Cao v Regina

O'Neil-Shaw v R [2010] NSWCCA 42 CASES CITED : R v Olbrich [1999] HCA 54; 199 CLR 270 Regina v Baker [2000] NSWCCA 85 Tyler v Regina; Regina v Chalmers [2007] NSWCCA 247; 173 A Crim R 458

PARTIES: Ying CAO (Applicant) Regina (Respondent)

FILE NUMBER(S): CCA 2007/00015394; 2008/00012288

COUNSEL: Mr N Parsons (Applicant) Mr N Adams (Respondent)

SOLICITORS: Ren Zhou Lawyers Commonwealth Director of Public Prosecutions

LOWER COURT FILE NUMBER(S): 2007/11/0429; 2008/11/0761

• 1 - IN THE COURT OF CRIMINAL APPEAL 2007/15394 2008/12288

MACFARLAN JA JOHNSON J R A HULME J

1 MACFARLAN JA: I agree with R A Hulme J. 2 JOHNSON J: I agree with R A Hulme J.

3 R A HULME J: This is an application for leave to appeal in respect of sentences imposed in the District Court at Sydney by his Honour Judge Freeman on 9 October 2009.

4 The applicant had pleaded guilty to receiving stolen property (s 188 Crimes Act 1900) ("the receiving offence") and attempting to obtain a financial advantage by deception (ss 11.1 and 134.2(1) Criminal Code 1995 (Cth)) ("the Commonwealth offence"). The maximum penalty for each offence is imprisonment for 10 years.

5 The applicant was sentenced for the receiving offence to imprisonment for a fixed term of 16 months and for the Commonwealth offence, imprisonment for 2 years with a recognizance release order after 16 months. Both sentences were specified to commence on 9 October 2009. The applicant is due to be released upon recognizance on 8 February 2011.

6 In sentencing the applicant for the receiving offence the judge was asked to take into account 26 offences of possessing a false instrument contrary to s 302 Crimes Act. In sentencing for the Commonwealth offence the judge was asked to take into account 4 offences of possessing a forged Commonwealth document contrary to s 145.2 of the Criminal Code.

7 An agreed statement of facts was before the District Court from which I have derived the following.

8 742 client files were stolen from a tax agency in Hurstville in December 2005. They came into the applicant's possession at sometime after 30 December 2005.

9 Between 2 and 13 April 2006 the applicant lodged 47 applications for Australian Business Numbers ("ABNs") with the Australian Taxation Office ("ATO") using the personal details and tax file numbers obtained from the stolen files. The applications were lodged electronically and the ABNs were allocated automatically. None of the businesses in fact existed. The applicant used an internet account to which she had subscribed in a false name although she gave an address in Hurstville of premises which she and her partner had leased on 22 February 2006.

10 The applicant also applied for a personal identification number and a digital certificate in respect of each of the 47 ABNs in order to permit access to the "business portal" on the ATO website. This portal provided a facility for taxpayers to update their details and to lodge Business Activity Statements ("BAS") electronically. Between the ABN registration date and 4 May 2006 the nominated bank account details for each ABN were changed several times.

11 Between 23 April and 4 May 2006 the offender lodged via the ATO business portal 53 BAS in respect of the 47 fictitious businesses. Each BAS contained false details and claimed a Goods and Services Tax ("GST") refund that was not properly payable. The total sought to be refunded was $120,950. The ATO stopped the refunds before any payments were issued.

12 52 of the 53 false BAS were lodged via another internet account subscribed to by the offender in a false name. She provided an address of a house at Marsfield where she had sublet a room. Residents of the house described her moving in with 2 suitcases, a large travel bag and a computer on 21 April and moving out again on 3 May 2006.

13 On 1 May 2006 a person by the name of Suming Rui leased a unit at Cronulla. The lease was in the name "Bili Chen". Rui produced to the real estate agent a false driver's licence in that name. Subsequent investigation revealed that "Chen" had been nominated as a referee when the applicant leased the premises at Hurstville.

14 On 3 May 2006 the applicant moved her suitcases and computer from the Marsfield address to the Hurstville unit. Later that day she, her partner Yong Bing Xie, and Rui moved computers, suitcases and other items from the Hurstville unit to the Cronulla unit.

15 The last of the BAS was lodged from the Cronulla unit. Once again the applicant used an internet service to which she had subscribed in a false name.

16 A search warrant was executed at the Cronulla unit on 9 May 2006. Police found 739 of the 742 stolen client tax files, including the 47 that had been used for the applications for fraudulent ABNs. Within those files was correspondence from the ATO regarding ABN and GST registrations and the details for accessing the ATO business portal.

