R v Abouchabake

[2024] NSWDC 42

District Court

New South Wales

Medium Neutral Citation:

R v Abouchabake [2024] NSWDC 42

Hearing dates:

22 February 2024

Date of orders:

1 March 2024

Decision date:

01 March 2024

Jurisdiction:

Criminal

Before:

Newlinds SC DCJ

Decision:

See [74-77]

Catchwords:

CRIME – Bankruptcy Act offences – disposing of assets with intent – defraud creditors – purpose of bankruptcy regime – general deterrence – important for public confidence in bankruptcy law – first offence – strong subjective case

Legislation Cited:

Bankruptcy Act 1966 (Cth)

Crimes Act 1914 (Cth)

Crimes (Sentencing Procedure) Act 1999 (NSW)

Judiciary Act1903 (Cth)

Cases Cited:

DPP (Cth) v Thomas [2016] VSCA 237

Hili v The Queen (2010) 242 CLR 520

JM v R [2014] NSWCCA 297

Paragalli v R [2006] NSWCCA 87

R v Bibaoui [1997] 2 VR 600

Stipkovich v R [2018] WASCA 63

Weininger v R (2003) 212 CLR 629

Xiao v The Queen [2018] NSWCCA 4

Category:

Sentence

Parties:

Commonwealth Director of Public Prosecutions (Crown)
Joseph Abouchabake (Offender)

Representation:

Mr L Fomiatti, solicitor (Crown)
Mr R Hanrahan, counsel (Offender)

File Number(s):

2022/221356

JUDGMENT

INTRODUCTION

The charges

1. The offender has pleaded guilty to and is to be sentenced for the following offences:

Count	Offence	Description	Maximum penalty
1	Section 266(3), Bankruptcy Act 1966 (Cth)	Between 9 May and 11 October 2018, the offender disposed of $567,041 with intent to defraud creditors within 12 months of presentation of a petition for bankruptcy	5 years imprisonment and/or 300 penalty units
2	Section 266(3), Bankruptcy Act 1966 (Cth)	Between 7 October and 27 November 2018, the offender disposed of $20,500 with intent to defraud creditors within 12 months of presentation of a petition for bankruptcy	5 years imprisonment and/or 300 penalty units
Section 16BA schedule	Section 267(2) Bankruptcy Act 1966 (Cth)	On 26 November 2018, the offender knowingly made a false declaration in a statement of affairs	12 months imprisonment and/or 60 penalty units

Penalties

2. The maximum penalty applicable to each of Counts 1 and 2 (s 266(3)) is imprisonment for five years or pecuniary penalty of $63,000 (300 penalty units) or both.

3. The maximum penalty applicable to the s 16BA matter (s 267(2)) is imprisonment for 12 months or pecuniary penalty of $12,600 (60 penalty units) or both.

Procedural history

4. The procedural history is as follows:

1. The Court Attendance Notice (CAN) was issued on 7 May 2021. Service of the CAN was unsuccessful and a first instance warrant was issued by the Downing Centre Local Court on 28 July 2022. The offender presented himself voluntarily to police and appeared in court on 6 September 2022.

2. On 26 April 2023, the matter was committed to the Downing Centre District Court for trial.

3. On 9 August 2023, prior to the matter being set down for trial, the offender signed the statement of agreed facts, indicating that he would accept an offer to plead guilty to the two charges on the indictment, with the summary charge contrary to s 267(2) Bankruptcy Act 1966 being placed on a s 16BA schedule.

4. On 22 February 2024 the Offender pleaded guilty to Counts 1 and 2 before me and indicated he wished to have the s 267(2) matter taken into account.

Time in custody

5. The offender has not spent any time in custody.

THE FACTS

6. The parties have agreed as to detailed facts which I will shortly set out.

7. I find, based on those agreed facts and the inferences I draw from them, that what has occurred here is that in 2018 the offender, who previously had led a blame-free and constructive life, found himself in the midst of a catastrophic marriage breakdown involving allegations of criminal conduct going both ways. He was the subject of a serious assault by his former wife's new partner. His business as a tyre retailer collapsed. He was being sued by a number of creditors. He was anxious and depressed and no doubt very angry at his wife. Family Court proceedings had either commenced or were threatened. The matrimonial home had been sold. His wife obtained an injunction from the New South Wales Supreme Court freezing the sale proceeds by requiring them to be held in a specific account, pending resolution of the Family Court proceedings.

