Regina v Austin & Manasseh

THE SUPREME COURT OF NEW SOUTH WALES CRIMINAL DIVISION

BELL J 13 June 2001 70038/00 & 70204/00 - Regina v Leslie Raymond AUSTIN and Maurice Showa MANASSEH

1 On 5 February 2001 the prisoners Leslie Raymond Austin and Maurice Showa Manasseh were arraigned before me on an indictment charging each of them with one count; that between about 1 May 1997 and 6 June 1997 at Sydney he created a false or misleading appearance of active trading in securities, namely, shares in Diamond Rose NL ("DRN"), on a stock market, to wit the Australian Stock Exchange Ltd ("the ASX") . Each prisoner entered a plea of not guilty. A jury was empanelled and there followed a trial lasting fifteen days. On 23 February 2001 the jury returned verdicts convicting each prisoner of the offence charged. 2 The offence is created by s 998(1) of the Corporations Law. It carries a maximum penalty of five years imprisonment and/or a fine of 200 penalty units ($22,000). Relevantly, s 998 is in these terms: "False Trading and Market Rigging Transactions

(1) A person shall not create, or do anything that is intended or likely to create, a false or misleading appearance of active trading in any securities on a stock market or a false or misleading appearance with respect to the market for, or the price of, any securities.

…. (5) Without limiting the generality of subsection (1), a person who: (a) enters into, or carries out, either directly or indirectly, any transaction of sale or purchase of any securities, being a transaction that does not involve any change in the beneficial ownership of the securities; (b) offers to sell any securities at a specified price where the person has made or proposes to make, or knows that an associate of the person has made or proposes to make, an offer to buy the same number, or substantially the same number, of securities at a price that is substantially the same as the first-mentioned price; or (c) offers to buy any securities at a specified price where the person has made or proposes to make, or knows that an associate of the person has made or proposes to make, an offer to sell the same number, or substantially the same number, or securities at a price that is substantially the same as the first-mentioned price; Shall be deemed to have created a false or misleading appearance of active trading in those securities on a stock market. (6) In a prosecution of a person for a contravention of subsection (1) constituted by an Act referred to in subsection (5), it is a defence if it is proved that the purpose or purposes for which the person did the act was not, or did not include, the purpose of creating a false or misleading appearance of active trading in securities on a stock market. (7) A purchase or sale of securities does not involve a change in the beneficial ownership for the purposes of this section if a person who had an interest in the securities before the purchase or sale, or an associate of the person in relation to those securities, has an interest in the securities after the purchase or sale."

