DPP v MOURCHED

Local Court of NSW|2010-03-23

PARTIES: Director of Public Prosecutions Tony Mourched

CATCHWORDS: Criminal Law - Sentencing - Publish a False Statement for Financial Advantage

Crimes Act 1900 LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 Criminal Procedure Act 1986

Cobiac -v- Liddy (1969) 119 CLR 257 Dodd -v- R [2010] QCA 31 R -v- Borkowski [2009] NSWCCA 102 R -v- Cartwright (1989) 17 NSWLR 243 R -v- Doan (2000) 50 NSWLR 115 R -v- El Rashid (unrep, 7/4/95, NSWCCA) CASES CITED: R -v-Ingrassia 41 NSWLR 447 R -v- Mears (1991) 53 A Crim R 141 R -v- Mungomery (2004) 151 A Crim R at [40] R -v- Seiler [2003] QCA 217 R -v- Taylor [2000] NSWCCA 442 R -v- Thomson & Houlten (2000) 49 NSWLR 383 Thornloe -v- Filipowski 52 NSWLR 60

The offender is charged with Publishing a False Statement for a Financial Advantage. The Prosecution is brought pursuant to Section 178BB(1) of the Crimes Act 1900. The maximum penalty for the offence is 5 years imprisonment. The value of the financial advantage tainted by the offender's conduct is $955,620. As the value of the advantage is in excess of $5,000.00 the offence falls within Table 1 of Section 267 of the Criminal Procedure Act 1986. The maximum jurisdictional penalty that may be imposed in the Local Court is 2 years imprisonment.

In proceeding to sentence and identifying the objective seriousness of the offence the Local Court is not constrained by the jurisdictional limitation. In line with the principles set out in R -v- Doan (2000) 50 NSWLR 115 the sentencing court is to have regard to the legislated maximum penalty. It is only after so doing and having turned its mind to the appropriate penalty that reference need be made to the jurisdictional limit. THE FACTS

The agreed facts in this matter are extensive. The historical narrative arises out of an extensive investigation by the Independent Commission against Corruption into tendering within Railcorp. Despite the lengthy history the Crown relies only on one act of dishonesty in relation to the conduct of the offender. This relates to a statement made in the course of submitting a tender for air conditioning work and maintenance. Succinctly re-cast the offender, knew that a person called Said Marcos was a member of the Tender Evaluation Committee of Railcorp. He also knew that Marcos was a Director of companies styled B&S Mechanical Services and Isis Australia Pty Ltd. The offender had a commercial arrangement with these entities and a history of sub-contracting work to them under a previously awarded contract.

In 2002 the offender submitted a tender for further work. . The tender price was $955,620. In the course of tendering he asserted that no other sub contractor would be employed. At the time he knew this was untrue. He also knew by virtue of the conditions of tender that Section B 15 required him to provide details of any sub-contractor and Section C 11.1 prohibited the use of a sub-contractor without permission. On 11th November 2002 the company of which the offender is a director was awarded the contract by Railcorp. The person Said Marcos was part of the Tender Evaluation Committee that awarded the tender. Once the investigation by the Independent Commission Against Corruption reached a certain stage another member of the Marcos family approached the offender to seek his assistance in fabricating false invoices for the purpose of misleading the investigation. To his credit, on the agreed facts, the offender refused. Paragraph 55 of the agreed facts states "At no time did Tony Mourched seek to mislead the ICAC or give evidence to assist Marcos'".

The agreed statement of facts are silent on whether the initial relationship between Said Marcos and the offender was the product of the offender's proposal to Marcos or an approach by Marcos to the offender. Irrespective of the formative aspects of the relationship it is clear from the facts that it existed for the purpose of financial gain. THE PLEA

The Independent Commission Against Corruption brought proceedings against the offender on 24th March 2009. The Director of Public Prosecutions represents the Commission and the matter first came before the Court on 21st April 2009. On that date the Court made orders for service of a brief of evidence. A number of subsequent adjournments took place during which time, so the Court record suggests a combination of representations and negotiations were taking place between the offender and the prosecutor.

On 1st December 2009 the offender entered a plea of guilty. Given the objective seriousness of the offence the Court ordered the preparation of a Pre Sentence Report by the Probation and Parole Service. That report is attached to the Court papers. Certain aspects of the report were challenged before me. I indicated that the issue taken was not ultimately relevant to the resolution of the proceedings.