8. In direct breach of that order and with the intention to make sure the money was not available to his creditors generally (most likely this intent focused on his wife with little thought of the collateral damage to other creditors), he drew down $561,041.00 from the account, which he says has all been gambled away. That assertion is not corroborated by any other evidence. I am sceptical as to what happened to the money but accept it has been dissipated. It is the dissipation of that money which is the subject of Count 1.

9. In October 2018 the offender drew down from two credit cards with the ANZ bank the cash sum of $20,500 which he then disposed of, again with the intention of defrauding his creditors. It is the dissipation of that money which is the subject of Count 2.

10. The offender filed his own petition for bankruptcy on 27 November 2018 and the matters to be taken account pursuant to s 16BA concern false statements in a statement of affairs he provided to his trustee in bankruptcy.

11. The detailed agreed facts are as follows:

Bridgestone debt

1. The defendant is a mechanic by trade. In 2013, he set up Evolution Autos Pty Ltd (ACN 161842664) ("Evolution Autos") as sole director and entered into a franchise agreement with Bridgestone Australia Pty Ltd ("Bridgestone Australia") for a tyre a ci auto services business.

After four years, the franchise agreement was terminated. Bridgestone Australia issued an invoice for $81,403.25 to Evolution Autos for its trading debt. Evolution Autos did not pay the invoice and on 21 December 2017, Bridgestone Australia commenced legal proceedings against Evolution Autos and the defendant as guarantor. In April 2018, the defendant filed a defence and counterclaim in the proceedings.

Marriage breakdown and sale of Mount Lewis property

2. In 2011, the defendant purchased 34 Harold St, Mount Lewis NSW ("the Mount Lewis property"). He and his wife, Tammy Abouchabake ("Mrs Abouchabake") lived there with their 2 children, with Mrs Abouchabake's adult son Nicholas from her prior marriage, and her father (now deceased). The defendant and Mrs Abouchabake separated on a final basis on the 29 October 2017.

3. On 30 April 2018, the defendant sold the Mount Lewis property for $1,505,000. Upon the exchange of contracts, a deposit of $72,250 was released into the defendant's personal ANZ savings account ending 5344 ("ANZ savings account").

4. Mrs Abouchabake initiated legal proceedings in the NSW Supreme Court in relation to the sale. Consent orders were made on 14 June 2018 that upon settlement, the whole of the sale proceeds were to be invested in a controlled monies account, pending agreement between the parties or an order of the Family Court of Australia.

5. Settlement took place on 17 July 2018. On 19 July 2018, the defendant opened a new savings account with Delphi Bank ending 1001 ("Delphi Bank Account"). A cheque was made out to the defendant for $575,430.05 by his solicitor, being the balance of funds held in trust from the sale proceeds after legal fees and disbursements.

6. Despite the court order requiring the funds to be held in a controlled monies account, the defendant immediately deposited the $575,430.05 into his Delphi Bank Account.

Count 1 - Pre-bankruptcy disposal of funds held in savings accounts

7. In 2018, the defendant held savings accounts with three banks, each in his name:

1. The ANZ Savings Account;

2. The Delphi Bank Savings Account; and

3. A Bank of Sydney Everyday Saver Account ending 9831 ("Bank of Sydney Account").

8. Between 9 May 2018 to 11 October 2018, the defendant transferred funds between his three bank accounts and, across a series of 51 transactions, made large, unexplained cash withdrawals from each account, totalling $567,041. The transactions are described in further detail below.

9. The defendant's earliest cash withdrawal on 9 May 2018 occurred six months and 19 days before he filed for bankruptcy. His last cash withdrawal on 11 October 2018 occurred one month and 17 days before he filed for bankruptcy.

Disposal of $186,835 from ANZ Savings Account

10. Across 15 transactions from 9 May 2018 to 28 September 2018, the defendant withdrew $186,835 in cash from his ANZ Savings Account. A final pre-bankruptcy withdrawal of $300 reduced his account balance to $19.01.

Disposal of $265,850 from Delphi Bank Account

11. Across 18 transactions from 23 July 2018 to 8 October 2018, the defendant withdrew $265,850.00 in cash from his Delphi Bank Account. A final pre-bankruptcy withdrawal of $850.00 reduced his account balance to $59.75.

Disposal of $114,356 from Bank of Sydney Account

12. Across 18 transactions from 24 July 2018 to 11 October 2018, the defendant withdrew $114,356 in cash from his Bank of Sydney Account. A final pre-bankruptcy withdrawal of $150 brought his account balance to $8.27.

