forwarding of the records of each of the companies to the liquidator, a second notice was sent to the appellant by the liquidator on 9 July 2014. Again the appellant did not comply with that notice or perhaps one should say the demand contained in the notice. On 23 September 2014 a warning letter was sent by ASIC to the appellant that described the appellant’s failure to provide the required documents to the liquidator and the legal consequences of his not having done so. On 20 October 2014 a further warning letter was issued by ASIC to the appellant.

4. On 25 October 2014 the appellant forwarded an e-mail to the liquidator. It attached the MYOB files relating to the “service companies” by which I infer the appellant meant the seven Pram Warehouse companies. The appellant told the liquidator that if she had any further inquiry that the liquidator should contact his accountant, Mr Lloyd Agha, to whom a copy of the e-mail was also sent.

5. On 18 November 2014 the appellant was served with a copy of a court attendance notice in respect of each of the seven companies which court attendance notices contained a charge pursuant to s 530A(1) of the Corporations Act 2001. Those court attendance notices were, according to the file, not actually filed in the Local Court at Sutherland until 28 November 2014 and the filing fees were not paid until 1 December 2014. The court attendance notices were first returnable on 9 December 2014 when they were adjourned until 10 February 2015. On that occasion the accused pleaded guilty to each of the seven charges and eventually on 14 April 2014 was sentenced by Magistrate Trad.

6. Her Honour recorded a conviction that under s 20(1)(a) of the Crimes Act 1914 of the Commonwealth and ordered that the appellant be released without passing sentence on condition that he give security in the amount of $1,000 to comply with a condition to be of good behaviour for a period of two years, that is a recognisance to be of good behaviour pursuant to s 20(1)(a) of the Crimes Act 1914. The appellant asks that those orders be set aside and be replaced by a formal order under s 19 of the Crimes Act 1914 of the Commonwealth. In the meantime the appellant sent on 6 February 2015 to the liquidator of the seven Pram Warehouse companies a further e-mail which explained that when the landlord entered the premises of the Pram Warehouse’s Greenacre store the appellant was denied access to the records which had been kept on those premises. The appellant told me that the landlord entered into possession of the Greenacre premises in either late October or early November 2014.

7. The real question that concerns me, and no doubt would have concerned the learned Magistrate, was why the appellant did not comply with the notices which had been sent to him by the liquidator on 2 June and 9 July 2014 and the notices sent by ASIC on 23 September and 20 October 2014. Clearly there was an attempt to comply with the last notice on 25 October 2014. The appellant told me, in shorthand fashion, that what happened after he placed the seven Pram Warehouse companies in voluntary winding up was that such voluntary winding up was noted against the company names on, for example, the Internet, that he was then besieged by enquiries by employees, by suppliers, by landlords, and that his business fell away because customers did not wish to deal with companies in liquidation and suppliers also called in debts owed to them by the Pram Warehouse companies and as a result liquidity problems arose, the appellant became unable to pay rent for a number of the stores which were forced to close and, for example, landlords entered into possession when rents remained unpaid.

8. The appellant referred to this as a “massive catastrophe” which changed what had been a profitable business into one that failed and which led to the appellant losing the benefit of his investment of time and labour in those companies over a period of some five to seven years. When actively managing the companies the appellant was resident in Queensland but returned to live in Punchbowl in 2011 in order to pursue his career in the law. His original tertiary qualifications were in commerce and law. Since March 2013 the appellant has been practising law as a solicitor employed as a clerk with a firm at Marrickville dealing primarily in family law and wills and estates.

9. I accept that there were mitigating circumstances which prevented the appellant giving the attention which he should have given to the notices of 2 June, 9 July, 23 September and 20 October 2014. The appellant did not seek to raise a valid excuse to defend himself from the charges brought against him by the Australian Securities and Investments Commission but I accept there were mitigating circumstances. The appellant otherwise came before the Local Court and comes before this Court as a man of prior good character. There are certainly circumstances here which justify the Court in approaching the matter under s 19B of the Crimes Act 1914, they are the character and antecedents of the appellant, a man of prior good character, the mitigating or extenuating circumstances in which he found himself when required to comply with the notices that had been served upon him.

10. In the circumstances I believe that I should set aside the sentences passed by Magistrate Trad on 14 April 2015. In respect of each of the seven offences I, without proceedings to conviction, discharge the appellant upon his giving security in the sum of $1,000 by way of recognisance to be of good behaviour for a period of two years.

11. Any other orders sought.

12. TODD: No your Honour.

13. EMMETT: No your Honour.

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Decision last updated: 25 September 2015