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  • Unreported Judgment

R v Leonard Properties Pty Ltd

 

[2019] QDC 209

DISTRICT COURT OF QUEENSLAND

CITATION:

R v Leonard Properties Pty Ltd & Anor [2019] QDC 209

PARTIES:

THE QUEEN

v

LEONARD PROPERTIES PTY LTD

and

BRADLEY JAMES LEONARD

(defendants)

FILE NO/S:

2533/18

DIVISION:

Criminal

PROCEEDING:

Sentence

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

25 October 2019

DELIVERED AT:

Brisbane

HEARING DATE:

17 October 2019

JUDGE:

Smith DCJA

ORDERS:

  1. In relation to each of counts 1-20 and 24-35 the defendant company, Leonard Properties Pty Ltd, is convicted and fined the sum of $10,000.
  1. In relation to count 36 the defendant company Leonard Properties Pty Ltd is convicted and fined the sum of $15,000.
  1. I direct that the Registrar give particulars of the order against Leonard Properties Pty Ltd to the State Penalties and Enforcement Registry for registration under s 34 of the State Penalties Enforcement Act 1999 (Q).
  1. In relation to each of counts 14-35, Bradley James Leonard is convicted and fined the sum of $1,000.
  1. In relation to count 36, Bradley James Leonard is convicted and fined the sum of $3,000.
  1. The fines imposed on Bradley James Leonard are to be paid within six months.
  1. In default of payment within that time I order that Bradley James Leonard be imprisoned for three days on each of counts 14 to 35 and 24 days on count 36.
  1. If the fines are not paid within that time I direct that Bradley James Leonard appear before the District Court at Brisbane at 10am on 28 April 2020 to show cause why the default imprisonment should not be enforced.

CATCHWORDS:

CRIMINAL LAW – SENTENCE – Breaches of the Export Control Act 1982 (Cth) – quantum of fines for Body Corporate – whether imprisonment is the only available sentencing option for the natural defendant – quantum of fines for natural person

Legislation: 

Crimes Act 1914 (Cth) ss 4B, 4AA, 4K, 15A, 16A, 16C, 17A, 19

Criminal Code 1995 (Cth) s 11.2

Export Control Act 1982 (Cth) s 8

Export Control (Unprocessed Wood) Regulations (Cth)

Export Control (Plant and Plant Products) Orders 2005 (Cth)

Export Control (Plant and Plant Products) Orders 2011 (Cth)

Penalties and Sentences Act 1992 (Q) ss 50, 182A

State Penalties Enforcement Act 1999 (Q) s 34

Cases:

Australian Building and Construction Commissioner v

Construction Forestry Mining and Energy Union (2017) 254

FCR 68; [2017] FCAFC 113 cited

Bryce v Chief Executive Officer of Customs (No 2) [2011] 2

Qd R 40, [2010] QSC 125 cited

Chief Executive Officer of Customs v Labrador Liquor

Wholesale Pty Ltd & Ors (2006) 65 ATR 547; [2006] QCA

558 applied

Chief Executive Officer of Customs v Labrador Liquor

Wholesale Pty Ltd & Ors (No. 2) (2006) 62 ATR 494; [2006]

QSC 40 applied

R v Chew New South Wales District Court, 15 December

2006 and 23 February 2007 cited

R v Morex Meat Australia Pty Ltd & Anor [1996] 1 Qd R

418; (1995) 78 A Crim R 269; [1995] QCA 154 cited

R v Moxon [2015] QCA 65 cited

Sgroi v R (1989) 40 A Crim R 197 applied

COUNSEL:

Mr M McCarthy for the crown

Mr G Rice QC for the defendant

SOLICITORS:

Commonwealth Director of Public Prosecutions for the crown

Gilshenan and Luton for the defence 

Introduction

  1. [2]
    The defendant Leonard Properties Pty Ltd (“the Company”) has pleaded guilty to 32 counts of exporting of prescribed goods contrary to s 8(3)(a) of the Export Control Act 1982 (Cth) and one count of conveying prescribed goods with intent to export contrary to s 8(3)(b) of the Export Control Act 1982 (Cth).
  1. [3]
    Mr Bradley Leonard (“Bradley”) has pleaded guilty to 22 counts of exporting of prescribed goods contrary to s 8(3)(a) of the Export Control Act 1982 (Cth) and one count of conveying prescribed goods with intent to export contrary to s 8(3)(b) of the Export Control Act 1982 (Cth).
  1. [4]
    I take into account the pleas of guilty and reduce the penalties I would have otherwise imposed by reason of the pleas. They are early pleas of guilty and have saved the cost of a trial which would have been reasonably lengthy if it had proceeded.

