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[2013] NSWCCA 172
Court of Criminal Appeal (NSW)
2013-07-23
Macfarlan JA, Campbell J, Barr AJ, MacFarlan JA
Original judgment source is linked above.
The applicant's subjective case 38The applicant was born on 29th July 1972 and accordingly was 40 years old when sentenced on 30th April 2013. He and his wife had then been married for fourteen years, but had been in a relationship since the applicant was fifteen. There are two children of their marriage, a son and a daughter. His mother raised the applicant and his sister as a single parent after she separated from the father of her children, who was a violent drunk. By parental instruction and her strong example, the applicant's mother instilled the work ethic and a sense of financial responsibility in him. 39He left school after completing year ten and went to work for the State Rail Authority at the age of fifteen as a station assistant. He worked his way up to the project manager's position he occupied during the period of his offending. 40Like most white-collar criminals, he has no prior criminal record of any significance. 41As has already been stated, as much as $273,000 of the unlawful profit generated by the Precision enterprise was gambled in poker machines according to the information obtained by the ICAC investigation. Notwithstanding this he tended to deny a problem with gambling (see Mr. Henckleman's report 30th December 2011; Pre-Sentence Report 9th November 2011). 42Mr. Henckleman considered that the applicant was experiencing clinical depression not only because of his offending and the pressure of the legal process since 23rd November 2007, but also because of his childhood difficulties. The psychologist expressed the view that the applicant's depression was not only consequential to his involvement in the offences, but also may have been causative of his offending. In a sense the offending reflected his deprived childhood. 43The trial judge accepted that "until he embarked upon the stupid enterprise, [he was] a person of prior good character. He is a family man and he has a history of hard work." 44As I have already said, he pleaded guilty at the earliest possible opportunity and was subject to anxiety during the period of five years and six months it took for the matter to come before the court for sentencing. The delay was not the responsibility of the applicant, as the trial judge accepted by allowing a discount for the vexation due to it. 45The evidence also indicated that the offending, or at least its discovery, had a very adverse impact upon the applicant's family, particularly his wife. The psychologist's report tendered about the condition of the applicant's wife expressed the view that she suffered an adjustment disorder with mixed anxiety and depressed mood as a result of her husband's offending and its consequences.
Reasons for sentence 46I will exclude from what I say his Honour's reasons relating to the sentences from which there is no application for leave to appeal. 47At the outset, his Honour indicated that in respect of the early plea, he would apply a discount of 25 per cent on account of "contrition and some assistance in the administration of justice". His Honour accepted that there had been "an inordinate delay between the time of the revelations at ICAC and the bringing of the charges". He proposed to allow a further discount for that consideration, and in the end indicated an overall reduction in the head sentence for the misconduct in public office offence of one-third. 48The sentencing judge recognised that the misconduct in public office charge was "brought under the common law, for which the maximum penalty is unlimited". His Honour acknowledged that "the offence here is not an offence of incompetence or failure to repair the rails, but rather a crime of fraud related to [the applicant's] public position". Indeed, his Honour found in accordance with the agreed facts that the work was competently performed. 49His Honour also found that had RailCorp known of the applicant's involvement with - and profiting from - Precision, it would not have placed the company on the panel. The applicant had a duty to disclose his involvement but continued to hide it from RailCorp throughout the whole period covered by the charge. His Honour also found that the applicant's deception extended to concealing the fruits of his crime by placing some assets thereby acquired in his father-in-law's name. 50His Honour said (AB p22; ROS p6): The offence of misconduct in public office is very serious - it involves a breach of public trust - and although courts do not too readily impose prison sentences, the grave criminality involved here requires a serious punishment. 51His Honour referred to the applicant's conduct as "a deliberate and lengthy exercise of fraud". 52As I have already said, his Honour referred favourably to the applicant's prior good character, but also said (AB p26; ROS p10): He knew from the very beginning was he was doing. He knew that it was fraudulent and he knew that it was misconduct in the office which he occupied. The sentencing judge referred to the evidence about the applicant's gambling, but did not regard it as "a mitigation of these offences". 53His Honour said (AB p26; ROS p10): ... the objective gravity of this matter is substantial. Millions of dollars of public money have gone through what is in effect a "bodgie" company set up by this man, deliberately for the purpose of obtaining work to which he otherwise would not have been entitled. I note by subtracting the amount which [his business partner] and he extracted, that the profitability of these contracts was enormous. It is not for me to make any commercial assessment about these matters, but by definition if he was getting $1.3 million or more in cash and [his business partner] was getting the same, and it was something over four million [dollars] that went through the books for legitimate real work, the profitability was extraordinary. It is precisely for this reason that government departments have processes for independent tendering, because those who seek to obtain government work which is valuable to them and valuable to the their employees must be at arms length from the contractor who pays. 54The sentencing judge indicated that apart from the plea and the factor of delay, his starting point would have been "a penalty of six years imprisonment". This was discounted to four years. He did not find special circumstances and in passing sentence, as I have said, his Honour imposed a non-parole period of three years and an additional term of one year.
