Brown v Miskiewicz[1997] QDC 91

APPELLATE JURISDICTION

JUDGE C F WALL, QC

and

TOWNSVILLE

DATE 09/04/97

JUDGMENT

HIS HONOUR: The appellant, an accountant, pleaded guilty in the Magistrates Court at Townsville to eight offences against section 251L of the Income Tax Assessment Act and one offence against section 119 of the Fringe Benefits Tax Assessment Act.

The first eight offences were committed on 26 August 1991, 24 and 31 October 1994, 30 December 1994, 3 January 1995, 9 August 1995, 10 August 1995 and 17 August 1995 and involved preparing income tax returns for clients for a fee whilst not a registered tax agent. The fringe benefits tax offence was committed on about 7 June 1995 and involved similar conduct.

For each offence he was convicted, fined $200 and ordered to pay two amounts of costs of Court, each amounting to $49.25. I am told that the maximum penalty for each offence is a fine of $2,000. Two appeals have been instituted against the sentences imposed in respect of each set of offences. The appeals were heard together; each contained the following grounds of appeal:

1. 1
   The sentence imposed was manifestly excessive.

1. 2.
   Having decided to exercise his discretion pursuant to section 19B of the Crimes Act the learned Stipendiary Magistrate changed his mind when there was no warrant to do.

1. 3.
   Given all of the circumstances the learned Stipendiary Magistrate should not have recorded a conviction.

Grounds 1 and 3 were argued together; no objection was taken to the amount of the fines. The grounds relate solely to the recording of convictions and the refusal of the Stipendiary Magistrate to exercise his discretion and proceed under section 19B of the Crimes Act.

So far as is relevant section 19B provides as follows:

1. “(1)
   Where:

with certain conditions, including that he will be of good behaviour for a period not exceeding 3 years.

The following facts do not appear to be in dispute, or were conceded by the parties. These were all relevant so far as concerns section 19B (1) (b) (i) and (iii).

3. 1.
   The appellant was a competent professional accountant, 48 years of age, with no previous convictions.

3. 2.
   So far as consumers were concerned there was or may not have been any interest to protect in the circumstances of this case.

3. 3.
   Only fit and proper persons can obtain registration as tax agents. Convictions could be relevant to that question and to possible economical impacts on an offender.

On a comparative basis, a person with convictions would be less of a fit and proper person than a person without convictions. Convictions may affect the registration process. They might affect it, but the effect, if any, cannot be quantified. There would be likely to be less effect if there were not convictions; that is a matter of commonsense.

The secretary of the registration board was apparently in the Magistrates Court and was not, according to the Prosecutor in that Court, able to say what effect convictions would have on the obtaining of registration.

3. 4.
   The appellant negligently failed to renew the registration he honestly but mistakenly believed he had. He was negligent in respect of the registration requirement, or negligent in not taking steps to renew the registration he believed he had.

3. 5.
   The appellant was not a risk to consumers. He charged a normal fee of $65 a return. He was not unqualified to prepare taxation or fringe benefits returns.

3. 6.
   Other charges were withdrawn because of the mistaken belief of the appellant.

3. 7.
   The requirements in section 19B (1) (b) are disjunctive.

3. 8.
   Detection was likely.

3. 9.
   The offences do not appear to be prevalent. The Stipendiary Magistrate, who is very experienced, said he had not come across them before and the Commonwealth Prosecutor before him said that she had not done a lot of them herself.

3. 10.
   A punishment may include a conviction.

3. 11.
   The offences are statutory offences, not criminal offences.

3. 12.
   The matters referred to in section 12 of the Penalties and Sentences Act of Queensland, to which regard is to be had (in Queensland for State offences) in considering whether or not to record a conviction, would in any event apply generally by analogy. Those matters are the nature of the offence, the offenders character and age, and the impact that recording a conviction will have on the offender's economic or social well being or chances of finding employment.

3. 13.
   In State Courts, convictions are regularly not recorded in relation to criminal offences of far greater severity than the present for first offenders or offenders under the age of 25.

3. 14.
   The Commonwealth may not be as enlightened as Queensland in sentencing matters, but nevertheless Courts are bound by the legislation as enacted.

3. 15.
   Section 19B must be applied with compassion and justice.

3. 16.
   The Stipendiary Magistrate was not particularly clear in his reasoning.

3. 17.
   So far as the second ground of appeal is concerned, it is a little hard to follow precisely what the Stipendiary Magistrate did.