3 The Crown made its case as against each prisoner solely upon the basis of transactions which fell within one or more of the limbs of s 998(5). 4 In the case brought against the prisoner, Leslie Austin, the Crown relied on eight transactions numbered 5, 7, 9, 10, 11, 13, 14, & 15 as set out in a schedule, Ex B. These transactions involved the sale and purchase of shares in DRN between 1 May 1997 and 30 May 1997. The volume of shares traded the subject of these transactions amounted to some 466,500 shares (excluding the shares the subject of transaction 9 to which I will return). 5 In the case brought against Maurice Manasseh the Crown relied on ten transactions numbered 1, 2, 3, 4, 8, 9, 12, 14, 16 & 17 as set out in Ex B. These transactions took place between 1 May 1997 and 6 June 1997. The volume of shares traded in connection with these transactions (again, excluding transaction 9) amounted to some 437,000 shares. 6 Each prisoner conducted his share trading activities through companies which were controlled by him. The two prisoners were friends and, in a number of instances, they were joint directors of companies within the "Manasseh group". No particular significance attaches to this fact. The evidence disclosed that Leslie Austin became a director of each of these companies around February 1997 at a time when Mrs Elsie Manasseh had found it necessary to resign her directorships as the result of a sustained period of ill health. 7 In respect of some transactions the Crown relied on the operation of both s 998(5)(a) "wash trades" (involving a transaction of sale or purchase being a transaction that did not involve a change in beneficial ownership of the securities) and s 998(5)(b) & (c) matching orders (offering either to buy or to sell securities at a specified price knowing that the prisoner or an associate had made, or proposed to make, an offer to sell or to buy the same number or substantially the same number at a price which was substantially the same). A number of transactions relied upon in the case made against each prisoner attracted the operation of each of s 998(5)(a), (b) & (c). 8 The Crown established its case as against each prisoner upon proof of any one transaction which fell within the operation of the deeming provision of s 998(5). 9 It was submitted on behalf of the prisoner Manasseh that it was a realistic possibility that none of the transactions involving the broking firm, Falkiners, had been found by the jury to have fallen within the scope of s 998(5). I am not concerned to determine the basis upon which the jury arrived at its verdict. It is a matter for me to determine the facts upon which, consistent with the jury's verdict, I approach the matter of sentence; R v Isaacs (1997) 41 NSWLR 374. Findings of fact adverse to the prisoner must be arrived at beyond reasonable doubt. 10 The submission concerning the Falkiner's transactions arises out of evidence given by Ms Carol Corbey, a Director of Falkiners Stockbroking Limited. In 1997 Ms Corbey was the Administration Manager of that firm. Generally it was her evidence that she had been concerned about the extension of any latitude (in terms of the settling of accounts) to either of the prisoners. Both were new clients of the firm. In each of the eight transactions recorded in Ex B where Falkiners were the broking firm placing the "ask bid" she had conveyed to the prisoner that his shares would be forcibly sold should he fail to promptly settle his account with the firm. In the event, the subject transactions were not forced sales carried out in accordance with ASX Rules. They were effected upon the instructions of the prisoner in each case. I accept that the prisoners were under pressure from Falkiners to settle however this does not cause me to put the Falkiners' "sell" transactions to one side in assessing the objective features of the criminality in each case. 11 I exclude from my consideration of the prisoners' criminality transaction 9. This was a transaction relied upon by the Crown as against both the prisoners. The Crown relied on the second limb of the deeming provision, namely the matching orders provisions of s 998(5)(b) & (c) with respect to this transaction. James Thomas of Ord Minett gave evidence concerning the "buy" instructions received by him from Mr Manasseh. In the course of his cross-examination Mr Thomas agreed that it was quite possible that he had been instructed on behalf of Minosea Pty Limited (a Manasseh group company) to purchase 33,000 DRN shares and that it had been left up to him as to how he filled the order. I am not satisfied beyond reasonable doubt that transaction 9 falls within the terms of s 998(5)(b) or (c). In other respects I approach the matter upon the basis that the Crown established the transactions particularised in the case it made against each prisoner as falling within one or more of s 998(5) (a), (b) &(c). 12 On behalf of each of the prisoners I am invited to find that the conduct in the present case did not involve dishonesty, breach of trust or the like. It is said that there was no detriment caused to any person. Generally it is submitted that the offence was in the nature of a technical offence only. In this respect my attention was directed to the evidence given by a number of stockbrokers who were called in the Crown case to prove the various transactions particularised. Considerable emphasis was also placed on the evidence of the expert called by the Crown, Alexander Burt. 13 Evan Tong, a Director with Peake Lands Kirwan Pty Limited (a broking firm carrying on business in Melbourne) is an experienced stockbroker who gave evidence concerning the DRN float. DRN is a speculative mining exploration company. Mr Tong said that there was a lot of interest in DRN prior to the shares being listed. He recalled that interest as continuing for about two or three months following the float. Mr Tong believed about four million shares had been traded in DRN in the week following the float. 14 Mr Tong's attention was directed to the trades particularised by the Crown against Mr Manasseh for 1 May 1997. Mr Tong agreed that it appeared that the market had been a reasonably active one on that day and that it would have been reasonably active regardless of the subject transactions. The four trades relied upon by the Crown made no difference to Mr Tong's opinion that DRN shares were being actively traded. 15 Alfred Day is a broker who in 1997 was employed by Prudential Bache Securities Australia Limited. Mr Day was very much aware of the listing of DRN. It was his understanding that it was very well sought by the general public. In Mr Day's opinion DRN had been an actively traded stock on each day throughout the period 22 April to 6 June 1997. Mr Day's attention was drawn to the four transactions relied upon by the Crown in the case against the prisoner, Manasseh, on 1 May 1997. He was asked: Q. Whether these trades occurred or did not occur, that is transactions 1, 2, 3 and 4 on 1 May I would suggest in your opinion make absolutely no difference to your opinion that the stock was actively traded on that day? A. No difference, very little difference (T 248).