Count 2 - Pre-bankruptcy disposal of funds borrowed on credit

13. In 2018, the defendant held two credit accounts in his name, an ANZ Platinum account ending 8326 ("ANZ Platinum Account") and an ANZ Low Rate account ending 1006 ("ANZ Low Rate Account").

Disposal of borrowed funds from ANZ Platinum Account

14. The ANZ Platinum Account had a credit limit of $8,000.00. As of 1 October 2018, the defendant had $238.47 borrowed on the account. On 10 and 11 October 2018, seven weeks before his bankruptcy, the defendant borrowed a further $6,000.00 by way of two cash withdrawals. As at the date of bankruptcy, he owed $6,561.70 on the account. The account was cancelled on 10 January 2019.

Disposal of borrowed funds from ANZ Low Rate Account

15. The ANZ Low Rate Account had a credit limit of $16,000. As of 28 September 2018, the defendant had $56.98 borrowed on the account. In the seven weeks before bankruptcy, the defendant borrowed a further $14,500 by way of five cash withdrawals. As at the date of bankruptcy, he owed $15,495.78 on the account. The account was cancelled on 28 February 2019.

Bankruptcy

Pre-bankruptcy conference

16. In November 2018, the defendant was referred to Stratogen Clout Chartered Accountants ("Stratogen Clout") for assistance in relation to bankruptcy. On 26 November 2018, the defendant met with Hugh Ramsay, who was then the Principal of Stratogen Clout and a Registered Trustee in bankruptcy. During their meeting, Mr Ramsay asked the defendant about the source of the $575,000 banked into his personal bank account in July 2018. The

17. The defendant said it was the surplus from the sale of the Harold Street house and that the house was his because it was in his name and he worked all his life to pay for it.

18. Mr Ramsay asked about the mechanic's business, Evolution Autos. The defendant stated:

1. that he owned and operated this business for years until his wife got booked for speeding in the harbour tunnel and lost him his licence. She had attributed a penalty notice to him whilst he had been working and then signed a declaration concerning the matter without his knowledge;

2. that together with Bridgestone suing him for $90,000, this was the end of the business;

3. after the loss of his business, experiencing his wife with another man, the trashing of his house and him being bashed, repeatedly to the head by his former wife and step son, he suffered severe headaches and mental problems;

4. his head was all over the place and he "gambled the lot at the casino";

5. he had nothing left and nowhere to live;

6. there is a record of him collapsing at the casino.

19. The Casino was the Star City casino, in Pyrmont, NSW.

20. The defendant confirmed that the Family Court proceedings were still on foot. Mr Ramsay asked whether he was concerned that the $575,000 should form part of those proceedings. The defendant replied, "Yes, but what can I do?" Mr Ramsay enquired whether the defendant could prove that he gambled the funds. The defendant said "No, not all of it. I collapsed at the casino. I was not in control of myself'.

21. Mr Ramsay asked for further details in relation to Bridgestone Australia. The defendant stated:

1. as part of his motor mechanic business, he had carried on and operated a Bridgestone franchise (from premises 49 Canterbury Road, Bankstown);

2. Bridgestone started selling tyres to the Bob Jane T Marts (from premises at 164 Canterbury Road Bankstown) less than 1 mile up the road from his shop, for less than they were selling the tyres to his business. The defendant could not compete;

3. Bob Jayne was able to sell Bridgestone tyres at retail prices for less than the defendant's buy price, because of the quantity discounts that Bridgestone were offering Bob Jayne;

4. Bridgestone claimed that the defendant owed them $90,000 for tyres and that they were suing him; and

5. the defendant was not sure where the proceedings were currently up to, but he had filed a cross claim and in which he alleged that Bridgestone corporate was in breach of its duties of good faith under the franchise agreement.

22. The defendant confirmed to Mr Ramsay that he had gambled all the sale proceeds and had no cash or funds left from the proceeds of sale.

23. Prior to his meeting with him in November 2018, Mr Ramsay had requested that the defendant make available approximately $10,000 for the payment of fee in the administration of his estate.

24. At the meeting, Mr Ramsay advised the defendant of his responsibilities and obligations under the Bankruptcy Act. The defendant paid Mr Ramsay $3,000 in cash which he handed to Mr Ramsay as a voluntary contribution towards the cost of administration, in exchange for accepting the appointment.