3. 18.
   The appellant was in ill health at the relevant times. He is now back at work. He receives a 60 per cent disability pension from the Department of Veterans Affairs. He has been married for 30 years and has three children. He has been an accountant since and has never ever, received a traffic ticket.

3. 19.
   He has served in Vietnam. He is the Townsville president of the ??? Veterans. He is a chairman of the Vietnam Veterans emergency accommodation centre. He is a captain in the Cadet Corps and runs the Ignatius Park College Cadet Unit. He is a past president of the Townsville Lions, and is still a member of that club. He is the honorary treasurer of the Townsville RSL, which is a very large business concern, and is on the professional list of the Queensland Small Business Corporation, which means that if a snail business wishes to start in Townsville, and it needs accountancy assistance and business planning, it is referred to the appellant.

3. 20.
   The offences occurred because of an oversight by the appellant.

Mr Durward who appeared for the Crown on the appeals would not concede that a 48 year old accountant with an unblemished character, who engages more in negligent, rather than criminal conduct, could not be said to be in an unusual category.

In deciding not to act under section 19B the Stipendiary Magistrate said;

I have considered the cases referred to by Mr Durward and his submissions.

In my view, the fact alone that the appellant is a first offender may or may not, depending on all of the circumstances, be sufficient to justify the use of section 19B; compare Kelton v. Uren (1981) 81 ATC 4, 119 at 4, 120.

In the appellant's case, no administrative steps were taken prior to the prosecution to remind him of his obligations. This factor does not appear to have been considered by the Stipendiary Magistrate, or if he did consider it, he did not refer to it. See Kelton v. Uren at p.4, 121.

Each case must be considered on its own facts, and having regard also to the personal circumstances of the offender. I do not think that the Stipendiary Magistrate so approached the present case. His approach appears to me to have been fairly general, and not such as to indicate a consideration or sufficient consideration of the particular facts surrounding the offences, and the particular circumstances of the offender.

Certainly, if the offence or offences were not “run of the mill” offences or instances of offences, and the circumstances were both unusual or extenuating resort to section 19B would be regarded as appropriate.

In my view, the present case bears these features, and the Stipendiary Magistrate was in error in not so approaching it.

I do not agree that in general terms only “rare” cases of taxation offences can provide practical scope for any warrant for resort to section 19B. Compare Kelton v. Uren. Such an approach adds a gloss or a factor to section 193 which the legislature did not think to include. It imposes a gloss on the section and a fetter on the exercise of the discretion conferred by the section, which is difficult to justify by reference to the clear words used.

In one of the cases referred to by Mr Durward, Uznanski v. Searle (1981) 52 F.L.R. 83, King C.J. said at page 84:

I do not agree with the submission that the test is higher for taxation offences per se. King C.J. also said at page 84 in relation to the miscarriage of the discretion:

I agree. This really restates the test adopted by the High Court of Australia in House v. The King (1936) 55 C.L.R. 449 at 504 to 505. See also Minister for Aboriginal Affairs v. Peko-Wallsend Limited (1986) 162 C.L.R. 24; Wyatt v. Albert Shire Council (1987) 1 Q.R. 486 at 487; and Australian Coal and Shale Employees Federation v. The Commonwealth (1953) 94 C.L.R. 621 at 627.

Generally in relation to a provision such as section 19B, King C.J. said in the same case at page 85:

I agree with the sentiments expressed in that passage. In my view the Magistrate in the present case did not exercise his discretion wisely and in accordance with the intention of the legislation. In my view he fell into error in not approaching the sentencing exercise in the manner indicated by King C.J.

Further, in my view, the character, antecedents, age and health of the offender alone can justify the use of section 19B even if the offence is not necessarily a trivial offence, and even it if was not committed under extenuating circumstances. In such cases, however, it may be that those personal circumstances alone would have to be relatively significant but it is unnecessary for me to express a concluded view about that.

In Uznanski, the appellant pleaded guilty to three charges of forging and three charges of uttering social security cheques, all offences carrying a higher maximum penalty than the present. The offences were not regarded as trivial but the facts chat the appellant was a young man with a good work record, no previous convictions for dishonesty, and that the offences were committed under extenuating circumstances, were regarded as sufficient to warrant the use of section 19B. The same should be the case here and the Stipendiary Magistrate was in error in not taking that approach.

I think that ever taking into account, as I think it should be the currency's interests in a matter such as the present, there is nevertheless apple scope for the application of section 193 and the Stipendiary Magistrate was wrong in not so approaching the matter.

