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List of subheadings:
Sentencing
of corporations under the Crimes Act 1914 (Cth)
Relevant Sentencing Principles
- General Sentencing Principles
- Global Sentencing and the Totality Principle
- General Deterrence
- Discounts
--- Pleas of Guilty to Be Taken
Into Account
--- Discounts for Past Cooperation
--- Discounts for Future Cooperation
--- Combined Discounts for Pleas and Cooperation
Sentencing Options for Corporations
- Fines
--- Maximum Fines for Indictable
Offences Dealt with Summarily
--- Financial Circumstances
Further reading
Related links:
One
Transaction Rule
Totality Principle
Fines
Commentary on the Sentencing of Corporations Under the Crimes Act 1914 (Cth)
A corporation can commit a federal offence: s 4B.
The general principles of corporate criminal responsibility are set out in Part 2.5 of the Criminal Code Act1995 (Cth):
12.1 General principles (1)
This Code applies to bodies corporate in the same way as it applies
to individuals. It so applies with such modifications as are set
out in this Part, and with such other modifications as are made
necessary by the fact that criminal liability is being imposed
on bodies corporate rather than individuals. |
Relevant Sentencing Principles
The non-exhaustive list of matters in s 16A(2) must be taken into account by the court when passing sentence on a federal offender. Where relevant and known these principles apply to corporations as well as individuals.
An example of the relevance and application of each of the general sentencing principles contained in s 16A(2) to corporate offenders is given by the Federal Court in ACCC v Chubb Security Australia Pty Ltd [2004] FCA 1750, [70] - [128].
GLOBAL SENTENCING AND THE totality PRINCIPLE
Global sentencing and the totality principle have been relevant to the sentencing of corporations for offences which arise under the same federal provision.
Corporations are often prosecuted for multiple or continuing offences. See Multiple or Continuing Offences; see also the One Transaction Rule.
Setting a sentence for a corporate offender may require the Court to consider the intersection of the relevant offence provision with the sentencing principles as they apply under the Crimes Act 1914 (Cth) for a federal offence.
For example, in ACCC v Santo Pennisi [2007] FCA 2100, [16]-[20] the Court discussed the maximum penalty that may be applicable under the Crimes Act 1914 (Cth) for 28 corporate offences against the Trade Practices Act 1978:
the maximum penalty that is applicable in respect of any one corporate offence is specified in s 75AZC of the TPA. It is specified as a maximum of 10,000 penalty units. The effect of s 4AA of the Crimes Act is that a penalty unit is $110. Thus, the maximum penalty for each offence committed by a corporation against s 75AZC(1) is $1,100,000. The effect then, so far as the corporate Defendant is concerned, of s 4K(4) of the Crimes Act is, at least in terms of theoretical maximum, to multiply that particular amount 28 times in this case.
See also ACCC v Chubb Security Australia Pty Ltd [2004] FCA 1750, [181] - [182].
Although not expressly listed in the Crimes Act 1914 (Cth), the principle of general deterrence is a matter which should be taken into account in determining the sentence to be passed on an offender: see R v Sinclair (1990) 51 A Crim R 418, [430]; DPP (Cth) v Said Khodor El Karhani (1990) 21 NSWLR 370, [377]- [378].
General deterrence has assumed importance as a consideration when sentencing corporate offenders. [2]
This is particularly so for breaches of the Trade Practices Act 1974 (Cth); ACCC v Skippy Australia Pty Ltd [2006] FCA 1343, [15]. This was highlighted by von Doussa J in Trade Practices Commission v Farrow (1990) 95 ALR 53 who stated:
it is to be remembered that as the policy of the Trade Practices Act is consumer protection it is important that the penalty is such that it will not only deter the particular offenders from engaging in similar conduct again, but will also deter others from engaging in conduct that is prohibited by the Trade Practices Act. [3]
Where the Court thinks fit, a corporate offender may benefit from a discount on the sentence imposed.
Discounts can be provided for:
- a plea of guilty; and/or
- past cooperation; and/or
- promise of future cooperation.
Pleas of Guilty Taken Into Account
Section 16A(2)(g) provides that a court must take into account a plea of guilty in respect of that offence.
There is no further direction in the Crimes Act 1914 (Cth) as to how such a plea is to be taken into account.
Section 16A(2) does not specify the weight that should be given for a guilty plea, nor does it require a court to specify such a discount given. [4] See further Discounts.
Discounts for Past Cooperation
Section 16A(2)(h) requires a court to take into account the degree to which a person has cooperated with law enforcement agencies in the past.
There is no legislative requirement for the court to specify the discount that is provided for past cooperation and no legislative guidance as to factors relevant to assessing a discount for cooperation. See further Discounts.
Discounts for Future Cooperation
Section 21E applies where the federal offender has undertaken to co-operate 'in proceedings, including confiscation proceedings, relating to any offence'.
Section 21E(1) requires the court to specify that a reduction has been granted for this promised cooperation and state what the sentence would have been but for that reduction.
Section 21E(2) requires the court to allow appeals from the Director of Public Prosecutions where an offender has promised cooperation but has failed to do so without reasonable excuse.
Combined Discounts for Both Past and Future Cooperation
Where both past and future cooperation are relevant considerations the legislative effect of ss 16A(2)(h) and 21E mean that each should be dealt with separately: see R v Gladkowski [2000] QCA 352, [12]; (2000) 115 A Crim R 446, 449.
See further Discounts.