Debtor's Petition and Statement of Affairs

25. On 26 November 2018, the defendant completed and signed a Debtor's Petition as an individual debtor. He was assisted by Stratogen Clout to complete his Statement of Affairs. He signed the document on completion, declaring the following details to be correct:

1. he had a solicitor;

2. he was currently involved in family law proceedings;

3. he was involved in a legal dispute with Bridgestone in the District Court of South Australia (PROC.DCCIV18/711);

4. he has received nil income over the last 12 months;

5. he was in the process of applying for a Government Sickness Benefit/Newstart Allowance;

6. his last employment was 9 months previously as a mechanic;

7. the main cause of his insolvency was domestic discord or relationship breakdown;

8. he had obtained information about bankruptcy and alternatives from his solicitor;

9. he had never previously presented a declaration of intention to present a debtor's petition, proposed or entered into a debt agreement or a personal insolvency agreement or become bankrupt;

10. he had no fixed address at the time;

11. he had $50 in cash and $45.77 in the bank;

12. l)he held three bank accounts being the Delphi Bank Account, the ANZ Savings Account and the Bank of Sydney Account;

13. he owned a trailer worth approximately $2,500 but no other vehicles;

14. he was owed $300,000.00 by Bridgestone subject to legal proceedings;

15. in July 2018, he sold his Mount Lewis property for $1,505,000 and received net proceeds of $560,000;

16. assets were in the possession of his former wife Tammy Abouchabake, being household furniture and affects to the value of $250,000, and property in Greece to the value of $250,000;

17. he had no secured creditors;

18. he had not been in business as a sole trader or in partnership at any time in the last 5 years;

19. he was the director of Evolution Autos Pty Ltd which had been deregistered on 3 June 2018.

26. At item 40 of his Statement of Affairs, the defendant listed 10 unsecured creditors to whom he owed a total of $41,263.49.

27. The defendant signed the Statement of Affairs knowing that that the following particulars were incorrect:

1. That he had never previously presented a declaration of intention to present a debtor's petition or become bankrupt. On 23 May 1994, at 32 years of age, the defendant became bankrupt by debtor's petition under Administration Number NSW 1127/94/0. He was discharged from this bankruptcy on 24 May 1997; and

2. That from the sale of 34 Harold Street, Mount Lewis NSW he had received net proceeds of $560,000. In fact, he had received $647,680.05.

Statement to accompany Statement of Affairs

28. The defendant prepared a 21-page 'Statement to Accompany Statement of Affairs' which he signed on 26 November 2018. Relevant to the Mount Lewis sale proceeds, the defendant claimed to have no recollection of how he disposed of the funds due to memory loss sustained during from bashing that was captured on camera on 6 April 2018, stating:

“Since I was bashed repeatedly in the head, I have suffered headaches and memory loss... / went to the doctors to get scans done on my brain and on my head. This has been the most difficult time for me...I have no recollection now as to how I spent all of the money that came from the sale of my home and I suffer memory loss”.

Declaration of bankruptcy

29. On 27 November 2018, Stratogen Clout filed the defendant's Debtor's Petition and the Statement of Affairs with the Official Receiver in Bankruptcy. The Official Receiver accepted the petition on 28 November 2018 and the defendant became a bankrupt under Administration Number NSW 4550 of 2018/4. Mr Ramsay was appointed trustee of the bankrupt estate.

Bankruptcy Administration

30. Upon being appointed trustee, Mr Ramsay took steps to engage with the defendant for the purposes of investigating his financial affairs and administering his estate. Letters sent by Mr Ramsay to the defendant's listed postal address were not responded to. His mobile phone number was disconnected and his email address was no longer in use.

31. The defendant's solicitor, Trevor Hall, advised Mr Ramsay that the defendant had no permanent address as he was fearful for his safety. Mr Hall advised this fear arose from the defendant's belief that the son of the defendant's ex-wife (his stepson) has a history of illegal handling or use of firearms.

32. In the course of investigating the defendant's financial affairs, Mr Ramsay contacted The Star Entertainment Group ("the Star") seeking details of the defendant's casino membership and gambling history. Business records held by The Star show that between July 2018 and October 2018, the defendant attended The Star Sydney casino on seven occasions and lost a total of $1,763.15. On each visit, the defendant was at the casino for less than an hour and the largest sum of money he lost during a single visit was $550.

33. On 18 April 2019, Mr Ramsay filed a Notice of Objection with the Official Receiver, extending the period of the defendant's bankruptcy to eight years, based on the defendant's failure to provide up-to-date contact details and his failure to adequately explain how he disposed of the proceeds from the sale of the Mount Lewis property.

Interview

34. On 3 September 2020, AFSA sent the defendant a letter to his last known address notifying him of the allegations and offering him the opportunity to participate in an interview. The defendant did not respond to the offer.

