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[2011] NSWCCA 261
Court of Criminal Appeal (NSW)
2011-11-09
Whealy JA, Adams J, Latham J, McClellan CJ, Justice McClellan CJ
Original judgment source is linked above.
The Applicant's Subjective Case - Material before the Sentencing Judge 35The applicant presented a substantial subjective case at the sentencing hearing. For example, there was evidence to demonstrate that the applicant was fully willing to facilitate the course of justice. This was evidenced by his prompt attendance at ASIC on the 21 September 2009 and his voluntary admissions made during the first interview. It was evidenced thereafter by his facilitation of the making of the order under the Proceeds of Crime Act . It was also evidenced by his entry of a plea at the earliest available opportunity. His co-operation with authorities and the provision of assistance, both past and present, was also significant. 36One factor of special importance in the sentencing proceedings was the material relating to the applicant's mental illness. This, of course, had a bearing not only on the subjective case presented on his behalf but also on the issue of the overall criminality involved in the commission of the offences. 37The evidence before the Sentencing Judge included various reports of the applicant's treating psychiatrist, Dr Wilson, and the report of the consultant psychiatrist, Professor Jonathon Phillips. 38Dr Wilson had treated the applicant since the time of his admission to the North Side Clinic in January 2009. He had been admitted in a distressed and suicidal state. Dr Wilson had diagnosed the applicant as suffering from a major depressive disorder with anxiety, pathological gambling and past (chronic) dysthymia. Dr Wilson stated in his report on 7 November 2009: There was initial consideration given to the diagnosis of adjustment disorder with depressed mood, but his syndrome was much more severe, pervasive and persistent than an adjustment disorder. The pre-existing dysthymia and strong family history further contributed to the diagnosis of major depressive order. 39In relation to the gambling addiction, referred to in his reports, Dr Wilson said: Mr Hartman meets diagnostic criteria for pathological gambling. This includes preoccupation with gambling, a need to gamble increasing amounts of money, plus feeling gambling is pointless if you cannot gamble large amounts. He gambles to relieve dysphoria and as a way of achieving a sense of escape...as mentioned, some of Mr Hartman's stock market activity appears to constitute gambling behaviour also. Dr Wilson developed this at page 3 of his report when he said: There are elements of Mr Hartman's approach to his work in share trading that are closely akin to gambling. Mr Hartman describes a similar "rush" and excitement with share trading to gambling. The share trading also has a compulsive quality and often interferes with normal social and home function. A striking example is that Mr Hartman would wake through the night and check the price of various shares. He had his bedroom set up so that he faced the computer screen. Because he could not view the screen from the lying position, he kept binoculars with him, and viewed the screen through these throughout the night. 40It appears that shortly prior to the sentencing hearing, the applicant suffered a brief relapse in relation to his gambling addiction. He had been free from gambling activities for quite a considerable time prior to this relapse. Dr Wilson had attempted to pre-empt this in his earlier work with the applicant. In his September 2010 report he said: In the light of our work and various discussions, John and I together formulated his difficulties as involving a combination of factors such as being heavily prone to addiction, being inexperienced and foolish with regard to judgment as well as suffering significant depression and trying in a sense to self medicate by way of gambling which included his illegal activities. 41The reasons for the applicant's depressive condition were not in issue. It appears to have been generally accepted at the sentence hearing that the applicant's serious depressive problems began when he was in his last year at school. Prior to this time, he had been a relatively happy boy, successful in many areas of his schooling and popular with his many friends. There was however, as Dr Phillips in his reports noted, a strong family history of psychiatric disorder. Up until his final year at school, the applicant had recorded a generally happy family life but his situation changed dramatically when his brother Alex was diagnosed with serious bi-polar disorder at the age of eighteen. Alex made a suicide attempt at the time. He was treated by psychiatrists and found to be medication resistant. There were involuntary admissions to hospital. These events, according to the applicant's father and teachers, had a significant effect on him and led to serious changes in his personality and behaviour. 42In his September 2010 report, Dr Phillips expressed the opinion that the applicant suffered chronic depression spectrum symptoms and that these, according to reliable material, had been in existence at the time of the commission of the offences. Dr Phillips thought it probable that the applicant had sought temporary relief from his dysphoric state through his illegal activities. He explained that relief, at least in part, was achieved through his personal trading activities and through gambling. However, he did not believe that the applicant had a personality disorder in those regards. He concluded in this report: Mr Hartman has a clear understanding of his wrongdoing. He does not deny his illegal actions. He recognises that he will be punished for his illegal actions and is trying to make adjustment to this. He is ashamed by his illegal actions and is contrite. He is not psychopathic by disposition. He committed his illegal actions at a time when his thinking was altered because of his chronic depression symptoms with motivation at the time principally to lift himself (albeit in a temporary matter) above his anhedonic symptoms. He remains in therapy with Dr Wilson and has reached a point in the process of treatment where it is highly unlikely that he will offend again. 