Edwards v R

Judgment 1JOHNSON J: I agree with Harrison J. 2HARRISON J: The applicant came before Flannery DCJ for sentence on 30 March 2012 following his plea of guilty to four counts of dishonestly obtaining a financial benefit by deception contrary to s 134.2 Criminal Code Act 1995 (Cth). The maximum penalty for each offence is 10 years imprisonment and/or a fine of $66,000. Four further offences on a s 16BA schedule were taken into account. The applicant was sentenced to a total head sentence of imprisonment for 4 years and 3 months commencing on 30 March 2012 and expiring on 29 June 2016 with a non-parole period of 2 years and 2 months expiring on 29 May 2014. 3The applicant seeks leave to appeal to this Court against the severity of the sentence imposed by her Honour on several grounds. The applicant specifically abandoned grounds 11 and 12 at the hearing of his application in this Court. The remaining 10 grounds of appeal are referred to later in these reasons. 4Her Honour found that between 9 July 2004 and 4 January 2006 the applicant had lodged 27 Business Activity Statements with the Australian Tax Office in which he falsely claimed refunds for goods and services tax to which he was not entitled. These statements were lodged by the applicant on behalf of three companies of which he was the sole director and shareholder and on behalf of himself personally. The statements were based on a claimed total business expenditure of $6,726,852 reported for four of his businesses. The figure was a complete fabrication, as the nominated entities were not engaged in any trading. 5The applicant claimed total GST refunds of $540,898. He received $380,724 relating to counts 1 to 4 on the indictment. Four claims totalling $160,174 were stopped before any payment was made. The applicant was not entitled to any of these monies. 6The applicant appeared without legal assistance in this Court by video link from Cessnock Gaol. With limited exceptions, he relied upon his written submissions without significant additional oral argument. Ground 1: Her Honour was not properly informed due to incompetent representation by the appellant's legal team 7The Crown has characterised this ground as a complaint that the applicant was incompetently represented at the sentencing proceedings so as to lead to a miscarriage of justice in accordance with the relevant authorities. Whether or not that perception is correct, the applicant offered no submissions under this ground that advanced such a contention. He has not set out what are said to be the facts, material or circumstances that were allegedly not drawn to her Honour's attention at the time or how that led to an unjust result. 8The applicant was represented at the sentencing proceedings by counsel and solicitor. He gave evidence. I am not able to discern from the applicant's submissions what, if any, particular or general allegations of professional incompetence he purports to rely upon in aid of the present ground. The Crown has taken a somewhat beneficial approach to these submissions and has identified two matters that might qualify as complaints of this type. One is counsel's failure to object to her Honour seeing an inaccurate bail record that included at least one serious matter with which the applicant had been charged but in respect of which he had not been convicted at the time of the sentencing proceedings. The other was related to the issues raised in grounds 11 and 12 that have been abandoned. 9Her Honour indicated that she would not take into account any then current matters that were disclosed in the applicant's criminal history. Her Honour's remarks on sentence contain nothing that either expressly or by implication suggests that she did so. Her reference to the applicant's criminal history was cursory and in any event concluded with a finding that the applicant's prospects of rehabilitation were reasonable. Having regard to the seriousness of the then outstanding matter it is apparent that it formed no part of her Honour's assessment of the applicant or the sentence that she imposed. 10It is clear from R v Birks (1990) 19 NSWLR 677 at 685 that this Court has a power and a duty to intervene in the case of a miscarriage of justice. What amounts to such a miscarriage has to be considered in the light of the way in which the criminal justice system operates. In that case, Gleeson CJ said this: "As a general rule an accused person is bound by the way the trial is conducted by counsel, regardless of whether that was in accordance with the wishes of the client, and it is not a ground for setting aside a conviction that decisions made by counsel were made without, or contrary to, instructions, or involve errors of judgment or even negligence. However, there may arise cases where something has occurred in the running of a trial, perhaps as the result of 'flagrant incompetence' of counsel, or perhaps from some other cause, which will be recognised as involving, or causing, a miscarriage of justice. It is impossible, and undesirable, to attempt to define such cases with precision. When they arise they will attract appellate intervention." 11In Nudd v The Queen [2006] HCA 9; (2006) 80 ALJR 614; 162 A Crim R 301, Gummow and Hayne JJ said at [25]: "... But an appeal against conviction must ultimately focus upon the trial and conviction of the accused person not the professional standards of the accused's counsel. Was what happened, or did not happen, at trial a miscarriage of justice?" 12Their Honours continued at [27] in these terms: "... For the reasons given in TKWJ, the inquiry about miscarriage must be an objective inquiry, not an examination of what trial counsel for an accused did or did not know or think about. The critical question is what did or did not happen at trial, not why that came about." 