|
ΠΑΓΚΥΠΡΙΟΣ ΔΙΚΗΓΟΡΙΚΟΣ ΣΥΛΛΟΓΟΣ
|
|
|
(1967) 2 CLR 158
1967 May 11
[VASSILIADES, P., TRIANTAFYLLIDES AND JOSEPHIDES, JJ.]
THE ATTORNEY-GENERAL OF THE REPUBLIC,
Appellant,
HAGOP MICHAEL DJEREDJIAN AND ANOTHER,
Respondents.
(Criminal Appeal No. 2897)
Criminal Law-Bankruptcy-Sentence-Appeal against sentences imposed for bankruptcy offences-As being "insufficient in view of the seriousness, gravity and prevalence of the offences as well as the facts and circumstances of the case"-Seriousness of offences-Proper application of Bankruptcy Law by courts-Statutory obligation for keeping, proper books of account-The Bankruptcy Law, Cap. 5, sections 116 (p) (s) and 122 (3)-Appeal allowed in part-Sentences increased.
Bankruptcy-Sentence-Failing to keep proper hooks of account See under Criminal Law above.
Sentence-See tinder Criminal Law above.
The respondents in this appeal were convicted jointly on a count for failing to keep proper books of account contrary to section 122 of the Bankruptcy Law Cap. 5, on thee different counts for permitting assets to be seized or applied for the benefit of a favoured creditor contrary to s. 116 (s) of the Bankruptcy Law (supra) and on a separate count, each respondent, for making a transfer of property contrary to s. 116 (p) of the Bankruptcy Law (supra) and they were given concurrent sentences of 12 months on count 1, 18 months on the counts for permitting assets to he seized or applied for the benefit of a favoured creditor, and 3 months on count 3.
The Attorney-General appealed against the above sentences on the ground that they were insufficient in view of the seriousness, gravity and prevalence of the offence as well as the facts and circumstances of the case.
The appeal was mainly argued in connection with the sentences imposed on the 1st and 2nd counts.
Held, (1) having given the sentences of I 8 months imprisonment imposed on the counts for permitting etc. (supra) our best consideration, we find ourselves unable to say that the sentence imposed by the trial Court is so manifestly inadequate as to justify an intervention by this Court.
(2) We think that regarding the sentence for the offence in the first count the trial Court acted on wrong principle to the extent of calling for intervention by this Court. Here again it is not without difficulty that we have not increased the sentence to one of longer term than that imposed on the other counts. The Bankruptcy Law provides for imprisonment of up to three years; and we can only say that there is obviously good reason for such a provision in the statute which the courts have the duty to apply with appropriate severity in the circumstances of each particular case.
(3) In the result the appeal is allowed regarding the sentence on count 1 which shall be increased under the provisions of section 145 (2) of the Criminal Procedure Law (Cap. 155) to one of 18 months the appeal against sentence on the other counts shall stand dismissed. All sentences to run-concurrently from conviction.
Appeal allowed in part.
Sentence on count 1 increased
to one of 18 months. Sentences
to run concurrently from
conviction.
Appeal against sentence.
Appeal by the Attorney-General of the Republic against the inadequacy of the sentence imposed on the respondents who were jointly convicted on the 11th March, 1967, at the Assize Court of Famagusta (Criminal Case No. 8271/66) on a count for failing to keep proper books of account contrary to section 122 of the Bankruptcy Law, Cap. 5, on three different counts for permitting assets to be seized or applied for the benefit of a favoured creditor contrary to section 116 (s) of the Bankruptcy Law (supra) and on a separate count, each respondent, for making a transfer of property contrary to section 116 (p) of the same Law and they were sentenced by Georghiou, P.D.C., Kourris & Demetriou, D.JJ. to 12 months' imprisonment each, on count 1, 18 months' imprisonment on count 2 and 3 months' imprisonment on count 3, all sentences to run concurrently.
A. Frangos, Counsel of the Republic, for the appellant.
Chr. Mitsides with X. Clerides, for the respondents.
The judgment of the Court was delivered by:
VASSILIADES, P.: This is an appeal by the Attorney General against the sentences imposed by the Assize Court of Famagusta on the respondents for bankruptcy offences (connected with business credits and bankruptcy proceedings wherein the respondents were found involved).
The two respondents were charged before the Assize Court on an information containing 15 counts, all connected with their business, which is now the subject of a winding up order and bankruptcy proceedings involving claims exceeding £100,000 against which the assets available can only satisfy a small percentage.
The trial of the case lasted "for some weeks" as the Assize Court say in their judgment and as the voluminous record before us amply shows. The appellants, in the end were convicted jointly on four counts, and severally on one other count each. They were convicted jointly on a count for failing to keep proper books of account as required by section 122 of the Bankruptcy Law, Cap. 5; on three different counts for permitting assets to be seized or applied for the benefit of a favoured creditor contrary to section 116 (s) of the Bankruptcy Law; and in addition on a separate count each respondent for making a transfer of property contrary to section 116 (p) of the Bankruptcy Law.
The sentences imposed by the Assize Court for these offences were:
(a) 12 months' imprisonment for failure to keep proper books of account;
(b) 18 months' imprisonment for permitting assets to be seized or applied for the benefit of one creditor to the detriment of the rest; and
(c) three months' imprisonment for the transfer of property.