Prosecution submissions

  1. [5]
    As to the facts of the case, they are contained in Exhibit 1, the Schedule of Facts tendered by the prosecution.
  1. [6]
    At all material times Bradley was a director and operator of the Company. The Company was involved in the business of exporting timber and timber products from Australia to China and other places.
  1. [7]
    On 36 occasions between 13 March 2009 and 22 May 2013 one or both the defendants exported or attempted to export timber or timber products contrary to the requirements under the Export Control Act 1982 (Cth).
  1. [8]
    Leonard Properties Pty Ltd is charged with a total of 33 offences and Bradley is charged with 23 offences relying on s 11.2 of the Criminal Code 1995 (Cth).
  1. [9]
    Each of the charges alleges non-compliance with the Export Control (Plants and Plant Products) Orders 2005 or 2011 and/or the Export Control (Unprocessed Wood) Regulations.
  1. [10]
    The Company was originally founded in 1995 as the Queensland Sandalwood Company Pty Ltd. It changed its name to Leonard Properties Pty Ltd on 14 February 2011. Bradley’s father, Ronald Leonard was a director from 21 August 1995 until 14 February 2011. Bradley was a director from 21 August 1995 until 22 January 2009 and again from 2 June 2010 until the present.
  1. [11]
    Jaysmere Pty Ltd (“Jaysmere”) was founded in 1987. Mr Leonard Senior was a director from 14 December 1987 until 14 February 2011 and again from 11 August 2011 onwards.  Bradley was a director from 2 June 2010 until 11 August 2011.  Jaysmere was deregistered as a company on 20 March 2015.
  1. [12]
    The Company, Jaysmere and Queensland Sandalwood were operated by Mr Leonard Senior and Bradley and engaged in the business of harvesting and exporting logs of timber to the Peoples Republic of China; Hong Kong and the Republic of China (Taiwan).
  1. [13]
    The timber, predominantly sandalwood timber, was harvested from properties in Central and Western Queensland near Cloncurry, Winton, Richmond and Hughenden. It was debarked, loaded onto cargo containers and transported to Townsville. The containers were then exported to Asia by sea either from Townsville or from Brisbane following transport there by rail. On the occasions the subject of the charges, the fumigation and inspection processes required for quarantine purposes were not undertaken in contravention of the Export Control Act.
  1. [14]
    The Department of Agriculture and Water Resources (“the Department”) has responsibility for the biosecurity of exports from Australia. This responsibility previously lay with the Australian Quarantine and Inspection Service (AQIS). The Department administers the Export Control Act and subordinate legislation.  The Department was responsible for inspecting and certifying for export plant products intended for shipment overseas from Australia.
  1. [15]
    The relevant regulations and orders prescribe that timber and timber products of the kind involved in this matter were subject to the control of the Department.
  1. [16]
    The facts note that sandalwood is a class of fragrant wood which is heavy, yellow in colour and fine grained. It retains its scent for decades after harvesting. The wood and the oil extracted are highly valued. The trees are slow growing and are at risk of overharvesting. Sandalwood is treated differently from other woods to prevent illegal and unsustainable practices.
  1. [17]
    For sandalwood that comes from a Queensland plantation a licence is required for each shipment. The harvester, vendor and exporter must have and present a Queensland Government commercial harvesting wildlife licence, a commercial wildlife licence and associated sales documentation for each export shipment. During the period of the offending, nine licences were issued to Queensland Sandalwood and six to Jaysmere.
  1. [18]
    The Export Control (Plants and Plant Products) Order (Cth) (in addition to the requirement for an export licence to be held for export to Hong Kong, China and Taiwan) requires the wood to be properly treated, inspected and a phytosanitary certificate to be issued by Departmental officers.  A phytosanitary certificate is issued by the government of an exporting country to the government of an importing country certifying that the plant or plant product referred to in the certificate has been inspected according to appropriate procedures and attests to the health and cleanliness of the plant or plant product.  The certificate may also attest to treatment such as fumigation performed on plants and plant products in accordance with the requirements of an importing country.
  1. [19]
    In Australia the Department is responsible for ensuring that phytosanitary certificates for plant and plant products exported from Australia are issued and comply with both Australian and international requirements.
  1. [20]
    The requirement arises from Australia’s status as a signatory to the International Plant Protection Convention which was ratified by Australia in 1952. The convention is an international plant health agreement which aims to protect cultivated and wild plants by preventing the introduction and spread of pests. There are 177 signatory countries to the convention. Signatory countries rely on phytosanitary certificates as essential in the import and export of plant and plant products. The inspection in phytosanitary certification process is managed by the Department. The Department’s records indicate that no export certificates were issued for the defendants in the relevant period.
  1. [21]
    When an exporter intends to export prescribed goods they must lodge a Notice of Intention (“NOI”) with the Department to initiate the export certification process. After the lodgement of the NOI, an inspection of the prescribed goods is organised to ensure the product complies with the importing country’s phytosanitary requirements and Australian law. An authorised Departmental officer can then issue a phytosanitary certificate. If the goods fail inspection the authorised officer must notify the exporter that further treatment of the consignment is required. Documentation confirming the further treatment must then be supplied by the exporter when submitting the goods for reinspection. The exporting of sandalwood logs to China requires that consignments are to be free from soil and pests of concern to China. Logs that are free of bark must be declared as such on the certificate. The requirements for Hong Kong are similar. For Taiwan the import conditions are similar for logs, wood or timber with bark but a phytosanitary certificate is not required for debarked logs, wood or timber.
  1. [22]
    Documents seized from the defendant’s premises at Chermside West on 23 May 2013 show that a number of different timbers were declared and exported from Australia to China and Hong Kong including Australian Rose Mahogany and Australian Blue Cypress. Australian Rose Mahogany ranges in colour. The timber can be used in construction and for decorative uses in panelling, furniture, carving, wine casks and brush stocks. It has a distinctive aromatic odour. Sawn timber of this species is not readily available.
  1. [23]
    Australian Blue Cypress is commonly known as Northern Australia Cypress Pine. The oil from Australian Blue Cypress requires a long distillation and is primarily used as a “base” note and fixative in perfume manufacturing. It also has some therapeutic potential but the major economic use of cypress pine has been as termite resistant timber in the north of Australia.
  1. [24]
    Australian Border Force uses an integrated cargo system to facilitate and record the movement of goods into and out of Australia. On Thursday, 23 May 2013 investigators from the Department executed a search warrant on a cargo container located at Townsville Port. The container had been delivered to the port from Richmond, Queensland for loading on to a ship for export to China and had been entered into the integrated cargo system by a customs broker. The exporter was the company.
  1. [25]
    Investigators removed the seals from the doors of the shipping container and observed it was loaded with timber logs. The container had not been certified for export by Departmental officers. The container itself had a number of defects and the timber was contaminated with grass, soil and spiders and lizards. Samples of the timber were taken, later analysed and it was identified as sandalwood.
  1. [26]
    On the same day, 23 May 2013 investigators executed a search warrant at the offices of North Queensland Customs Service[1] at South Townsville.  Also on 23 May 2013 investigators executed a search warrant at Chermside West which is the home of Mr Leonard Senior and the registered business address of the Queensland Sandalwood Company, Jaysmere and the Company.
  1. [27]
    A large number of documents were seized along with a desktop computer and laptop computer. Recorded conversations occurred between Mr Leonard Senior and investigators. He admitted to investigators that on only one occasion they had undertaken a complete process of conducting inspections and fumigations and obtaining a phytosanitary certificate for the exporting of timber. This related to an export in 2009. Mr Leonard Senior stated that proper compliance was not economical and would have “broken” the Company. Thereafter the Company did not comply with the export regime.
  1. [28]
    Turning then to the charges they may be summarised as follows:

