Citation: R v Abouchabake [2024] NSWDC 42
Court: District Court of New South Wales
Date: 1 March 2024
Judge: Newlinds SC DCJ
Background
The offender, a mechanic and former tyre franchise operator, faced financial ruin in 2018 following the collapse of his business and a bitter marriage breakdown. His former wife obtained Supreme Court consent orders requiring the proceeds of the sale of the matrimonial home to be held in a controlled monies account pending Family Court proceedings. The offender breached that order and, across 51 transactions, withdrew approximately $567,041 in cash from three bank accounts in the months leading up to his bankruptcy.
In addition, in the seven weeks before filing for bankruptcy, the offender drew down $20,500 from two ANZ credit card accounts in cash. He filed his own petition for bankruptcy on 27 November 2018 and subsequently made false declarations in his statement of affairs provided to his trustee.
The offender pleaded guilty to two counts of disposing of assets with intent to defraud creditors under s 266(3) of the Bankruptcy Act 1966 (Cth), with a further charge of making a false declaration in a statement of affairs (s 267(2)) taken into account on a schedule.
Legal Issues
- What sentence was appropriate for offences of pre-bankruptcy disposal of assets with intent to defraud creditors, given the scale of the offending and the offender's subjective circumstances?
- What weight should be given to general deterrence in offences that undermine the integrity of the bankruptcy regime?
- How should the late guilty plea, the offender's medical conditions, age, and otherwise good character affect the sentence?
- Whether full-time imprisonment was required for Count 1, and whether Count 2 warranted a custodial or non-custodial sentence.
Decision
Newlinds SC DCJ found that Count 1 was serious offending that demanded full-time imprisonment, regardless of the weight accorded to the offender's subjective case. The total amount disposed of under Count 1 was approximately $567,041, the bulk of which derived from the proceeds of the matrimonial home held in breach of a Supreme Court order. His Honour was sceptical of the offender's claim that the entire sum had been gambled away, but accepted that the money had been dissipated.
His Honour emphasised the importance of general deterrence in Bankruptcy Act offences, noting that the integrity of the bankruptcy regime and public confidence in it required that such conduct be met with a meaningful custodial response. The primary motivation appeared to be concealing funds from the offender's former wife rather than creditors generally, but the collateral harm to other creditors was nonetheless real.
Count 2 was found to be less serious in isolation and might, viewed alone, have attracted a non-custodial sentence. However, considered in the context of Count 1, a short concurrent custodial term was appropriate. The s 16BA schedule matter was taken into account in sentencing on Count 1.
On the offender's subjective case, his Honour gave weight to the offender's otherwise good character, absence of prior criminal history, significant medical conditions (which would make custody more onerous), and the difficult personal circumstances surrounding the offending. A guilty plea discount was applied, though reduced from the standard 25% starting point in New South Wales because the plea came at a late stage. Taking all matters into account, his Honour imposed an aggregate term of 18 months imprisonment, with only the first six months to be served in custody and the balance on a Recognisance Release Order.
Orders Made
- Aggregate term of 18 months imprisonment on Counts 1 and 2, commencing 1 March 2024 and expiring 31 August 2025.
- Execution of the sentence partially suspended after 6 months pursuant to s 20(1)(b) of the Crimes Act 1914 (Cth), on condition the offender enter into a recognisance in the sum of $100 without security.
- Condition of recognisance: good behaviour for 12 months from 31 August 2024.
- Indicative sentences: Count 1, 18 months; Count 2, 6 months (wholly concurrent).
- The s 267(2) offence on the s 16BA schedule taken into account in sentencing on Count 1.
Key Takeaways
- Offences under s 266(3) of the Bankruptcy Act 1966 (Cth) involving large-scale pre-bankruptcy asset disposal will attract significant weight on general deterrence grounds, given the importance of public confidence in the bankruptcy regime.
- A strong subjective case, including good character, medical conditions, and difficult personal circumstances, can reduce the severity of the custodial term but will not necessarily displace the need for full-time imprisonment where the objective seriousness of the offending is high.
- Where a plea of guilty is entered late in proceedings, the discount applied will be less than the standard 25% starting point applied in New South Wales.
- The District Court treated Counts 1 and 2 differently in isolation: Count 2 alone might have attracted a non-custodial outcome, but its assessment shifted when considered alongside the much more serious Count 1.
- Medical conditions that make custody more burdensome are a relevant factor in sentencing, and can inform decisions about the proportion of a term to be served in full-time custody versus on a Recognisance Release Order.
Legislation and Cases Referenced
Legislation
- Bankruptcy Act 1966 (Cth), ss 266(3), 267(2)
- Crimes Act 1914 (Cth), s 20(1)(b)
- Crimes (Sentencing Procedure) Act 1999 (NSW)
- Judiciary Act 1903 (Cth)
Cases
- DPP (Cth) v Thomas [2016] VSCA 237
- Hili v The Queen (2010) 242 CLR 520
- JM v R [2014] NSWCCA 297
- Paragalli v R [2006] NSWCCA 87
- R v Bibaoui [1997] 2 VR 600
- Stipkovich v R [2018] WASCA 63
- Weininger v R (2003) 212 CLR 629
- Xiao v The Queen [2018] NSWCCA 4