17 Bank accounts in either fictitious names or names of foreign citizens who had left the country had been opened in December 2005. 31 such bank accounts were nominated for the receipt of GST refunds. Paraphernalia relating to such bank accounts including false identification documents were found in the Cronulla unit. One of the debit cards in respect of the fraudulently opened bank accounts was found in the applicant's handbag.

18 The 26 offences of possessing a false instrument taken into account related to the applicant's possession of bank cards and drivers' licences in false names. The 4 offences of possessing a forged Commonwealth document related to her possession of Medicare cards in false names.

19 The applicant was born in Beijing in 1978. She was an only child. Her father was a university lecturer in accounting and her mother was a shop assistant. She completed primary and secondary schooling and then a four year bachelor degree in industrial engineering. She came to Australia in October 2002 to continue her studies. She completed a master of commerce in information technology at Macquarie University in 2004.

20 The applicant met her partner and co-offender, Yong Bing Xie, in May 2004. They established a cleaning business after she had completed her university studies. The applicant looked after administrative aspects of the business. She gave evidence that the business was generating income of about $1000 per week.

21 It was the applicant's evidence that she commenced gambling on poker machines during her university days. She said that during the time that she and her partner were involved in the cleaning business she was regularly attending hotels and clubs to play poker machines. She said that she lost money most of the time but very rarely incurred debts as a result. She claimed that any indebtedness from borrowing money from friends in order to gamble was only in the order of a few hundred dollars which was quickly repaid.

22 A report by Dr John Jacmon, psychologist, was before the judge. Dr Jacmon's assessment of the applicant was that she suffered from a "major depressive disorder" and a "generalised anxiety disorder". The sentencing judge noted that Dr Jacmon's opinion relied significantly upon the self-report of the applicant, both as to her state of mind at the time of her interview with Dr Jacmon in January 2009 and at the time of the offences in 2006. The judge expressed reservations about the applicant's credibility, something to which I will return. The judge concluded that he did not consider that Dr Jacmon's opinion justified "a major departure from an otherwise appropriate sentence". He did say, however, that he would take into account the applicant's distress arising from her prosecution and the prospect of being sentenced.

23 Other matters that the judge took into account as part of the applicant's subjective case included the fact that she had no previous convictions and that she was of prior good character. He also took into account her plea of guilty which had been entered in the District Court prior to any trial date being set. The judge noted that there had been a contested committal hearing. He resolved to reduce the sentence to be imposed for the Commonwealth offence to reflect the applicant's willingness to facilitate the course of justice and in respect of the receiving offence he indicated that he would reduce the sentence "in the order of 15 percent".

24 The applicant gave an account to the author of the Pre Sentence Report, to Dr Jacmon, and in her evidence before the sentencing judge, as to the circumstances that motivated her to commit the offences. It was to the following effect.

25 She said that she became acquainted with a man she knew as Bili Chen at a club she regularly attended for the purpose of gambling on poker machines. She said that he was talkative and friendly and they exchanged personal information. She told him that she had sophisticated computer skills. He was also from Beijing and he asked her about her parents who remained there. The information she provided included their home address.

26 There was an occasion when the applicant attended the Star City Casino. She was playing blackjack and Mr Chen was also present but playing baccarat. She said she lost her money and she borrowed $10,000 from Mr Chen. She lost that amount as well. A few days later she spoke with Mr Chen about how she would repay him and offered to pay him by instalments. He, on the other hand, insisted that she do some work for him and once that work was completed he would consider the debt as having been repaid.

27 The applicant claimed that Mr Chen had threatened her that if she did not do what he asked he would inform her parents in Beijing that she owed him a lot of money and would force her parents to repay the loan on her behalf. She claimed that she became distressed at the prospect of her parents learning of her troubles and so she agreed to do as he asked. It was contended that he was the "architect" of the criminal enterprise and that she took part at his direction.

28 It was submitted to the judge that whilst this was inadequate to make out a defence of duress, it nevertheless was a relevant matter in the assessment of the applicant's moral culpability. The determination of this issue turned upon an assessment of the applicant's credibility which is the subject of the first ground of appeal. The applicant bore the onus of proof: R v Olbrich [1999] HCA 54; 199 CLR 270.

29 There are two grounds of appeal: 1. His Honour erred in rejecting the applicant's evidence that, at all material times, she participated in the criminal activity under a form of duress generated by Mr Chen's threat to tell her elderly parents in Beijing of her indebtedness to him.