Charge 1

Leonard Properties Pty Ltd

13 March 2009

Export of sandalwood to Taiwan

Departmental records show no inspection of the container and its contents and no export permit was issued for the export

Charge 2

Leonard Properties Pty Ltd

27 March 2009

Export of sandalwood to Hong Kong

Records show no inspection of the two containers and no phytosanitary certificate or export permit was issued for the export

Charge 3

Leonard Properties Pty Ltd

17 April 2009

Sandalwood exported to Taiwan

Departmental records show no inspection of the container and no export permit issued for the export

Charge 4

Leonard Properties Pty Ltd

18 July 2009

Export of sandalwood to Hong Kong

Department records show no inspection of the container and its contents and no phytosanitary certificate or export permit were issued

Charge 5

Leonard Properties Pty Ltd

7 August 2009

Export of sandalwood to Taiwan

Departmental records show no inspection of the container and its contents and no export permit was issued

Charge 6

Leonard Properties Pty Ltd

9 August 2009

Export of sandalwood to Singapore

There are no biosecurity requirements for the export of this timber to Singapore but the Company still needed an export licence which it did not have.

Charge 7

Leonard Properties Pty Ltd

14 August 2009

Export of sandalwood to China

Departmental records indicate the Company had not applied for or been granted an export licence at the time of the export

Charge 8

Leonard Properties Pty Ltd

25 September 2009

Export of sandalwood to China

Departmental records show no inspection of container and its contents and no phytosanitary certificate or export permit for the export

Charge 9

Leonard Properties Pty Ltd

19 October 2009

Export of sandalwood to China

Departmental records show no inspection of the container and its contents and no phytosanitary certificate or export permit

Charge 10

Leonard Properties Pty Ltd

22 November 2009

Export of sandalwood to China

Departmental records show no inspection of the container and its contents and no phytosanitary certificate or export permit issued

Charge 11

Leonard Properties Pty Ltd

7 February 2010

Export of sandalwood to China

Departmental records show no inspection of the container and its contents and no phytosanitary certificate or export permit issued

Charge 12

Leonard Properties Pty Ltd

14 April 2010

Export of sandalwood to China

Departmental records indicate the Company had not applied for or been granted an export licence at the relevant time

Charge 13

Leonard Properties Pty Ltd

27 May 2010

Export of sandalwood to China

Departmental records show no inspection of the container and its contents and no phytosanitary certificate or export permit issued

Charge 14

Leonard Properties Pty Ltd and Bradley Leonard

10 June 2010

Export of sandalwood to China

Departmental records show no inspection or fumigation of container and its contents and no phytosanitary certificate or export permit issued

Charge 15

Leonard Properties Pty Ltd and Bradley Leonard

26 September 2010

Export of sandalwood to China

Departmental records show no inspection or fumigation of the two containers and their contents and no phytosanitary certificate or export permit issues