13In TKWJ v The Queen [2002] HCA 46; (2002) 212 CLR 124 at [79], McHugh J said: "... Accordingly, 'it is not a ground for setting aside a conviction that decisions made by counsel were made without, or contrary to, instructions, or involve errors of judgment or even negligence'. The appellant must show that the failing or error of counsel was a material irregularity and that there is a significant possibility that it affected the outcome of the trial." 14These principles have been applied in sentencing proceedings: see Munro v R [2006] NSWCCA 350 at [23] - [24]. 15I have reviewed the transcript of the sentencing proceedings and her Honour's remarks on sentence in some detail. I am unable to discern any relationship between anything done or not done by counsel appearing for the applicant and the existence of a possible miscarriage of justice. At least one significant reason for this is to be found in the very fair and balanced way that her Honour dealt with the applicant's counsel and with the case he was presenting for the applicant. His failure to object to the tender of material that included reference to the fact that the applicant was facing serious charges may have been unfortunate but it did not in the scheme of the proceedings as a whole amount to a material irregularity. Moreover, and in my view critically, the error did not give rise to a possibility, let alone a significant possibility, that the outcome of the sentencing proceedings was thereby adversely affected. 16The applicant has not established that there was even the faintest possibility that the conduct of his counsel led to a miscarriage of justice. This ground is not made out. Ground 2: Her Honour failed to consider the appellant's accountant was actually bankrupt himself and unreliable in advice. (Incompetent legal) 17This ground appears to raise the importance of alleged shortcomings of the applicant's accountant and the fact that the applicant relied on his advice when committing the subject offences. The applicant referred to what he described as his own "fiscal naivety" in oral submissions in this Court. That phrase is also to be found in a pre-sentence report prepared by Michael Taylor that was tendered before her Honour. Mr Taylor said this concerning the applicant's attitude to the offences: "Whilst verbalising an acceptance of his guilt, so far as he considers himself 'ultimately responsible' for his company's financial circumstances, Mr Edwards tended to claim some fiscal naivety and shift some blame to poor advice/guidance he received from an accountant. He claimed that he is most concerned and worried about the consequences of these proceedings." 18A later pre-sentence report written by Trevor Rogers indicated that: "When questioned regarding the offences before the Court, he appeared to minimise his accountability by continuing to deflect blame upon incorrect advice he had apparently been given." 19Her Honour did not accept this. She referred to the applicant's concerns in her sentencing remarks as follows: "... Mr Gleeson who appeared for the offender, although accepting that the offences were serious, pointed to his client's evidence that he had committed the offences to keep afloat his legitimate business, which employed six people, after it started to suffer financially in 2004, in seeking to dispute the Crown assertion that the offences were committed for reasons of greed. ... However, he gave a different explanation, not only to the author of the pre-sentence report of 10 September 2010, but also to the author of the pre-sentence report of 14 November 2010, to the effect that he had received poor advice or guidance from an accountant. An explanation that is hard to reconcile with the explanation he now gives, unsupported as it is by any detail or documentary evidence. It is also difficult to understand how an accountant could be blamed for what were blatant frauds upon the Tax office." 20The applicant submitted that he obtained an affidavit prior to the sentencing hearing and presented it to his legal team outlining the shortcomings of his accountant. That affidavit was not relied upon before her Honour. It has not been referred to in this Court. An affidavit by Scott Andrew Atkins sworn 17 February 2012 that was relied upon at the hearing of this appeal does not advance the applicant's claim that he received poor advice from his accountant. 21In his written submissions, the applicant maintained that he "was of the understanding that his companies were able to trade with each other". His submissions make reference to having "consulted his accountant in 2009 as per file and attached affidavit." However, the offences to which the applicant pleaded guilty were completed by no later than April 2006. The applicant said that he "ultimately signed all tax office submissions and accepted responsibility" but "was unclear as to if he acted 'recklessly' or not, hence committing and guilty of fraud". 22The applicant makes no comprehensible case of reliance on any specified poor advice that led him to commit the offences. There was in fact no evidence before her Honour that the applicant's accountant or financial adviser had given him any particular advice at all, and certainly no evidence of the respects in which he alleged that such advice was faulty. Her Honour was entitled to form and to express the views that she did. There is no basis to find that any miscarriage of justice occurred in the circumstances. This ground is not made out. Ground 3: Her Honour did not consider the offender committed one act of recklessness or error 23The applicant's submissions in support of this ground were brief and in the following terms: "The appellant admitted at the earliest instance January 2006 that he had made a 'mistake' or error outlined in detail in the previous submission No 2. This offence should be considered as one of error of judgment as the offender's companies were not set up to correctly trade with each other. The appellant was fiscally and naïve as he explained in his pre-sentence reports, also the appellant relied on poor advice as supported in the affidavit." 