Re Harald Rolf Linhart and Paula Bongardt v Elwyn Edgard Ernest Elms; the Honourable Lionel Bowen Her Majesty'S Attorney-General of the Commonwealth of Australia and the Federal Republic of Germany [1987] FCA 459 (14 December 1987)

FEDERAL COURT OF AUSTRALIA

Re: HARALD ROLF LINHART and PAULA BONGARDT
And: ELWYN EDGARD ERNEST ELMS; THE HONOURABLE LIONEL BOWEN
HER MAJESTY'S ATTORNEY-GENERAL FOR THE COMMONWEALTH OF AUSTRALIA
and THE FEDERAL REPUBLIC OF GERMANY
No. G665 of 1987
Extradition

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Beaumont J.(1)

CATCHWORDS

Extradition - Warrants issued for committal of applicants applican whether acts or omissions in respect of which surrender requested were set out in warrants - principle of double criminality.

Extradition (Foreign States) Act 1966 ss.4, 15, 16, 17, 18.

HEARING

SYDNEY
14:12:1987

Counsel for the Applicants: M.H. Tobias Q.C., S.M. Littlemore

Solicitors for the Applicants: Hunt & Hunt

Solicitors for First Respondent: Crown Solicitor

Counsel for the Second and P. Flemming Q.C.,
Third Respondents: P. Dwyer

Solicitor for the Second Australian Government

Respondent: Solicitor

Solicitor for the Third Director of Public

Respondent: Prosecution

ORDER

1. Declare that:

(a) the warrants of committal are invalid to the extent that they are based on the charges referred to in recital (a)(iii) of the warrants; (b) otherwise the warrants are valid.

2. Make no order as to costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

The applicants, Harald Rolf Linhart and Paula Bongardt, are German citizens; they entered Australia in November 1985. In January 1987, warrants for their arrest were issued by a judge of the third respondent, the Federal Republic of Germany. In April 1987, a warrant for the apprehension of each applicant was issued by a Magistrate pursuant to s.16(1)(b) of the Extradition (Foreign States) Act 1966 ("the Act"). In May 1987, a notice was issued by the Attorney-General, the second respondent, pursuant to s.15(1)(b) of the Act. Subsequently, proceedings were brought under s.17 of the Act. So far as presently relevant, s.17(6) provides:

"(6) If...the Magistrate receives a notice by the
Attorney-General under paragraph 15(1)(b) and -
(a) there is produced to the Magistrate -
(i) in the case of a person who is accused
of an extradition crime -
(A) a duly authenticated foreign
warrant in respect of the person
issued in the foreign state that
made the requisition for the
surrender of the person or a duly
authenticated copy of such a
warrant;

(B) a duly authenticated statement in
writing setting out a description
of each offence for which the
surrender of the person is
requested and the penalty
applicable to each such offence;
and

(C) a duly authenticated statement in
writing setting out all the acts or
omissions in respect of which the
surrender of the person is
requested;.... (Emphasis added)

and, if the application of this Act to
the foreign state that made the
requisition for the surrender of the
person is subject to any limitations,
conditions, exceptions or qualifications,
any other documents required by those
limitations, conditions, exceptions or
qualifications to be produced; and

(b) the Magistrate is satisfied, after taking
into account any evidence properly
adduced by the person, that the person is
liable to be surrendered to the foreign
state that made the requisition for the
surrender,

the Magistrate shall either -

(c) by warrant in accordance with the form
prescribed for the purposes of this
sub-section, commit the person to prison
to await the warrant of the
Attorney-General for the surrender of the
person; ..."