16 John Stokes was employed by Reynolds and Co Pty Limited in 1997. Reynolds was a co-broker of the DRN float. Mr Stokes described the stock in DRN as highly sought after at the time of the float. The float was over subscribed and stock in DRN was hard to come by. Mr Stokes said that DRN stock had excited interest among investors and potential investors for the first two to three months following the float, certainly during April and May. He considered the stock to have been actively traded until the end of May 1997. In Mr Stokes' opinion one might ignore the eighteen transactions, particularised by the Crown, and still conclude that DRN had been actively traded during the period covered by the Indictment. 17 The Crown called Alexander Burt to give expert opinion evidence. Mr Burt has some forty years experience in the stockbroking industry. Mr Burt agreed that he had not been able to establish any reason for the transactions relied on by the Crown. He agreed that he had conveyed to Mr Austin's counsel that he had not been able to work out why either prisoner had engaged in the transactions. In this respect Mr Burt accepted that there appeared to be no personal benefit derived by either prisoner. 18 Generally the evidence of Mr Day, Mr Stokes and Mr Burt was consistent with the view that the transactions relied upon by the Crown had not had an effect on the price of DRN stock. 19 It was not suggested on behalf of the Crown that any identifiable personal gain had been made by either prisoner in connection with the trades the subject of the case made against him. 20 As to the seventeen transactions particularised by the Crown Mr Burt considered that they had little effect on the market. He was frank in acknowledging that others engaged in the business of stockbroking might reasonably conclude that these transactions had no effect. 21 I approach this matter upon an acceptance that the transactions relied on by the Crown in support of the case it makes against each prisoner had little, if any, discernible effect on the market. 22 Equally, I am mindful of another aspect of the evidence of John Stokes. He agreed that one could not discount the fact that a buyer may enter the market because he perceives that the market is active and that the fact that shares are being traded may attract other buyers and sellers into the market. Such a consideration might be thought to explain the qualified answers Mr Burt gave in cross examination when assenting to the proposition that he had not been able to identify any personal gain made by the prisoners: Q. I'm asking you whether you told Mr Farmer that you couldn't work out why Mr Manasseh and Austin may have done it. Is that true or not? A. That is true. Q. That is because, is it not, when you looked at it in the context of an allegation of what might be called market rigging, none of this made sense, did it? A. Yes it did make sense.

Q. I don't quite understand, Mr Burt. You said you looked at everything, you couldn't work out why they did it. A. By that I meant what personal gain …. Q. That's right, because you worked out there was nothing to be gained from that, is that right? A. Well, there's obviously gain from the market manipulation but there is no personal benefit (T 503).

23 I do not accept that the transactions were themselves de minimis (as was put on behalf of the prisoner Manasseh) or that they bear no hallmarks of transactions designed to rig the market (as was put on behalf of the prisoner Austin). Nor do I approach the matter upon the basis that these offences were purely technical offences. Section 998(5) of the Corporations Law deems those who engage in transactions of the nature of wash trades or matching orders to have created a false or misleading appearance of active trading. 24 The predecessor of s 998(1) of the Corporations Law was s 70 of the Securities Industries Act 1970 (NSW). In dealing with the latter provision Mason J in North v Marra Developments Limited (1981) 148 CLR 42 at 59 observed: "It seems to me that the object of the section is to protect the market for securities against activities which will result in artificial or managed manipulation. The section seeks to ensure that the market reflects the forces of genuine supply and demand …. it is in the interests of the community that the market for securities should be real and genuine, free from manipulation. The section is a legislative measure designed to ensure such a market and it should be interpreted accordingly."