All sentences running concurrently.
The complaint of the Attorney-.General regarding these sentences, as stated in the grounds given in the notice filed, is that "the sentences are insufficient in view of the seriousness, gravity and prevalence of the offences as well as the facts and circumstances of the case".
The facts of the case are sufficiently stated in the careful and well-considered, judgment of the Assize Court. As regards the failure of the respondents to keep proper books of account the court found (page 6B of the judgment at p. 211 of the record) that "the evidence against the accused is overwhelming. the partnership did not keep such books as were necessary to explain the transactions and financial position of its business or containing entries from day to day of the cash received or of accounts of all goods sold and that the statements of the annual stock-takings did not represent or show the true picture of the financial position of its business as required by sub-section (3) of section 122 of Cap. 5. We cannot possibly. accept that such large-scale business as that of the partnership could be carried on without proper books with the sole excuse of it being a custom of the trade or that it was a hardship on them to keep books or that in the circumstances in which the partnership traded and carried on business the failure to keep books was honest and excusable. On the contrary" the trial Court add "we find that the omission of the accused in keeping proper books was accentuated by improper motives and intentions and an example of this is the balance-sheet, exhibit 42, prepared for the purpose of obtaining further credit from the bank".
As regards the three counts for permitting assets to be applied for the benefit of the favoured creditor the trial Court found that the respondents, at the material time, were insolvent; and knowing of their insolvency they suffered "substantially the whole of their assets to be seized by and applied for the benefit of the company in liquidation to the detriment and with intent to defraud the other creditors (p. 216 D)
As regards the counts for making transfer of property in violation of the Bankruptcy Law the Court found that this concerned the transfer of appellants' old-personal cars within the 12 months prior to the presentation of the bankruptcy petition, in circumstances which justify the lightest of the sentences imposed.
At the hearing of the appeal learned counsel for the Attorney-General did not press the matter regarding these last mentioned sentences We take the view that he was justified in taking this course and we do not propose saying anything more about it, excepting that in different circumstances the transfer of property in violation of the Bankruptcy Law may well call for a severe sentence.
The appeal was mainly argued in connection with the sentences imposed on the counts for permitting assets to be seized or applied for the benefit of a favoured creditor and the count for failing to keep proper books of account.
It appears that business at the material time was generally bad for certain exports which involved the respondents (and other merchants dealing with the same commodities) in big losses and large banking overdrafts. These losses proved far too heavy for the financial strength of the respondents and ruined their business as well as their personal property assets.
Such losses can hardly justify, however, the offences of permitting assets to be seized by one of their creditors in the course of execution proceedings under a judgment.
As this matter is still the subject of other proceedings (under the Bankruptcy Law and other judicial process) we should avoid saying anything which may affect in any way such pending proceedings.
Having given the sentences of 18 months' imprisonment imposed on these counts our best consideration we find ourselves unable to say that the sentence imposed by the trial Court is so manifestly inadequate as to justify an intervention by this Court.
It must be added, however, that we feel grave concern for the effect which a case of this nature may have on the reputation of the business market of this country, which this Court has the duty to protect by proper application of the provisions of the Bankruptcy Law and relative provisions of the Criminal Code. One may think that 18 months' imprisonment may not be sufficient deterrent for business methods leading to such state of things. On the other hand the most unenviable position in which the two respondents find themselves and their families in consequence of business misfortunes and bad business methods explain the lenient, in our opinion, sentences imposed by the Assize Court, on whom the primary responsibility for measuring the sentence rests. This is why we reached the conclusion, not without considerable difficulty I must say, that we should not interfere with the sentence imposed by the trial Court, even if that may not be the term which some of us might consider appropriate if we stood in the shoes of the trial Judges.
Coming now to the sentence of 12 months imposed for the failure to keep proper books of account, we find ourselves unable to see, in the circumstances of this case, how the trial Court reached the conclusion that this offence was less serious than the offence of permitting a judgment-creditor to seize assets which should be preserved for the whole body of creditors in an imminent bankruptcy.
There is no evidence that the bank concerned with these large credits enquired as to the book-keeping of the customers to whom they were granting facilities of that size.
On the other hand people involved in business must bear in mind that where there is statutory obligation to keep a certain type of records in their business or for purposes of taxation they must be prepared to face the full consequences of their failure to do so if their business brings them to that point. The omission to keep the necessary records is as a rule not a matter of accident. It is a continuing state of affairs to the full knowledge of the persons concerned who must be prepared to carry the responsibility for the illegality in their business methods.
We, therefore, think that regarding the sentence for the offence in the first count the trial Court acted on wrong principle to the extent of calling for intervention by this Court. Here again it is not without difficulty that we have not increased the sentence to one of a longer term than that imposed on the other counts. The Bankruptcy Law provides for imprisonment of up to three years; and we can only say that there is obviously good reason for such a provision in the statute which the courts have the duty to apply with appropriate severity in the circumstances of each particular case.
In the result the appeal is allowed regarding the sentence on count 1 which shall be increased under the provisions of section 145 (2) of the Criminal Procedure Law (Cap. 155) to one of 18 months; the appeal against sentence on the other counts shall stand dismissed. All sentences to run concurrently from conviction.
Appeal allowed in part.
Sentence on count 1
increased to one of 18 months.
Sentences to run concurrently
from conviction.