Submissions of the parties 55Mr. G. Porter of counsel, who appeared for the applicant sought to make good the ground of manifest excess by making the following points: (a) by referring to the penalty as unlimited, rather at large, his Honour had adopted an erroneous approach; (b) his Honour failed to refer to the point of reference provided by Crimes Act Part 4A offences, and adopted a starting point of six years, which placed the current offence close to the worst category, which it was not; (c) by characterising the crime as one of "fraud" his Honour had mistaken the necessary elements of the offence; (d)the sentencing judge's reference to "breach of public trust", in effect treated what was an element of the offence as an aggravating factor in contravention of the Sentencing Act, s21A(2); (e)by referring to Precision as a "bodgie" company, and to its profitability as "enormous", and "extraordinary", his Honour must have inferred an aspect of gross overcharging or price gouging which was not established either by the guilty plea, or by the agreed facts; (f)his Honour failed to have sufficient regard to the applicant's previous good character and his substantial attempt at reparation. 56Mr. N. Bruni, solicitor, who appeared for the Crown, emphasised the following matters: (a) that the sentence needed to reflect criminality over a period of four years involving a total sum of $4.3 million. Even if no defalcation was involved, the period during which the criminality continued, and the very large sum involved, indicated a breach of trust committed by the applicant to a very high degree; (b) the offence involved considerable planning and deliberation; (c) the degree of deception extended to the representation that at the time Precision was proposed as a service provider, it in fact was incapable of performing the work because it then employed no qualified welders, and even if the applicant was not directly involved in each aspect of allocation of work to Precision, his position at RailCorp greatly facilitated it being approved for the work, and the allocation of subsequent work; (d) the applicant's criminal involvement had the effect of qualifying Precision by the experience gained for appointment to the panel when it was re-established. This compounded the applicant's criminality; (e) the applicant committed the crime purely for personal gain, and successfully so; (g)his Honour gave appropriate weight to the applicant's subjective case.
Resolution 57It is not necessary in this case to descend into detail as to what is involved in the appellate process when the Court of Criminal Appeal is asked to determine that a sentence imposed is manifestly excessive, except to call to mind what was said by Gaudron, Gummow and Hayne JJ in Wong v. The Queen [2001] HCA 64; 207 CLR 584 at 605 [58]: Reference is made in House [House v. The King (1936) 55 CLR 499] to two kinds of error. First, there are cases of specific error of principle. Secondly, there is the residuary category of error which, in the field of sentencing appeals, is usually described as manifest excess or manifest inadequacy. In this second kind of case, appellate intervention is not justified simply because the result arrived at below is markedly different from other sentences that have been imposed in other cases. Intervention is warranted only where the difference is such that, in all the circumstances, the appellate court concludes that there must have been some misapplication of principle, even though where and how is not apparent from the statement of reasons. 58In my judgment the applicant has not made good his challenge to the sentence passed in the District Court on this basis. I should add that, with respect, there may have been some confusion on counsel's part as to what was involved in the ground advanced. The argument put before the Court sought to identify specific errors exposed by the reasoning process which betrayed either error of principle, or misapprehension of fact. As the statement of principle from Wong above demonstrates, this is not what is required. 59His Honour's reference to the maximum penalty being "unlimited" did not betray error of principle. The statutory analogue is a point of reference only. As the long passage quoted at [10] above from, and the result in, R. v. Hokin make clear, the statutory analogue does not establish a kind of de facto maximum. Indeed, in expressing the reasons of the Court, Gordon J at page 291 affirmed, by reference to earlier authority, "that there was no limit in law to the term of imprisonment which might be imposed on a person convicted for a common law misdemeanour" (emphasis added). Rather, the statutory analogue, the point of reference, is applicable by a rule of practice only. As I have already pointed out Mr. Hokin, after reduction on appeal, received a term of imprisonment that was 50 per cent in excess of the applicable statutory analogue. 60Nor did his Honour, by referring to the applicant's misconduct as "fraud", fall into error. It is clear that in context, his Honour employed that descriptor to distinguish the present case from that category of case where the offence is said to be constituted by non-feasance in the nature of a gross neglect of duty. In Shum at 817 [84] Sir Anthony Mason NPJ gave the example of wilful and intentional neglect or failure to perform a duty to which a public official is subject by virtue of his office. That is not this category of case. This case falls into that category referred to by Doyle CJ in Question of Law Reserved (No. 2 of 1996) as involving "an element of corruption". Moreover, the statutory analogue is dealt with by the Crimes Act as a species of "fraud". 