2. His Honour imposed a sentence that was manifestly excessive.

30 The applicant was cross-examined at length by the prosecutor in the court below. A major thrust of the cross-examination was that she had concocted an elaborate story concerning the involvement of Chen and that in fact it was she and her partner who had devised the scheme to defraud the ATO. The Crown Prosecutor made submissions at the conclusion of the evidence in support of these contentions. It was put in submissions in this Court that in the course of making submissions in the court below the prosecutor had contended that there were inconsistencies between what the applicant said to Dr Jacmon compared to what she had said in her evidence. However, it was pointed out that the prosecutor had said that these inconsistencies were "not significant matters".

31 Senior counsel then appearing for the applicant subsequently submitted to the judge that the prosecutor had "very fairly said that they (the inconsistencies) were fairly minor matters".

32 Counsel for the applicant in this Court contrasted what he suggested was common ground between opposing counsel in the court below with the approach taken by the sentencing judge. It is necessary to set out the complete passage (with liberty taken to break up a very long paragraph): The offender Cao gave evidence relevant to the nature and circumstances of the offence, which was to the effect that she had only participated in this criminal activity because of pressure brought to bear upon her by the man she named as Billy Chen. This arose, she said, because of a debt she had incurred to Mr Chen through her gambling.

I formed a strong impression that her evidence was designed to minimise her role and that of her partner Xie . For example, she volunteered that Xie's attendance at the Cronulla unit, when the man known as Billy Chen leased the property, was for the purpose of acting as an interpreter. The basis on which she made this assertion is unclear. She claimed that she only ever spoke to the man known as Billy Chen in Mandarin. Since, according to her, the conversations were mainly about their shared Chinese heritage and her achievements in this country, it might be natural for them to converse in their native tongue. Even if that is accepted, it by no means follows that he was unable to speak English.

Of greater concern in terms of her credit was the way in which she testified as to how she had incurred this debt and a corresponding sense of obligation to Mr Chen. To the officer preparing the Pre-Sentence Report she apparently said that the debt was incurred over a period of time. To Dr Jacmon, a psychologist who examined her at the request of her solicitor, she reported that on an occasion at Star City Casino Mr Chen gave her $10,000 and told her it was for her to gamble with. In evidence she recounted a version which was different again. She testified that she was, in her words, addicted to playing poker machines. This normally occurred at clubs close to where she lived in Hurstville. On this occasion at Star City Casino she played blackjack and lost her money. She went to see Mr Chen, who was playing baccarat, and told him she was going home because she had no money. He advanced her $1,500 with which to play blackjack. Having lost this she returned to Mr Chen, who advanced her another $3,000 and asked her to play at the same table because he was winning. She played alongside him and again lost. She changed to another table still playing baccarat but lost again. How the other $5,000 or more came into her possession is not detailed, despite the fact that she said Mr Chen also lost on that night. That seems to me to be an inherently improbable story as well as being, as I said, at marked variance from versions she had given before.

Furthermore, in relation to her possession of false credit cards attached to the bank accounts and in fictitious names, she said that she had just taken a few with the intention of seeing if there was any money in the accounts. She had not accessed these accounts by the time she was arrested, but conceded that her actions had been motivated by greed. At one stage her attempts at minimisation went too far, and in re-examination she had to be led back from apparently traversing her plea.

Overall I concluded that Ms Cao is not a witness upon whose testimony I could rely . I am not prepared to accept, even on the balance of probabilities, that she participated in this criminal activity under a form of pressure generated by Mr Chen's alleged threat to tell her parents in Beijing of her indebtedness to him. (Emphasis added).

33 It was submitted that the judge erred by referring to the inconsistencies in the versions given by the applicant as the "dominant reason" for rejecting her explanation and that it was inappropriate for him to have done so because it was common ground between the parties that the inconsistencies were insignificant.

34 It was submitted that another reason why the judge was in error was that it had never been put to the applicant that there were inconsistencies in her various accounts. The only questioning that related to the reports tendered occurred in chief when the applicant testified that she had told the authors the truth. Accordingly, the applicant had not been given an opportunity to comment or explain. Reference was made to O'Neil-Shaw v R [2010] NSWCCA 42 in which Basten JA stated: [27] It is a basic rule of procedural fairness that a party who does not accept the evidence of a witness should put the alternative view in cross-examination, both so that the witness may respond and so that the court has the benefit of assessing the response: R v SWC [2007] VSCA 201; 175 A Crim R 71 at [12]-[15] (Maxwell P, Kellam JA and Kaye AJA). Where there has been no cross-examination of witnesses to contest their evidence, "judges should in general abstain from making adverse findings about parties and witnesses": MWJ v The Queen [2005] HCA 74; 80 ALJR 329 at [39] (Gummow, Kirby and Callinan JJ).