43We turn next to consider a third factor that was of importance in the sentencing hearing. 44The material before the Sentencing Judge relating to the applicant's provision of assistance to the authorities and cooperation with them was beyond doubt compelling. Indeed, at the hearing, the experienced Crown Prosecutor informed the Sentencing Judge that the assistance he had provided was "substantial" and "significant". The learned Crown Prosecutor added (Transcript 101): What happened as well was that not only was there a plea, but there was, I am instructed, a disclosure of his own activity as regards a number of activities that he had been involved in. It does not happen often in cases such as this...the number of cases that people expose, frankly, the whole of their activity is unusual and it is sought to be encouraged by the investigator involving these matters and sought to be encouraged by the only way that is possible by your Honour dealing with it here. Mr MacAlpine in his statement said (Appeal Book 240-241): [42] The offender's assistance to ASIC commenced with his participation in an interview on 21 January 2010. [43] The offender's participation in the interview provided ASIC with assistance in a number of ways: (a) he identified and explained conduct that he had engaged in; (b) he identified and explained conduct that he alleged Mr Curtis had engaged in; (c) he identified sources of evidence for ASIC to pursue in an investigation of possible offences; (d) his admissions were made voluntarily under caution with consequent evidential and not merely informational value; and (e) savings in ASIC's time and resources flowing from the assistance referred to in (a)-(d). [44] I believe that the offender was candid and truthful in interview. 45Mr MacAlpine made it clear that, in the absence of information being disclosed by the applicant, ASIC would not have identified the tipping offences nor would they have been likely to have obtained material that assisted them in the investigation as to whether Mr Curtis had himself engaged in insider trading. He fairly stated that without the assistance of the applicant, there would not have been sufficient admissible evidence to prove the tipping offences to the required standard in a defended prosecution. 46In relation to the final statement made by the applicant in February 2010, Mr MacAlpine said that the provision of this statement enabled the charging and prosecution of the applicant to be commenced earlier than it could otherwise have been. It saved ASIC from deploying resources to obtain most of the witness statements that would have been needed for a full brief of evidence against the applicant. Mr MacAlpine also made reference to the manner in which the applicant had given an undertaking to assist and give evidence in any proceedings against Mr Curtis. Although no decision had been made as to whether any charges would be brought against Mr Curtis, it was stated that the applicant would be a crucial witness in any future criminal or civil proceedings against Mr Curtis. He reiterated that the applicant had also provided information and assistance in relation to further matters in which it was not alleged the applicant had any involvement. This assistance was also provided on a voluntary basis. 47In the concluding portion of his statement, Mr MacAlpine said: [68] Since participating in the interview on 21 January 2009, the offender has at all times assisted ASIC in a timely and effective manner. [69] I consider that the offender has made a genuine effort to fully cooperate with ASIC's investigators and lawyers and to be full and frank in each interview he has attended. [70] The offender's disclosure of information to ASIC has included voluntary admissions as to his own involvement in conduct contravening the Corporations Act 2001. These included admissions by the offender that he communicated inside information to Mr Curtis which ASIC would have otherwise been unlikely to identify or be able to prove by admissible evidence to a required standard. ... [75] It is inherently difficult to obtain the evidence necessary to prove insider trading offences and for this reason it is of significant assistance to ASIC if persons voluntarily disclose details of their own conduct or the conduct of others. 48Mr Hartman gave evidence at the sentence hearing before the Sentencing Judge and submitted himself for cross-examination. In his evidence in chief, he confirmed the facts to which earlier reference had been made . He gave evidence that he had paid tax on the profits he made from the illegal trades and that he had openly conducted the IG Markets account in his own name. However, he agreed that he had lied in relation to the audit statements made to his employer as to whether he had been trading during the relevant period. At Appeal Book 69 the following passage occurs in his evidence in chief: Question: Alright. Now in terms of how you, shall I say, felt when you made CFD trades, in your own words, what were your feelings, shall I say, when you made these trades? Answer: The way that I was feeling around the time, I was in a very depressed state and the CFD trading gave a feeling similar to that of gambling. Question: And was that a