Charge 16

Leonard Properties Pty Ltd and Bradley Leonard

3 October 2010

Export of sandalwood to China

Departmental records show no inspection or fumigation of the container and its contents and no phytosanitary certificate or export permit issued

Charge 17

Leonard Properties Pty Ltd and Bradley Leonard

14 October 2010

Export of sandalwood to China

Departmental records show no inspection or fumigation of the two containers and their contents and no phytosanitary certificate or export permit issued

Charge 18

Leonard Properties Pty Ltd and Bradley Leonard

15 December 2010

Export of plum wood China

Departmental records show no inspection or fumigation of the two containers and their contents and no phytosanitary certificate or export permit issued for the export of these

Charge 19

Leonard Properties Pty Ltd and Bradley Leonard

29 December 2010

Export of plum wood to China

Departmental records show no inspection or fumigation of the container and its contents and no phytosanitary certificate or export permit issued

Charge 20

Leonard Properties Pty Ltd and Bradley Leonard

28 January 2011

Export of plum wood to China

Departmental records show no inspection or fumigation of the two containers and their contents and no phytosanitary certificate or export permit issued

Charge 21

Bradley Leonard

31 March 2011

Export of Buddha Wood to China

Departmental records show no inspection or fumigation of the container and its contents and no phytosanitary certificate or export permit issued

Charge 22

Bradley Leonard

10 May 2011

Export of Buddha Wood to China

Departmental records show no inspection or fumigation of the container and its contents and no phytosanitary certificate or export permit issued

Charge 23

Bradley Leonard

3 June 2011

Export of Golden Wood to China

Departmental records show no inspection or fumigation of the two containers and their contents and no phytosanitary certificate or export permit issued

Charge 24

Leonard Properties Pty Ltd and Bradley Leonard

9 June 2011

Export of Rosewood Mahogany to China

Departmental records show no inspection or fumigation of the container and its contents and no phytosanitary certificate or export permit issued for the export of these prescribed goods

Charge 25

Leonard Properties Pty Ltd and Bradley Leonard

1 July 2011

Export of Australian Rose Mahogany to China

Departmental records show no inspection or fumigation of the container and its contents and no phytosanitary certificate or export permit issued

Charge 26

Leonard Properties Pty Ltd and Bradley Leonard

10 July 2011

Export of Australian Rose Mahogany to China

Departmental records show no inspection or fumigation of the container and its contents and no phytosanitary certificate or export permit issued

Charge 27

Leonard Properties Pty Ltd and Bradley Leonard

12 July 2011

Export of Australian Rose Mahogany to China

Departmental records show no inspection or fumigation of the container and its contents and no phytosanitary certificate or export permit issued

Charge 28

Leonard Properties Pty Ltd and Bradley Leonard

11 May 2012

Export of sandalwood to China

Departmental records show no inspection or fumigation of the containers and their contents and no phytosanitary certificate or export permit issued

Charge 29

Leonard Properties Pty Ltd and Bradley Leonard

23 June 2012

Export of sandalwood to China

Departmental records show no inspection or fumigation of the two containers and their contents and no phytosanitary certificate or export permit issued

Charge 30

Leonard Properties Pty Ltd and Bradley Leonard

13 July 2012

Export of sandalwood to China

Departmental records show no inspection or fumigation of the two containers and their contents and no phytosanitary certificate or export permit issued for the export of these prescribed goods

Charge 31

Leonard Properties Pty Ltd and Bradley Leonard

26 July 2012

Export of sandalwood to China

Departmental records show no inspection or fumigation of the container and its contents and no phytosanitary certificate or export permit issued

Charge 32

Leonard Properties Pty Ltd and Bradley Leonard

14 August 2012

Export of sandalwood to China

Departmental records show no inspection or fumigation of the two containers and their contents and no phytosanitary certificate or export permit issued

Charge 33

Leonard Properties Pty Ltd and Bradley Leonard

4 September 2012

Export of sandalwood to China

Departmental records show no inspection or fumigation of the container and its contents and no phytosanitary certificate or export permit issued for the export of these prescribed goods.

Charge 34

Leonard Properties Pty Ltd and Bradley Leonard

4 October 2012

Export of timber to China

Departmental records show no inspection or fumigation of the container and its goods and no phytosanitary certificate or export permit issued

Charge 35

Leonard Properties Pty Ltd and Bradley Leonard

4 October 2012

Export of sandalwood to Hong Kong

Departmental records show no inspection or fumigation of the container and its contents and no phytosanitary certificate or export permit issued

Charge 36

Leonard Properties Pty Ltd and Bradley Leonard

 

 

On 13 May 2103 investigators noticed a shipping container at South Townsville.  It was later determined that the container contained a containment of sandalwood headed to China.  Departmental records showed no inspection or fumigation of the container and its contents and no phytosanitary certificate or export permit issued.

.