35. The defendant surrendered himself to police at Burwood on 6 September 2022, having become aware of the matters now before the Court. The defendant seeks to enter a plea of guilty to the charges, and with the entry of the plea, seeks also to convey his apologies to the authorities and to the Court for the trouble and inconvenience to which they have been put.

SECTION 16A(2) CRIMES ACT FACTORS

12. Sentencing for Commonwealth offences is governed by Part 1B Crimes Act 1914 (Cth) (“the Act”). In addition to any other relevant factors, the court must take into account the sentencing factors set out in s 16A that are relevant and known to the court: Weininger v R (2003) 212 CLR 629. The parties have agreed as to which of those factors are relevant in this case. They are the nature and circumstances of the offence, the s 16BA matter, general and specific deterrence, the guilty plea and remorse and contrition, and the character and antecedents of the offender. I will deal with each in turn.

Nature and circumstances: s 16A(2)(a)

13. In relation to Counts 1 and 2, the quantum is approaching $600,000.

14. It is entirely unclear precisely what the quantum of creditors of the offender’s bankrupt estate is. However, one thing that is certain is that they exceed considerably the amount disclosed by the offender in his statement of affairs.

15. The statement of affairs filed by the offender when he filed for bankruptcy disclosed $41,263 in creditors which included his former solicitor, American Express, a real estate agent, Westpac bank and the Local Court of New South Wales.

16. Bridgestone Australia Ltd was included as a creditor at $1.00.

17. This disclosure was not correct in at least a number of ways.

18. The outstanding debt to the ANZ bank resulting from the use of the credit card which is the subject of Count 2 was not included. Nor is any claim by the offender’s former wife included. As far as the claim by Bridgestone Australia is concerned, all I know is that at the date of bankruptcy Bridgestone was suing the offender and his company for money due pursuant to unpaid invoices guaranteed by the offender amounting to about $81,000 in a court in South Australia and the offender had filed a cross claim.

19. Those proceedings, for obvious reasons, have not continued post-bankruptcy.

20. I am not in a position to make any assessment as to the strength or otherwise of the Bridgestone claim nor do I know anything about the former wife's potential matrimonial claim other than the Supreme Court of New South Wales thought it appropriate to put in place an injunction securing nearly $600,000. I think it is a reasonable inference from that fact that the potential claim of the wife was considered to be at least that.

21. Accordingly, I proceed upon the basis that the unpaid creditors of the offender’s bankrupt estate are substantial, probably in the vicinity of many hundreds of thousands of dollars, perhaps as much as $700,000.

22. At the very least, the filing of the debtor’s petition by the offender in circumstances where he seems to have effectively denuded himself of all assets, has deprived his former spouse and Bridgestone of the ability to make good the claims they may have against his estate.

23. It is important to emphasise that the monies the subject of Count 1 were obtained by the offender in direct breach of an order of the Supreme Court of New South Wales. Whilst I am not punishing the offender for breach of that order, I do think that it is a very relevant fact going to the objective seriousness of the offence. The starting point of the relevant conduct, indeed the only way he was able to dissipate the money at all, was a serious breach of a court order put in place, no doubt to prevent the very conduct that then occurred.

24. The offender has yet to advise the trustee of how the funds were disposed of other than a series of very vague allegations that he “gambled the lot away”.

25. As to the offender’s motive it seems to me clear enough, from the elements of the offence to which he has pleaded guilty and the agreed facts, that he was motivated by a desire to himself receive some short-term financial gain but perhaps more importantly was almost certainly motivated by a desire to cause direct financial harm to some if not all of his creditors, most likely his wife. He did this by removing from the available pool of assets for distribution to creditors the best part of $600,000, leaving, for all intents and purposes, nothing.

26. In all the circumstances I have concluded that the offending the subject of Counts 1 and 2, but in particular Count 1, is towards the higher end of seriousness for these types of offences. If I had to place that objective seriousness on a notional scale I would say it was somewhere well above the mid-range perhaps towards the top of the range.

Other offence to be taken into account: s 16BA

27. Section 16BA of the Act enables other federal offences to be taken into account when sentencing a federal offender. The offender is not to be punished for the scheduled offence nor is this offence to be regarded as an offence for which he has been convicted. My focus must be on imposing a sentence for the principal offences. The nature and seriousness of the s 16BA offence is a relevant consideration in the assessment of the gravity of the whole course of conduct and the need for personal deterrence. This may increase the penalty imposed for the principal offence or attract a sentence of a more serious type. There is no requirement to quantify the effect.

