Reardon v Nolan

[1983] FCA 291

Re: LESLEY PATRICIA REARDON
And: JAMES PATRICK NOLAN (1983) 74 FLR 309
Nos. G5, G6 and G7 of 1982
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Fisher J.(1)

CATCHWORDS

Trade Practices Act 1974 (Cth) - Prosecution and Conviction - Non-payment of fines - Imprisonment in default of payment - Ability to pay fines - Discretion to order imprisonment.

Trade Practices Act 1974 s.79

Crimes Act 1914 ss.5, 18A

Justices Act 1921 South Australia ss.81,83

Trade Practices - Prosecution and conviction - Non-payment of fines - Imprisonment in default of payment - Ability to pay fines - Discretion to order imprisonment - Trade Practices Act 1974 (Cth), s. 79 - Crimes Act 1914 (Cth), ss 5, 18A - Justices Act 1921 (S.A.), ss 81, 83.

HEADNOTE

The defendant had been convicted of three offences against the provisions of s. 59(2) of the Trade Practices Act 1974 and had, under the provisions of s. 79 (1)(a) of the Act been fined the sums of $5,000 in respect of one offence and $500 in respect of each of the other two contraventions.

The fines were to be paid within twenty-one days.

The defendant was not represented in court on the day the fines were imposed and did not pay the fines.

The prosecutrix later sought the imposition of an order for imprisonment in default of payment of the fines, and the defendant asked for extended time to pay. He offered to pay at the rate of $1,000 per month, alleging that his financial position would not permit him to do more.

His application was opposed by the prosecutrix.

Held: (1) Section 79 of the Trade Practices Act 1974 does not provide for the enforcement of fines imposed under that section.

(2) Until some ability to pay even a small instalment towards the fines is established, any prison term can only be regarded as punishment for the primary offence.

(3) In circumstances where the court is expressly forbidden to imprison for the primary offence it is necessary for the court to consider ability to pay before being of opinion that imprisonment will aid the enforcement of payment.

(4) Prosecutrix's application dismissed and the matter adjourned to a date to be fixed for the purpose of examining the defendant as to his means to pay the fines by instalments.

Thomas v. Quarmby (1983) 63 FLR 402; De Vos v. Daly (1947) 73 CLR 509; Juris Wilde v. Menville Pty Ltd (1981) 50 FLR 380; Ducret v. Colourshot Pty Ltd (1981) 35 ALR 503; Hollis v. Clark (1981) 40 ALR 179; R. v. Woking Justices; Ex parte Johnstone (1942) 2 KB 248, referred to.

HEARING

Adelaide,1983, February 17; September 13; October 14. #DATE 14:10:1983

NOTICE OF MOTION.

Motion for orders of imprisonment in default of payment of fine.

T.P. Kavanagh, for the prosecutrix.

D.M. Berman, for the defendant.

Cur. adv. vult.

Solicitor for the prosecutrix: T. A. Sherman, Acting Commonwealth Solicitor.

Solicitors for the defendant: White Berman & Co.

M.P.S.

ORDER

1. The application of the prosecutrix that the defendant James Patrick Nolan be imprisoned for a period of 6 months be dismissed.

2. The matter be stood over generally with liberty to either party to bring it on for further hearing on seven days' notice to the other party.

JUDGE1

In this matter the defendant James Patrick Nolan has been convicted of three very serious offences being contraventions of s.59(2) of the Trade Practices Act 1974. On 10 February 1983 I imposed a fine of $5,000 on him pursuant to the provisions of s.79(1)(a) of that Act in respect of one contravention, and $500 for each of the two other contraventions. I directed that the fines were to be paid to the District Registrar of this Court within 21 days of that date. It is pertinent that the defendant was not represented on that day nor on an earlier occasion when submissions were made on the matters of penalties and costs. He did not file an affidavit pursuant to the provisions of Order 49 Rule 5 of the Rules of this Court. The prosecutrix on 10 February 1983 sought the imposition of an order for imprisonment in default of payment of the fines. However as it was understood that the High Court was probably to hear an appeal from the decision of Miles J. of the Supreme Court of New South Wales in the matter of Thomas v Quarmby and Anor (1983) A.T.P.R. 44,303 leave was granted to the prosecutrix to apply on 7 days' notice for orders in default of payment of the fines. On this day the defendant asked for extended time to pay his fines. I adjourned this hearing to a specified time in the following week.

When the defendant's application for extension of time for payment came on for hearing on 17 February 1983, counsel for the prosecutrix opposed any extention on the basis that, on the information before the Trade Practices Commission, the defendant, who was again unrepresented, would never be able to pay his fines. The defendant however offered to pay at the rate of $1,000 per month, contending that his financial position would not permit him to do more. In the face of opposition from the prosecutrix, who would not consent to the time being in effect extended for a period of 6 months, no order was made. Upon her counsel indicating that he had instructions to apply for orders in default, he was informed that the Court could hear the application within a fortnight and that a time for hearing could be obtained from the associate. This application was not pursued and no appointment was sought.

