Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA

Consumer protection - Unlicensed motor vehicle dealing - Extended period - Whether fine excessive - Whether spent conviction order appropriate - Principles in respect of fines - Means to pay

Motor Vehicle Dealers Act 1973 (WA), s 30

Sentencing Act 1995 (WA), s 45

1 McKECHNIE J: While a student and working part time as a taxi driver the appellant thought up a way to boost his income. He would buy cheap cars at auction, do some minor work on them and sell them for a profit.

2 For nearly 18 months, though he did not make much money, the work was steady. However, he overlooked one thing. It was also illegal. When he received a letter from the Commissioner for Consumer Protection he stopped immediately.

3 But it was too late. He was prosecuted and pleaded guilty to breaching the Motor Vehicle Dealers Act 1973 (WA) s 30.

4 He was fined $15,000 and denied a spent conviction order.

5 Being dissatisfied with both outcomes, he appeals to this court.

6 I allow the appeal, impose a fine of $5,000 and make a spent conviction order.

7 For 18 months between 8 February 2012 and 3 August 2013 the appellant traded extensively in used motor vehicles. He bought 63 vehicles from a number of auction houses and private sellers and subsequently sold 61 of them to private bidders placing advertisements on Gumtree tending to hold the vehicles for an average of 11 days before selling them. A schedule showing the sale and purchase of the vehicles was tendered and showed that most vehicles were not valued above $5,000. One was valued at $7,000 but most were in the range of $1,000 to $2,500. For those vehicles no obligation to repair arose: Motor Vehicle Dealers Act div 4.

8 The prosecution submitted that the offences fell in the low to midrange category and pointed to a number of examples of fines. No daily penalty was sought.

1. The learned Magistrate erred in fact or erred in law or in both law and fact in imposing a fine that was manifestly excessive in the circumstances of the case.

(a) The learned Magistrate erred in fact and/or law by imposing a fine of $15,000.00 that was excessive, having regard to the facts/circumstances of the offending and that of the offender; and

(b) The learned Magistrate did not have regard to the means of the offender, or the extent the fine will burden the offender, as per s 53 of the Sentencing Act (WA) 1995.

1. The learned sentencing magistrate erred in law in imposing a substantial fine which did not account for the means of the appellant and the extent to which payment of the fine would burden him, as required by s 53(1)(a) of the Sentencing Act 1995 (WA).

10 The Sentencing Act 1995 (WA) s 53 provides:

(1) Subject to Division 1 of Part 2, if a court decides to fine an offender then, in deciding the amount of the fine the court must, as far as is practicable, take into account -

(b) the extent to which payment of the fine will burden the offender.

(2) A court may fine an offender even though it has been unable to find out about the matters in subsection (1).

(3) A court must not fine an offender if satisfied that after paying compensation to the victim in accordance with a compensation order under Part 16, the offender will be unable to pay the fine within a reasonable time.

11 The Sentencing Act must be read with the Fines, Penalties and Infringement Notices Enforcement Act 1994 (WA) (the Act) pt 4. By s 29 the Act applies to the fine imposed on the appellant. When a fine is imposed an offender must either pay the fine; or apply for a time to pay order in respect of the fine: s 32. In other words there is a mechanism to ameliorate the immediate effects of a heavy fine. This is a factor relevant to sentence.

12 The factors to be taken into account in imposing a fine are summarised in Sgroi (1989) 40 A Crim R 197, 200 201 (Malcolm CJ).

13 Sgroi was decided before the Sentencing Act mandated that where practicable a court must take into account means and burden but is to the same effect.

14 The obligation to take means into account is most easily achieved if the court, after weighing up all the circumstances of the offending and mitigating circumstances, selects a percentage of the maximum fine which is considered to be appropriate. Adjustment should be made for the separate mitigatory effect of an early plea of guilty. An early plea of guilty should be recognised as having mitigation in the amount of fine as well as any other sentencing disposition: Sentencing Act s 9AA(2)(iii).

15 Having converted the percentage to a provisional amount of money, the court should apply Sentencing Act s 53 to the extent practicable. This may lead to a reduction to take account of the offender's capacity to pay or the burden of the fine.

16 In recognising the burden, the court should not overlook the fact that a fine is a punishment and intended to be a burden on the offender to recognise appropriate sentencing principles of punishment and general and personal deterrence.

17 That said, there is perhaps more variance in a fine than other forms of sentence to take account of individual circumstances.

18 An amount may be a disproportionate burden on a person of straitened circumstances. It may be no burden at all to a wealthy person. The rich should not buy themselves out of trouble; the poor should not be sentenced to prison by default. This is why the capacity to pay is important.