25 Transactions caught by s 998(5)(a), (b) & (c) are transactions which are not real and genuine in the sense described by Mason J above. 26 The Crown submitted that the offence committed by each prisoner should be viewed as "a relatively serious offence" within the category of offences covered by s 998(1) of the Corporations Law. In the Crown's submission, the need for general deterrence in respect of offences of this character was such as to call for a custodial sentence. The Crown did not submit that such a sentence should necessarily be served by way of full time custody. 27 In support of his submissions the Crown prosecutor appended details of a number of cases involving the sentencing of persons convicted of offences said to be broadly similar to that created by s 998(1) of the Corporations Law. 28 In R v Wright [1980] VR 593 the Victorian Full Court dismissed an appeal against the severity of a sentence of twelve months imprisonment with a six month non-parole period following the appellant's conviction for an offence under s 110 of the Securities Industries Act 1975 (being an offence comparable to the offence created by s 999 of the Corporations Law). In that case the appellant was the Director of Wattle Gully Gold Mines NL. He and members of his family had a substantial shareholding in the company. In December 1996 he released a letter to the Melbourne Stock Exchange which contained wrong assertions as to the quantity and quality of a uranium deposit over which Wattle Gully had an option. The share price of Wattle Gully stock increased following publication of that letter. Young CJ (with whom Murray J agreed) observed that this was a serious instance of such an offence. It is to be noted that the trial judge found that appellant had carried out a deliberate deception for a dishonest purpose. There was no evidence that the appellant had gained personally from the offence, however the court found that the potential for gain was present. 29 In R v Goward (unreported) NSWCCA 16 October 1998, the court dismissed an appeal against the severity of a sentence of two years imprisonment with a ten month additional term imposed upon the applicant following his plea of guilty to an offence under s 125 of the Securities Industries (NSW) Code of making a statement which was false or misleading in a material particular (an offence in similar terms to that provided by s 999 of the Corporations Law). In that case the applicant was a director of Westmex Ltd and the holder, through a variety of companies which he controlled, of large numbers of shares in it. In late 1989 the share price of Westmex declined. The applicant issued a press announcement stating that over the previous two months the directors of Westmex had purchased in excess of one million Westmex shares and that they had sold none. In the previous month the applicant had sold a large number of the Westmex shares held by companies over which he had control. Following his announcement the price of Westmex shares rose. Subsequently the share price declined and the company went into liquidation. In that case the sentencing judge found as a circumstance of aggravation that the applicant's false statement had actually induced others to purchase Westmex shares thereby occasioning a substantial loss to those individuals. Sperling J (in a judgment with which the other members of the Court agreed) observed: "I think it is clear that the applicant's major motivation was an attempt to stave off the fall of the company and his own financial demise by inducing others to pay more for the company's shares in the market than they were worth. Such conduct is analogous to fraud if it does not technically qualify as fraud. To classify it as merely inappropriate conduct in office is unrealistic." (pp 13 - 14)

