Supreme Court New South Wales Medium Neutral Citation: De Celis (Election Funding Authority) v Lindsay Bennelong Developments [2012] NSWSC 917 Hearing dates: 12 July 2012 Decision date: 06 August 2012 Before: Latham J Decision: The defendant company is convicted. The defendant company is fined $6,000, half of which is to be paid to the prosecutor pursuant to s 122 of the Fines Act 1996. No order is made as to costs Catchwords: CRIMINAL LAW - summary prosecutions - s 91 Election funding and Disclosures Act 1981 - reportable political donation - failure to lodge declaration - defendant admitted offence - objective gravity lower end of scale Legislation Cited: Election Funding and Disclosures Act 1981 Crime (Sentencing Procedures) Act 1999 Fines Act 1996 Category: Principal judgment Parties: Brian De Celis (Election Funding Authority of NSW) - (Plaintiff) Lindsay Bennelong Developments Pty Ltd - (Defendant) Representation: Counsel: AC Johnson - (Plaintiff) RJ Jankowski - (Defendant) Solicitors: I V Knight - Crown Solicitor (Plaintiff) Torquil Murray - (Defendant) File Number(s): 2012/62274 Judgment 1By summons filed on 24 February 2012 the Election Funding Authority commenced proceedings against the defendant pursuant to s 91 of the Election Funding and Disclosures Act 1981. That provision, created the offence of failing to lodge a declaration in relation to a reportable political donation, that is a sum equal to or more than $1,000. 2The defendant has admitted the offence. The circumstances surrounding the commission of the offence require some explanation not least because they bear upon the penalty to be imposed. 3On 30 July 2008 the defendant donated $2,000 to the Liberal Party of Australia, the New South Wales Division for the purposes of the "Elect Sydney Liberals the Shayne Mallard Campaign" for Sydney Council. The funds were used towards the campaign costs of the Local Government elections of the Sydney Council in September 2008. 4On 4 September 2008 the defendant donated $25,000 to Mayor Patrick Reilly for the purposes of his election campaign in the Willoughby City Council elections of September 2008. 5Also on 4 September 2008 the defendant donated $20,000 to Councillor Stuart Coppock for the purposes of his election to Willoughby City Council in September 2008. 6These three donations each fell within the definition of a "reportable political donation" under the Act. The Act required disclosure in the form of a declaration to be made within eight weeks of the relevant disclosure period. Each of the three beneficiaries of these donations lodged declarations with the authority. However, the defendant did not lodge declarations. It was required to do so by 26 February 2009. 7Between 1 January 2009 and 2 February 2009, the Authority conducted an audit of recipients of donations. The defendant was identified as a donor which had not lodged a declaration. On or about 2 February 2009 the Authority sent a letter to the defendant to remind it of its obligations under the Act. It is common ground that the defendant did not receive this letter. 8On or about 21 May 2009 the authority carried out another audit, and again, identified the defendant as a donor which had not lodged a declaration. The Authority sent a letter to the defendant on 21 May 2009. This letter was received. The defendant completed a declaration but, through an oversight, the declaration was not sent. On 17 October 2011, the Authority notified the defendant of the commencement of an investigation into its failure to lodge a declaration in 2009. Following further correspondence the defendant lodged a declaration on 29 November 2011. 9The commencement of the prosecution about three months later might be legitimately considered by the defendant as something of an overreaction to its tardiness. It must be accepted that the legislative purposes underlying the Act are critical to the integrity of the democratic system and that the failure to disclose political donations strikes at the heart of any democracy. The Authority exercises a function that maintains and enforces a transparent mechanism for political donations. 10However, as with all prosecutorial authorities the Electoral Funding Authority has a broad range of discretionary powers. It is not obliged to prosecute in every instance of a breach of s 91 of the Act. It may issue warnings, penalty notices, seek recovery of the donations or enter compliance agreements with recalcitrant donors. 11The Authority's decision to prosecute in this case was motivated, it is submitted, by the size of the donations and the fact that the defendant is a property developer which had failed to respond to the Authority's letters advising it of its statutory obligations. Whether those factors warrant the decision to prosecute in this Court rather than in the Local Court or at all, is beyond the scope of these proceedings. The discretion to prosecute having been exercised, this Court is only concerned with issues of sentencing. 12Of particular relevance to the assessment of the objective gravity of the offence is the culpability of the defendant. It is conceded that the defendant was not dishonest or wilfully contumelious in the commission of the offence. Rather there was a regrettable measure of recklessness in the defendant's compliance with its statutory obligation. 13True it is that the defendant initially received legal advice in September 2008 to the effect that it was not required to lodge a declaration. However, it became aware in May 2009 that that advice was incorrect and it completed a declaration yet failed to lodge it. It is also correct to observe that the donation in combination was not a trivial amount. 14As against these factors the Authority's failure to take any action for two years and four months after the defendant was prompted to complete a declaration contributed to the defendant's default, in the sense that the company's responsible officer's belief that the declaration had been lodged subsisted over that period of time. 15Such a delay in instituting proceedings can not be satisfactorily explained. If as the Authority maintains, it was important for reasons of general deterrence to prosecute this offence, one might expect a greater degree of diligence. The leisurely pace of the decision making process is unlikely to convey to the general public a sense of the gravity of the offence. It mitigates the penalty otherwise appropriate to the offence because the defendant now stands to be punished for conduct that occurred over three years ago. Since that time it has taken responsibility for the offence and is genuinely contrite. 16It is not suggested that the donations were designed to, or did in fact, influence any decision making process on the part of anyone exercising powers with respect to property developments undertaken or to be undertaken by the defendant. In my view that does little to ameliorate the defendant's conduct. If the donation were made with that object in mind it would aggravate the offence. However, the legislation strikes at the fact of an undeclared donation because it is the appearance of influence of public officials that arises from such donations and which damages public confidence in the democratic process. 17In all these circumstances the objective gravity of the offence is not of a high order but nor is it so low on the scale of objective seriousness that the defendant ought to receive the benefit of s 10A of the Crime (Sentencing Procedures) Act 1999. In my view a conviction ought be recorded. The monetary penalty to be imposed is however affected by the excessive delay on the part of the prosecution. 18Taking all of these matters into account, I proceed to sentence as follows. The defendant company is convicted. I fine the defendant company $6,000, half of which is to be paid to the prosecutor pursuant to s 122 of the Fines Act 1996. I make no order as to costs. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 August 2012