19 The appellant was represented by counsel who advised the magistrate as to matters under the Sentencing Act s 53.

20 The appellant had completed his studies to Year 12. He had been studying Biomedical Science at ECU. He is married with two children and he supports his family. He is a young person (born 1 July 1990). It was submitted that he started buying and selling cars as a means to create a cash flow. He would buy cars on credit from auction agencies, utilise the interest free period and onsell the cars to pay down his credit card. It was submitted that he did make a loss and did not make any substantial profit. He was a gambler chasing his losses.

21 Perhaps unsurprisingly, this submission was greeted with a degree of scepticism by the magistrate who said:

So the 17 month venture was really not a profit venture. It was a loss venture.

22 It was put that he is a hard worker studying full time, finishing his degree off, overloading to get that done. He works as a taxi driver two nights a week and after he pays expenses he earns about $650 per week. All that is spent on his family. He was receiving benefits in respect of Centrelink. He is living at home and has the family support of a large extended family. He has to pay off his credit card. His parents have helped him in that regard and paid off his credit card debt. He wants to pay his parents back.

23 An affidavit filed in these proceedings essentially confirms these matters and adds little.

24 The magistrate properly took into account the number of vehicles and the length of time. The appellant was in essence operating a used car dealership without licence. He undertook the venture for commercial gain. It was despite the submission that he had made no or very little profit from the transactions.

25 The fact that a venture is carried on for commercial reason is relevant. If it is a significantly profitable venture that may be an aggravating factor. There is a need to ensure that the penalty is more than just part of the cost of doing business.

26 The reverse does not hold true. The fact that the business may have not been very profitable or even made a loss is usually not a mitigating factor. It is the purpose which is relevant.

27 The magistrate was obviously engaged in the sentencing process. After dealing with the application for a spent conviction he turned to the amount of the fine:

Leads me to section 6 of the Sentencing Act. And I need to have regard to not simply the statutory penalty provided by section 30 of the Motor Vehicle Dealers' Act - and that is a fine of up to $50,000. But I'm to look at the circumstances of the commission of the offence and I do acknowledge the mitigating factor of a relatively early plea of guilty. Given the offending that occurred, as I've been told, over a period of about 17 months, involving the purchase of 63 vehicles and the sale of 61 of those, this cannot be dealt with at the lower end of the spectrum of fines.

There needs to be a very significant personal deterrence element along with general deterrence to the community that this sort of blatant breach of section 30 of the Motor Vehicle Dealers' Act will not be tolerated. Accordingly, there will be a costs order, as sought, of $1202.08 and the fine will be $15,000 (ts 14).

28 Sentencing calls for the exercise of a discretion: Lowndes v The Queen [1999] HCA 29; (1999) 195 CLR 665 [15].

29 Although the magistrate properly referred to the Sentencing Act s 6, he did not refer to s 8 or mention any of the considerable matters of mitigation in his sentencing remarks. It is unlikely that he overlooked the matters of mitigation or the financial circumstances of the appellant. I do not consider he overlooked them but gave them insufficient weight.

30 Whether a sentence is in error by manifest excess is a conclusion. It is not enough for me to be satisfied that I might have passed a different fine. The actual fine must manifest error.

31 I am of opinion that it does. The aggravating features were the commercial dealing over a considerable period involving many vehicles. As against that, the plea of guilty at the first opportunity, prior good character, youth and capacity to pay a fine required a fine considerably less than $15,000.

32 I grant leave on grounds 1 and 4 and allow the appeal on the amount of the fine.

34 Taking expressly into account the matters of mitigation and the appellant's present financial situation there must still be an element of punishment. And the appellant offended for economic reasons. The appellant is fined $5,000.

1. The learned Magistrate erred in fact or erred in law or in both law and fact by not granting the Appellant a Spent Conviction Order, as per s 45 of the Sentencing Act (WA) 1995.

(a) The learned Magistrate erred in fact and/or law by finding that the Appellant was not unlikely to commit the offence again; and

(b) The learned Magistrate erred in fact and/or law by finding that the Appellant would not have an adverse effect on his future employment prospects as a result of the conviction.

1. The failure of the learned Magistrate to grant a spent conviction order resulted in a miscarriage of justice.

36 In M v O'Neill [2013] WASC 187 I set out the questions to be asked when considering whether to make a spent conviction:

The principles which I rephrase as questions are:

1. Is the offender unlikely to commit such an offence again?
2. Is the offence trivial?

1. Should the offender be relieved immediately of the adverse effect that the conviction might have on the offender?

The answer to the first question involves a prediction, noting the prediction is of the likelihood of committing 'such' an offence, not 'any' offence.

The answers to the alternatives in the second question are matters of fact.