  1. [29]
    Mr Leonard Senior and Bradley made admissions to investigators on 23 May 2013.
  1. [30]
    The Crown in written submissions[2] points out that for Bradley the maximum penalty for each offence is imprisonment for five years and/or a fine of 300 penalty units.[3]  The applicable maximum penalty for each offence for Bradley Leonard on each of counts 14 to 35 is five years’ imprisonment and/or a fine of $33,000 and on count 36 five years’ imprisonment and/or a fine of $51,000.
  1. [31]
    For Leonard Properties Pty Ltd as a body corporate the maximum penalty applicable to each offence is a fine of five times the number of penalty units applicable to a real person i.e. 1,500 penalty units.[4]  For Leonard Properties Pty Ltd on each of counts 1 to 20 and 24 to 35 the maximum penalty was a fine of $165,000 and on count 36 a fine of $255,000.
  1. [32]
    The Crown submits that having regard to s 17A of the Crimes Act 1914 (Cth) no other sentencing option is appropriate for Bradley aside from imprisonment.
  1. [33]
    It is submitted that general deterrence is an important sentencing consideration in this case. In the case of ,a body corporate, a fine should be imposed that will send a message that contraventions of this sort are serious and not acceptable.[5]
  1. [34]
    Where a fine is appropriate the court must have regard to s 16C of the Crimes Act.  The court must take into account the financial circumstances of the defendant but is not prevented from imposing a fine because the financial circumstances of the offender cannot be ascertained by the court nor is the court relieved of the obligation to impose a deterrent penalty merely by reason of the defendant’s capacity to pay.[6]
  1. [35]
    The Crown submits that the offending here involved the deliberate avoidance of inspection/fumigation requirements and was motivated by a desire to bypass the time and cost of compliance. The process is essential to Australia’s compliance with international laws.
  1. [36]
    It may have been that other consignments (apart from the one the subject of charge 36) were infested with pests. However, in oral submissions this was not persisted with and it was conceded that there was no evidence that they were so infested.
  1. [37]
    Phytosanitary certificates are issued in accordance with Australia’s treaty obligations. Valid certification is of fundamental importance to gaining and maintaining access for commodities into many overseas markets and the credibility of Australia’s export system would be compromised if the system was flawed. A 2013 report[7] estimated that in 2012/13 the total value of rural products exported from Australia was in excess of $41 billion.  Round wood timber accounted for over $154.7 million.  China, Hong Kong and Taiwan are significant markets for Australia’s timber.  The offences presented a direct threat to Australia’s export market for timber in China.
  1. [38]
    The offences have the potential to undermine Australia’s reputation as a safe exporter of timber and thereby to harm the industry and the Australian economy. Hence, the need for general deterrence. It is also submitted that it is the exporter’s responsibility to ensure goods presented for inspection are export compliant and meet the requirements outlined in the Export Control Act 1982 (Cth) and its subordinate legislation.  The offending involves a breach of trust bearing in mind the system relies on the honesty and integrity of participants.  The scheme was committed over a number of years and would likely have continued but for the intervention of law enforcement officers. 
  1. [39]
    It is accepted that the pleas of guilty are timely and should be taken into account as a mitigating factor and the utilitarian value of the pleas must be taken into account. It is accepted the offenders have no prior convictions but this is the sort of case where courts give less weight to good character because the need for general deterrence is strong.
  1. [40]
    It is submitted that there has been some delay in the prosecution of the offences. The offences were detected in 2013 and charges laid in August 2017. The defendants were committed for sentence on 27 July 2018. It is submitted that the rate of progression was not remarkable given the number and complexity of the allegations.
  1. [41]
    The Crown concedes it has not been able to identify any directly comparable appellate decisions but relies on three, namely R v Chew,[8] R v Morex Meat Australia Pty Ltd & Anor[9] and R v Moxon.[10] 
  1. [42]
    Of course each case depends on its own facts and it is for the sentencing judge to do the best that he or she can on the given facts of the case. However those cases do of course provide guidance to the court.
  1. [43]
    The Crown submits that Bradley should be sentenced on the basis that:
  1. (a)
    He has been convicted of 23 offences committed over four years.
  1. (b)
    The consignments concerned each contained between 10 and 40 tonnes of timber i.e. between 230 and 920 tonnes in total.
  1. (c)
    The maximum penalty is five years for each count.
  1. (d)
    He has no prior convictions.
  1. (e)
    He has pleaded guilty.
  1. (f)
    There is limited co-operation.
  1. (g)
    The need for general deterrence.
  1. (h)
    As a director he was in a position of trust.
  1. [44]
    Leonard Properties should be sentenced on the basis that:
  1. (a)
    The Company has been convicted of 33 offences committed over four years.
  1. (b)
    The consignments concerned each contained between 10 and 40 tonnes of timber i.e. between 330 and 1320 tonnes in total.
  1. (c)
    The maximum conceivable penalty is a $5.5 million fine.
  1. (d)
    No previous convictions.
  1. (e)
    Pleas of guilty.
  1. (f)
    Some admissions by Mr Leonard Senior.
  1. (g)
    The need for general deterrence.
  1. (h)
    The breach of trust.
  1. [45]
    In oral submissions the prosecutor relied on Exhibits 1 and 2. The Crown also heavily relied on Moxon but conceded that in Moxon the court was concerned with a 10 year maximum penalty, a late plea and the false use of a certifying stamp.
  1. [46]
    Ultimately the Crown submitted that the court might consider a fine in the order of $25,000 on each count for Leonard Properties and that a prison sentence should be imposed on Bradley although it was conceded that in light of his good character the delay and the pleas of guilty this could be the subject of an immediate recognisance release order.