30 I was referred to a further case involving the making of a statement which was false or misleading in a material particular. This was the decision of the West Australian District Court in R v Georgiopoulos (unreported) DCWA, 9 April 1998. I was informed that the prisoner in that case pleased guilty to two counts contrary to s 999 of the Corporations Law. In that case the prisoner falsely stated in a letter to Mount Burgess Gold Mining ("Mount Burgess") that he was one of a group of people who intended to mount a take-over bid for the company. The information was announced to the market by the ASX and the price of shares in Mount Burgess rose. Subsequently trading in Mount Burgess was suspended when the prisoner informed the ASX that he was unsure of his position regarding the take-over. At the time trading was suspended ninety-six transactions had taken place following the prisoner's announcement involving some 3 million shares valued at $1.1 M. In that case the prisoner was fined the sum of $12,500.00 on each of the two counts. 31 I was also referred to the decision of Judge David in R v Shearer (unreported) DCSA, 18 June 1998. In that case a twenty year old man pleaded guilty to an offence under s 997 of the Corporations Law namely that he had entered transactions likely to increase the share price of stock in Reef Mining with the intention of inducing others to buy shares. His Honour imposed a sentence of eighteen months which was suspended. The prisoner was assessed as of borderline intellect. He appeared to have a constellation of other difficulties. I do not consider the determination in that case to be of any assistance in dealing with the subject offences. 32 The only case to which I was taken which involved an offence similar to that provided for by s 998(1) of the Corporations Law was R v Lloyd (1996) 19 ACSR 528. This prosecution arose out of a scheme to maintain the share price of stock in Paragon Resources NL ("Paragon"). Had the share price fallen below 70c that event would have triggered default provisions in the loan and security agreements between Oakhill Pty Ltd ("Oakhill") and Standard Chartered Bank Australia Ltd ("the Bank") relating to a loan of $105M by the Bank to Oakhill. The latter was a company associated with Rothwells Ltd ("Rothwells"). The respondent, Lloyd, was the managing director of Rothwells. Default under the Oakhill loan was likely to lead to the collapse of Rothwells. Over the course of nine months in 1988 Rothwells arranged and funded substantial trading in the shares of Paragon through a number of companies. Trading was conducted on three stock exchanges and involved 51 million shares at a cost in excess of 30 million. Once the scheme came to an end the share price in Paragon fell. 33 Lloyd was convicted, following trial, of three offences under s 124 of the Securities Industries (Western Australia) Code of creating a false appearance with respect to the price of shares. He was fined the sum of $32,500. The Crown appealed against the inadequacy of the sentence to the Full Court of the Supreme Court. By majority (Malcolm CJ and Ipp J) the Court allowed the appeal and substituted fines totalling $50,000. The Chief Justice considered that the offences were within the category of the very worst kind of offences that could be disposed of by way of fine rather than imprisonment. Murray J (in dissent) was of the view that the offences were such as to call for sentences of imprisonment. 34 In Lloyd the trial judge found that the share market trading results of Paragon during the subject period were most unusual and inconsistent with its results before and after that period. The results were entirely contrary to that which would have been expected in a free market. The share price was artificially inflated throughout the period of the offences. It was not clear that the respondent, Lloyd, was aware that he was committing a criminal offence although the trial judge considered that a person in the position of Managing Director of Rothwells would have been aware, at the least, that it was a matter on which advice should have been obtained. There was no evidence that the respondent was motivated by personal gain. 35 I now turn to a consideration of the subjective circumstances of each of the prisoners. 36 Leslie Austin is aged 65 years. He has no prior convictions. A report prepared by Mr Baker, Probation and Parole officer, sets out a brief account of the prisoner's employment history. He was the owner of a printing company which was sold in 1986. Since that time he is described as having lived on his assets and as attempting to augment his income by share trading. In the course of the trial there was some evidence given by the accountant, Gary Lissa, that around 1995 Mr Austin had acquired a farming property at a place called Moonan Flats near Scone. It was his intention to become a beef cattle producer. It appears from Mr Baker's report that the prisoner got into financial difficulties and that the farm was sold at the behest of the bank. This much is confirmed in the reference of Father Smith to which I will return. The prisoner is currently in receipt of the age pension of approximately $300.00 per fortnight. 37 Both the prisoner and his estranged wife are described in the pre-sentence report as being bankrupt. 38 The prisoner and his wife separated four years ago. They remained on friendly terms and have in recent times resumed sharing rented accommodation as a means of minimising their living expenses. They are the parents of four children whose ages range between thirty-one and sixteen years. They have faced considerable tragedy in their family life. One of their sons died as the result of a drug overdose. Another son suffers from schizophrenia. Presently they have concerns for their youngest boy who is exhibiting difficulties in coming to terms with these family losses. 39 A reference from Father Anthony Smith, Headmaster of St Aloysius' College describes the prisoner as a faithful parent. He has supported his sons in their academic, sporting and other activities throughout their school years. The prisoner showed personal kindness to Father Smith during a period of illness. As I have noted, Father Smith comments on his awareness of the decline in the Austin family fortunes over a number of years. 40 The prisoner Maurice Manasseh is aged fifty-four years. He lives with his wife and twenty-eight year old daughter, Leah. Seven years ago Leah was involved in a serious motor vehicle accident. She spent almost two years in hospital. She sustained brain damage and suffers from partial paralysis. She is only able to walk by using a walking frame. She requires the assistance of paid carers six days per week. Mrs Manasseh has suffered from a variety of health problems following the removal of a tumour from her neck some years ago. Her poor health limits her ability to provide assistance to her daughter. The prisoner is described by Mr Cole, Probation and Parole Officer, as meeting the bulk of the caring and domestic responsibilities for his daughter on the weekends and of an evening. He is said to be devoted to her and she appears to be highly dependent on both his practical assistance and his emotional support. 41 The prisoner was born and raised in Singapore. He moved to Australia with his family in his late teens having completed the equivalent of the Higher School Certificate in Singapore. His first employment was in a bank. He worked as a teller and later as a loan clerk for some five years. Thereafter he had employment as a taxi driver on a part time basis. He worked for some time with his younger brother selling jewellery. For a period he was employed in the stock market in Sydney. The pre-sentence report records of this period: "Mr Manasseh stated, that he had been employed in the stock market in Sydney, for about two years in the mid 1980's but that circumstances had arisen where he had not been allowed to renew his license."