2. On 25 November 1987, the first respondent, a Magistrate, issued a warrant of committal in respect of each applicant pursuant to s.17(6)(c). The warrant in respect of the first applicant contained the following recitals (it is unnecessary to refer also to the case of the second applicant)-

"WHEREAS
(a) HARALD LINHART, a fugitive from the
Federal Republic of Germany who is
accused of the offences of:-
(i) having made knowingly false
statements as a shareholder and
Director of a private company
limited on the paying up of shares
in order to have the company
officially registered (one count);

(ii) having kept the legally required
accounts during the impending
insolvency and after insolvency in
such a way that it was extremely
difficult to get a picture of the
financial situation, in coincidence
with not having produced the asset
and liability statements within the
period required by law (two counts);

(iii) having inflicted damage to another
party's property by fraudulent
misrepresentation causing factual
errors with the intention to obtain
unlawful enrichment for themselves
or a third party (twenty four
counts);

against the law of that State, having
been apprehended in the State of New
South Wales under a warrant issued in
pursuance of Section 16 of the
Extradition (Foreign States) Act 1966,
was in accordance with Section 17 of that
Act brought on 14 September and 25
November 1987 before me Elwyn Elms, a
Magistrate in that State.
(b) all the documents that, under paragraph
17(b)(a) (sc.(6)(a)) of that Act, are to
be produced to me in this case, have been
produced to me in accordance with that
paragraph; and
(c) I am satisfied that HARALD LINHART is
liable to be surrendered to the Federal
Republic of Germany...."

3. The applicants now seek to review the Magistrate's decision in accordance with s.18(1) of the Act; alternatively, review is sought under the provisions of the Administrative Decisions (Judicial Review) Act 1977.

4. In order to understand the basis of the challenge made to the validity of the warrants, it is necessary to refer to the terms of the German warrant of arrest. It states that the applicants -

"are charged in particular
(1) in one case
of having made knowingly false statements
as shareholders and Directors of a
private company limited on the paying up
of shares in order to have the company
officially registered;
(2) in two cases
of having kept the legally required
accounts during the impending insolvency
and after insolvency in such a way that
it was extremely difficult to get a
picture of the financial situation,
in coincidence with
not having produced the asset and
liability statement within the period
required by law;
(3) ...
(4) in 23 cases (sc. 24)
of having inflicted damage to another
party's property by fraudulent
misrepresentation causing factual errors
with the intention to obtain unlawful
enrichment for themselves or a third
party;"
The warrant continues:
"Facts of the Case:
Both persons charged were shareholders as well as de
facto Directors and most of the time also official
Directors of the Century-Consumer-Products Video
Handelsgesellschaft mit beschrankter Haftung
(Century-Consumer-Products Video-Trading Company
Limited) incorporated on July 22, 1983 with headquarters
in Unkel and the Century-Consumer-Products
Video-Handelsgesellschaft mit beschrankter Haftung
incorporated on January 30, 1984 with registered
headquarters in Bad Honnef. Allegedly, it was the
object of both companies to set up and manage video
shops in supermarkets and department stores.

In the first place the persons charged really wanted to
enrich themselves on account of others under the guise
of these companies.

Both companies had only one business establishment in
Unkel. There was no business nor financial separation.
On the contrary, the persons charged acted at their own
discretion on account of one or the other company. When
Century-Consumer-Products Video-Handelsgesellschaft mit
beschrankter Haftung (Unkel) was incorporated, there was
no real shareholders' equity available to speak of. When
the Century-Consumer-Products Video-Handelsgesellschaft
mit beschrankter Haftung (Bad Honnef) was incorporated,
only their co-partner Dieter Braun had paid up his
original capital share amounting to 100,000. -
Deutschmarks. This amount however was used up within
the first weeks. No additional capital was transfered
to the companies. At the latest by mid March 1984 both
companies were insolvent. Payments were stopped...."

The warrant then gives the following particulars:

"Relating to (1)
With a motion dated January 30, 1984 the two persons
charged and the witness Dieter Braun applied for entry of
the Century-Consumer-Products Video-Handelsgesellschaft
mit beschrankter Haftung (Bad Honnef) into the commercial
register of the District Court in Koenigswinter. Though
only the witness Braun had paid up his original capital
share of 100,000. - Deutschmarks, the persons charged
affirmed untruthfully in the application that they too
had paid up their original capital shares of DM 100,000.
- each and that these amounts are definitively at the
free disposal of the company management. Even later on
the persons charged didn't pay up their shares nor parts
of them.