24The offending conduct occurred over a period from October 2004 to April 2006. Dishonesty is an element of the offence. The applicant pleaded guilty. The statement of facts tendered before her Honour included the following material: "21. On 9 January 2006 the ATO contacted the Offender in order to verify the lodgement and non-capital purchases of $249,304 claimed in the BAS lodged for Security Broker for the period October-December 2005. 22. In answering the ATO's questions, the Offender spoke in some detail about the nature of this business. He stated that it was a new business that had recently started up selling monitored security alarms. He claimed that the business turned over $250,000 in sales, and that he was responsible for preparing the BASs for this business. The Offender stated that he would like to check the BAS to see if it contained any mistakes. 23. On 13 January 2006 a fax was received from the Offender stating that he had made an error on the October to December 2005 BAS for Security Broker, and his refund should be reduced from $19,274 to Nil. The explanation given was 'The non-capital purchases were made on account and their payment did not actually fall in this quarter.' 24. In January 2006 the ATO advised the Offender that a number of his entities were now under review and requested he make his business records available to the ATO for review. The Offender replied that he could not address the issue for six weeks as he was too busy at that time. He was asked to furnish his bank statements in the interim, however nothing was ever received by the ATO to support any of the claims. 25. Despite repeated attempts by the ATO, contact with the Offender could not be re-established. The Offender's business telephone number was subsequently disconnected." 25The offences involved "more than a degree of planning" as her Honour found. The applicant's scheme was not, however, particularly sophisticated. Whatever be the most accurate characterisation of the offences, they could not on any reasonable view be described as one act of recklessness. This ground is not made out. Ground 4: Her Honour should have allowed for the appellant cooperating with law enforcement authorities 26Section 16A(2)(h) of the Crimes Act 1914 is in these terms: "(2) In addition to any other matters, the court must take into account such of the following matters as are relevant and known to the court: ... (h) the degree to which the person has co-operated with law enforcement agencies in the investigation of the offence or of other offences;..." 27Her Honour made the following finding: "The offender did not cooperate with law enforcement agencies, although he did indicate that he was now prepared to make arrangements to repay the money." 28Her Honour did not fall into error. This ground is not made out. Ground 5: Her Honour did not consider the first instance punishment the ATO inflicted on the appellant Ground 6: Her Honour did not consider the delay from January 2006 - September 2008 29The applicant contended that he had suffered as the result of "the protracted nature of the ATO bringing any proceedings to a head." He submitted that it "was almost three years before [he] was raided and informed of any investigation and almost five years before charges or proceedings started." He submitted that by this time he "had dealt with the debt by way of bankruptcy and suffered significant stress and social issues in his life as [he] stated in evidence". He said, "the brakes had been applied to all aspects of [his] life". He relied upon what was said by Tim Watson-Munro in his report dated 12 March 2012 when he said: "Certainly the protracted nature of these proceedings appears to have had a telling impact upon him to the point where he is now seeing a psychiatrist on a regular basis and being treated with psychotropic medication for his sleep." 30Street CJ stated the relevant principles in R v Todd [1982] 2 NSWLR 517 at 519 as follows: "Moreover, where there has been a lengthy postponement, whether due to an interstate sentence or otherwise, fairness to the prisoner requires weight to be given to the progress of his rehabilitation during the term of his earlier sentence, to the circumstances that he has been left in a state of uncertain suspense and to what will happen to him when in due course he comes up for sentence on subsequent occasion, and to the fact that sentencing for a stale crime, long after the committing of the offences, calls for a considerable measure of understanding and flexibility of approach - passage of time between offence and sentence, when lengthy, will often lead to considerations of fairness to the prisoner in his present situation playing a dominant role in the determination of what should be done in the matter of sentence; at times this can require what might otherwise be a quite undue degree of leniency being extended to the prisoner." 31This principle has been affirmed by the High Court in Mill v R [1988] HCA 70; (1988) 166 CLR 59. 