42 Nothing further is disclosed concerning this matter. I note that the prisoner is a person of no prior convictions. 43 The prisoner has worked for the past fifteen years as a stock market trader. He described his work as raising money for public companies through established connections he has with some wealthy private individuals but mainly with the business sector. Mr Cole observes that it is difficult for the Service to thoroughly assess the prisoner's standing in the business world given that he is self-employed in what is described as entrepreneurial work. Mr Cole states that those contacted in connection with the prisoner's business activities have generally spoken well of him. 44 The prisoner is a practising Orthodox Jew. He is the Vice President of his Synagogue. A reference from Rabbi Michael Chriqui speaks of the prisoner in most positive terms. Rabbi Chriqui has known the prisoner for almost nine years. He attests to the prisoner's devotion to his daughter following her accident. He also attests to the prisoner's good works in the community generally. The prisoner is described as helping the needy and destitute and as being dependable both financially and otherwise in his support. Rabbi Chriqui considers the prisoner's conviction to be out of character. 45 I have also been supplied with a reference by Dr Tringali who has been the prisoner's treating doctor for the past fifteen years. Dr Tringali observes that, as the result of his wife's condition, the burden of much assistance for Leah falls upon the prisoner. Dr Tringali comments on the time consuming nature of the prisoner's commitments at home associated with the preparation of food in accordance with the dictates of his religious beliefs. Generally, Dr Tringali expresses the opinion that the prisoner's conviction is out of character. 46 The starting point in considering the appropriate sentence are the provisions of Part 1B of the Crimes Act 1914 (Cth) ("the Act"). Section 16A(1) of the Act requires me to impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence. I am not to pass a sentence of imprisonment unless, after considering all other available sentences, I am satisfied that no other sentence is appropriate in all the circumstances of the case; s 17A(1). 47 Section 16A(2) of the Act sets out in subparagraphs (a) - (p) the matters which the court must take into account in determining the sentence to be passed upon a person in respect of a federal offence. The statement of those matters is not exhaustive. While general deterrence is not, in terms, provided for it is plain that this remains a consideration to which a court must have regard in sentencing federal offenders; Director of Public Prosecutions (Cth) v El Karhani [1990] 21 NSWLR 370. 48 Both the prisoners are persons of otherwise good character who have made out positive cases in this respect at the sentence hearing. It is true that crimes of this nature will frequently be committed by persons of good character and that, to this extent, good character may assume a lesser significance in the sentencing process. This is not to say that in each case the prisoner's good character does not entitle him to some claim upon the court for leniency for the reasons explained in Ryan v the Queen [2001] HCA 21 at paragraphs 31, 33, 108 and 178. 49 I am not of the opinion, having considered all other available sentences, that no sentence other than one of imprisonment is appropriate to this case. While I reject the proposition that the offences were in either case technical ones, I consider that they are to be distinguished from the cases to which I was referred in which sentences of imprisonment were imposed where there was a finding that the offender had engaged in a deliberate course of deception. Neither of the subject cases admits of such a finding. 50 I consider that the facts of these cases do not disclose offences as objectively serious as those with which the Court was concerned in Lloyd for the reason that in neither case was there evidence that the price of DRN shares was affected to any degree by the transactions or that any person suffered (or was likely to have suffered) loss in consequence of them. 51 Since I am not of the view that no sentence, other than a sentence of imprisonment, is appropriate it is not necessary for me to consider whether any such sentence should be served by way of full time custody or otherwise. 