61There is no merit in the argument that his Honour "double counted" in some way by saying the offence involves "a breach of public trust". So it does. As the Court of Appeal for England and Wales pointed out in Attorney General's Reference (No. 3 of 2003) at [57,] the idea that an abuse of office involves a breach of the public's trust has been recognised as a rationale for the common law offence since Lord Mansfield CJ's day: R. v. Bembridge (1783) 3 Dougl 327. In so far as the common law in Australia is concerned, however, as Redlich JA pointed out in Quach at 583 [44], a breach of trust is not "part of the definition of the offence", rather "it serves to emphasise the degree of departure from the proper standard that must be established". The sentencing judge was entitled, if not bound, to have regard to that factor. 62Moreover, and more generally, the recognition that "white collar crime" will often involve a breach of trust has long been recognised as a consideration relevant to the assessment of objective criminality giving the aspect of general deterrence particular relevance in sentencing for these offences: R. v. Hawkins (1989) 45 A Crim R 430 at 436; R. v. Mungomery [2004] NSWCCA 450; 151 A Crim R 376 at 384 [41]. 63The sentencing judge's reference to the level of profitability of the enterprise should not be read as implying a material misapprehension of fact. His Honour was not suggesting that there must have been gross overcharging or price gouging. I accept this would have been an aggravating factor for proof by the Crown beyond reasonable doubt. In fact his Honour expressly disavowed any "commercial assessment". On any view of it, Precision's business was highly lucrative. His Honour was making the entirely commonplace observation, in this area of discourse, that the amount of money involved is a highly relevant consideration in the assessment of the objective seriousness of the offending. Moreover, as he pointed out, it was indicative of the degree of abuse of office involved in the offending. Given what appears to be the high level of profitability of government contracts in this field, it is essential that the public have complete confidence in the integrity of the processes for the allocation of government contracts on a fair and competitive basis. His Honour's comments show he was mindful of the need to consider the protection of the community as a purpose in fixing a proportionate sentence. The comments were also relevant to appropriate denunciation. 64The arguments advanced on behalf of the Crown should be accepted. As Hulme J said in Mungomery at 383 [40] - 384 [41]: [40] In this regard authority makes it clear that the amount of money involved in premeditated deception is an important, and the period of time over which offences are committed a relevant, factor in determining the extent of criminality (citations omitted). [41] The cases in this area also stress the importance of general deterrence. Organisations, be they business or government, cannot operate effectively without placing a good deal of trust in their employees. Opportunities for the abuse of that trust are legion and breaches are often difficult to detect. Commonly, offenders are able to continue their depredations for long periods. Often matters only come to light when the total amounts involved become too large to be overlooked. It seems to me an inevitable inference that there must be many cases where offending is never discovered - a factor also arguing for sentences which are substantial deterrents. 65In my judgment the sentencing judge bore these considerations firmly in mind when passing the undoubtedly stern sentence justice required in all the circumstances. 66Perhaps, it could be said that some consideration might have been given to the substantial reparation made in the case. But, the materials put before his Honour in this regard may fairly be described as scant, and in this regard the applicant bore the onus. Still, I accept that there was no evidence of actual defalcation in this case, and the illicit profit was, as I have said, disgorged to a substantial extent. However, this consideration is of limited value in mitigation in cases of this type; the absence of reparation "is more a matter of aggravation": R v Phelan (1993) 66 A Crim R 446 at 448. 67As Gleeson CJ pointed out in R v El-Rashid (NSWCCA, unreported 7th April 1995; BC9504681), crimes like the present offending involving "a serious breach of trust...are only able to be committed because of the previous good character of the person who has been placed in a position of trust". It follows that previous good character is of less relevance as a mitigating circumstance here. 68The sentence passed was within the range available to the learned sentencing judge and I am not of the opinion that some other more lenient sentence is warranted in law and should have been passed. 69The orders I propose are:
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Blackstock
Regina