Counsel for the offender prepared written submissions to assist the Court. They are attached to the Court papers. I intend to firstly deal with the submission set out on page 5 at (f) namely that the plea was entered at the earliest opportunity. Considerations relevant to a plea of guilty are set out in Section 22 of the Crimes (Sentencing Procedure) Act 1989 and in the Guideline Judgment of R -v- Thomson & Houlten (2000) 49 NSWLR 383. The Guideline was revisited more recently in R -v- Borkowski [2009] NSWCCA 102 wherein Howie J. drew together the various authorities since the Guideline Judgment to re-state relevant principles applicable in assessing the utilitarian value of a plea of guilty. Considered against the context of both the Guideline Judgment and R -v- Borkowski the Court cannot agree with the submission by counsel for the offender that the plea in this matter was entered at the earliest opportunity such that it might attract consideration of a discount towards the upper end of the range between 10-25%.

The plea of guilty was not entered until some 8 months after the proceedings were commenced, and after the prosecution was put to the requirement of preparing and serving what the court record of 30th June 2009 describes as "a significant brief". It is also clear from an examination of the Court record that there was a degree of negotiation between the offender and the prosecution during that time. Principles 8 and 9 of the "Principles of General Application" set out in Borkowski make it clear that a choice by an offender to engage in delay in the entry of a plea for reasons unconnected with his ultimate guilt will result in a reduction in the discount. Paragraphs 13-29 of the statement of agreed facts provide an insight of what may have been the subject of "negotiations" during the lengthy periods of adjournment. What is set out in those parts of the statement of facts is not directly relevant to sentence on this matter but they are nonetheless, explanatory.

In my view the utilitarian value of the plea is measured at 15%. The offender; above all others knew of his guilt. It was apparent from the time he signed the document containing the false and dishonest representation. Whether it is on the basis of legal advice or otherwise he cannot have it both ways. By creating a situation of delay he is not in my view then entitled to claim that his plea of guilty is entered at the earliest opportunity when the administration of justice is delayed and the prosecution is put to the task of preparing a brief of evidence. AGGRAVATING FACTORS

In his written submissions on behalf of the offender counsel conceded that four of the factors set out in Section 21A(2) of the Crimes (Sentencing Procedure) Act 1999 as being aggravating factors in the commission of an offence were relevant to the facts in this matter. I agree with the concession.

It is clear from the relationship between the offender and Said Marcos that they were operating collusively. The modus operandi of their agreement was to use Marcos' position on the Tender Evaluation Committee to skew consideration of tenders towards the offender's company. There was a mutuality of agreement that a financial benefit would then flow to Said Marcos as payment for his corrupt influence.

Accordingly I agree that the offender's conduct was, for the purpose of Section 21A(2)(n) a planned or organised criminal activity. The relationship between the offender and Said Marcos, the agreement to provide what is commonly described as a "kick back" financial benefit through the use of companies with whom Marcos had a direct and beneficial financial relationship came about through agreement and planning by both parties as to the way in which a tender was to be structured and the manner in which the product of the successful tender was to be shared.

I also accept the concession by counsel for the offender that the offender was in a position of trust relative to Railcorp. The requirements in Clause B 15 and C 11.1 for honest disclosure carry with them an implicit understanding that the evaluation of the offender's tender was dependent on the truthfulness of the answers. It is reasonable to accept his assertions were to be taken at face value and trusted for their reliability.

Given the value of the tender awarded to the offender, viz., $955,620 and accepting that this sum contained an element of profit for the offender [and for Marcos] it is clearly the case that the offence was committed for financial gain. This is also a circumstance of aggravation. MITIGATING FACTORS

Section 21A (3) of the Act identifies a number of matters that may be taken into account in mitigation of the prospective penalty. The statutory considerations are well known within the criminal justice process and are part of the balancing process of competing considerations necessary to arrive at what it believes to be a sentence appropriate to the offence and the offender.

The offender comes before this Court as a person with no prior convictions Crimes (Sentencing Procedure) Act 1999 Section 21A(3)(e). References tendered on his behalf establish, conduct the subject of this offence to one side that he was hitherto a person of good character Ibid Section 21A(3)(f).

It is said the offender is unlikely to re-offend. At 48 years of age and with no prior convictions this is a reasonable inference that may be drawn in his favour Ibid Section 21A(3)(g). I accept the submission that he has good prospects of rehabilitation. Similarly I am satisfied, given the manner in which he refused to assist Said Marcos attempt to evade detection and what I am told was his frank evidence before ICAC that he has provided evidence of remorse and contrition ibid Section 21A(3)(I).

I have already dealt with the plea of guilty. Referring to it again in the context of the Act would constitute an element of double counting.