Defence submissions

  1. [47]
    Mr Rice QC on behalf of the defendant tendered Exhibit 3 which detailed the background of the defendant. He was born on 14 February 1970 and is 49 years old. He is married to Linda, a pharmacist and they are raising their six year old son who attends a school in New Farm.
  1. [48]
    He has an excellent work history. After completing school at Brisbane State High School in 1988 he undertook bachelor degree courses at Griffith University and then completed an MBA at the National Taiwan University. He also worked with Textron Inc between 1998 and 2006.
  1. [49]
    Bradley worked as a China business development leader in Shanghai from 2002 to 2006.
  1. [50]
    From 2006 until 2008 he worked with Atwill Media in Shanghai.
  1. [51]
    From 2008 until 2010 he worked as a project manager in China. In December 2008 he returned to Australia to undergo major reconstructive spinal surgery. Between 2009 and 2016 there has been intensive pain management treatment for ongoing chronic lower back pain with eventual remission.
  1. [52]
    In January 2009 he commenced work with Leonard Properties (previously the Queensland Sandalwood Company Pty Ltd). He engaged in slow rehabilitation and recovery from his spinal reconstruction which made it impossible for him to continue in China. He agreed to assist his father and commenced learning about the family business focussing on field operations. This mostly involved relations with rural harvest contractors and State government forestry personnel in the field.
  1. [53]
    He still works with the Company.
  1. [54]
    Exhibit 5 were a number of good character references tendered on behalf of Bradley. David Allen who resides in Taiwan has known Bradley for about 25 years. He notes the defendant’s conduct in his personal and professional life – that he has demonstrated the upmost integrity and respect for ethical and legal standards. This matter has caused Bradley great distress and shame.
  1. [55]
    There is a reference from Geoffrey Bonner an architect from New Zealand. He knows Bradley and speaks well of his character.
  1. [56]
    Denis Lefranc, a French national residing in Shanghai has known Bradley since 2002 and speaks well of him.
  1. [57]
    Luc Froelich residing in the Philippines has known Bradley since 2000. He speaks well of Bradley and notes that Bradley’s wife has suffered a lengthy postnatal depression. He considers the breaches of the law are totally out of character for Bradley.
  1. [58]
    James Soderqist is aware of the charges and also expresses the opinion that the offences are out of character.
  1. [59]
    Timothy Knowles, Senior Legal Counsel at Citic Pacific Mining has known Bradley for 30 years. Bradley has shown integrity, loyalty, support and resolve in all aspects of his personal and family life.
  1. [60]
    David Hogan, a senior intelligence analyst for the New South Wales Police Force (as a civilian) has known Bradley for more than 40 years. Bradley has shown himself as a reliable, dependable and trustworthy individual.
  1. [61]
    Stuart Buckingham, a British businessman living in China speaks well of the defendant.
  1. [62]
    Peter Chiang, a solicitor, has known Bradley for over 30 years since they were at school together. He considers Bradley as a loyal, trustworthy and sensible person.
  1. [63]
    Finally, a reference from Denis Mac-Mumford states he has known Bradley for 27 years and finds that Bradley has admitted his wrongdoing and has deep regret for his serious errors of judgment and ordinarily he conducts his affairs with the utmost attention to ethical, moral and legal standards.
  1. [64]
    In oral submissions Mr Rice QC stressed that the basis of Bradley’s liability was one of strict liability.[11]  It is not a case where he deliberately avoided the regulations.  Between 1995 and 2008 Bradley lived and worked in Asia.  He became a director of the Company whilst he was overseas at Mr Leonard’s Senior’s request but was not active.
  1. [65]
    In late 2008 he returned to Australia suffering a back condition and had serious surgery in 2009. He became a director of the Company in June 2010 but was a novice when it came to the export of the wood. His father, Mr Leonard Senior had conducted the business since 1993. Bradley became involved because his father’s health had deteriorated. There had been an arrangement with the Department of Forestry (Queensland) concerning the harvesting of sandalwood. The situation is that the harvester gets a royalty and as to the profits on sale, 50 per cent go to the Forestry Department and 50 per cent to the Company. Mr Leonard Senior knew he had not complied with the relevant legislation. As it turns out he now has dementia and is no longer involved with the Company. Mr Leonard Senior was originally charged but the charges were discontinued because of his ill health. The father thought it would break up the business if he complied and to avoid costs engaged in this scheme. As it turns out, it only costs about $200 per certification so it would have only cost about $6,600 with respect to all of the counts.
  1. [66]
    Mr Rice QC stressed that Bradley was a not a privy to this decision. There was a division of functions in the business. The wood was harvested from Central and Western Queensland. The wood was harvested and prepared for export at a depot in Richmond and then transported to the Port of Townsville. Bradley’s role was to be in Western Queensland to liaise with the harvesters and the Forestry Department. The business was administered from Mr Leonard Senior’s address in Chermside West in Brisbane.
  1. [67]
    Bradley had no knowledge of the deliberate non-compliance by his father. The first time he became aware of the non-compliance was when the search warrant was executed in May of 2013 at his father’s premises. It had been the father’s responsibility to arrange the certificates and fumigation.
  1. [68]
    Bradley took immediate steps to rectify the situation and in this regard Mr Rice QC tendered as Exhibit 4 numerous emails which corroborate the submission that Bradley rectified the situation after the search warrant by contacting the Department to make the Company compliant. The Company has been compliant since. The business is still operating but the trade has reduced.
  1. [69]
    So this is a situation where, in the six years since, the Company has been compliant.
  1. [70]
    With respect to the conversation with Mr Leonard Senior referred to at paragraph 47 of Exhibit 1, Bradley was not privy to that conversation. He arrived at the Chermside West Office at about noon. During the search warrant execution, after Bradley arrived a recorded conversation suggests that Mr Leonard Senior told Bradley what he had been doing for the first time.
  1. [71]
    Presently, the defendant lives in New Farm and is running the business. He has a five year old son. The business is not overly profitable. Exhibit 6 is a schedule of taxable income between 2015 and 2017.
  1. [72]
    Mr Rice also submitted that there were no alerts in place either at the business level or government level which alerted Bradley to the fact that regulations were not being complied with. Also there were two customs brokers involved who should have known of the requirements but did not tell Bradley about this. Further, there was never any complaint from the recipients of the goods about the absence of a certificate. There has never been any complaint of any disease passed on so it is a case of risk of disease rather than actuality.
  1. [73]
    Ultimately Mr Rice QC submitted that Bradley acted reasonably to leave business affairs to his father. He submitted there was no fraud involved on Bradley’s part in this case unlike the cases of Moxon and Morex Meats.
  1. [74]
    With respect to Bradley, Mr Rice QC submitted that there were options available aside from a term of imprisonment. He submitted that the court should take into account his good character, his fixing up the business, the delay, the fact that his breach of the law was not deliberate and the fact there was no fraud. He submitted that a total fine of $25,000 should be imposed on Bradley.
  1. [75]
    Mr Rice QC submitted that Bradley owned two units worth $600,000 each which were encumbered to a value of $921,000. He also owned $19,000 on a visa card, $8,000 on another credit card.
  1. [76]
    He further submitted that it was relevant that Bradley had a real chance of travelling back to Asia and particularly China for work. The imposition of a jail sentence even with immediate release could adversely impact a visa.
  1. [77]
    With respect to the Company, it was submitted that a fine of $5,000 should be imposed on each count. It was submitted that Moxon should be distinguished ($25,000 was imposed on each count in that case).  Moxon was a large business with 200 employees.
  1. [78]
    Ultimately Mr Rice QC submitted the Crown cases should be distinguished.

