Baldini v Regina

Court of Criminal Appeal (NSW)|2007-11-21|Before: McClellan CJ, Hall J, Price J, Clellan CJ

CITATION: Baldini v Regina [2007] NSWCCA 327

JUDGMENT OF: McClellan CJ at CL at 1; Hall J at 2; Price J at 4

DECISION: (i) Leave to appeal be granted. (ii) Quash the sentences imposed for counts 1, 2 and 3. (iii) Re-sentence the applicant under s 6(3) of the Criminal Appeal Act 1912 making an order under s 10A of the Crimes (Sentencing Procedure) Act 1999 on each count to the effect that the proceedings be disposed of on the basis that no other penalty be imposed. (iv) Order the release of the applicant forthwith.

CATCHWORDS: Criminal law - sentencing - accessory after the fact of fraud - pleas of guilty - assessment of objective seriousness - parity - assistance to authorities - special circumstances - no loss attributable to applicant's conduct - application of s 10A of Crimes (Sentencing Procedure) Act 1999

Crimes Act 1900 s 176A, s 347 LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 s 10A, s 21A(2)(g), s 21A(2)(n), Criminal Appeal Act 1912 s 6(3)

Bikhit v Regina [2007] NSWCCA 202 R v Ilbay [2000] NSWCCA 251 CASES CITED: R v Kollas & Mitchell [2002] NSWCCA 491 R v Negline NSWCCA 5 December 1990 Regina v Sukkar [2006] NSWCCA 92

PARTIES: Paul Baldini Regina

COUNSEL: S Hanley - Applicant N Adams - Respondent

SOLICITORS: Watsons - Applicant S Kavanagh Solicitor for Public Prosecutions - Repsondent

LOWER COURT JURISDICTION: District Court

LOWER COURT DATE OF DECISION: 29 March 2007

LOWER COURT MEDIUM NEUTRAL CITATION: Regina v Paul Enzo Baldini

IN THE COURT OF CRIMINAL APPEAL 3011/2007

McCLELLAN CJ at CL HALL J PRICE J

21 November 2007 Paul BALDINI v REGINA Ex tempore Judgment

1 McCLELLAN CJ at CL: I agree with Price J. 2 HALL J: I agree with Price J. 3 McCLELLAN CJ at CL: The orders proposed by Price J are the orders of the Court. 4 PRICE J: On 19 March 2007 Paul Enzo Baldini pleaded guilty in the Sydney District Court to an indictment which contained three counts of being an accessory after the fact to a serious indictable offence. The charges were brought under s 347 of the Crimes Act 1900. Pursuant to s 350 of the Crimes Act an accessory after the fact to any other serious indictable offence [other than murder] is liable to imprisonment for 5 years. The offences to which the applicant was an accessory were offences contrary to s 176A of the Crimes Act, namely a director of any body corporate or public company cheating or defrauding. Offences contrary to s 176A are punishable by imprisonment of up to 10 years and are for the purposes of s 350 a serious indictable offence. 5 The applicant asked that two offences contained on a Form 1 be taken into account on sentence. They were also offences contrary to ss 347 and 176A of the Crimes Act. 6 Pleas of guilty had been entered on 19 September 2006 in the Local Court by the applicant to five counts of being an accessory after the fact to a serious indictable offence and it seems that for administrative reasons when the indictment was presented in the District Court two counts were included on the Form 1. 7 On 29 March 2009 the applicant was sentenced to an aggregate non-parole period of two years with a balance of term of six months structured as follows:

Count 1: Imprisonment for a non-parole period of twelve months commencing on 29 March 2007 and expiring on 28 March 2008 with a balance of term of four months commencing on 29 March 2008 and expiring on 29 July 2008.

Count 2: Fixed term of imprisonment for twelve months commencing on 28 March 2008; and