28. As to the objective seriousness of the s 16BA offence the offender understated the amounts of the proceeds received from the sale of the matrimonial home and failed to disclose a number of important matters to his trustee in bankruptcy all of which must have been known to him and can be taken to be deliberate. Again, I consider the s 16BA offences to be somewhere around the mid-range of seriousness for offences of this kind. Insofar as the quantum of the proceeds of sale of the matrimonial home’s non-disclosure is concerned, that understatement, whilst not significant, is directly linked to the conduct the subject of Count 1, and forms part of the overall criminality of that offence.

29. I regard the s 16BA offences as elevating my assessment of the overall gravity of the offending the subject of the charges before me. This has the consequence, in my mind, of pushing the objective seriousness of Count 1 even higher up the notional scale.

General deterrence: section 16A(2)(j)

30. The regime set up by the bankruptcy legislation is extremely important to our society. It is not only important to individuals who find themselves unable to pay their debts but also to the economy generally including creditors.

31. The regime allows people who find themselves insolvent to “wipe the slate clean" and therefore economically start again. It also ensures that creditors of insolvents are treated as between themselves fairly in that they each share pro-rata in whatever is left of the estate of the insolvent person.

32. Without a bankruptcy regime society would be driven back to the days of debtors’ prisons where people’s lives were often destroyed as a result of their inability to pay their debts, yet at the same time creditors were left unpaid.

33. The bankruptcy regime acknowledges that very often a person's insolvency occurs through no particular fault of their own and is but a unfortunate consequence of the operation of a market economy.

34. That all being said the bankruptcy regime can be abused. It is imperative that bankrupts, including insolvent people shortly to become bankrupt, comply with the bankruptcy law. The provisions which make it a crime for people to dispose of assets in a period shortly before going bankrupt with the intention of defrauding creditors are critical to its operation and also to public confidence in the process. In those circumstances what is effectively happening (or how it would be seen in equity) is that even though a person is dealing with their own assets they are, by their conduct, actually stealing from creditors’ assets which should be available to be divided fairly between creditors.

35. Bankruptcy is in fact a compassionate release mechanism the compromises creditors rights to receive payment of what they would otherwise be legally entitled to so that debtors experiencing financial distress are released from most of their debts and can make a fresh start. It follows that a key purpose of all of the Bankruptcy Act offences but in particular the ones I am dealing with is to deter bankrupts from putting assets which would otherwise be available to creditors beyond their reach. Such conduct completely subverts the system and as I have said deprives creditors of money that they are legally entitled to.

36. Compliance by bankrupts with their obligations under the Bankruptcy Act is essential in supporting confidence in the Bankruptcy Act and has consequential important consequences for the economy. In 2010 the Commonwealth Parliament increased the penalties for the offences before me from three years to six years. It was made clear in the explanatory memorandum with those amendments that the Parliament wished to recognise the seriousness with which breaches of what is now s 266 are to be treated.

37. What all that means is general deterrence in relation to offences arising under the Bankruptcy Act and in particular, the offences with which I am dealing, must be a weighty matter. It is necessary that the general public understand the breaches of the Bankruptcy Act will, if they come to the attention of the courts, be treated as serious crimes.

38. Moreover, it is notorious that conduct of the type as is alleged in this case often occurs. All too often it goes unpunished for reasons including that it is difficult to identify and prove such breaches of the Bankruptcy Act.

39. To sum up, as Sully J said in Paragalli v R [2006] NSWCCA 87 at [23]:

“Deterrence, both general and personal, but especially general deterrence, was a significant factor in aid of maintaining the integrity of the law of bankruptcy without which there would be serious disadvantage of various commercial, economic and social kinds.”

40. For all those reasons, I consider that general deterrence is an important factor on which I will place significant weight.

Specific deterrence

41. I am satisfied that the extreme economic and personal circumstances under which the offender committed the offences were the cause of his offending. Those circumstances being the catastrophic marital breakdown, ongoing violence and court cases consequential on matrimonial disputes, a dispute with his wife about the matrimonial home, the failure of his business and as might be expected the anxiety and depression thereby caused are very unlikely to re-occur.

42. I am satisfied, notwithstanding that the offender chose not to give any direct evidence before me, that the very experience of being charged with these offences and brought before the court (leaving aside any penalty which I may impose) has been salutary.

43. Whilst I give specific deterrence some weight, as I have said, I think it is very unlikely that the offender will reoffend in the circumstances. The sentence assessment report suggests a medium/low risk of reoffending. I think that overstates things. He comes with glowing references as to his character and no relevant history of criminal conduct. The more important factor is general deterrence for the reasons I have explained.