Counsel further submits that Section 21A(3)(l) and (m) apply to further mitigate the penalty. Dealing firstly with Section 21A(3)(l) I reject the submission that it is relevant to these proceedings. The provision refers specifically to pre-trial disclosure "as provided by Section 22A". Section 22A is limited in its application to sentences imposed on an offender who was "tried on indictment". The Local Court is a court of summary jurisdiction. Section 22A is only relevant in matters dealt with before the Supreme or District Courts.

Turning to Section 21A(3)(m) the application of this provision in mitigation is to be considered in the context of Section 23 of the Act. Whether a Court decides to impose a lesser penalty as a consequence of assistance is discretionary. It is also subject to taking into account, where applicable, the criteria set out in Section 23(2). Putting to one side for the moment the reasonable expectation on the part of the ICAC and society in general that the offender would be truthful in his answers to questions regarding his conduct and the related conduct of others as a matter of course there is nothing persuasive before me or within paragraphs 42-54 of the statement of facts that is sufficiently convincing that the contribution by the offender in assisting law enforcement authorities is of such weight that it justifies an additional level of discount or mitigation of penalty on this basis.

In R -v- Cartwright (1989) 17 NSWLR 243 at [252] the Court said, inter alia: "The information which he gives must be such as could significantly assist authorities". A consideration of the agreed statement of facts persuades me that the authorities already knew the truth of the relationship between the offender and Said Marcos and that an examination of the invoices tendered by B&S Mechanical Services and/or Isis Australia Pty Ltd. Together with the corporate records of either or both those companies would readily disclose that Said Marcos was the registered proprietor of one and a Director of the other. Against that background the truthfulness of the offender can hardly be said to be an exercise in the provision of "significant assistance to authorities".

The offender is a 48-year-old married man with 2 children. He has tertiary qualifications in Engineering and is the principal in the company involved in the tendering process that brings him before this Court. References tendered to the court both on a personal and professional level suggest he is well regarded within the community. He appears to be successful in his business. Given the enormity of the sum involved in the contract the subject of the charge and the sums involved as described in the past history of his relationship with Said Marcos it may well be argued that part of that success can be attributed to a mutuality of reward to both he and Marcos arising out of biased success in the tendering process. THE SENTENCE

Counsel for the offender contends that the appropriate sentence in relation to the offender's conduct and after taking his subjective circumstances into account is for the dismissal of the charge pursuant to Section 10 of the Crimes (Sentencing Procedure) Act 1999. Paragraph 23 of his written submissions encapsulate the tenor of his submission.

The basis of the submission is that the work performed by the offender's company was of a sufficiently high standard that no loss accrued to Railcorp. Counsel also tendered a letter dated 20th October 2006 from the Project Engineer, Major Projects Division of Railcorp to the offender's company inviting it to submit an offer for further work as indicating that in the eyes of that organisation the regard for the capabilities of the offender's company is such that it has taken no action to prohibit it from ongoing participation in the tender processes with Railcorp.

In support of his submissions Counsel refers the Court to the decisions of R -v-Ingrassia 41 NSWLR 447 and Thornloe -v- Filipowski 52 NSWLR 60 as authorities to which the Court may turn to assist it in coming to the conclusion that such a sentence is both possible and in the context of this matter, appropriate. Since making those submissions Counsel has also provided two further decisions to bolster his submission. These are decisions of the Queensland Court of Appeal - Dodd -v- R [2010] QCA 31 and R -v- Seiler [2003] QCA 217.

Dealing firstly with the decisions of the Queensland Court of Appeal I am of the view they contain no statements of principle, rather they represent the substitution of the exercise of one Court's discretion on sentence for that of another, albeit in an appellate context. Additionally the relevant provision of the legislation under which the court in both instances exercised its discretion - Section 12 or the Penalties and Sentences Act 1992 QLD is expressed in different terms to that contained within Section 10(3) of the Crimes (Sentencing Procedure) Act 1999. Inasmuch as they represent statements of legislative authority the differences are important.

The focus in the relevant Queensland provision is on the impact of a conviction on the offender. For the sake of clarity the provisions in question are expressed as follows: "12 (2) In considering whether or not to record a conviction a court must have regard to all the circumstances of the case including - (a) the nature of the offence and (b) the offender's character and age, and (c) the impact that recording a conviction will have on the offenders (i) economic or social wellbeing; or (ii) chances of finding employment