Count 3: Imprisonment for a non-parole period of eighteen months commencing on 28 September 2007 and expiring on 27 March 2008 (sic) with a balance of term of six months expiring on 28 September 2009 (sic). The earliest date that the applicant is eligible for release on parole was specified to be 27 March 2009. 8 The applicant seeks leave to appeal against the severity of the sentence imposed. 9 Alfred Gomes and Jose Gomes (the Gomes brothers) were sentenced at the same sentencing proceedings as the applicant. They were the directors who had committed the serious indictable offences contrary to s 176A of the Crimes Act. Samuel Bikhit was also sentenced at the same proceedings as the applicant. He was a director of Egypco Chemical Australia Pty Limited an existing customer of Smartpak. 10 The Gomes brothers were the directors of Smartpak Australia Pty Ltd (Smartpak) which had entered into a factoring agreement with Scottish Pacific Finance Pty Ltd (Scottish Pacific). 11 Scottish Pacific purchased invoices rendered by Smartpak to its customers at a price which was less than the face value of the invoices. Shortly after receiving the invoices, Scottish Pacific paid a percentage to Smartpak known as "the advance". Scottish Pacific then recovered the balance from the customer, which it then forwarded minus a "factoring fee" to Smartpak. The factoring agreement assisted Smartpak to conduct its business of supplying paper products by ensuring that it had a continuous cash flow. 12 The Gomes brothers devised a means of raising false invoices which they sent to Scottish Pacific. They created false invoices in the names of existing known customers of Smartpak in respect of which neither a product order had been received nor product supplied. These false invoices were forwarded to Scottish Pacific who paid the advance to Smartpak. Scottish Pacific then sought to recover the balance from the customer. There were existing customers of Smartpak who participated in the arrangement and paid, at the request of Smartpak, the amounts owing to Scottish Pacific on the invoices which they knew to be false. Smartpak provided the existing customers with the funds to do this. 13 The applicant was a director and controller of State Packaging Pty Ltd (State) which was an existing customer of Smartpak. He participated in five transactions to produce false invoices in the name of State for factoring with Scottish Pacific and acknowledged the false invoices by accepting the monthly statements in which the fraudulent invoices appeared. 14 Count 1 involved the factoring of three invoices totalling $116,639.60 between 6 January 2003 and 21 January 2003. Count 2 involved the factoring of five invoices totalling $127,084.43 between 3 February 2003 and 13 February 2003, count 3 involved the factoring of three invoices totalling $100,682.88 between 1 May 2003 and 27 May 2003. The first offence on the Form 1 involved three invoices totalling $79,424.40 and the second offence three invoices totalling $119,958.19. The total value of the false invoices which involve the applicant amounted to $540,789.50. 15 Scottish Pacific in relation to each of these transactions was paid in full by State utilising monies paid to it by either Smartpak or other companies controlled by the Gomes brothers. 16 The first ground of appeal is that his Honour erred in his assessment of the objective seriousness of the applicant's offences. The second ground is that his Honour erred in finding aggravating factors established against the appellant. These grounds are related and may be considered together. 17 The principle contention is that the Judge erred in rejecting the submission made on behalf of the applicant that his involvement did not cause Scottish Pacific to suffer any loss. During his remarks on sentence the Judge said (ROS at 20): "The exception mentioned above was the submission put on behalf of Mr Baldini that his involvement in the offences did not cause Scottish to suffer any loss and that any loss which might have been sustained by Scottish would have been confined to the investigation of the matter and the costs associated with the liquidation. When asked to reconcile this submission with the agreed fact that Scottish had incurred a loss of $1,300,000.00 the explanation offered was in these terms 'The loss is agreed but not due to the transaction the subject of the charges.' These submissions on behalf of the all of the accused are not sustainable in light of contested evidence in the case. The agreed facts in the case of Mr Baldini and Mr Bikhit expressly state that there was such a loss and it was attributable to the actions of those offenders." 18 The statement of agreed facts contained a statement that Scottish Pacific had suffered a loss of $1.3 million. It seems that his Honour misconstrued counsel for the applicant's enunciation during the sentencing hearing that there was no dispute as to any of the facts (POS T 42 L 19-20 19/3/07) as an acceptance that the applicant was to be held liable for the loss referred to in the agreed facts. 19 It was not the Crown case that Scottish Pacific had suffered any financial loss as a result of the five transactions in which he was involved. The Crown had informed his Honour that the loss in the agreed facts related to "later invoices that were not met" and represented "the statement by the liquidators as to the deficiency after the company went into receivership". 20 The applicant was charged with (including the Form 1 offences) five specific offences. The statement of agreed facts demonstrated that in respect of each of these transactions Scottish Pacific had been paid and no loss was suffered. Mr Fogarty, a chartered accountant, during his evidence confirmed that in relation to all of the false State invoices, Scottish Pacific had received all monies due and suffered no financial loss. 21 The Judge found that the substantial loss sustained by Scottish Pacific was a feature of aggravation (ROS at 32). His Honour was there referring to s 21A(2)(g) of the Crimes (Sentencing Procedure) Act 1999 (Crimes (SP) Act) which relevantly provides that one of the aggravating factors to be taken into account in determining the appropriate sentence is: "(g) the …………………, loss caused by the offence was substantial."