52 I do not consider that the imposition of a fine is, in either case, appropriate. I am not persuaded that either prisoner derived any financial benefit from the subject transactions. The prisoner, Austin, does not have the financial capacity to pay a fine and this is not an appropriate sentencing option with respect to him; s 16C(1) of the Act. I favour the imposition of like sentences on each of the prisoners. There is little to distinguish between the two in terms of the objective gravity of the offence nor, broadly, in a consideration of their subjective circumstances. 53 On behalf of the prisoners I was invited to deal with the matter by discharging them without proceeding to conviction pursuant to the provisions of s 19B(1)(d) of the Act. I am not disposed to approaching the matter in that way. I do not consider the offences to be of a trivial nature nor has it been suggested that they were in either case committed under extenuating circumstances. Notwithstanding the prisoners' good character I am not of the view that this fact or any matter as to their antecedents, cultural background, age, health or mental condition are such as to make a discharge under s 19B(1)(d) an appropriate disposition given the seriousness of the offence. 54 I consider that the nature of the offence, together with the period over which it was carried into effect, requires that in each case a conviction be recorded. Recording a conviction is itself part of punishment; Pearce v the Queen [1998] HCA 57; (1998) 194 CLR 610 per Kirby J at para 119. This might be thought to have particular force in the case of persons, otherwise of good character, who have been involved in the management of companies. They will be disqualified from such activity in consequence of the conviction for a period of five years. 55 I consider that the appropriate penalty is in each case to release the prisoner without passing sentence on him upon him on a recognisance pursuant to s 20(1) of the Act. 56 In each case I direct the entry of a conviction upon the verdict of the jury. 57 I am required by law to explain the effect of the sentence which I propose to impose. I am going to direct that, in each case, you are to be released without sentence being passed on you upon you entering a recognisance or bond by which you agree to be of good behaviour for a period of three years from to-day. You are not required to deposit any money as security for entering the recognisance. If during the three years that you are subject to the recognisance, you should breach it by the commission of any criminal offence you would be liable to being brought back to court in respect of this offence. In such an event the Court would have the power to do a number of things including revoking the order and dealing with you for this offence by any means which are available to me today including the imposition of a sentence of imprisonment. I am also required to inform you that the recognisance may be discharged or varied upon your application, or the application of authorised persons including the Director of Public Prosecutions for the Commonwealth, in accordance with the provisions of s 20AA of the Act. Among the variations which may be made by a court pursuant to that section are the insertion of additional conditions in the recognisance. The length of the recognisance may be extended or reduced upon an application to vary its terms. 58 Leslie Austin, I order that you be released, without passing sentence on you, upon you giving security, without sureties, by recognisance, that you will comply with the following condition: (i) That you be of good behaviour for a period of three years from the date of entering the recognisance;

Maurice Showa Manasseh, I order that you be released, without passing sentence on you, upon you giving security, without sureties, by recognisance, that you will comply with the following condition: (i) That you be of good behaviour for a period of three years from the date of entering the recognisance.

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