Inspector Fraser v Karabelas

Judgment 1In its decision in Inspector Fraser v Karabelas [2011] NSWIRComm 56, the Full Court upheld an appeal brought by the prosecutor challenging the inadequacy of penalties imposed at first instance in relation to three separate offences occurring at the same work site and involving similar breaches. The facts are fully set out in the judgment on appeal and in the first instance judgment ( Inspector Fraser v Forcom Holdings Pty Ltd [2010] NSWIRComm 114). 2In the course of submissions on appeal, counsel for the respondent indicated that, should the Court consider that the original penalties imposed were inadequate, an opportunity would be sought to place material before the Court concerning the personal circumstances of Mr Karabelas. It was agreed that evidence and submissions could be made in writing without the need for a further oral hearing. The Full Court, having determined that the original penalties were inadequate and that there had been a failure to properly apply the totality principle, established a timetable for receiving further evidence and submissions as to the personal circumstances of Mr Karabelas. While there has been some slippage in the timetable, the material filed by both parties has now been finalised and the Court is in a position to conclude the matter. 3Although provision was made in the timetable for the filing of evidence and submissions, in fact, the respondent filed no submissions but did file an affidavit sworn by Mr Peter Karabelas. In that affidavit Mr Karabelas stated that he was now employed by Mani Constructions Pty Ltd as a formwork carpenter and earned "approximately $1100 per week after tax." He stated that he was married, had a two-year old child and that his wife was employed, earning approximately $800 per fortnight after tax. 4Mr Karabelas annexed "group certificates" for the financial years 2007-2008, 2008-2009 and 2009-2010. Those PAYG payment summaries indicated that in the 2007-2008 financial year he earned a gross salary of approximately $51,000 and in 2008-2009 financial year he earned a gross salary of $8000. In the 2009-2010 financial year, Mr Karabelas earned more than $19,000. No explanation was provided for these widely varying earnings. 5A bank statement for the period 24 January 2011 to 3 June 2011 showed that Mr Karabelas had a credit of $5.63 in the account and he attested that this was "his only bank account." The transaction history showed during that period, there were some 39 internet deposits variously described but often identified by reference to "Peter K" with the only other similar deposit being a credit of $330. There were no clearly defined deposits that appeared to relate to payments for employment of approximately $1100 per week. The largest deposit was one in the sum of $2500, two deposits were in the sum of $2000, one was in the sum of $1500, one was in the sum of $1100, one was in the sum of $1000 and one in the sum of $900. There were a variety of deposits in much smaller amounts. 6Approximate figures were provided in relation to regular monthly expenses totalling $5,300. That figure comprised $1500 for groceries, $600 for utilities (including electricity and water), $2600 in rent, $450 for fuel and $150 for telephone services. Mr Karabelas stated that he also had significant debts or liabilities. An amount in excess of $33,000 was the subject of a judgement debt in relation to which the judgment creditor had proceeded to file a bankruptcy notice. A further amount owed to the same entity in the sum of approximately $97,000 was also the subject of a judgement debt in relation to which a bankruptcy notice had been served upon Mr Karabelas. Copies of the bankruptcy notices were annexed to the affidavit. 7In relation to these matters Mr Karabelas stated that he was unable to pay or "resist" his creditors and anticipated being made bankrupt in the foreseeable future. He said his present financial circumstances were "dire" and the worst he had ever experienced. His ability to pay any fine was therefore "limited" by his severe financial circumstances and the Court was requested to take those matters into account in setting the new penalties in relation to these three offences. 8Following the filing of the affidavit sworn by Mr Karabelas, the prosecutor filed an affidavit and an outline of submissions concerning the financial capacity of the respondent to pay a suitable fine. The affidavit was sworn by Mr William Steenson, the acting principal solicitor for the WorkCover Authority of New South Wales. Mr Steenson recorded that, in correspondence from solicitors acting for the respondent, the prosecutor had been served with Mr Karabelas' affidavit and requested to advise as to whether the prosecutor would be filing any evidence and submissions in reply. It was proposed that, if there was nothing further, then the Court should be requested to deal with the matter on the papers and in the absence of the parties. 9Mr Steenson reviewed Mr Karabelas' affidavit and then forwarded a letter to solicitors acting for the respondent. In that correspondence the prosecutor identified a number of concerns arising from the terms of Mr Karabelas' affidavit and a number of "apparent inadequacies" in the material. Mr Steenson raised the following matters:

CONSIDERATION 15It is well established that a court should first arrive at a penalty and then review it on the basis of any case properly made out by a defendant of a lack of capacity to pay a substantial penalty or any penalty ( Rahme v R (1989) 43 A Crim R 81; BC8901984). In this respect, s 6 of the Fines Act provides: 6. Consideration of accused's means to pay In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider: (a) such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and (b) Such other matters as, in the opinion of the court, are r relevant to the fixing of that amount. 16It has frequently been said by the Court that, in dealing with occupational health and safety prosecutions, the primary consideration is the objective seriousness of the offence. Subjective considerations, while important, are necessarily secondary considerations. Thus, when considering issues concerning the capacity of a defendant to pay a fine or a substantial fine in the context of the operation of s 6 of the Fines Act , as noted in Rahme, the Court will first determine an appropriate penalty and then, if persuaded by the available material as to the capacity of the defendant to pay such a fine, reduce the penalty. Nevertheless, where such issues are raised the Court is not to impose a crushing or oppressive penalty nor should it impose a fine that the offender does not have the means to pay ( Rahme at p 86; Retsos v Regina [2006] NSWCCA 85; BC 200601967; R v Reader (Brian Henry) (1988) 10 Cr App R(S) 210 at 214). The Court is to have regard to the burden a fine will impose ( Sgroi v The Queen (1989) 40 A Crim R 197; BC8901125 ). 17Section 6 of the Fines Act , therefore, operates on a broad basis: the Court is required to consider "such information regarding the means of the accused as is reasonably and practicably available to the court for consideration" and "such other matters as, in the opinion of the court, are relevant to the fixing of that amount." Those words do not suggest any narrow or confined consideration but they leave the court to assess the appropriateness and adequacy of the information according to the circumstances concerning each particular case. Individual directors and family companies may not be as well placed to provide extensive material or specialist opinions as other better resourced individuals or companies. 18The three breaches committed by the respondent, Mr Karabelas, are serious offences occurring in the context of a prior conviction for a similar breach. The offences have been found to be aggravated in each case and represent a continuing disregard for safety at a large building site. The penalty to be imposed must reflect that situation except for an assessment of the extent to which that penalty should be reduced because of the financial circumstances of the respondent. 19The evidence and submissions for the appellant/prosecutor highlight the inadequacy of the financial information provided by Mr Karabelas. The solicitor for the appellant/prosecutor drew to the attention of Mr Karabelas' legal representatives the inadequacy of the material provided in his affidavit and sought additional information and source documents. None have been forthcoming. No party has asked for an oral hearing and no objection has been raised to the Court receiving Mr Karabales' affidavit nor has he been required for cross-examination. 20While the Court accepts much of the criticism levelled by the appellant/prosecutor against the adequacy of the material provided, the absence of submissions and a more detailed response to the issues raised by the appellant/prosecutor may also be an indication of the straitened financial circumstances of Mr Karabelas. The present state of the evidence leaves the Court in a difficult position. Mr Karabelas has sworn to being in dire financial circumstances but the full extent of his financial circumstances is unclear. Bankruptcy notices were served in June 2010 and February 2011 but Mr Karabelas' affidavit does not state that bankruptcy proceedings have, in fact, been commenced. 21A further issue arises for consideration. The terms of Mr Karabelas' affidavit did not raise the question of costs but logically, any inability to fully pay fines must also apply to costs. As no submissions were filed for the respondent, this aspect has not been developed. Costs have been recognised "as an important aspect" of punishment (see Environmental Protection Authority v Barnes [2006] NSWCCA 246; BC200606364) and as falling within the considerations required by the Fines Act ( Inspector Jelley v Albright & Wilson (Australia) Ltd [2007] NSWIRComm 148; [2007] 164 IR 456). In the absence of precise figures or an estimate as to costs, this issue can only be taken into account in the broad exercise of discretion having regard to the fact that there have been two hearings, each occupying one day. 22Applying the spirit of s 6 of the Fines Act , the Court can accept that Mr Karabelas is facing financial difficulties but the extent of those difficulties has not been established. Importantly, Mr Karabelas has accepted a limited ability to pay increased fines rather than asserting a total inability to pay any fine. His position, so described, may be met by an application to the Registrar for time to pay and/or to pay by instalments. The Court will, therefore, proceed on the basis that there will be some modest reduction in the penalties to be imposed. ORDERS 23Having regard to the abovementioned matters, the Court makes the following orders: (a) in relation to Matter No IRC 1090 of 2008: (i) the defendant, Peter Karabelas, is convicted of the offence as particularised; (ii) the defendant is fined the sum of $7000 with half that amount to be paid to the prosecutor by way of moiety; (iii) the defendant is to pay the costs of the prosecutor in a sum as agreed or, in the absence of agreement, as ordered by the Court. (b) In relation to Matter No IRC 1091 of 2008: (i) the defendant, Peter Karabelas, is convicted of the offence as particularised; (ii) the defendant is fined the sum of $8500 with half that sum to be paid to the prosecutor by way of moiety; (iii) the defendant is to pay the costs of the prosecutor in a sum as agreed or, in the absence of agreement, as ordered by the Court. (c) in relation to Matter No IRC 1092 of 2008: (i) the defendant, Peter Karabelas, is convicted of the offence as particularised; (ii) the defendant is fined the sum of $11,500 with half that sum to be paid to the prosecutor by way of moiety; (iii) the defendant is to pay the costs of the prosecutor in a sum as agreed or, in the absence of agreement, as ordered by the Court.

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