35 Finally, it was submitted that the judge should have accepted a submission that the applicant had not "over-egged the pudding" by claiming that the person Chen had threatened some form of violence against herself and/or her parents and that this gave a "ring of truth" to her evidence. So, it was contended that the judge should have accepted on the balance of probabilities that the applicant was not the "architect" of the criminal enterprise; she became involved as a result of a gambling debt; and she was recruited at a time when she was vulnerable. Findings in the applicant's favour in relation to these matters would have resulted in an assessment that her moral culpability was at a lower level.

36 The cross-examination of the applicant by the prosecutor clearly put the applicant's credibility in issue. Senior counsel then appearing for the applicant obviously recognised this. He made relatively lengthy submissions, prior to those made by the prosecutor, directed to persuading the judge to accept her oral evidence. He openly acknowledged that the judge, "would have certain misgivings about her evidence". A moment later he said: And I have no doubt your Honour would struggle with some of her evidence, and in particular your Honour might have formed a view that there was an underplaying of the role of her de facto.

37 Counsel also anticipated a potential issue in relation to prior inconsistent statements when he said of the applicant's evidence concerning gambling and the role played by Chen: It's basically - not entirely - but basically consistent with what she told Mr Jacmon (sic), the psychologist.

38 The prosecutor subsequently submitted that the judge should "reject much of her account as to how she came to participate". He proceeded to refer to a number of aspects of her account which he submitted were "uncorroborated and essentially unsupported by the objective evidence"; "illogical to the point of being fanciful"; "preposterous"; and an endeavour to "minimise her criminality". Having addressed at length in this vein, it appears to have been almost an afterthought that he raised the subject of inconsistencies between the applicant's evidence and what she had said to Dr Jacmon. He concluded this comparatively brief submission with: Now on one view these perhaps are not significant matters, but they cast doubt on the reliability and credibility of her evidence.

39 Two things should be noted. One is that the prior inconsistent version was a minor aspect of the case sought to be made by the prosecutor concerning the applicant's credibility. The other is that, contrary to the submission now made on her behalf, the prosecutor did contend that inconsistency was a matter available to the judge to be taken into account adversely against the applicant's credibility. It was not at all common ground that the inconsistencies were insignificant.

40 Senior counsel for the applicant made submissions in reply. He addressed a number of matters that related to his client's credibility, including the matter of inconsistent accounts. He sought to make light of it and contended that the judge should not, "place too much weight on any minor inconsistencies". The point is that it cannot be said that the judge took a matter into account that had not been addressed by the applicant's counsel. 41 I am not satisfied that there was any unfairness involved. This is particularly so when the decision of the judge was made after both parties made submissions to him on the topic, with the submissions of senior counsel for the applicant, in which it was anticipated that the judge could make an adverse finding on credibility, preceding those made by the prosecutor. Counsel had the further opportunity to deal with the issue in reply to the prosecutor's submissions. 42 If it had been considered by the applicant's counsel that there was any element of unfairness I would have expected him to (a) object to the prosecutor's submissions, and/or (b) offer to recall his client for further cross-examination. The fact that either of these steps were not taken by such an experienced criminal law practitioner strongly suggests that there was no unfairness at all.

43 The major difficulty for the applicant in relation to this ground is that the extract from the judge's sentencing remarks set out earlier clearly reveals that the matter of inconsistent versions was only one of the examples he gave for his "strong impression that her evidence was designed to minimise her role and that of her partner Xie" and for concluding that "overall" he could not rely upon her testimony. He also referred to her evidence of Xie acting as an interpreter for Chen when the Cronulla property was leased; the inherent improbability of her account of how the indebtedness to Chen arose; her evidence relating to the false credit cards; and her attempt to minimise her knowledge that the client tax files were stolen.

44 The latter related to evidence she gave in cross-examination that she did not know or believe the files were stolen until after the police arrived. In re-examination, after a short conference with counsel, she said that she did in fact have a belief prior to the police arriving that the files had been stolen.

45 It seems to me that the judge did not exhaustively list all of the available reasons for concluding that the applicant's evidence should be rejected. He did, however, list sufficient reasons to explain why he came to that conclusion. He could also have made reference to the applicant's evidence in chief: A. INTERPRETER: So it's not like he lent me $10,000 in one go. He would lend me like one to $2,000 in each go and then I tried to using those monies try to win back what I lost but then I lost again so I went back to him to borrow more money with this kind of cycle a few times and it accumulate up to $10,000 loan from him. and compared it with her evidence in cross-examination when she said that on the first occasion Chen loaned her, "around 1,500, around that", and on the second occasion, "three thousand".