On 13 September 1983 the matter was again before the Court when the prosecutrix made application for an order of imprisonment. The defendant has not paid the fines or any part thereof, which matters were proved by the statutory declaration of the Registrar of this Court. The application was heard on that day and subsequently on 16 September 1983. The contention of the prosecutrix was that I had no choice but to imprison the defendant for six months as he had failed to pay the fines and her counsel expressly asked me to rule on this submission. The case of De Vos v Daly (1946-47) 73 C.L.R. 509 was not cited by her counsel but could be said to have some relevance although decided prior to the enactment of s.18A of the Crimes Act 1914.

Prior to being amended by s.47(1) of the Trade Practices Amendment Act 1977 s.79 of the Act read to the extent relevant as follows:

79 (1) A person who contravenes a provision of Part V other than section 52 is guilty of an offence punishable on conviction -

(a) in the case of a person not being a body corporate - by a fine not exceeding $10,000 or by imprisonment for a period not exceeding 6 months; or

(b) . . ."

The words emphasized were deleted in 1977 by s.47(1) of the amending Act of that year.

In Juris Wilde v Menville Pty. Ltd. (1981) A.T.P.R. 42,646 Smithers J. was of the opinion that it was proper for him to order imprisonment as a means of enforcing payment of fines imposed under the Act. He reasoned that pursuant to s.5 of the Crimes Act 1914 individuals who aided and abetted the commission of offences under the Trade Practices Act 1974 were deemed to have committed the offence and liable to be fined under s.79 of that Act. As the latter Act did not provide for the enforcement of the fine, s.18A of the Crimes Act directed in appropriate circumstances the application of State legislation. Smithers J. was of opinion that certain provisions of the Magistrates (Summary Proceedings') Act 1975 were applicable and empowered, if they did not require, him to fix a term of imprisonment in default, particularly as the offences were committed in Victoria. He also imposed a term of imprisonment in default of payment of fines in Ducret v Colourshot Pty. Ltd. and Anor (1981) 35 A.L.R. 503. In Hollis v Clark (1981) 40 A.L.R. 179 Fox J. did likewise, expressly applying the decision of Smithers J. in Wilde v Menville and exercising powers of enforcement embodied in the Justices Act 1886 of the State of Queensland.

It is necessary to consider the terms of s.18A of the Crimes Act which provide

"18A (1) The laws of a State or Territory with respect to the enforcement of fines ordered to be paid by offenders, including laws making provisions for or in relation to -

(a) the awarding of imprisonment in default of payment of fines;

(b) the allowance of time for payment of fines;

(c) the payment of fines by instalments; or

(d) the giving of security for the payment of fines,

shall, so far as those laws are applicable and are not inconsistent with the laws of the Commonwealth, apply and be applied to persons who are convicted in that State or Territory of offences against laws of the Commonwealth.

(2) A reference in this section to fines should be read as including a reference to pecuniary penalties, costs or other amounts ordered to be paid by offenders."

In South Australia, Division VI of the Justices Act 1921 is in pari materia with the provisions of the Victorian and Queensland legislation applied respectively by Smithers J. and Fox J. It deals specifically with the topics referred to in s.18A(1)(a)(c) and (d) of the Crimes Act and I would have no hesitation in applying the provisions of that Division of the Justices Act in appropriate circumstances. Counsel for the prosecutrix relied upon s.81 of that Act as requiring a term of imprisonment for not less than 6 months and s.83 is relevant.

Sections 81 and 83 are in the following terms:

"81. (1) The term of any imprisonment for the enforcement of, or in default of payment of any fine or sum adjudged to be paid by a conviction or order shall, in the absence of any express statutory provision to the contrary, be determined by the court imposing the term of imprisonment, or the court or justice issuing the warrant of commitment, subject to the provisions of this section.

(2) Subject to subsection (3) of this section, the term of imprisonment shall be determined within the following limits:

(a) where the sum adjudged to be paid exceeds twenty five dollars or less, the term of imprisonment shall not exceed one day;

(b) where the sum adjudged to be paid exceeds twenty five dollars the term of imprisonment shall not exceed a period arrived at on the basis of one day for each multiple of twenty five dollars constituting that sum and where it is not exactly divisible into multiples of twenty five dollars, a further day for any remainder.

(3) A term of imprisonment determined under this section shall not exceed six months

82. . . .

83. (1) When any application is made to a justice to issue a warrant of distress or commitment to enforce payment of any fine or sum of money adjudged or ordered to be paid by any conviction or order, the justice may, if he deems it expedient so to do, postpone the issue of such warrant for such time and on such conditions (if any) as he thinks just.

(2) In any such case the justice may direct payment of the fine or sum by instalments or that security be given therefor, in the manner provided by section 76."

