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Welcome to the COMMONWEALTH SENTENCING DATABASE

Corporations

The content on this page was last reviewed on 23 December 2016.

1. Overview

A corporation can commit a federal offence: s 4B(1).

Section 4B
(1) A provision of a law of the Commonwealth relating to indictable offences or summary offences shall, unless the contrary intention appears, be deemed to refer to bodies corporate as well as to natural persons.

The general principles of corporate criminal responsibility are set out in s 12.1 of the Commonwealth Criminal Code:

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.

(2) A body corporate may be found guilty of any offence, including one punishable by imprisonment.

2. General 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.

For an example of the relevance and application of each of the general sentencing principles contained in s 16A(2) to corporate offenders, see ACCC v Chubb  Security Australia Pty Ltd [2004] FCA 1750, [70]-[128].

3. Multiple offences or continuing offences

Corporations are often prosecuted for multiple or continuing offences. When sentencing corporations for multiple offences or continuing offences, a court is required to consider the interaction of the relevant offence provisions with federal sentencing principles such as the totality principle and the one transaction rule.

See further Multiple or Continuing Offences; One Transaction Rule, Totality Principle.

3.1 Aggregate sentences

Section 4K of the Crimes Act 1914 (Cth) empowers a Court in some circumstances to impose an ‘aggregate’ sentence for a series of offences that are deemed to be of the same or a similar character.

In Director of the Fair Work Building Industry Inspectorate v CFMEU [2016] FCA 413 it was held that a Court is not empowered to impose a single penalty in respect of multiple contraventions of civil pecuniary penalty provisions in the Fair Work Act 2009 (Cth). White J stated at [54]–[58]:

I doubt that s 4K(4) of the Crimes Act is applicable to contraventions of civil remedy provisions in the FW Act. The reference in subs (3) to “offences” which have been joined in the same “information, complaint or summons” and the terms “convicted” and “offences” in subs (4) indicate that those provisions are directed to criminal offences. The distinctions between criminal proceedings and civil penalty proceedings to which the reasons of the plurality drew attention in Commonwealth v DWFBII [[2015] HCA 46] at [51][57] are also pertinent in this context. In my opinion, the power vested in courts by s 4K is not available in the present context.

I add that a power to impose a single penalty for multiple contraventions would be advantageous. In particular, it would simplify the task of courts when imposing penalties for multiple contraventions.

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4. General deterrence

General deterrence is listed as a relevant sentencing factor in s 16A(2)(ja) of the Crimes Act 1914 (Cth). General deterrence has assumed importance as a sentencing consideration when sentencing corporate offenders. 1

For example, courts have recognised the importance of general deterrence as a sentencing consideration in cases dealing with breaches of the former Trade Practices Act 1974 (Cth): 2 ACCC v Skippy Australia Pty Ltd [2006] FCA 1343, [15]. This was highlighted by von Doussa J in Trade Practices Commission v Farrow [1990] FCA 74 who stated at [39]

[I]t 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

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5. Discounts

Discounts to a sentence which may apply to a natural person can also apply to a corporate offender. Where the Court thinks fit, a corporate offender may benefit from a discount on the sentence for:

  • a plea of guilty; and/or
  • past cooperation; and/or
  • promise of future co-operation.

See further: Guilty Plea, Co-operation.

6. 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 sentencing option for federal corporate offenders. 4

6.1 Fines

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, if a contrary does not appear and the court thinks fit: s 4B(3).

Specific legislation may provide for a lower or higher loading for fines for corporations. For example, s 73F(2)(a) of the Defence Act 1903 (Cth) provides for a ten-fold increase on the maximum fine for bodies corporate.

‘Fine’ is defined in s 3(2) of the Crimes Act 1914 (Cth). The definition includes a pecuniary penalty (with noted exceptions) and ‘costs or other amounts ordered to be paid by offenders.’ See further Fines.

Note: A penalty unit under s 4AA of the Crimes Act 1914 (Cth) means $180.

6.1.1 Principles relevant to imposing fines on corporations

The fine must be of a severity appropriate in all circumstances to the offence: s 16A(1).

When sentencing a federal offender a court must not impose a fine without recording a conviction: Crimes Act 1914 (Cth) s 19B; Commissioner of Taxation v Doudle [2005] SASC 442, [26].

6.1.2 Relevance of financial circumstances of the corporation

In addition to other relevant matters, the court must take into account the financial circumstances of the federal offender before imposing a fine:  s 16C(1).

The Court is not prevented from imposing a fine where the Court cannot ascertain an offender’s financial circumstances: s 16C(2).

While courts are required to take an offender’s financial circumstances into account when sentencing federal offenders, there is no further direction in the Crimes Act 1914 (Cth) as to how such information is to be taken into account. 5

The onus is on the offender to inform the court of their capacity to pay a fine. 6 However there may be circumstances in which the sentencing discretion cannot be properly exercised if the court fails to inquire into a particular offender’s financial circumstances. 7

Courts have imposed fines on corporate offenders, notwithstanding that the corporation is in liquidation. This has been found 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] FCA 1798, [6].

6.1.3 Calculating the fine when imprisonment only

A fine may be imposed on a corporation for an offence that is stated to be punishable
by imprisonment only: s 4B(3).

Section 4B(2) provides that a court may, if it thinks fit and if a contrary intention does not appear, impose a fine on a natural person for an offence that is stated to be punishable by imprisonment only. Section 4B(3) provides that a court can impose on a corporation a pecuniary penalty not exceeding 5 times the amount of the maximum pecuniary penalty that could be imposed on a natural person. Sub-sections 4B(2)-(3) therefore work in conjunction to provide the maximum penalty for a corporation convicted of an offence stated to be punishable by imprisonment only.

This is confirmed in the Explanatory Memorandum, which provides:

[Section 4B(3)] … provides that 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 persons is found in the law creating the indictable offence or whether the pecuniary penalty is derived pursuant to proposed sub-section 4B(2) 8 [emphasis added].

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. The formula for the quantum of a fine that could be imposed on a natural person is set out in s 4B(2)-(2A):

Section 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.

Section 4B(2A)

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 180 = $5, 400.

For a corporation the maximum available fine would be five times that amount: $5,100 x 5 = $27, 000.

6.1.4 Maximum fines for indictable offences dealt with summarily

There are maximum fines that may be imposed for certain indictable offences which are dealt with summarily: see s 4J of the Crimes Act 1914 (Cth).

There are maximum fines that may be imposed for some indictable offences punishable by fine only, which may be dealt with summarily: see s 4JA of the Crimes Act 1914 (Cth).

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Notes:

  1. See ACCC v Australian Safeway Stores Pty Ltd [1997] FCA 450.
  2. Now the Competition and Consumer Act 2010 (Cth). 
  3. Cited with approval in ACCC v Hartwich [2002] FCA 273, [21]; ACCC v Chubb Security Australia Pty Ltd [2004] FCA 1750, [118].
  4.  Australian Law Reform Commission, Same Crime, Same Time: Sentencing of Federal Offenders, Report 103 (2006), [30.3]. 
  5.  Australian Law Reform Commission, Same Crime, Same Time: Sentencing of Federal Offenders, Report 103 (2006), [7.7]. 
  6. R v Cheshire 76 A Crim R 261, 270. See also Arie Freiberg, Fox & Freiberg’s Sentencing: State and Federal Law in Victoria (3rd ed, 2014) 473.
  7.  Reeves v Ranson [1999] TASSC 52, [21] (Crawford J); Venn v White [2003] TASSC 115, [4]-[11] (Blow J).
  8. Explanatory Memorandum, Crimes Legislation Amendment Bill 1987 (Cth) 11.