(cf Crimes Act 1900 sec 440AB and Justices Act 1902 sec 80A)
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 relevant to the fixing of that amount.
17 For the purpose of this submission, there was tendered into evidence documentation concerning the financial circumstances of each of the defendants.
18 Crown was registered in May 2004. I infer from the totality of the evidence that it was the vehicle by which Mr Ivanovski carried on business as a roofing contractor. It has no employees other than Mr Ivanovski and his wife. All labour used for the purpose of carrying out roofing work is engaged on a "contract" basis.
19 Financial statements for the years ending 30 June 2006, 2007 and 2008 indicate gross profit from trading before expenses of $45,139, $125,813 and $75,332 respectively. There appears nothing untoward in an examination of the expenditure shown for each of these years. In the 2008 year, wages were shown as $54,080, which is an amount similar to that shown for the 2007 year. These include a salary of about $15,000 per annum paid to the wife of Mr Ivanovski, the remainder being a sum attributed to him for his work. In all of these financial years, the financial statements show a trading loss. For the 2008 year, that loss would have been about $8,000 after making an adjustment for the wages paid to Mr Ivanovski and his wife.
20 It was Mr Ivanovski's evidence that the trading position of Crown had deteriorated since 30 June 2008 because of the current downturn in building work. It may be assumed therefore that Crown's current trading position will continue at a loss.
21 Mr Ivanovski furnished some updated information about the assets and liabilities of Crown as at "March" 2009. Assets were shown at $37,610, which I am advised comprises substantially motor vehicles. Whether that amount represents historical figures, depreciated figures or an assessment of current market value is unknown. There are liabilities totalling $249,872 but this includes an amount of $197,000 approximately owing to Mr Ivanovski by way of a director's loan. I shall ignore this amount for the purpose of considering whether it is appropriate to apply the provisions of s 6 of the Fines Act.
22 There are other amounts owing, including approximately $11,500 to the Australian Taxation Office, $5,000 to a roofing sub-contractor and $26,500 to American Express on a "business credit card" account. Furthermore, there is an amount of approximately $30,000 owing with respect to the defendants' own legal costs in these proceedings and a further $5,000 due soon to the Australian Taxation Office.
23 The overall position of the company, therefore, is that it is trading at a loss, its liabilities, after discounting the director's loan, exceed its assets and, given Mr Ivanovski's assessment of the current trading position, its financial future is uncertain.
24 Mr Ivanovski provided details of his personal financial circumstances verified by supporting documentation. His assets are a home which he valued (without supporting evidence) at $650,000 and motor vehicles valued at $5,000. However, there are loans secured against the home from Westpac totalling $483,000. The loan amounts have increased over the last few years because Mr Ivanovski has drawn down against them for the purpose of funding Crown and this funding accounts in large measure for the amount of the director's loans shown in Crown's accounts.
25 In addition, Mr Ivanovski appears to owe a further $70,000 approximately to a number of creditors including the Australian Taxation Office for $6,600, American Express for $21,600, Commonwealth Bank Visa account for $16,000 and three further bank credit cards exceeding $23,000. Some of those accounts are in arrears and Mr Ivanovski has available something of the order of $8,000 left to draw down from the Bank. Mr Ivanovski and his wife have two children aged seven and a half months and three years. His wife derives limited income, as I have said, from Crown. Mr Ivanovski is aged 34.
26 Mr Ivanovski's assessment is that his net personal and family expenditure of $6,780 per month exceeds his net monthly income after expenses of about $3,000 per month.
27 In endeavouring to assess Mr Ivanovski's personal circumstances in a realistic fashion, I infer that he has limited or no ability to service his existing financial commitments and, in circumstances where his future income is likely to decrease, there must be a real likelihood that one or other of his creditors will take such action as may require him to sell the family home. In this regard I note also that the American Express "business account" debt owed by Crown is, in reality, in Mr Ivanovski's personal name and this must represent a further contingent personal liability if Crown is unable to adjust this account.
28 The appropriate approach to the application of s 6 of the Fines Act is now well established. I set out an extract from the judgment of a Full Bench of this Court in McColl v John Watson Building Services Pty Ltd and Dowdon Contracting Pty Ltd [2004] NSWIRComm 353. At [24] and [25], the Full Bench said:
"24 We agree with and adopt the following principles which may be distilled for present purposes from the discussion of the authorities contained within the judgment in Inspector Mansell v Eleven Lighting Pty Ltd :
1. This court is obliged to take into account the means of a defendant to pay any penalty by virtue of s 6 of the Fines Act .
2. The imposition of a fine on a corporation may have different ramifications to the imposition of a fine on an individual where imprisonment or some other penalty may be available as an alternative sanction. That alternative is not available in the case of a corporation.
3. A defendant who wishes to rely on the provisions of s 6 to temper the amount of any monetary penalty bears the onus of putting such evidence in support as is appropriate before the court and bears the onus on the basis of the balance of probabilities of satisfying the court as to the truth of such evidence and its relevance to the fixing of penalty.
4. Whilst it is for a corporate defendant to fully disclose its financial state, it is for the prosecutor to check that information in order to assist the court in determining the propriety of taking that evidence into account in imposing a monetary penalty. It is inappropriate for the court to exercise an inquisitorial role in this regard.