Heshmati v R [2012] NSWDC 143

District Court New South Wales

Medium Neutral Citation: Heshmati v R [2012] NSWDC 143 Hearing dates: 30 May 2012 Decision date: 30 May 2012 Jurisdiction: Criminal Before: Berman SC DCJ Decision: Appeal is allowed and the conviction is quashed Catchwords: CRIMINAL LAW - Conviction Appeal - Transfer of assetts - Statement of affairs Legislation Cited: Bankruptcy Act Category: Principal judgment Parties: Bijan Heshmati - in person The Crown Representation: Mr R Ranken (Crown) Director of Public Prosecutions (Cth) File Number(s): 2011/304754

Judgment 1HIS HONOUR: This case is an appeal from the Local Court. Dr Bijan Heshmati was found guilty by a magistrate of signing a declaration contained in a statement filed under the Bankruptcy Act which Dr Heshmati knew to be false. That is an offence contrary to s267(2) of the Bankruptcy Act. The particular statement which was said to be untrue, was made when Dr Heshmati indicated (by crossing a box with 'no' written next to it), the answer 'no' to this question; "Have you sold, transferred or given away any assets worth more than a thousand dollars in the last five years?" 2Evidence in the Local Court was called on the prosecution side and Dr Heshmati gave evidence. When the appeal was heard in this Court he tendered some further documents, pursuant to a grant of leave that had been granted to him earlier by a different judge. He sought to give further evidence but I refused that application. 3There is no doubt that in August 2006, well within the five years prior to Dr Heshmati signing the statement of affairs, he had transferred assets worth more than a thousand dollars. The prosecution focused on one particular transaction. On 29 August 2006, Dr Heshmati, obtained a bank cheque for $150,000 from the ANZ bank, utilising money that he had held in a premium cash management account. (I note in passing, both sides have drawn my attention to this, that that particular account was not listed as an account held by Dr Heshmati, as it should have been at question 23 of the statement of affairs). As I say, the appellant obtained a bank cheque for $150,000 which he transferred to his wife. He says that this was for two reasons, one, to pay a debt that he owed his wife in these circumstances: When he married his wife, he agreed to pay her a total of 100 Iranian Azadi gold coins, upon his wife's request. A photocopy of what is apparently a marriage certificate together with an authorised translation was tendered as fresh evidence on this appeal. 4It is apparent according to that translation, there is on the marriage certificate, this appearing; "The couple agreed on a marriage portion of a total of 100 Iranian Azadi gold coins which is payable by the groom upon the request of the bride". 5The appellant says that $75,000 of that $150,000 bank cheque, was in payment of the debt to his wife, as she had requested payment pursuant to the agreement made upon marriage and that they agreed between them, since Iranian Azadi gold coins are not as freely available as Australian dollars, that the debt would be settled by payment of that $75,000. The remainder of the $150,000 was according to Dr Heshmati, used to pay his wife's living expenses in advance, in anticipation of the doctor leaving Australia. After he changed his mind in the next few days, and decided to stay in Australia, thus obviating the need for his wife to have that $75,000, it was apparently transferred back to him, and he then gambled it away. 6So the prosecution in the Local Court and here, is based on that $150,000 bank cheque. The prosecution says that represents the appellant transferring assets worth much more than a thousand dollars, in the five years prior to the statement of affairs being signed by the appellant. 7I gather that Dr Heshmati agrees now that he should have ticked the 'yes' box in those circumstances. But of course it is not enough for the prosecution to prove that the answer to question 33 is wrong. The prosecution has to prove the relevant mental element, which is that the appellant knew that it was wrong to tick the 'no' box when he did so, and it is in these circumstances that I look closely at what was apparently going through Dr Heshmati's mind when he made the statement of affairs. 8He spoke about his state of mind at the time being extremely distressed and disordered. One thing I can work out from the material before me is that Dr Heshmati was gambling heavily. He had failed in his attempt to become accepted into a college appropriate to his medical speciality and was in those circumstances, planning to go away. Although some of what I have just outlined occurred before the money was transferred, the evidence would tend to suggest that Dr Heshmati continued to be distracted and disordered at the time he filled in the relevant form and indeed, he says, the failure to include any bank accounts at all in answer to question 23, is not evidence of dishonesty, but further evidence of that state of mind. Thus says Dr Heshmati, when he came to look at question 33, in a very lengthy document, he did not immediately consider that by paying off a debt to his wife, and prepaying her expenses, he was selling, transferring or giving