Relating to (2)
There was no proper bookkeeping neither for
Century-Consumer-Products Video-Handelsgesellschaft mit
beschrankter Haftung (Unkel) nor for
Century-Consumer-Products Video-Handelsgesellschaft mit
beschrankter Haftung (Bad Honnef). Just the incoming
invoices, vouchers and other documents of both companies
were put together into files; therefore it was extremely
difficult and required much time and effort to get a
picture of the financial status of each company at the
time of insolvency in March 1984. it's true that the
persons charged had the accounts up to the middle of 1984
worked up by the witness Lanzenberger in July 1984, but
this did not produce a true picture of the financial
status because not all accounts payable in the first half
of 1984 had been submitted to the witness Lanzenberger.

The persons charged had not produced any balance sheets
for the fiscal years 1984 and 1985 neither for
Century-Consumer-Products Video-Handelsgesellschaft mit
beschrankter Haftung (Unkel) nor for
Century-Consumer-Products Video-Handelsgesellschaft mit
beschrankter Haftung (Bad Honnef).
...
Relating to (4)
a. In order to obtain fresh money, the persons charged
persuaded the witness Dieter Braun by the end of 1983
to become a co-partner with a capital share of
100,000. - Deutschmarks and also a Director of the
Century-Consumer-Products Video-Handelsgesellschaft
mit beschrankter Haftung (Bad Honnef) which was to be
newly incorporated. In this connection they falsely
pretended to the witness Braun already having paid up
themselves original capital shares in the amount of
100,000. - Deutschmarks each and having bought with it
the major part of the actually available video-films
of the company. In fact they had not paid up any
capital shares but only leased those films. Because
of this fraudulent misrepresentation the witness Braun
was of the opinion to become a partner in a sound
company and consequently paid the amount of 100,000.
Deutschmarks on December 22, 1983 into the company
account mentioned to him.
He did not get any money back of his paid up capital
share.
b. In October 1983 the witness Rottmann suggested to the
witness Roehr on behalf of the persons charged that he
should set up the video-shop "Django" in the
Kronecenter in Schweinfurt as licensee under a
franchise agreement with Century-Consumer-Products
Video-Handelsgesellschaft mit beschrankter Haftung.
As licence fee he should be paying a lump sum of
28,500. - Deutschmarks to Century-Consumer-Products.
In order to get the money the persons charged made the
witness Roehr believe that Century-Consumer-Products
would provide for regular exchange of the
video-cassettes. The persons charged knew that
Century-Consumer-Products was financially not in a
position to do so. The fraudulent misrepresentation
regarding a regular exchange of cassettes caused the
witness Roehr on October 20, 1983 to sign such an
agreement with Century-Consumer-Products and to pay a
licence fee of 28,500. Deutschmarks. The promised
exchange of cassettes did not happen. The witness
Roehr had to buy cassettes on his own expense to offer
his customers a reasonably attractive programme. He
did not get any money back of the paid licence fee."

c. - x.

Furthermore the persons charged ordered and obtained
goods between October 1983 and October 1985 by
fraudulently pretending to be solvent and willing to
pay; they also entered into other financial
obligations. In this connection they acted mostly on
behalf of Century-Consumer-Products. The agreed
remuneration was only paid in part or not at all, as
was intended right from the beginning. The goods
obtained were kept. Such fraudulent acts were
committed in the following individual cases:

c. Time of the offence: November 21, 1983
Injured party: Storebest - Shop Equipment
Private Company Limited in Luebeck
Kind and object of the transaction:
Purchase of equipment on behalf of
Century-Consumer-Products Company
Damage: 12,657,41 Deutschmarks.
..."

5. It is not necessary to set out the details of transactions d. to x. The allegations are in a form similar to c.

6. Annexed to the German warrant was a certificate with respect to the wording of the relevant provisions of the German Criminal Code as follows:

"Section 263, paragraph 1
Everyone who aims at obtaining unlawful enrichment
for himself or a third party and thus inflicts
damage to another persons property by causing or
maintaining an error due to fraudulent statements,
misrepresentation or concealment of facts will be
imprisoned up to five years or imposed a fine.