The answer to the third question is a matter of discretion. The discretion will be informed by a number of considerations including:

1. The discretion should be exercised:
   • sparingly;
   • in a clear case; and
   • for good reason is desirable.
2. The court should take into account:
   • the nature and seriousness of the offence (both in its commission and referable to the offender); and
   • the rehabilitative effect of immediate removal of the conviction, the effect both on the offender and the community being considered. The conviction for a lesser offence (of which this is one) will be able to become spent after 10 years so emphasis is placed on immediacy.

In taking into account the rehabilitative effect it may be necessary to consider, among other things:

• impact on employment, present or future; and
• exceptional hardship to offender or family.

1. The court must also take into account the public interest which includes:
   • any employer or potential employer being aware of the offences in assessing suitability and reliability for the type of work; and
   • general and personal deterrence [26] - [30].

37 As to the application for a spent conviction the magistrate said:

An application is made by defence counsel. An application that I find a bit surprising, given the number of matters that make up the charge. I'm told, and it's not in dispute, there were 63 vehicles purchased by Mr Al Hussein over a period that I've calculated to be around about 17 months. And the material acts indicate 61 have been sold with what's, on the face of it, a very modest, indeed, profit.

I ought not to, and I won't speculate as to what might be the real situation behind these transactions, if there is any other profit having been made. I simply deal with it on the facts presented and those facts indicate serious offending by Mr Al Hussein over that significant period of time and which calls for, and I will be imposing, a significant monetary penalty along with costs. Section 45 of the Sentencing Act requires the court to be satisfied that it's unlikely that someone such as Mr Al Hussein won't reoffend. I have great difficulty with that, given the persistence of his offending over that period of time.

And, as well, I'm not satisfied - and there's no evidence to support the contention put to the court of any adverse effect that such a conviction will have on him. But, as well, I make the comment that for offending such as this - or an offence such as this, involving such a large number of components to it, I have a significant problem with granting a spent conviction and, ultimately, I decline to exercise my discretion having taken the view that Mr Al Hussein fails to meet the criterion concerning the likelihood of reoffending. As well as I'm not persuaded as to any adverse effect on him as a result of this offence (ts 13 -14).

38 The appellant's then counsel pointed out that as soon as he was advised it was against the law he stopped immediately. The respondent does not seek a daily penalty. There is no evidence that he has started again.

39 The appellant challenges the conclusion as to the likelihood that he will commit a further offence.

40 As is said in M v O'Neill the answer to the question involves a prediction. In answering the question the magistrate was entitled, as he did, to take into account the past offending. However, he should also take into account the appellant's behaviour since he was made aware of the consequences of his actions and the penalty to be imposed when it has an element of specific deterrence. It does not appear that the magistrate focused on anything other than the past behaviour. I infer error in the result. Objectively I predict that it is unlikely the appellant will offend in such a way again.

41 As to the adverse effect of a conviction section 45(1)(b):

[it] considers the offender should be relieved immediately of the adverse effect that the conviction might have on the offender.

42 There is no special onus on an appellant for a spent conviction order to show that there will be an adverse effect. The effect may be obvious.

43 Since the introduction of spent conviction orders, there have been changes in the community. It is a matter of general knowledge that there is now in place a National Police Clearance system to which may employers have regard, requiring a certificate from prospective employees. Obviously a recorded conviction, even for a regulatory offence, might have an adverse effect on a young person entering the workforce or changing jobs. This must be balanced by a countervailing public interest that employers should be aware of some convictions.

44 The magistrate took the view that in essence that the discretion should not be exercised in favour of a spent conviction order because of the nature of what he described as serious offending over a significant period of time. In other words he did not consider that a spent conviction order was for good reason desirable. Although there were factors in favour of a spent conviction order there were other factors, as expressed by the magistrate, against making an order. The decision was the exercise of discretion by the magistrate. Absent error I would not have interfered in the exercise of the discretion.

45 Because the magistrate's discretion miscarried in focussing only on past behaviour and assuming that the appellant had to provide evidence of adverse effect, leave should be granted on ground 2 and the appeal allowed.

46 I briefly mention ground 3. This is an inappropriate ground in the circumstances. If the decision is a proper exercise of discretion and free from error, there is no scope for a residual miscarriage of justice.

47 Because I allow the appeal on ground 2 (and dismiss the appeal on ground 3) it is necessary for me to exercise the discretion again.

48 The appellant is unlikely to commit such an offence again. He is of previous good character. Exercising the discretion, I consider that having regard to all the circumstances, and his future prospects, there is a strong rehabilitative effect by the immediate removal of the conviction. I make a spent conviction order.

• Leave to appeal is granted and appeal is allowed.
• The fine of $15,000 is set aside.
• In lieu, the appellant is fined $5,000.
• A spent conviction order is made.