There was no loss caused by the applicant's offending and his Honour, with respect, erred in making this finding. 22 The Judge accepted the Crown submission that the applicant was closely involved in the planning, even if not the prime mover of the offences and appears to have found that his involvement in the planning was a factor of aggravation (ROS at 32). His Honour, it seems, was referring to s 21A(2)(n) of the Crimes (SP) Act. Such a finding required proof beyond reasonable doubt and with respect his Honour could not be so satisfied on the available evidence. 23 The Judge ranked the offences with which the applicant had been charged as demonstrating a high degree of criminality for the same reasons as he had similarly assessed the criminality of the offending by the Gomes brothers (ROS at 26). The Gomes brothers had been charged with twelve counts with 61 offences being included on a Form 1. A total amount of $2,044,644.72 was involved in their offending. The offences had been meticulously planned and the Gomes brothers were financially advantaged. The applicant had not received a financial benefit by his participation in the offending nor had there been a high degree of planning. The offences as alleged do not demonstrate criminality of a high degree. 24 Grounds 1 and 2 of the appeal have, in my opinion, been established. 25 It is convenient now to deal with ground 4 of the appeal which is that his Honour erred in failing to reflect an appropriate disparity of sentences between the applicant and the principal co-offenders such that the applicant had suffered a justifiable sense of grievance. 26 The Gomes brothers were each sentenced by his Honour to terms of imprisonment the effective head sentence of which was four years ten months and one week with an effective non-parole period of two years eleven months and three weeks. The sentences commenced on 29 March 2007 and they are eligible for release to parole 7 March 2010. The 12 counts to which they pleaded guilty were laid pursuant to s 176A of the Crimes Act for which the maximum penalty is ten years imprisonment. 27 The Crown concedes that the sentencing remarks of the Judge do disclose anomalies in the manner in which his Honour sentenced each offender and points out that the two principal offenders, the Gomes brothers received a non-parole period of just less than a year longer than the applicant in circumstances where they were being dealt with for 12 offences on the indictment and 62 offences on a Form 1. The Crown notes that their offences carried a maximum penalty that was twice that for the applicant's offences. 28 It appears to me that his Honour's approach to sentencing the applicant was infected by the error of the assessment of the applicant's criminality being of the same high range of seriousness as the Gomes brothers. Plainly it was not. 29 Samuel Bikhit had pleaded guilty to two counts in similar terms to those charged against the applicant. The amount involved in total $212,354.23. On each count, he was sentenced to imprisonment for eighteen months, made up of a non-parole period of twelve months and a balance of term of six months. Mr Bikhit's sentence was quashed by this Court after the Court expressed concern about the charges which alleged that he was an accessory to the defrauding of Scottish Pacific by the Gomes brothers. When this Court re-sentenced Mr Bikhit an order was made under s 10A of the Crimes (SP) Act to the effect that the proceedings be disposed of on the basis that no other penalty be imposed. 30 The applicant has shown that a reasonable person looking at the circumstances of the case would regard his grievance as justified: R v Ilbay [2000] NSWCCA 251 [at 6], R v Kollas & Mitchell [2002] NSWCCA 491 [at paras 45-50]. The sentences imposed by the Judge give rise to a justifiable sense of grievance. 31 Ground 5 of the appeal is that his Honour erred in the manner in which he took into account the applicant's assistance to authorities. 32 The applicant had pleaded guilty in the Local Court on 19 September 2006. In an affidavit tendered on sentence, Superintendent Dyson deposed that when the appellant was charged in May 2006 he indicated his intention at that time to plead guilty and expressed a willingness to assist the police. 33 On 10 November 2006 he signed an "Undertaking to Give Evidence" against the Gomes brothers and four other alleged accessories at "any proceedings (including any appeal and re-trial)". Superintendent Dyson opined that the applicants assistance was "significant" and "substantially strengthened the police brief". 34 When the Judge sentenced the Gomes brothers he discounted their sentences by 35 per cent. It seems from his Honour's remarks that this discount was given for the utilitarian value of the pleas and for remorse. The Judge when sentencing the applicant said: "Mr Baldini, with the advantage of his offer of worthwhile assistance to the authorities and his very early plea of guilty with its significant utilitarian value in a case such as this is likewise entitled to a 35% discount on sentences." (ROS at 36). 35 The Crown concedes that the applicant does not appear to have received any additional discount for his assistance to authorities when his discount is compared with that of the principal offenders. This Court has been informed this morning that the applicant has given evidence at a trial against two alleged offenders. 36 It seems that his Honour did not properly reflect on the appropriate discounts to be given. The discount allowed to the Gomes brothers for the utilitarian value of their pleas and remorse was, in my opinion, excessive. The applicant had pleaded guilty in the Local Court and a discount of 20 to 25 per cent for his plea was appropriate. A discount of 15 per cent for past and future assistance was within an appropriate range. This Court has emphasised that a discount for a plea and assistance of more than 40 per cent should be very exceptionally, if at all, granted where there is no evidence that the offender will spend the sentence, or a substantial part of it, in more onerous conditions than the general prison population: see Regina v Sukkar [2006] NSWCCA 92 per Howie J at [5]. There was no such evidence before the Judge. 