Section 283, paragraph 1 number 5
Up to five years of imprisonment or a fine will be
imposed to everyone who refrains from keeping the
legally required accounts in case of
over-indebtedness, impending or actual insolvency,
or who keeps or changes the accounts in such a way
that it becomes difficult to obtain a true picture
of his financial situation.

Section 283, paragraph 1 number 7
Up to five years of imprisonment or a fine will be
imposed to everyone who in case of
over-indebtedness, impending or actual insolvency
and contrary to the provisions of the commercial
law

a. draws up the balance sheets in a way which
makes it difficult to obtain a true picture
of his financial situation, or
b. refrains from drawing up the asset and
liability statement or taking the inventory
within the required period of time..."

7. Also annexed to the German warrant was a certificate with respect to the wording of the relevant provisions of the Private Company Limited Act as follows:

"Section 64, paragraph 1
1. If the company becomes insolvent, the
Directors have to file a petition in
bankruptcy or a petition to institute
composition proceedings without undue delay,
latest three weeks after becoming insolvent.
2. This applies accordingly if the assets of
the company do not cover the debts.
3. There is no undue delay of the petition, if
the Directors proceed with the institution
of composition proceedings in due diligence
of a businessman.

Section 82 paragraph 1 number 1
Up to three years of imprisonment or a fine will be
imposed to everyone who, acting as shareholder or
Director for the purpose of registration of the
company, makes false statements with regard to the
take-over of original capital shares, paying-up of
shares, use of paid-in amounts, special advantages,
organization expenses, contribution in kind and
provisions of security for not fully paid-in money
contribution."

8. On behalf of the applicants, it is first submitted that the warrant now challenged failed to comply with the requirements of s.17(6)(a)(i)(C); it is said that there was not produced to the learned magistrate a statement in writing "setting out all the acts or omissions in respect of which the surrender of the (applicants) is requested." It is convenient to deal with each set of charges in turn.

9. It will be remembered that the first charges are that the applicants "made knowingly false statements as shareholders and Directors of a Private Company Limited on the paying up of shares in order to have the company officially registered"; and that s.82 of the Private Company Limited Act makes it an offence for a person who, acting as shareholder or director for the purpose of registration of the company, makes "false statements with regard to (inter alia) the...paying-up of shares..."

10. In the general description of the facts, it is said that when the Bad Honnef company was incorporated, only Braun had paid up his original capital of DM100,000. The specific matters then alleged in respect of the first charges are that by a motion dated January 30, 1984 the applicants and Braun applied for entry of the company into the commercial register, although the applicants had affirmed untruthfully in their application that, as in Braun's case, "they too had paid up their original capital shares of DM100,000 each and that these amounts (were) definitively at the free disposal of the company management. Even later on the persons charged didn't pay up their shares nor parts of them."

11. It is argued, on behalf of the applicants, that these assertions are not statements of acts, as required by s.17(6)(a)(i)(C), but merely a compendious expression of the draftsman's conclusions with respect to the legal classification or characterisation of the conduct alleged - a matter for the Magistrate under s.17(6)(a)(i)(B).

12. True it is that the relevant terms of s.17(6)(a)(i)(C) ("acts or omissions") may be contrasted with those of s.17(6)(a)(i)(B) ("a description of each offence"). This indicates that s.17(6)(a)(i)(C) requires more than a mere description of the offence. But what is meant by a setting out of "all the acts or omissions" in respect of which the surrender is requested? Clearly, it will not suffice to mention only some of the relevant "acts"; yet what is meant by "the acts"?

13. In its primary dictionary meanings, "act" is defined as -

"1. anything done or performed: a doing; deed.
2. the process of doing: caught in the act."
(Macquarie Dictionary)

Assistance in construing s.17(6)(a) is, I think, provided by some observations made by Lord Parker C.J. in Reg. v. Governor of Brixton Prison, Ex parte Gardner (1968) 2 QB 399. By s.3(1) of the Fugitive Offenders Act 1967 (U.K.) -

"For the purposes of this Act an offence of which a
person is accused . . . in a designated
Commonwealth country . . . is a relevant offence if
- (a) in the case of an offence against the law of
a designated Commonwealth country, it is an offence
which, however described in that law, falls within
any of the descriptions set out in Schedule 1 to
this Act, and is punishable under that law with
imprisonment for a term of 12 months or any greater
punishment . . . and (c) in any case, the act or
omission constituting the offence, or the
equivalent act or omission, would constitute an
offence against the law of the United Kingdom if it
took place within the United Kingdom. . ."