Crown reply

  1. [79]
    By way of reply, Mr McCarthy for the Crown submitted there was no excuse or justification in Bradley failing to make the relevant enquiries. Bradley was involved in the offending for three years. It was submitted that Morex is relevant.  There was no evidence one way or the other whether disease was passed on. There was a real risk here if one considers the state of the container the subject of count 36.  It was submitted that in some respects Moxon was less serious than the present case as the goods were fumigated.  Ultimately it was submitted deterrence was a very relevant feature in this case.

Further submissions

  1. [80]
    After the matter was adjourned Mr Rice QC forwarded further submissions which informed the court that Bradley’s income for the 2017/2018 financial year was a loss of $18,612. The overall loss was $40,912 attributable to the two rental properties. One was not tenanted for a year. It was submitted that Mr Leonard could pay the $25,000 contended for within six months and if the court wished to impose a default period a term of two to three months would be appropriate.
  1. [81]
    The commonwealth in further submissions pointed out that section 4K of the Crimes Act 1912 (Cth) permits a global penalty of one fine to be imposed in the Magistrates Court but this does not apply to proceedings on indictment so a separate penalty must be imposed on each count.[12] Also if imprisonment was to be imposed on Bradley by reason of section 19(2) of the Crimes Act, a separate sentence must be imposed on each count.
  1. [82]
    As to the imposition of the fine, the court is required to have regard to the financial circumstances of the offender before imposing a fine by reason of section 16C of the Crimes Act, but section 16C(2) notes that nothing prevents a court from imposing a fine merely because the financial circumstances of the offender cannot be ascertained.
  1. [83]
    Section 15A of the Crimes Act adopts State law relating to the enforcement of fines including SPER referral under section 50 of the Penalties and Sentence Act 1992 (Q).
  1. [84]
    Default imprisonment may be imposed under section 182A of the Penalties and Sentences Act 1992 (Q).[13] It was noted in Bryce v Chief Executive Officer of Customs (No 2)[14] that not to impose imprisonment in default [where the fine is not paid] would be to grant immunity for impecuniosity.         