32It is clear that her Honour did take account of the delay in this matter. She discounted the significance of delay in the period between January 2006 and September 2008. She explained her reasons for doing so in these terms: "The offences were committed between 9 July 2004 and 4 January 2006. As the facts indicate, an audit was conducted in February 2006 and the matter was then referred to the criminal section of the Tax Office. In September 2008, an officer from the Tax Office was present during the execution of a search warrant at the offender's house. He spoke to the offender and told him that criminal proceedings were most likely going to be instituted. The offender was charged on 19 April 2010. Unlike McGuiness [2008] NSWCCA 80, this is not a case where an offender after making full admissions of guilt to the Tax Office and entering into an arrangement to repay the agency, is lulled into a belief that the matter will be resolved without the intervention of the criminal law. However, as the offender was left in what the authorities describe as uncertain suspense between September 2008 and April 2010 and, as sentencing for stale crimes calls for a flexibility of approach, it being in the public interest that those suspected of serious crime be brought to justice quickly, I propose to take the delay between September 2008 and April 2010 into account when sentencing the offender." 33The applicant has not attempted to demonstrate, in the light of these remarks, and the clear indication that her Honour knew and understood the authorities, and applied them in this case, how she fell into any error. I do not consider that she did so. These grounds are not made out. Ground 7: Her Honour did not consider the loss of profession of the appellant. (Again the appellant's legal team and Crown were informed prior to sentence) 34Prior to his conviction the applicant worked in the security industry. He maintains that his anticipated inability to renew his security licence or to find work in that industry should have been taken into account in his favour by her Honour when passing sentence. 35However, no evidence of this contention was led at the sentencing hearing. The applicant did give evidence of his work in "security and electrical" and of having worked in "security". That was the extent of any evidence in this respect. 36Undoubtedly a court can take account of extra-curial punishment amounting to the "loss or detriment imposed on an offender by persons other than the sentencing court, for the purpose of punishing the offender for his offence or at least by reason of the offender having committed the offence": Silvano v R (2008) 184 A Crim R 593 at [29]. Such an approach necessarily requires the existence of evidence upon the basis of which to proceed. There was none in this case. 37This ground is also not made out. Ground 8: Her Honour did not consider that the offender had excellent prospects of rehabilitation 38Her Honour's finding was relevantly as follows: "It is hard to be too optimistic about the offender's prospects of rehabilitation in circumstances where I have not accepted his explanation for committing the offences. However, he is forty, his offending commenced at a relatively advanced stage of his life, he is seeing a psychologist for his problems and Mr Watson-Munro has some optimism that if he continues to have the support that he presently has, his prognosis is positive. In those circumstances, I accept that the offender's prospects of rehabilitation are reasonable." 39It is entirely understandable that the applicant should not agree with her Honour's opinion. However, her finding that the applicant's prospects of rehabilitation were reasonable is discretionary. The applicant has not identified, and I am otherwise unable to find, any basis upon which it could be suggested that her discretion miscarried. This ground is not made out. Ground 9: Calculating the degree of criminality 40The applicant submitted that his degree of criminality should be regarded as "low". Counsel for the applicant at the sentencing hearing conceded that the objective seriousness of the offences was "clear[ly] high". Her Honour referred to the submissions of counsel for both sides on this topic in her remarks on sentence. Her conclusions were stated in this way: "I agree with the Crown that the offender's criminality is significant, as the period over which each count was committed was months, rather than days or weeks; the amounts the subject of counts 1, 2 and 3 were not insignificant; the commission of the offences involved more than a degree of planning, although I accept not much sophistication as once registered for GST, a refund can be claimed by lodging the Business Activity Statement without the need to lodge any supporting documentation, and, as I have found that at least the bulk of the proceeds of the offences were used by him for his own purposes." 41Her Honour imposed partially cumulative sentences. She was clearly aware that she was dealing with offences that formed part of a course of conduct and that she was required to sentence in accordance with Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610. 42The applicant has not identified any error in her Honour's approach. This ground is not made out. Ground 10: Her Honour erred when considering custody and recognizance released order 43The applicant submitted that his case involved "exceptional and very special circumstances" and that "a custodial sentence when considering all the circumstances is unjust and unsafe." For reasons that will by now be apparent, that submission is entirely without merit and should be rejected. The decision of this Court in O'Meara v R [2009] NSWCCA 90 should be noted in this context. 44This ground is not made out.