In a slightly different but nevertheless analogous context, Mr Justice Cox in the Supreme Court of Tasmania, in Aikman v. Bourne (1992) 63 Australian Criminal Reports 467, said at page 470:

I agree. In try view, the Stipendiary Magistrate in the present, case did not carefully assess all of the circumstances of the offences and the offender before considering which of the sentencing options might be appropriate. At one point he arrears to have favoured section 19B but he then appears to have changed his mind. I do not consider he properly considered what he was required to consider.

Further, for reasons which I will refer to shortly, I do not consider he adverted to the potentially serious consequences convictions may cause or considered properly the extent to which the recording of a conviction itself amounted to a punishment.

The present case is not one of taxation or revenue fraud, but more of the failure to comply with administrative requirements. No loss was caused to individuals or to the revenue. These were relevant matters to consider and the Stipendiary Magistrate does not appear to have adverted to them. In the present case I think that the material establishes that the appellant may be significantly disadvantaged beyond the average person's situation by the recording of convictions for these offences. He may not be able to obtain registration as a tax agent. I do not think the Stipendiary Magistrate had sufficient regard to this and that is another reason why I think the discretion miscarried. In Abdi v Queen, unreported, Court of Appeal, Queensland, 23 August 1994, Mr Justice McPherson said of an appellant convicted of an offence under section 81 of the Migration Act:

There is such evidence or at least an indication of possible detriment in the present case, in my view. Mr Justice McPherson continued:

In the same case, the Chief Justice said:

That highlights, in my view, some of the factual differences between that case and the present. I do not consider it a question of interfering with any process but rather of failure to properly consider a matter relevant to the exercise of the sentencing discretion. It is a sufficient error in my view, along with the others I have referred to, to warrant that the appeal be allowed. The question then of the appropriate penalty in all the circumstances is thus at large and one for me to consider.

Were it only a question of possible detriment in relation to registration as a tax agent, without more, the result may be the same. In my view, however, there is ample other evidence supporting the manner and extent to which the Stipendiary Magistrate's sentencing discretion miscarried and further supporting the imposition of a less harsh penalty upon the appellant.

Before I conclude I should say something generally about the recording of convictions.

Firstly, I have already referred to section 12 of the Penalties and Sentences Act of Queensland. Secondly, depending on the circumstances, the consequences of recording convictions can be disproportionately undesirable, especially if they may affect employment prospects, see Laurie Carl Ngallametta v. The Queen, unreported Court of Appeal, Queensland, 9 July 1996. Thirdly, the recording of convictions is a discretionary matter and many factors are relevant. See, for example, Beutel v. The Queen, unreported, Court of Appeal, Queensland, 9 June 1995, admittedly a very different case to the present, and, Vizzone v. The Queen, unreported, Court of Appeal, Queensland, 15 July 1996.

In all of the circumstances, and for the reasons I have given, I am satisfied that the Stipendiary Magistrate erred in the approach he took. The case was an appropriate one for section 19B having regard to the character, antecedents, age and health of the appellant, and the extent to which the offences were committed under extenuating circumstances.

In each case the appeal is allowed. I uphold grounds 1 and 3 in each appeal. In the circumstances it is unnecessary for me to consider ground 2, but I should mention though that the Stipendiary Magistrate initially appeared as though he was going to use section 19B on the basis that he thought the appellant had in fact been registered and perhaps negligently failed to renew that registration. When the correct position was pointed out to him, he appears to have changed direction on the applicability of section 19B and to have regarded his non-registration in fact at any time as determinative of the issue. It is not entirely clear though what caused him to apparently change his mind. If my interpretation is correct, that would, in my view, be another basis for upholding the appeals. Because of my conclusions on grounds 1 and 3 it is not however necessary that I express any concluded view on ground 2.

In respect of each offence I will make orders under section 19B(1)(d). The appellant will be discharged without conviction upon giving security by recognisance in the sum of $200, conditioned that he will be of good behaviour for six months. I will not interfere with the orders for costs made by the Stipendiary Magistrate. They were, in the circumstances, appropriate and they will stand. Subject to hearing from you, Mr Durward, I would be minded to order that the appellant have his costs of each appeal to be taxed if not agreed.

...

HIS HONOUR: I order that the respondent pay the appellant his costs of each appeal to be taxed if not agreed.

Mr Pope, before your client can leave the precincts of the Court it will be necessary, as I understand the procedure, for him to enter into those recognisances.