(Emphasis added)
Lord Parker said (at p.415):
"Mr. Dunn submits that the offences to which the
authority to proceed in the present case relates
are those set out in the authority to proceed
itself, namely the perfectly general description of
the offences of obtaining money by false
pretences...

In my judgment Mr. Dunn's argument gives really no
effect to the provisions of section 3(1)(c). It
seems to me that what is clearly contemplated here
is that a request coming forward to the Secretary
of State must set out in some form, and no doubt
the most usual form is the warrant or warrants for
arrest, the offence or offences of which the
fugitive is accused in this case in New Zealand.
Not only must it supply a general description which
will fulfil the provisions of section 3(1)(a) but
it must condescend to sufficient detail to enable
the matter to be considered under section 3(1)(c)."

14. Edmund Davies L.J. said, with reference to s.3(1)(c), (at p 416):

'"The offence" there referred to must mean the
offence charged in New Zealand, and "the act or
omission" refers to the manner or means whereby the
offence so charged in New Zealand was committed.
This involves examination of the particulars of the
offence charged in New Zealand....'

15. The requirement of s.17(6)(a)(i)(C) may also be contrasted with the rule at common law that, in the case of a warrant for apprehension or a warrant for safe custody, a general description of the offence was sufficient (see Biron and Chalmers, The Law and Practice of Extradition at p.36). The position may further be compared with the operation of the Extradition Acts 1870 and 1873 (U.K.). In Ex parte Terraz (1878) 4 Ex D a warrant for apprehension stated that Terraz had been accused of "the commission of crimes against bankruptcy law within the jurisdiction of the Swiss Confederation". The question was whether the warrant "sufficiently" indicated the crimes or crimes alleged (per Kelly, C.B. at p.66). Kelly, C.B. said (at p.67):

"Now to put that charge into legal language might be
difficult for those who had occasion at very short
notice to obtain a warrant for the apprehension of
an alleged criminal, and who would necessarily be
required to act with great celerity and
promptitude. For this reason it seems to me the
legislature has permitted this comprehensive mode
of description, so as to enable the complainant to
bring the offender by general words of warrant
before the magistrate, with a view to determining
whether there is evidence to justify his
extradition."

(See also Stanbrook, The Law and Practice of Extradition at p.18; Hartley Booth, British Extradition Law and Procedure at p.53).

16. It follows, in my opinion, that a general description of the offence will not satisfy the requirements of s.17(6)(a)(i)(C); it is necessary to go further and to specify the details of the conduct alleged by referring to the manner or means whereby the offence charged was committed.

17. In my view, the particulars given by the prosecution did state the conduct of the applicants in detail which was sufficient to comply with the requirements of s.17(6)(a)(i)(C). It is alleged that the applicants knowingly made false statements with respect to the amounts paid up on their shares by making a false statement in a motion dated 30 January 1984 for entry of the company into the commercial register of the District Court in Koenigswinter; and that, contrary to the facts, the applicants there stated that they had paid up DM100,000 each on their shares. This appears to be a comprehensive statement of the conduct of the applicants which is alleged. As such, it is sufficient to satisfy s.17(6)(a)(i)(C).

18. It is next submitted, on behalf of the applicants, that the prosecution's statement fails to set out all the acts or omissions relied on in respect of the second set of charges. It will be recalled that these charges were those of having kept the legally required accounts during an impending insolvency and after insolvency "in such a way that it was extremely difficult to get a picture of the financial situation" in coincidence with not having produced the asset and liability statement within the period required by law. The charges are apparently grounded on s.283 of the German Criminal Code.