37 The applicant, however, is entitled to feel aggrieved by the manner in which the discounts were assessed. To my mind, a discount of 40 per cent for the plea and assistance was appropriate. 38 Ground 3 of the appeal is that his Honour did not give appropriate weight to the mitigating factors available to the applicant. Ground 6 of the appeal is that his Honour erred in the application of a finding of special circumstances in the sentence. 39 In his sentencing remarks the Judge did not refer to the applicant's subjective circumstances until he came to consider special circumstances. His Honour was required to give consideration to the subjective circumstances in determining the appropriate sentence for the offence and his consideration was not to be confined to a finding of special circumstances. There was before his Honour a probation and parole report which referred favourably to the applicant as a hardworking person who is family orientated. He had established his own business but due to issues associated with the offences was declared bankrupt in 2005. Whilst he has a limited criminal history, there have been no offences since 1996. The Judge considered but for the present offences the applicant had made a successful rehabilitation. His Honour found special circumstances noting his first time in prison, his valuable assistance, remorse and contrition. 40 Although special circumstances were found, the applicant received an overall head sentence of 30 months and a non-parole period of 24 months. It appears that his Honour made a miscalculation as the balance of the term of the sentence was intended to exceed one third of the non-parole period. 41 I turn to the principal issue in this appeal. This Court in Bikhit v Regina [2007] NSWCCA 202 considered the charges which had been laid against Mr Bikhit. Those charges were in the same terms as those brought against the applicant. The first count on the indictment is in the following terms: "1. Alfred Gomes and Jose Gomes between 6 January 2003 and 21 January, 2003 at Sydney in the State of New South Wales, being directors of a body corporate, namely Smartpak Australia Pty Limited, did defraud Scottish Pacific Business Finance Pty Limited, by factoring three false invoices in the name of State Packaging Pty Limited for the amount of $116,639-60 to Scottish Pacific Business Finance Pty Limited, and the Director of Public Prosecutions aforesaid charges that Paul Enzo Baldini , a director of State Packaging Pty Limited, knowing the said Alfred and Jose Gomes to have committed the said serious indictable offence in the manner aforesaid, afterwards, namely on or about 2 June 2003 in the said State did receive, harbour, maintain and assist the said Alfred Gomes and Jose Gomes". Counts 2 and 3 are in identical terms save for dates and amounts. 42 In Bikhit Simpson J (with whom Beazley JA and Grove J agreed) after noting that the charge alleged that Mr Bikhit was an accessory to the actual defrauding of Scottish Pacific by the Gomes brothers found that the evidence failed to establish that Scottish Pacific was deprived or defrauded of anything in respect of the transactions in which Mr Bikhit had been involved. Simpson J said [at 49]: '"Defraud" is not defined in the Crimes Act . However, it has been the subject of judicial consideration on a number of occasions. Some of the authorities are referred to in Howie and Johnson: Criminal Practice and Procedure NSW , LexisNexis Butterworths 1998 at pp 116, 626 in the notes to s 176A of the Crimes Act . In my opinion to "defraud" necessarily imports a loss to the victim of something of value. I acknowledge that the loss may be intangible, although, it must, in my opinion, at best involve prejudice to the victim's "proprietary rights" ( R v Negline (NSWCCA, 5 December 1990)).' 43 Her Honour went on to say that there was no "defrauding" of Scottish Pacific which was an essential element of each offence charged. 44 Grove J [at 7] said that it was difficult to identify how Mr Bikhit was an accessory after the fact to the defrauding. 45 Similar difficulties arise in the case of the applicant. The evidence as I have said demonstrates that in respect of the five specific offences of which the applicant was charged, Scottish Pacific had received all monies due and suffered no loss. Hence the evidence failed to establish that Scottish Pacific was deprived or defrauded of anything in respect of the transactions in which the applicant was involved. There was no "defrauding" of Scottish Pacific which was an essential element of each offence charged. 46 The applicant pleaded guilty to the charges and has served almost eight months of his sentence. He was undoubtedly involved in serious acts of dishonesty. He allowed false invoices in the name of State to be produced by the Gomes brothers and acknowledged the false invoices by accepting monthly statements in which the false invoices appeared. As was said by Simpson J in Bikhit [at 53] had he been charged, for example, with being an accessory to an offence of obtaining a benefit by deception( s 178BA) his pleas would have been appropriate. 47 Error having been identified, I am of the opinion that some other sentence is warranted in law and should be passed.

48 I propose the following orders: (i) Leave to appeal be granted. (ii) Quash the sentences imposed for counts 1, 2 and 3. (iii) Re-sentence the applicant under s 6(3) of the Criminal Appeal Act 1912 making an order under s 10A of the Crimes (Sentencing Procedure) Act 1999 on each count to the effect that the proceedings be disposed of on the basis that no other penalty be imposed. (iv) Order the release of the applicant forthwith.

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Judgment (22 paragraphs)

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Cases Cited (4)