Guilty plea and whether contrition demonstrated by reparation or otherwise

44. A discount for a plea of guilty to a federal offence may be given on the basis of both subjective factors, namely acceptance of responsibility, or a willingness to facilitate the course of justice and separately to those factors the utilitarian value of the plea in avoiding a contested trial: DPP (Cth) v Thomas [2016] VSCA 237 and Xiao v The Queen [2018] NSWCCA 4 [277–8].

45. As to timing, the plea was entered after the matter was committed for trial but before the trial date had been set. The Crown accepts that the offender's guilty plea is demonstrative of some remorse and carries utilitarian value. I agree with that. However, the weight to be given to this is tempered by the late timing of the plea.

46. The offender has submitted that the plea of guilty should be given significant weight because, it was suggested, that the Crown case was a weak case and might not have succeeded at trial.

47. Having reviewed the facts as I understand them to be, and without being definitive, I am certainly not able to conclude that the Crown's case was weak. My own view is that it had more than reasonable prospects of succeeding. The only area of real contest would have concerned the element of intent. In circumstances where, at least in relation to Count 1, the monies had been obtained in direct and conscious breach of a Supreme Court order, I would have thought that an inference of relevant intention in favour of the Crown was readily available, if not close to inevitable.

48. Accordingly, I do not accept that the plea should be given any greater weight because of the suggested weakness in the Crown case.

49. The offender has made no reparations to any creditor, has been unable to identify where the money went, and whilst undoubtedly he is very upset and concerned by the fact that he has been charged with these offences and is before me for sentencing, the information I have in particular in the sentencing assessment report dated 14 February 2024 indicates that he has very limited insight into the offending.

50. In all the circumstances, whilst I take the guilty plea into account, I do not think the offender has shown over and above that any real contrition remorse or insight into the offending. To put it bluntly, I do not think he appreciates why what he did was wrong at all.

Character and antecedent: s 16A(2)(m)

51. The offender presents with a strong subjective case, leaving to one side his lack of contrition.

52. The offender is now 62 years old and was 57 at the time of the offending. He has no relevant criminal history other than common assault in contravention of an apprehended violence order in 2018, which all arose out of his marriage breakdown. I put those to one side and approach the matter that the offender is, other than the offending before me, of good character. He has put before me a number of references to that effect which I accept. I consider this a matter to be given significant weight.

53. The offender has placed great emphasis in his submissions before me on his current medical condition which, I think it is fair to say, is significantly worse than an average 62-year-old. He suffers from diabetes, hypertension, high cholesterol, an enlarged prostate, some form of heart disease and anxiety and depression.

54. I have no doubt that any period of full-time incarceration will, because of all the offender’s health conditions, be more significantly more onerous than it would be for others. I give that matter significant weight.

55. I accept, as I have said, that the circumstances under which the offender committed these offences were such as to put him under extreme pressure and are the cause of his offending. Accordingly, I do think that the offending was wholly inconsistent with his character and, for reasons I have explained, is unlikely to re-occur.

56. It was put to me that the offender has been subject to extra-curial form of punishment being the extension of his period of bankruptcy in these proceedings and that should be taken into account when exercising the sentencing discretion. I do not accept that submission. The offender’s bankruptcy has been extended because of his alleged continued non-cooperation with his trustee, not because of the conduct that is before me. I do not accept that that the extension of his bankruptcy, which of course is not intended to be a punishment but is rather to ensure that the mechanisms under the Bankruptcy Act can be properly implemented, has any relevance at all to the exercise before me.

GENERAL PRINCIPLES

57. The court must not pass a sentence of imprisonment unless, after having considered all other available sentences the court is satisfied that no other sentence is appropriate in all circumstances of the case: s 17A(1) of the Act.

58. The court may also impose terms of imprisonment that order the offender be released forthwith under s 20(1)(b) of the Act, however, the first and essential question is whether a term of imprisonment is the only appropriate sentence. If a court sentences an offender to imprisonment for one or more of the offences, the court must direct when each sentence commences: s 19(2). It follows from that the court cannot order only that the sentences be "concurrent" or “cumulative". If the court finds that two or more sentences should be concurrent the court should direct that they commence on the same day. If the court finds two or more sentences should be cumulative, the court can order that one of those sentences shall commence immediately upon the end of the other sentence. Partial concurrence can be achieved by ordering that the latter sentence commences on the day prior to the end of the sentence.