19. The particulars given by the prosecution state that there was no proper bookkeeping; that the primary records were filed away; that the company had become insolvent by March 1984; that in July 1984, Lanzenberger attempted to prepare some accounts but was hampered by lack of primary records in respect of the first half of 1984; and that no balance sheets were produced for the 1984 or 1985 fiscal years.

20. In my view, the prosecution's statement is a sufficient indication of the details of the conduct charged. The essence of the charges, as stated in the particulars given, is the failure, in a situation of threatened or actual insolvency, to produce balance sheets in the fiscal years mentioned. As particulars of omission, they are, in my opinion, adequate for the purposes of s.17(6)(a)(i)(C).

21. In the remaining charges (numbered (4)), a number of distinct allegations are made and it will be necessary to treat them separately.

22. The first offence alleged in this set of charges is the dealings with Braun (transaction (a)). Two false pretences are alleged: first, that the applicants had already paid up their share capital in the amount of DM100,000; secondly, that they, presumably on behalf of the company, had purchased video-films; whereas, in fact, no capital was paid up and the films had only been leased. However, whilst the terms of the false representations alleged, are stated, there is no mention of how or in what circumstances the representations were communicated by or on behalf of the applicants to Braun. In my opinion, the statement did not comply with s.17(6)(a)(i)(C) (cf. The King v. Weaver [1931] HCA 23; (1931) 45 CLR 321 at p 333).

23. The next offence alleged, (transaction (b)), is the Roehr allegation of a false pretence that the company would provide for regular exchange of the video-cassettes. But, again, there is no mention of the manner or means by which this false representation was made. In my opinion, s.17(6)(a)(i)(C) was not satisfied.

24. The remaining transactions (c. - x.) in this set of charges are also based on allegations of false pretences. It is said that the applicants fraudulently pretended that they were "solvent and willing to pay". But, again, there is no indication of how the pretence was executed. In my view, s.17(6)(a)(i)(C) was not complied with.

25. The other main argument put on behalf of the applicants is that, even if the requirement of s.17(6)(a)(i)(C) was met, the "dual criminality" standard required by s.4(1A) of the Act was not satisfied. It provides:

"(1A) An offence against the law of, or of a
part of, a foreign state (including an offence
against such a law relating to taxation, customs
duties, foreign exchange control or any other
revenue matter) for which a requisition for the
surrender of a person has been made to the
Attorney-General is an extradition crime for the
purposes of this Act if, but only if -
(a) the maximum penalty for the offence is
death or imprisonment for not less than
12 months; and
(b) had a relevant act or omission by the
person taken place, at the time when the
requisition was made, in or within the
jurisdiction of, the part of Australia,
where the person was found that act or
omission would have constituted an
offence against the law in force in that
part of Australia the maximum penalty for
which is death or imprisonment for not
less than 12 months."

26. It is hardly necessary to say that the present question falls to be determined on the proper construction of the municipal statute rather than by reference to any rule of public international law (see Riley v. The Commonwealth [1985] HCA 82; (1985) 159 CLR 1).

27. It is submitted on behalf of the applicants that the first charges did not comply with s.4(1A) because the conduct alleged would not have constituted an offence against the relevant local law, viz. that of the State of New South Wales at the time the requisition was made. On behalf of the second and third respondents, it is contended that, if the acts alleged had occurred in this State, offences would have been committed under the Crimes Act 1900 (N.S.W.) (s.178BB); under the Companies Act 1981 (N.S.W.) (s.563(2)); and there would also have been a common law conspiracy to cheat and defraud.

28. In the circumstances, it is necessary to refer only to s.563(2) of the Companies Act as follows:

"563 (2) (Misleading documentation) A person who,
in a document required by or for the purposes of
this Act or lodged with or submitted to the
Commission, makes or authorizes the making of a
statement that to his knowledge is false or
misleading in a material particular, or omits or
authorizes the omission of any matter or thing
without which the document is to his knowledge
misleading in a material respect, is guilty of an
offence.

Penalty: $10,000 or imprisonment for 2 years,
or both."