Misconduct in public office 8Misconduct in public office is a common law offence in respect of which the penalty is at large, that is to say, no maximum penalty is fixed by law. In respect of such matters it is the practice of the Court to adopt an analogous or corresponding statutory offence, where one is available, as a reference point for the imposition of penalty: R. v. Hokin, Burton and Peisley (1922) 22 SR (NSW) 280 at 291 - 2 per the Court. 9In Jaturawong v. Regina [2011] NSWCCA 168 Beazley JA (as her Honour then was) (Hall and Harrison JJ agreeing) adopted the offences created by Part 4A Crimes Act relating to corruptly receiving commissions and other corrupt practices as the appropriate reference point for this common law offence. The offences created by the provisions of that part each impose a maximum penalty of imprisonment for seven years. 10I do not understand R. v. Hokin to establish a rule that the sentence imposed for the common law offence cannot, as a matter of law, exceed the maximum imposed for the statutory analogue. In delivering the judgment of the Court, Gordon J said at 291-2: It was contended that on a conviction for a common law misdemeanour the Court could not impose a sentence as in this case of five years and four years imprisonment. In my opinion that contention is untenable. In R. v. White (13 S.C.R. p. 338) the Court imposed a sentence of three years imprisonment with hard labour on a person convicted of a common law misdemeanour. It was held that such sentence was illegal not because of the term of imprisonment imposed but because there was then no power to impose hard labour. That is not now the law, vide s. 432 of the Crimes Act of 1900. In that case it was stated by Faucett J, expressing the view of all the members of the Court, that there was no limit in law to the term of imprisonment which might be imposed on a person convicted of a common law misdemeanour. As a rule undoubtedly the practice of the Court (where the misdemeanour charged is an "attempt" to commit a statutory offence) is not to impose a greater punishment than that imposed by Statute for the complete offence. For example, if A were indicted for the common law misdemeanour of attempting to commit a statutory offence, the Court would not as a rule inflict upon conviction a heavier punishment than that imposed by Statute for the full offence. Here, no doubt, in one sense the offence charged as a common law misdemeanour was a conspiracy to commit perjury and by so doing to defeat justice. The penalty provided by statute for perjury is by s. 327 of the Crimes Act a maximum of seven years penal servitude or a maximum of two years imprisonment with hard labour. An increased penalty is provided by s. 328 which does not apply to this case. In my opinion there is in law no such limit as that contended for on the term of imprisonment which the Court can impose on a person convicted on indictment of a common law misdemeanour. If this had been a case of a person convicted of an attempt to commit an offence for which the punishment is prescribed by Statute, I should have been prepared to hold that the Court ought not to impose a heavier punishment than that prescribed by Statute for the completed offence. In this case, however, I do not think that rule applies. Here the accused were convicted of a conspiracy to defeat the ends of justice by committing perjury and incidentally branding as a common prostitute a girl who was in fact not such an abandoned character. It was argued (1) that this being a conviction for a common law misdemeanour the Judge could not by law impose a sentence of more than two years imprisonment. That contention is directly contrary to R v. White in which the Court imposed a term of imprisonment for three years, and to the judgment in that case, and also to Re Forbes (8 N.S.W.L.R. 68); (2) that the Judge ought not to have imposed a longer sentence than that imposed by statute for perjury, i.e., s. 327, by which the maximum penalty is seven years penal servitude or two years imprisonment with hard labour. There is, of course, no power to impose penal servitude as a punishment on a person found guilty of a common law misdemeanour. This is, I think, a matter of discretion to be used in each case according to its circumstances. The presiding Judge sentenced Hokin, the principal offender, to a term of imprisonment for five years, and each of the other two appellants to a term of imprisonment for four years. While in no way suggesting that such sentence was illegal, I think that in view of the youth of the accused and in view of the maximum term of imprisonment imposed by law for perjury the sentence ought to be reduced in the case of Hokin to three years imprisonment, and in the case of Burton and Peisley to two years imprisonment in each case with hard labour, such sentences to commence as from the date of conviction [emphasis in the original]. 11I have set out this whole passage because, in my view, a consideration of it demonstrates that the statutory analogue provides no more than a reference point which does not fetter the discretion, which remains at large. The result and the reasoning in R. v. Hokin illustrate this. This will have relevance to the disposition of this case. Although the Court found the sentences imposed excessive, on re-sentencing the offenders the Court took into account the maximum term of imprisonment imposed by the statutory analogue, but sentenced the main offender to a term of imprisonment which exceeded the statutory maximum by 50 per cent. In the case of each of the two lesser offenders, terms of imprisonment equal to the statutory maximum were imposed. It is also worth observing that the Court approved the statement in White that "there was no limit in law to the term of imprisonment which might be imposed on the person convicted of a common law misdemeanour" (emphasis added). These considerations are relevant to the disposition of this case.