away any assets. It is his submission that the question is unclear and that he misunderstood it. He did not consider that by paying a debt, he was doing anything in relation to an asset of his, all he says he was doing was paying a debt. 9In response the prosecution says, well if he was paying a debt, he should have answered 'yes' to question 36. But that question begins as a result of pressure for payment from creditors. Have you done certain things? The opening words are important. The evidence would tend to suggest that Dr Heshmati's wife asked for payment of the marriage debt. There is no evidence that she put pressure on him and so I can draw no conclusion favourable to the Crown, from the failure of Dr Heshmati to answer 'yes' and then provide details in relation to question 36. 10If you look at question 33 closely, it is apparent that it covers the situation where a person uses money in a bank account to pay off a debt worth more than a thousand dollars. So if a person has a credit card bill of more than a thousand dollars and transfers money from a bank account in credit to the credit card provider, that should be recorded in question 33. But there are only six lines given for details to be provided. I might have thought that if I had to record every time in the last five years I have paid a debt of more than a thousand dollars, more space would be allocated. 11Of course in an ideal world, everyone filling in a statement of affairs would think carefully about every single question that is asked of them and if that had been done, it is possible, I do not say it is likely but it is possible, that Dr Heshmati might have realised that he should have ticked the answer 'yes'. But in circumstances where I consider that there are indications in the form itself, that transferring assets in order to pay a debt, is not included in question 33, that is a significant matter in assessing whether the prosecution has proved, beyond reasonable doubt I emphasise, that Dr Heshmati knew that the declaration was false. 12I pause here to note that other aspect of the documents given to a person who has been made bankrupt, are unnecessarily complex. Tendered in the Local Court and then tendered to me, is a document headed, "Information About Being a Bankrupt". It contains many extracts of Commonwealth legislation including such helpful things as, "Note a defendant bears an evidential burden in relation to the matter in subsection 1(A) see subsection 13.3(3) of the Criminal Code". 13I have on other occasions commented about the difference between the way Commonwealth Parliamentary Counsel drafts legislation, and the way in which New South Wales Parliamentary Counsel drafts legislation. Those comments have not been favourable to the Commonwealth. It appears that some closer consideration could be given to documents given to a bankrupt, in order to ensure that that person can understand the person's obligations and liabilities. 14I will give another small example. Every time a number is mentioned it is both written out and put in numerals. Lawyers are used to reading that but one wonders why it is necessary to include such obvious impediments to a clear understanding in documents which are supposed to be understandable by the man in the street, even the doctor in the street. 15Question 33 could have asked very simply, have you transferred money in excess of a thousand dollars in the last five years in any circumstances whatsoever. I appreciate that even the word 'whatsoever' could be improved upon, but the point that I wish to make is that it is necessary to give careful consideration to the meaning of the question, in order to understand that regular, even automatic, payment of debts, worth more than a thousand dollars, requires disclosure. 16In those circumstances I consider whether the prosecution has proved beyond reasonable doubt, the mental element of this offence. 17Now I put to one side almost completely, the circumstance that Dr Heshmati's first language is not English. He addressed me eloquently and understood most of the legal concepts that I was speaking to him about. He appeared unrepresented despite acknowledging that this might not be such a good idea but I was able to converse with him and confirm that he understood some of the things I was saying to him by asking him to repeat them back to me. So I can put to one side any question of language being a factor which might tend to explain why Dr Heshmati has answered question 33 inaccurately. But I am not satisfied beyond reasonable doubt that Dr Heshmati did not make the mistake that I identified earlier, that is in thinking that the question was not asking questions about the payment of debts. It is always a difficult thing to prove a person's state of mind beyond reasonable doubt and in circumstances where Dr Heshmati has explained why he considered that the proper answer to the question was "no", and where I am satisfied that it is at least reasonably possible that misunderstanding arose, I am not satisfied beyond a reasonable doubt that Dr Heshmati was aware and thus knew, that the statement he made, the subject of these proceedings was false. 18The appeal is therefore allowed and the conviction is quashed.