Section 10(3) of the Crimes (Sentencing Procedure) Act 1999 is materially different. A court considering the exercise of its discretion is required to consider: "10(3) (a) the person's character, antecedents, age, health and mental condition (b) the trivial nature of the offence (c) the extenuating circumstances in which the offence was committed (d) any other matter that the court thinks proper to consider
Although the decision of Thornloe -v- Filipowski contains, particularly at [151]-[154] statements of principle reinforcing the observations made in earlier cases that decision was one in which the offence was one of absolute liability and in relation to which the offender had made little or no personal contribution in terms of conduct. It ought be distinguished from the circumstances under consideration in this matter.
Counsel also referred the Court to the decision of R -v- Ingrassia (supra) as authority for the proposition that the exercise of discretion not to record a conviction is one ultimately to be exercised by the Court. In particular counsel referred to the observations of Gleeson C.J. at 449 [E] wherein he said: " The essence of S.556A is that it empowers a court which considers that a charge has been proven in certain circumstances to take certain steps "without proceeding to conviction". The legal and social consequences of being convicted of an offence often extend beyond any penalty imposed by a Court. As Windeyer J. said in Cobiac -v- Liddy (1969) 119 CLR 257 at 269 " a capacity in special circumstances to avoid the rigidity of inexorable law is of the very essence of justice."
When considering this passage it is important not to lose sight of the deliberate use of the words "special circumstances"
It is also important to re-state the observations of the Court at [G] "Whilst subs (1A) confers upon the court a wide discretion, the discretion is a judicial discretion, to be exercised consistently with the scheme and purpose of the section as a whole."
It is important not to lose sight of the deliberate use of the words "consistently with the scheme and purpose of the section as a whole." In considering whether the section has application the entirety of the provisions are relevant. This includes considering whether the offence is trivial or whether the court is satisfied that there are extenuating circumstances in which the offence was committed.
The offence can hardly be described as "trivial". This much is conceded at paragraph 7 of counsel for the offender's submissions wherein he describes the conduct as "a very serious matter". I agree with that observation. The objective seriousness of the offence is to be judged by reference to the legislated maximum penalty of 5 years imprisonment. Objectively any offence capable of being dealt with on indictment would be difficult to classify as trivial. The fact that it is dealt with summarily before this Court does not, taking the principle set out in Doan's case into account, change the objective nature of the offence. It simply limits the sentencing discretion of the Court to that of the jurisdiction being exercised.
Subjectively the offence cannot be regarded as trivial. Here the offender was engaged in a course of conduct that he well knew was an organised, premeditated course of conduct. The intended purpose was to win a contract for the provision of work valued at almost 1 million dollars. Within this sum there is undoubtedly a significant level of profit after costs in carrying out the work.
It may be the case that the work was carried out for a fair price. It may be that it was carried out efficiently but it was tainted by the willingness of the offender to encourage the corrupt conduct of Said Marcos by deliberately creating a veil of falsity in the tendering process. His conduct and the context in which his dishonest participation in it took place cannot be regarded as trivial. Without the offender's dishonesty and deliberate misleading of the two other members of the Tender Evaluation Committee a different outcome may have eventuated. An honest tenderer may have carried out the work just as well. The level of his moral turpitude is significant. This is particularly so when one has regard to the statutory provisions to be taken into account as matters of aggravation and referred to earlier in these remarks.
A similar conclusion comes to bear when considering the question of whether there were any extenuating circumstances sufficient to operate in favour of the offender under these provisions. I can find none. That the offender refused to participate in any further attempt to cover up Marcos' involvement is commendable but this was conduct after the event not in relation to the commission of the offence in the first instance. This was an offence committed for commercial reasons to do with contracting work of significant value to the offender's company and by extrapolation, to his own benefit. Whilst the satisfactory performance of the work may have represented value for money such that greed in its usual form is less visible it remains the case that there is nothing either redeeming or representative of any qualified justification for his behaviour.
The clear inference arises that he had an arrangement with Said Marcos that was intended to improve his chances at being awarded contracts with Railcorp in return for siphoning off an [undetermined] amount of money from the total value of the contract to Marcos as payment for his preferential, corrupt participation in the tender evaluation process.
I acknowledge for the remainder of the provisions of Section 10(3) that the offender was previously a person of good character without any criminal antecedents. The effect of those characteristics has already received consideration by the court. At this point I note the observations of Gleeson C.J. in R -v- El Rashid (unrep, 7/4/95, NSWCCA) that crimes such as this are frequently committed by persons of previously good character because it is that previous character that enables them to be in a position where the offence can be committed. The other heads of consideration under Section 10(3)(a) do not warrant consideration at all. They are unremarkable.
Before leaving consideration of counsel's submission that the provisions of Section 10 are appropriate to dispose of this matter I turn to the extraordinary concession made by the DPP. At paragraph 23 of his written submissions counsel for the offender makes the statement that the Crown is not opposed to this matter being dealt with pursuant to the provisions of Section 10 of the Act. The solicitor representing the DPP confirmed that approach when the matter was last before me but did not elaborate on why that ought be so. I reject it as a reasoned concession on the facts of this matter and against the important purpose of sentencing set out in Section 3A.
How; one might ask rhetorically is an offender to be adequately punished for what is conceded to be planned criminal offending behaviour if he is not to be convicted? How are the principles of general and particular deterrence to be advanced if such conduct is to be treated with a degree of leniency that the general public would find inexplicable? How would it discourage others from seeking to dishonestly enrich themselves at the expense of the public purse when they knew manifestly lenient sentences would follow such that it made the risk and reward worth taking? How would it make the offender accountable for his actions other than in a superficial manner? How would it contribute to a denunciation of this type of conduct? The simple answer to all of those questions is that it would not. I can find no justification for extending the provisions of Section 10 of the Crimes (Sentencing Procedure) Act 1999 to this offender in the circumstances of this offending.
Having reached the conclusion that the submission made on behalf of the offender must be rejected I return to the objective seriousness of the offence. It is already conceded that it is serious. There are other reference points that go towards influencing the assessment of the gravity of the crime. They are succinctly stated at paragraph [19-970] of the Sentencing Bench Book but can generally be stated as follows:

"authority makes it clear that the amount of money involved in premeditated deception is important, and the period of time over which offences are committed" R -v- Mungomery (2004) 151 A Crim R at [40]. In this matter the amount of money involved is $955,620, a significant sum. The conduct occurred over a relatively short period of time and is limited to a single course of conduct.
The motive for the crime is relevant. If the fraud is based on greed, and there is nothing before me to suggest that greed was not an important element driving the offender's willingness to participate in the deception then the penalty imposed should be more severe R -v- Mears (1991) 53 A Crim R 141 at 145.
The fact that the offence was part of a planned and organised activity is an aggravating factor to be taken into account under Section 21A(2)(n) of the Act. Taking it into account twice would result in double counting
Such is also the case where there has been a breach of trust.

Taking such factors into account in this offence I find that the objective seriousness or the offender's conduct places it at the middle range of seriousness. It certainly places it at the other end of the spectrum relative to counsel's submission. I have considered the provisions of Section 5 of the Act relative to the objective seriousness of the offender's conduct and after taking into account the mitigating factors in his favour. In so doing I come to the view that the offender's involvement in what appears to have been a form of institutionalised corrupt conduct is sufficiently egregious to warrant condign punishment.
It is contrary to the interests of the community for the reliability of an objective process such as tender evaluation for the purpose of expending public funds to be corruptly manipulated in favour of vested interests. That the product of such behaviour is subsequently found not to be deficient in terms of workmanship is not to the point. This outcome is irrelevant for the purpose of considering the act of dishonesty.
The amount of money involved, the clear inference that the offence was committed out of greed together with the established aggravating factors point towards imprisonment. Corruption within the administration of government and the Public Sector cannot be tolerated. General and particular deterrence together with denunciation are of signal importance and are to be reflected by the imposition of a sentence of imprisonment.
Taking into account the objective seriousness of the offending and the subjective circumstances in mitigation of penalty the appropriate sentence is one of 20 months imprisonment. After applying the discount of 15% the resulting penalty is a sentence of imprisonment of 17 months. It is at this point in the sentencing process that the court is required to determine the manner in which such sentence is served. This includes consideration whether in the exercise of its discretion the Court should suspend the sentence in accordance with Section 12 of the Act.
Having come to the view that general deterrence remains the paramount consideration and in line with the observations made in R -v- Taylor [2000] NSWCCA 442 that suspending a sentence of imprisonment "provides very little, if anything, by way of general deterrence." I decline to exercise my discretion to suspend the sentence.
The offender is convicted and sentenced to imprisonment for a period of 15 months. The sentence is to consist of a minimum period of 12 months and 23 days with an additional period of 4 months and 8 days during which the offender is to be released on parole.
Having determined the length of the sentence and taking into account the offender's age, lack of prior antecedents and good prospects for rehabilitation I come the view that general deterrence would not be so materially affected if the Court was to consider the offender as being suitable to serve the sentence by way of Home Detention. Such a sentence cannot be determined without an assessment of the offender's suitability by the Probation and Parole Service. This necessitates a further adjournment. The proceedings are adjourned until 4th May 2010 at 9.30 for that purpose. The offender is not currently subject to bail. Despite the sentence imposed by the Court there are no reasonable fears that he will not attend on the next occasion. Bail is dispensed with. Graeme Henson Chief Magistrate 23rd March 2010

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (34 paragraphs)

Parties

Cases Cited (8)

Cited By (1)