46 Reference might also have been made to her evidence in cross-examination at one point that there were "less than a hundred" of the stolen client tax files at Hurstville and a comparison made with what she said a short time later that there were "just a little bit over a hundred".

47 The judge might also have cited this passage from her evidence: Q. Do you remember opening a BigPond internet account whilst you were at the Hurstville premises? A. INTERPRETER: Yes.

Q. Using the name Ling Wu Yee (?). Right? A. INTERPRETER: I did not open this account, it was done by Mr Chen.

Q. The very question beforehand you agreed that you did open the account. Right? A. INTERPRETER: Mr Chen instructed me to use this name to open the account.

48 Findings of fact by a primary sentencing judge will not be disturbed by this Court unless they are findings not open to be made: Tyler v Regina; Regina v Chalmers [2007] NSWCCA 247; 173 A Crim R 458 per Simpson J at [86].

49 I am satisfied that it was open to the judge to reject the applicant's evidence that she participated in the enterprise as a result of threats made to her by Chen. I would not uphold this ground.

50 If ground 1 fails, as I feel it should, a large part of the applicant's case in relation to ground 2 also fails. In addition to that matter, however, it was submitted that the judge erred in his assessment of the objective seriousness of the offences in two respects and that he failed to give sufficient weight to the applicant's subjective circumstances.

51 The judge said that the applicant's conduct in the attempted imposition upon the Commonwealth, "covered a number of months". Counsel pointed to the fact that the first act by the applicant was an application for a fraudulent ABN on 2 April and that she was arrested five weeks later.

52 Perhaps the judge had in mind the fact that the applicant and her partner moved to the Hurstville premises at the end of February 2006, something the applicant had said was done at the behest of Chen. He may also have had in mind there was a need for preparation before any application was made for an ABN - for example, acquiring an account with an internet service provider in a false name. Regardless, I do not think there is anything significant in relation to this. There is no suggestion that the judge regarded the applicant as being involved in any way in the opening of bank accounts and the theft of the client tax files in December 2005. The important thing in the assessment of the gravity of the applicant's conduct was what she did as opposed to how long it took her to do it.

53 It was also submitted that the judge erred by failing to make a finding as to the role of Chen. However, with his rejection of the applicant's evidence concerning Chen's role there was very little left upon which a finding could be made.

54 There was evidence in the statement of facts that Suming Rui, falsely pretending to be "Bili Chen", leased the Cronulla unit where the applicant and her partner were arrested, and he was listed as a referee on the applicant's lease of the Hurstville property. The telephone account for the Cronulla unit was in the false name of "Wei Lu Chen". Investigators were unable to identify any such person on government databases. Rui was seen to assist the applicant and her partner loading computers and other items into a car at Hurstville on 3 May 2006 but he was not mentioned as being present when the items were unloaded at Cronulla later that day.

55 That was the extent of the evidence, independent of the applicant, concerning the man Chen. Counsel for the respondent drew our attention to the fact that Chen was never charged with any offence arising from this enterprise. Far from it being erroneous to fail to make a finding as to his role, it would have been impossible to have done so on this limited evidence. It should be noted also that whilst the judge did make a finding that "the activities of this offender were central to the attempted imposition on the Commonwealth", he did not suggest that she was the "architect of the criminal enterprise".

56 It was submitted that the judge erred in not giving "sufficient weight" to the applicant's subjective circumstances, specifically that she had no family in Australia; she was an only child; she had a gambling problem; she was 30 years of age with no previous convictions; she was otherwise of good character; she pleaded guilty; and she had given evidence and had been cross-examined for almost 3 hours.

57 The judge was obviously aware of all of these matters and he mentioned most of them. It was a matter for the judge's discretion how much significance they had. The circumstances in which matters of weight will justify intervention by this Court are narrowly confined: Regina v Baker [2000] NSWCCA 85 per Spigelman CJ at [11]. There is no basis upon which it can be concluded that there was error in this respect.

58 Against maximum penalties of imprisonment for 10 years, sentences of 16 months and 2 years, ordered to be served concurrently, are not in my view manifestly excessive. This is particularly so when regard is had to the "central" role which it was open to the judge to find the applicant played in an attempt to defraud the Commonwealth of $120,000. It is appropriate that the sentences reflect the importance of general deterrence and the breach of trust that arises in self-reporting in taxation matters: Thorn v R [2009] NSWCCA 294 per Howie J at [56] - [57]. It should not be overlooked that there was also a need for numerous offences listed on the two schedules to be taken into account. Even if error had been established, I am of the view that no lesser sentence was warranted: s 6(3) Criminal Appeal Act 1912.

1. Leave to appeal granted.
2. Appeal dismissed. **********

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