29. It will be remembered that in the first charges it is alleged that, in applying to register the company, the applicants made false statements with respect to the amounts paid up on their shares. If those acts had occurred in New South Wales, that conduct, in my opinion, would have constituted an offence of the requisite kind. In the terms of s.563(2) of the Companies Act, the applicants, in a document required by or for the purposes of the Act or lodged or submitted with the Commission, as the authority responsible for the administration of the law relating to corporations, would have made a statement that to his or her knowledge was false in a material particular. It is true, of course, that the Commission established under the Companies Act is not the authority charged with the administration of the corporate laws of Germany. But this is no more to the point than it would have been in Riley, supra, to suggest that the precursor of the present s.4(1A) was not satisfied because the narcotics were alleged there to have been imported into the United States rather than into Australia (see per Gibbs C.J., Wilson and Dawson JJ. at p.8). The exercise, in terms of New South Wales law, is necessarily a notional or hypothetical one.

30. In my opinion, the first charges satisfied s.4(lA).

31. A similar objection is taken by the applicants to the second charges. Here, the prosecution relies upon a combination of ss.555(1), 267(1), 553(1) and 553(3) of the Companies Act 1981 (N.S.W.) to satisfy the requirement of s.4(1A).

Section 555 provides -

"Liability where proper accounts not kept

555(1) (Failure to take all reasonable steps)
If -
(a) a provision of section 267 was not
complied with, in respect of a company to
which this section applies, during the
whole or any part of the period of 2
years immediately preceding the relevant
day or the period between the
incorporation of the company and the
relevant day, whichever is the shorter;
and
(b) the company was at any time during that
period, or became at a later time, a
company to which this section applies,
a director of the company who failed to take all
reasonable steps to secure compliance by the
company with the provision throughout that period
and any officer of the company who is in default
are each guilty of an offence.

Penalty: $5,000 or imprisonment for 1 year, or
both.

555(2) (Defence) In any proceedings against a
person for failure to take all reasonable steps to
secure compliance by a company with a provision of
section 267, it is a defence if the person proves
that he had reasonable grounds to believe and did
believe that a competent and reliable person was
charged with the duty of seeing that that provision
was complied with and was in a position to
discharge that duty."

32. The keeping of accounts is provided for by s.267(1) as follows:

"267(1) (Duty to keep accurate accounting records)
A company shall -
(a) keep such accounting records as correctly
record and explain the transactions of
the company (including any transactions
as trustee) and the financial position of
the company; and
(b) keep its accounting records in such a
manner as will enable -
(i) the preparation from time to time of
true and fair accounts of the
company; and
(ii) the accounts of the company to be
conveniently and properly audited in
accordance with the Act."

33. By s.553(1)(f), it is provided that, inter alia, s.555 applies to a company that has ceased to carry on business or is unable to pay its debts.

34. Again, it is objected by the applicants that it is not possible to translate these provisions so as to apply to what the applicants are alleged to have done or failed to do in Germany. But, in my opinion, this argument misconceives the operation of s.4(1A). What it requires is not the actual translation of conduct from one jurisdiction to another, no doubt a difficult, if not impossible, task. Rather, what is called for is to inquire what, notionally or hypothetically, would have been the consequences, in terms of any relevant criminality, if the conduct had occurred here.

35. The facts alleged by the prosecution are that at a time of both impending and actual insolvency of the company, the applicants, as its directors, failed to produce any accounts. If this had happened in New South Wales, offences under the specified provisions of the Companies Act would have been committed. In my view, s.4(1A) was satisfied on these charges.

36. The applicants also objected to the fourth set of charges on this ground. This, of course, was put as an alternative argument in the event that the submission based on s.17(6)(a)(i)(C) were to fail. Since this submission has been upheld, it is not necessary to embark upon a consideration of the alternative.

37. In the result, it should be declared that the warrants of committal are beyond power in so far as they are based on the fourth set of charges; and that, otherwise, the warrants are valid (cf. Parker v. Churchill [1986] FCA 88; (1986) 9 FCR 334 at p 336). In the circumstances, there should be no order as to costs.