When the present application came before me on 13 September 1983 counsel for the defendant stated from the bar table that the defendant did not have any assets nor any ability whatsoever to pay the fine or make any reasonable proposal therefor. Counsel for the prosecutrix accepted and asked me to accept this statement, contending that this state of affairs was quite irrelevant. He asked me to consider his application on the assumption that the defendant could not pay the fines or any portion thereof and stated that he did not wish evidence to be gien or the defendant to be cross-examined on his means. He sought an order imprisoning the defendant for six months on the ground that he was in default. This period of six months was the proper period, he said, in the light of s.81 of the Justices Act and I had no choice and no discretion in the matter.

I put to counsel for the prosecutrix during argument the following passages from the reasons for judgment of Smithers J. in Wilde v Menville as at least suggesting that as I was attempting to enforce payment of the fines and not to punish the defendant, his ability to pay was relevant. At page 42,660 Smithers J. made the following comments:

"By virtue of s.5 of the Crimes Act 1914 individual persons who engage in such conduct are deemed to have themselves committed the relevant offence and they are liable to the monetary sanction set out above, namely $10,000 in respect of each offence. In the case of the bankruptcy of an individual on whom a fine has been imposed and which is not paid the amount of the fine is not a provable debt whether it was imposed under the law of the Commonwealth or otherwise (see Bankruptcy Act 1966 s.82(3)). However as in the case of a bankrupt corporation the individual may be a person without the sources to meet the fines. The Act does not expressly say what is to be the consequence of that situation. However it is not to be thought that Parliament intended that if the offender could not pay the fine that was the end of the matter. As a result it would seem that in these cases the Court must deal at this stage with the matter of enforcement of payment of the fines imposed on the individual defendants."

At page 42,664 His Honour dealt expressly with enforcement by imprisonment pursuant to State legislation of payment of fines. He said, in words which I adopt,

"Accordingly I regard it as necessary to order and fix the terms of imprisonment applicable in each case in default of payment of the fines imposed and in doing so have in mind that Parliament excluded imprisonment as the primary punishment for the offences. Parliament has indicated in the clearest possible way that contraventions of the sections with which the defendants have been charged are to be punished by fines and not by imprisonment. The period of imprisonment contemplated by s.18A of the Commonwealth Crimes Act is solely to enforce the payment of those fines and is not to be considered as a punishment for the primary offence. It is designed to encourage payment of the fines and questions of ability to pay inevitably obtrude."

The balance of the reasoning in that particular paragraph has also relevance in this matter.

As I am asked to proceed on the basis that the defendant does not at present have the ability to make any payment at all, the imposition of a term of imprisonment will not assist in any way in enforcing the payment by him of his fines. If the fixing of a term of imprisonment can in no way assist the enforcement of payment of fines, there would appear to be no ground for imposing it except as an alternative punishment for the main offence. In my opinion because this alternative form of punishment is expressly denied, I must pay regard only to the question of encouraging or aiding the payment of the fine. The fact that s.18A is directed to the enforcement of fines is relevant to my exercise of discretion as is the requirement that the imprisoning laws be not inconsistent with the laws of the Commonwealth. This reinforces my view that until some ability to pay even a small instalment towards the fines is established, any prison term can only be regarded as punishment for the primary offence. An order for payment by instalments can be secured by postponing the issue of a warrant for commitment in accordance with s.83 of the Justices Act.

It is interesting to note that the question of ability to pay in these circumstances has been the subject of legislation in the United Kingdom. The Money Payments (Justices Procedure) Act 1935 provides that where a person is fined but no order for imprisonment is made and if he fails to pay the fine, he should not be committed to prison without an enquiry into his means to pay. In R v Working Justices ex parte Johnstone (1942) 2 K.B. 249 the Lord Chief Justice discussed this legislation. He said at page 252 as follows:

"With regard to that sub-section it is argued on behalf of the justices that, while they must make an enquiry as to the means of the defendant in the manner prescribed by the sub-section, if they think that it is a grave case they may commit him to prison, even though they ascertain, as the result of the inquiry, that he has no means. That, however, seems to me to be quite contrary to the intention of the Act."

Later he said,

"The intention of the Act plainly was to amend the existing law in the direction which the habits of thought of these times increasingly have demanded, namely, not to send persons to prison for mere failure to pay debts. I think the intention of s.1, sub-s.3, was to prevent a person being committed to prison in the circumstances stated in the sub-section, if the justices found that he had no means to enable him to pay."

There is no corresponding legislation in this country as far as I am aware, but I conclude that in circumstances where I am expressly forbidden to imprison for the primary offence it is necessary for me to consider ability to pay before being of opinion that imprisonment will aid the enforcement of payment.

I therefore dismiss the application of the prosecutrix that the defendant be imprisoned for a period of six months but adjourn the matter to a date to be fixed for the purpose of examining the defendant as to his means to pay the fines by instalments.