59. Where a court sentences an offender for more than one offence the overall sentence must be “just and appropriate" to the totality of the offending behaviour. The Crown has submitted the given the separate and distinct criminality involved in each of the two offences it would be appropriate for there to be a degree of accumulation of the sentence.

60. Whilst s 4K(4) of the Act does not apply here: R v Bibaoui [1997] 2 VR 600, it has been held that s 53A of the Crimes (Sentencing Procedure) Act 1999 (NSW) is “picked up” by s 68 of the Judiciary Act1903 (Cth) and the principles explained in JM v R [2014] NSWCCA 297 at [39] apply. In short, I can impose one aggregate penalty for the two offences before me without “staggering” terms. Although indictive sentences for each count ought generally be disclosed.

61. If the total effective sentence imposed is to be between six months and three years imprisonment the court must ordinarily fix a single Global Recognisance Release Order, however, it may decline to do so if it is satisfied that such an order is not appropriate: s 19AC of the Act. Critical to this process is determining the length of sentence to be served before any Recognisance Release Order takes effect by reference to the principles explained in Hili v The Queen (2010) 242 CLR 520 at [22].

62. If the total effective sentence of six months or less, the court is not required to make such an order, although it may elect to do so.

63. Ultimately, if I determine that a term of imprisonment is to be imposed, that term must be the minimum time that justice requires: Stipkovich v R [2018] WASCA 63 at [32].

64. As far as comparative sentencing is concerned, I have been taken into a number of cases provided by both counsel before me. What they do seem to indicate is that the usual consequence of breaches of s 266 of the Bankruptcy Act is a full-time term of imprisonment. Thereafter there is great disparity between sentences imposed and I do not think much assistance can be obtained by trying to compare this case to particular other cases.

RESOLUTION

65. The offences comprising Counts 1 and 2 are serious offences. I have determined objectively that the breach of the law by the offender is well above the mid-range of seriousness for such offences, at least in relation to Count 1. I think it is reasonable to consider Counts 1 and 2 as a continuation of what was effectively one course of criminal conduct. I reject the Crown’s submission to the effect that each count should be considered as a separate and distinct criminal act. Count 1 is much more serious than Count 2. In all the circumstances I consider the penalty for both should be wholly concurrent.

66. General deterrence, for reasons I have explained, is a weighty matter. Whilst I accept subjectively that the offender was under a great deal of stress and pressure when he committed the offences, and whilst I think the conduct was wholly out of character and it is unlikely that he will re-offend, he did commit the offences in circumstances where he knew that he was setting out to defraud his creditors including his wife and along the way deliberately breached an order of the Supreme Court of New South Wales.

67. The offender has significant medical issues which I do take into account. I think any time in custody for him will be much more onerous than for others.

68. He is of otherwise good character and has experienced a dramatic fall from grace. These are important relevant factors in his favour.

69. That all being said, I have determined in relation to Count 1 on its own, and notwithstanding the weight I have given to the offender’s subjective case, that the only appropriate punishment is a period of full-time imprisonment.

70. If I was dealing only with Counts 2 and the matter on the s 16BA schedule, I think I would deal with those by way of some form of non-custodial sentence. However, when I consider Count 2 in the context of Count 1, I think it deserves a short period of imprisonment. However, that term should be wholly concurrent with the term for Count 1.

65. I have concluded that the minimum term of imprisonment appropriate in this case is 18 months imprisonment, commencing today. I have decided, particularly in light of the offender’s medical condition, age and the fact that this is his first time in custody, that the first six months of one of the terms must be served in custody whilst the balance is to be served by way of a Recognisance Release Order.

66. I have taken into account when reaching that conclusion a discount for the guilty plea although it is considerably less than the starting point at least in New South Wales on 25% because it came much later and together with the other factors I have indicated.

67. Taking into account the offender’s age, medical conditions and his otherwise strong subjective case, I will order that the offender should be released on a Global Recognisance Order after 6 months, being 31 August 2024.

ORDERS

74. On Counts 1 and 2, I sentence you to an aggregate term of 18 months imprisonment commencing on 1 March 2024 and expiring on 31 August 2025. Execution of the sentence is partially suspended after serving a period of 6 months, pursuant to s 20(1)(b), upon the condition that you enter into a recognisance, self in the sum of $100 without security.

75. The condition of the recognisance is that you be of good behaviour for a period of 12 months to date from 31 August 2024.

76. The indicative sentences are: Count 1, 18 months; Count 2, 6 months.

77. I take into account the offence on the s 16BA schedule attached to Count 1.

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Decision last updated: 01 March 2024