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Director's Discharge Without Conviction Overturned

Commerce Commission Overturn Director's discharge Without Conviction

The Commerce Commission has been successful in overturning the discharge without conviction of Naresh Shukla, Director of 230 Marua Limited, a leather furniture company.

In June 2007 Naresh Shukla and his company 230 Marua each pleaded guilty in the Auckland District Court to six charges of breaching the Fair Trading Act relating to:

  • Advertising furniture as being on 'sale' when the price was the same as before, during, and after the 'sale' and;

  • Claiming that the leather lounge suites on sale for $3,000 were sold by other retailers for $6,000 when this was not correct.

The company was fined $36,000 plus costs but Mr Shukla was discharged without conviction. The basis for Mr Shukla's discharge was that his overseas travel for business may be unduly hampered by a conviction. The Auckland District Court judge felt the consequences of a conviction would be out of proportion to the gravity of Mr Shukla's offence.

The Commission appealed to the High Court on the question of whether the Judge was correct to grant the discharge without conviction, which may be ordered only if the consequences of a conviction would be out of all proportion to the offending.

On Monday 19 November 2007 the matter was heard before Justice Baragwanath in the High Court in Auckland. In his reserved judgment, which was released today, Justice Baragwanath found that the expert evidence established only a likelihood of nuisance to Mr Shukla in that he would have to explain his convictions to foreign immigration authorities. He further stated:

"But it is the purpose of a sentence to sting and in a case such as the present to serve as a deterrent. While the fines against the company were substantial there was good reason to ensure that Mr Shukla's penalty was not limited to the reduced performance of his company".

Accordingly Mr Shukla's acquittal was set aside and he was convicted and discharged on all matters.

This is a significant and important result for the Commission, as well as for other enforcement agencies, as it ensures that individuals are held accountable for any breach of the law.

Section 106 of the Sentencing Act 2002 states:
"If a person who is charged with an offence is found guilty for pleads guilty, the court may discharge the offender without conviction, unless by any enactment applicable to the offence the court is required to impose a minimum sentence."

Section 107 of the Sentencing Act 2002 states:

"The court must not discharge an offender without conviction unless the court is satisfied that the direct and indirect consequences of a conviction would be out of proportion to the gravity of the offence."


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