 Disposition

  1. [85]
    In reaching my decision I have paid full regard to the provisions of s 16A of the Crimes Act 1914 (Cth) and s 17A of the Crimes Act.  I have taken into account the submissions made by the prosecution and the defence. I have also applied the totality principle when it comes to the imposition of the fines.[15]
  1. [86]
    Ultimately with respect to the Company it is my determination that an appropriate penalty on each count (aside from count 36) is a fine of $10,000 and $15,000 on count 36. A total of $335,000.
  1. [87]
    With respect to Bradley it is my determination that having considered the provisions of s 17A of the Crimes Act there are penalties aside from imprisonment available in this case and they are fines. 
  1. [88]
    I have reached this conclusion because of:
  1. (a)
    the early pleas of guilty (committal);
  1. (b)
    the significant delay between the investigation in 2013 and the laying of the charges in 2017;
  1. (c)
    the absence of previous convictions;
  1. (d)
    Bradley’s otherwise good character;
  1. (e)
    the fact that Bradley’s liability is on the basis of strict liability only;
  1. (f)
    there was no fraud involved on Bradley’s part;
  1. (g)
    the fact that once he found out what was happening he immediately rectified the situation; and
  1. (h)
    the impact of a period of imprisonment (even suspended) might have upon his working ability in China.
  1. [89]
    Bearing in mind his financial circumstances in the exercise of my discretion I have determined in his case that I should impose a fine of $1,000 on each count (apart from count 36) and $3,000 on count 36 for a total of $25,000. I consider a total of three months in default of payment is appropriate.
  1. [90]
    For the reasons I have mentioned my orders will be as follows. The order of the court is that:
  1. In relation to each of counts 1-20 and 24-35 the defendant company, Leonard Properties Pty Ltd, is convicted and fined the sum of $10,000.
  1. In relation to count 36 the defendant company Leonard Properties Pty Ltd is convicted and fined the sum of $15,000.
  1. I direct that the Registrar give particulars of the order against Leonard Properties Pty Ltd to the State Penalties and Enforcement Registry for registration under s 34 of the State Penalties Enforcement Act 1999 (Q).
  1. In relation to each of counts 14-35, Bradley Leonard is convicted and fined the sum of $1,000.
  1. In relation to count 36, Bradley Leonard is convicted and fined the sum of $3,000.
  1. The fines are to be paid by Bradley Leonard within six months.
  1. In default of payment within that time I order that Bradley Leonard be imprisoned for three days on each of counts 14 to 35 and 24 days on count 36.
  1. If the fines are not paid within that time I direct that Bradley Leonard appear before the District Court at Brisbane at 10am to show cause why the default imprisonment should not be enforced.
  1. [91]
    Under section 16F of the Crimes Act 1914 (Cth) I am required to explain the sentence to the defendants.
  1. [92]
    On each of the defendants I have imposed fines. On the Company, $335,000 and on Bradley $25,000. I have referred the Company matter to SPER.
  1. [93]
    The Registrar of SPER may enter into a payment plan with the defendant company for the payment of the amounts in question.
  1. [94]
    If the fines are not paid a number of things could happen as follows:

(a) An enforcement warrant could be issued.

(b) A charge on the defendant’s real property could occur.

(c) A fine notice could be issued to any debtor of the company.

(d) Vehicles owned by the defendant could be immobilised.

  1. [95]
    With respect to Bradley I have allowed him six months to pay the fines. If he fails to pay the fines within that time he is at risk of serving three months imprisonment.

Footnotes

[1]  The customs broker.

[2]  Exhibit 2.

[3]  Sections 4B and 4AA of the Crimes Act 1914 (Cth).

[4]  Sections 4B(3) and 4AA of the Crimes Act 1914 (Cth).

[5]Australian Building and Construction Commissioner v Construction Forestry Mining and Energy Union (2017) 254 FCR 68; [2017] FCAFC 113 at [98].

[6]Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd & Ors (No. 2) (2006) 62 ATR 494; [2006] QSC 40 at [21-22] per Fryberg J. An appeal was allowed in part on different grounds in  Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd & Ors (2006) 65 ATR 547; [2006] QCA 558.

[7] The Agricultural Commodity Report of the Australian Bureau of Agricultural and Resource, Economics and Scientists.

[8]  Judge Goldring, New South Wales District Court, 15 December 2006 and 23 February 2007.

[9]  [1996] 1 Qd R 418; (1995) 78 A Crim R 269; [1995] QCA 154.

[10]  [2015] QCA 65.

[11]  Section 8(7) of the Export Control Act 1982 (Cth).

[12] Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd & Ors (No 2) (2006) 62 ATR 494; [2006] QSC 40 at [33]-[34].

[13] Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd & Ors (no 2) (2006) 62 ATR 494; [2006] QSC 40 at [38]; Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd & Ors (2006) 65 ATR 547; [2006] QCA 558 at [84].

[14]  [2011] 2 Qd R 40; [2010] QSC 125 at [116]; Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd & Ors (2006) 65 ATR 547; [2006] QCA 558 at [102].

[15] Sgroi v R (1989) 40 A Crim R 197; Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd & Ors (2006) 62 ATR 494; [2006] QSC 40 [30].

Close

Editorial Notes

  • Published Case Name:

    R v Leonard Properties Pty Ltd & Anor

  • Shortened Case Name:

    R v Leonard Properties Pty Ltd

  • MNC:

    [2019] QDC 209

  • Court:

    QDC

  • Judge(s):

    Smith DCJA

  • Date:

    25 Oct 2019

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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