Combined Discounts for Pleas and Cooperation
The Crimes Act 1914 (Cth) is silent on factors relevant to determining a discount for a combined plea and cooperation.
However, in ACCC v Dimmeys Stores Pty Ltd [2001] FCA 299 Drummond J of the Federal Court supported:
the conventional substantial discount of about one-third for ... co-operation and [a] prompt plea of guilty. [5]
This was cited and adopted by the Court in ACCC v Chubb Security Australia Pty Ltd [2004] FCA 1750, [105]-[108].
Sentencing Options for Corporations
There are no sentencing options in the Crimes Act 1914 (Cth) which apply specifically to corporations.
Due to their non-corporeal nature, many sentencing options available against natural persons cannot be imposed on corporations.
Fines are the most common option utilised by courts when sentencing a corporation. [6] The fine must be of a severity appropriate in all circumstances to the offence: s 16A(1).
A court shall not impose a fine on a federal offender without recording a conviction: Crimes Act 1914 (Cth) s 19B ; Commissioner of Taxation v Doudle [2005] SASC 442, [26].
A fine is defined in s 3(2) of the Crimes Act 1914 (Cth).
Note: A penalty unit under s 4AA of the Crimes Act 1914 (Cth) means $110.
Under the Crimes Act 1914 (Cth) s 4B(3), where the Court thinks fit, it may impose a fine upon a corporation convicted of a federal offence.
The fine may be up to five times the amount of the maximum pecuniary penalty that could be imposed by the court on a natural person convicted of the same offence.
A fine may be imposed on a corporation for an offence that is stated to be punishable by imprisonment only. The Explanatory Memorandum, Crimes Legislation Amendment Bill 1987 (Cth) states that:
under s4B(3) bodies corporate are subject to pecuniary penalties equal to five times the amount applicable to natural persons convicted of the same offence, irrespective of whether the pecuniary penalty for the natural person is found in the law creating the indictable offence or whether the pecuniary penalty is derived pursuant to [s 4B(2)].
Note: section 4B(2) provides that a court may, if it thinks fit and if the contrary intention does not appear, impose a fine on a natural person for an offence that is stated to be punishable by imprisonment only.
Calculating the Fine
The quantum of the fine is to be calculated in accordance with the formula in s 4B(2):
|
Where a natural person is convicted of an offence against a law of the Commonwealth punishable by imprisonment only, the court may, if the contrary intention does not appear and the court thinks it appropriate in all the circumstances of the case, impose, instead of, or in addition to, a penalty of imprisonment, a pecuniary penalty not exceeding the number of penalty units calculated using the formula: Term of Imprisonment x 5 where: "Term of Imprisonment" is the maximum term of imprisonment, expressed in months, by which the offence is punishable. Where a natural person is convicted of an offence against a law of the Commonwealth in respect of which a court may impose a penalty of imprisonment for life, the court may, if the contrary intention does not appear and the court thinks it appropriate in all the circumstances of the case, impose, instead of, or in addition to, a penalty of imprisonment, a pecuniary penalty not exceeding 2,000 penalty units. |
For example:
Where the maximum term of imprisonment for an offence is six months, then the maximum pecuniary penalty available against a natural person would be 6 months x 5 = 30 penalty units.
This calculates a pecuniary penalty of: 30 x 110 = $3,300.
For a corporation the maximum available fine would be five times that amount: $3,300 x 5 = $16,500.
Maximum Fines for Indictable offences Dealt with Summarily
Section 4J of the Crimes Act 1914 (Cth) prescribes the maximum fines that may be imposed for certain indictable offences which are dealt with summarily.
Section 4JA prescribes the maximum fines that may be imposed for some indictable offences punishable by fine only which may be dealt with summarily.
[Top]Financial Circumstances
In addition to other relevant matters, the court must take into account the financial circumstances of the offender before imposing a fine: s 16C(1).
Note: the Court is not prevented from imposing a fine where the Court cannot ascertain an offender's financial circumstances: s 16C(2).
Courts have imposed fines on corporate offenders, notwithstanding that the corporation is in liquidation.
The Courts have found this to be consistent with the importance placed on the principle of general deterrence: ACCC v Fila Sport Oceania [2004] FCA 376, [23]- [25]; ACCC v Vales Wine Co Pty Ltd (1996) ATPR 41-528, [776]. See also Fines.
Further Reading
Australian Law Reform Commission, Same Crime, Same Time: Sentencing of Federal Offenders, Report 103 (2006), Chapter 30: Corporations.
New South Wales Law Reform Commission, Sentencing- Corporate Offenders, (2003) Report 102, Chapter 4: Factors Relevant to Sentencing.
Last Updated: 8 February 2008
Footnotes
[1] Criminal Code 1995 (Cth) ch 2, pt 2.5, div 12.
[2] See also ACCC v Australian Safeway Stores Pty Ltd [1997] FCA 450.
[3] (1990) 95 ALR 53, [64]. Cited with approval in ACCC v Hartwich [2002] FCA 273, [21] and in ACCC v Chubb Security Australia Pty Ltd [2004] FCA 1750.
[4] See for example Australian Law Reform Commission, Same Crime, Same Time: Sentencing of Federal Offenders, Report 103 (2006), [11.7] - [11.8].
[5] [2001] FCA 299, [27] -[28].
[6] Australian Law Reform Commission, Same Crime, Same Time: Sentencing of Federal Offenders, Report 103 (2006), [30.3].