The elements of the offence 12Because part of the argument advanced to make good the ground of manifest excess was to the effect that the learned sentencing judge had either overstated the objective seriousness of the offending, or may have taken into account as an element of aggravation an aspect of the offending which was in truth an element of the offence, contrary to s.21A(2) Crimes (Sentencing Procedure) Act 1999 (NSW) ("Sentencing Act"), it is appropriate to summarise the elements of the common law offence by reference to the authorities to which the Court was taken by counsel. As the Court does not very often see instances of this offence, it may be useful in any event to bring its elements to mind for the purpose of deciding this sentence appeal. I might add, however, that the applicant's offending was detected by an ICAC investigation. And it may well be that the discharge by it of its statutory functions may bring an increasing number of instances of this type of offending to light. 13In Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381, Sir Anthony Mason NPJ, with whom the four other members of the Hong Kong Court of Final Appeal agreed, set out the elements of the common law offence of misconduct in public office at 817[84] - 818[86]. His Honour said: ... the elements of the offence of misconduct in public office are: 1. a public official; 2. who in the course of or in relation to his public office; 3. wilfully and intentionally; 4. culpably misconducts himself. His Honour emphasised that the misconduct must be both wilful and intentional. His Honour explained that this conjunctive formulation "signifies knowledge or advertence to the consequences, as well as intent to do an act or refrain from doing an act". His Honour further emphasised that his phrase "culpably misconducts himself" connotes "serious misconduct" which "is to be determined having regard to the responsibilities of the office and the office holder, the importance of the public objects which they serve and the nature and extent of the departure from those responsibilities". 14By way of explanation of the rationale for the offence, Doyle CJ said in Question of Law Reserved (No. 2 of 1996) (1996) 67 SASR 63 at 66: It is clear, I consider, that the .... offence ... strikes at the public officer who deliberately acts contrary to the duties of the public office in a manner which is an abuse of the trust placed in the office holder and which, to put it differently, involves an element of corruption. It may be that the mere deliberate misuse of information is sufficient to give rise to an offence, but the further allegation of an intent to receive a benefit clearly, in my opinion, brings the matter within the ambit of the common law offence. This statement of the purpose of the applicable rule of criminal responsibility assists in the task of assessing the objective seriousness of the offending in this case: see also R. v. Quach [2010] VSCA 106; 27 VR 310 at 322 [44] - 323 [47]; and Attorney Generals Reference (No. 3 of 2003) [2004] EWCA Crim 868; 1 QB 73 at 90 [55] - 91 [61].
The relevant charge 15As I have said, the applicant pleaded guilty in the Local Court and the Court Attendance Notice which brought him there provided the following short particulars of his offending: That Allen Michael Blackstock between 16 December 2003 and 26 November 2007, at Sydney in the State of New South Wales, being a public official employed in the capacity of a project manager at the Rail Infrastructure Corporation and RailCorp, in the course of or connected to his public office did wilfully misconduct himself, by act or omission, without reasonable cause or justification. By his plea of guilty, the applicant admitted all of the elements of the offence with which he was charged: R. v. Olbrich [1999] HCA 54; 1999 CLR 270 at 275[4]. Notwithstanding the apparent generality of the particularisation of the offending, the applicant's plea should be understood in the light of the analysis of the elements of the offence offered above.
[2001] HCA 64
(1996) 67 SASR 63
(1936) 55 CLR 499