Pastro v Director of Public Prosecutions (Commonwealth) No. Scciv-03-1

[2003] SASC 21

PASTRO v DIRECTOR OF PUBLIC PROSECUTIONS (CTH)
[2003] SASC 21

Magistrates Appeal:  Criminal

1. PERRY J.   (ex tempore)   The appellant appeals against the sentence imposed upon him following his plea of guilty in the Magistrates Court sitting at Adelaide to a charge laid under s 265(1)(b) of the Bankruptcy Act (1966) (Cth). Particulars of the charge as they appear on the information are that on or about 12 April 1996 at Adelaide and other places, the appellant failed to disclose to the Official Trustee in Bankruptcy a disposition of property made within a period of two years preceding the date when he became bankrupt.

2. The appellant was sentenced to imprisonment for nine months, with a direction that he be released after four and a half months on entering into a bond in the sum of $1,000 to be of good behaviour for two years. It is from that sentence that the appeal is brought.

3. The appellant is aged 67 years and is an old age pensioner. He migrated to Australia from Italy where he was born in 1956. He had trained as a tailor in Italy, but in Australia he worked in the main in more manual occupations. His schooling in Italy did not proceed beyond the most basic level. He speaks English but has difficulty reading it.

4. He married in New South Wales in 1975. He purchased a house there. The house was sold on 17 March 1995. From the proceeds of sale the appellant received $179,000.

5. He was declared bankrupt on 12 February 1996.

6. On about 12 April 1996 the appellant completed and signed a Statement of Affairs. One of the questions in the Statement of Affairs was “List all assets worth more than $1,000 sold, transferred, given away or otherwise disposed of by you in the last two years”. He answered that question “Nil”, failing to disclose the sale of the New South Wales property. It is the answer to that question which was the basis of the charge.

7. In his lengthy remarks on penalty, the sentencing magistrate addressed a number of matters which, in my view, were of marginal, if of any relevance, to the task at hand. He gave a lengthy discourse as to various business dealings in which the appellant participated with other family members, chiefly his brother Emilio. He then made various findings as to the proceeds of sale of the house in question.

8. The magistrate dealt with the submission by the appellant’s counsel that the appellant had applied his share of the proceeds of sale of the house towards gambling debts incurred at the Casino. He refers to what can only be described as unsatisfactory responses by the appellant to questions asked of him during the course of his Public Examination under s 81 of the Bankruptcy Act which took place on 18 February 1997 as to the destination of the moneys.

9. The 86-page transcript of the Public Examination was put before the magistrate. In effect, in answer to cross-examination the appellant said that he did not know where the money had gone. At other times he said it was applied to pay off debts, which he could not particularise. He could not state the name of any creditor that he had paid off.

10. The magistrate contrasts the assertion that he had paid off various creditors with the submission made by counsel that the moneys were paid at the Casino. The magistrate eventually rejected the proposition that the appellant had gambled the money away. He stated:

    “The money may have been disposed of in other ways but its not in my view possible to make an express view about it. The money may, as Mr Ford suggests, have been salted away. It may have been given to Emilio. I am simply not in a position to make a finding about it.”

11. Later he said:

    “The reality of the matter is that the creditors have been deprived of either the funds, $179,000 or alternatively the benefit of a proper explanation about the disposition of the funds. I expressly reject the proposition that the defendant has gambled this money. I am unable to make any further finding about its ultimate destination.”

12. Later in his remarks on penalty he returned to the same topic. He said:

    “The creditors in my view have been deprived of the benefit of either the money or an explanation. In any event the matter is grave.”

13. In my opinion, the approach of the magistrate, revealed in the passages to which I have referred and in the balance of his remarks on penalty, is erroneous. The appellant did not stand to be punished on the footing that either the creditors had been deprived of funds, or alternatively, as the magistrate put it, a proper explanation as to their destination.

14. However unsatisfactory might have been the answers given by the appellant on the occasion of his Public Examination, they were of marginal if any relevance to the charge. The charge was simply that the appellant failed to disclose the fact of the sale of the New South Wales property in his statement of affairs. The fact that he did not disclose the sale obviously did not impede the investigation into his affairs, as counsel appearing for the Official Trustee at the Public Examination was clearly in possession of information concerning the sale, and cross-examined the appellant about it at length. In that sense the creditors were not disadvantaged. Even if the appellant had referred to the sale in his Statement of Affairs, there is no reason to suppose that the unsatisfactory answers given on his Public Examination would have been any different. I emphasise that the appellant was not charged with giving false and unsatisfactory answers on his Public Examination.

15. The Statement of Affairs is a written document, a copy of which has been appended to an affidavit which has been put before me for the purposes of the appeal. Nowhere in his remarks on penalty does the magistrate refer to the circumstances in which the Statement of Affairs was signed by the appellant, and the circumstances in which he came to make the answers in it which appear in the statement.

16. The magistrate had before him a psychological report furnished by Dr Jack White. Dr White remarks that the appellant said that at the time of the execution of the Statement of Affairs, the appellant had help from another person with the forms, and he had no idea what he was doing. The appellant told Dr White that he “did not understand that what he was doing had been an offence but now realised the error of his ways and was pleading guilty”.

17. It appears from the affidavit of Mr Chiro, who was counsel for the appellant in the court below, that he submitted to the sentencing magistrate that the appellant was not able to fill in the form by himself. Having asked a few people for help, he found a friend who would help him. This friend would read out the questions and then write down the appellant’s answers in the form for him.

18. Mr Chiro goes on to depose to the fact he put to the magistrate that the appellant did not or could not fully understand all the questions, and further he thought that the question the subject of the charge only applied to property in South Australia. Mr Chiro further put to the magistrate that if the appellant had wanted to hide the sale of his New South Wales house and the net proceeds of such sale, he would not have deposited the proceeds in his bank account with the ANZ bank in South Australia near where he lived, which he in fact did.

19. It does not appear that that explanation given by Mr Chiro, then counsel for the appellant, to the learned sentencing magistrate, was challenged by counsel for the prosecution.

20. In those circumstances it seems to me that there is no good reason why the explanation given on behalf of the appellant should not be accepted. In my view, the error which the sentencing magistrate fell into is that not only did he fail to have regard to that explanation, but that the essential focus of his sentencing remarks was on matters which are not germane to the charge, namely the performance by the appellant on the occasion of his Public Examination.

21. The appeal should be allowed and the conviction and sentence imposed by the sentencing magistrate must be quashed.

    [AFTER HEARING COUNSEL AS TO PENALTY]

22. Mr Ford, counsel for the respondent, has assisted me in understanding the sentencing parameters applicable to the offence. Section 265(1)(b) of the Bankruptcy Act refers to a sentence of 12 months imprisonment. Under s 4AA and s 4B of the Crimes Act 1914 (Cth) an alternative to imprisonment is a fine of up to $6,600.

23. Having heard counsel as to the appellant’s financial circumstances, in my view, an appropriate fine in this case would be $500 in substitution for the sentence under appeal.

24. The appeal is allowed.

25. I quash the sentence under appeal, and substitute a fine of $500. I order that the respondent pay the appellant’s costs of and incidental to the appeal fixed at $165.