good feeling? Answer: It was a rush of adrenalin similar to gambling. Question: Alright and did you make both big losses and big gains? Answer: Yes. Question: Sometimes after many hundreds of thousands of dollars at once? Answer: Yes. The applicant, in evidence, revealed a somewhat contrasting aspect of his life that ran counter to his illegal behaviour. During the time when it was occurring, he was working as a volunteer doing community work at Theresa House which is a shelter for homeless men. He would do this once or twice a month and the work required him to stay overnight, sleeping in a terrace in Redfern that provided emergency accommodation for twelve homeless people. The work was done by himself and another volunteer over a period of years. Secondly, he revealed that after he had lost his position with Orion and following his treatment at Northside Clinic, he had received the assistance and guidance of a Jesuit priest, Father Steve Sinn who was the parish priest at St Canices at Elizabeth Bay. In effect, following this, the applicant became the priest's personal assistant helping him especially with the parish work involving the care of homeless people and disadvantaged refugees in the local community. He worked in this capacity as a volunteer, wage-free for nearly two years. Father Sinn, as did others, provided a powerful reference at the sentencing hearing. 49The pre-sentence report prepared in June 2010 generally corroborated all the matters to which we have made reference. The Probation and Parole officer in charge, Ms Gloria Enfield, said in relation to the mental health issue: It appears that Mr Hartman first experienced feelings of depression during his later years of high school which corresponded with the time [when] one [of] his brothers became seriously unwell with a psychiatric illness, which was later diagnosed as bi-polar disorder. His depression remained untreated for several years, however after his illegal behaviour became known, Mr Hartman began treatment with a psychiatrist, initially twice weekly. In the past he has experienced feelings of suicidal ideation and he had begun to plan how he would suicide, although at the time of his interview with this service, he indicated he was no longer feeling suicidal...In January 2009 Mr Hartman was admitted to a residential psychiatric unit, where he stayed for three weeks while treatment was commenced. He has been diagnosed with a major depressive disorder and anxiety and remains on medication for these, as well as engaging in regular counselling. In the concluding part of the report, Ms Enfield said: Presenting as a cooperative albeit anxious person, Mr Hartman appears to have the benefit of stable formative years, raised by parents who remain emotionally supportive of him, despite their bewilderment of their son's offending behaviour. Inquires indicate that Mr Hartman began to experience depression when he was about sixteen years old, at about the time one his brothers developed a serious psychiatric illness. In his late teens, Mr Hartman developed a gambling dependency which in part has been a means, however dysfunctional, of his attempting to deal with his feelings of depression. His psychiatrist also believes his gambling dependence may have played a role in his cognitions in the workplace...He appears to have developed significant insight into what influenced his illegal behaviour and it is encouraging that he appears committed to maintaining the constructive changes he has brought to his life. The emotional support Mr Hartman receives from his family is also a positive element in his life.
The Sentencing Judge's Remarks 50The Sentencing Judge gave careful consideration to the situation of the offender. He was satisfied that the offences were serious, particularly as they had been carried over a period of about nineteen months. His Honour said (para 45 ROS): It must be remembered that his crimes were not victimless. Each illegal transaction was likely to have a cost to someone who either traded or held their position without the benefit of the knowledge available to the offender. The offender set about systematically trading in breach of the law for the sole purpose of enhancing his personal wealth at the expense of others. The evidence which I accept indicates that the insider trading charges alone made him a total profit in excess of $1.9 million. [46] The Courts have said on many occasions that general deterrence is of particular significance in relation to white-collar crime. This is particularly the case in relation to insider trading offences which by their nature are easy to perpetrate but difficult to identify. Whereas in the present case the course of offending conduct results in the commission of multiple offences, a sentence of imprisonment is inevitable. I appreciate that the trades which the offender was making were not made in conventional markets but I do not accept that as a consequence the need for general deterrence is diminished. [47] Although the offender has suffered from psychiatric difficulties, the need for a sentence which reflects general deterrence is such that his psychiatric illness is of only limited significance in the present case. There can be no doubt that notwithstanding any illness he may have been suffering from, he knew that what he was doing was wrong and a breach of the law. It appears that the Sentencing Judge accepted that the offender had been suffering from a psychiatric illness as the medical reports had indicated, and that it was related to the gambling and illegal trading. His Honour said (para 37 ROS): It would seem that the thrill of his illegal trades was similar to the thrill he received from a gamble on a horse or a play at the casino. His need for a "thrill" may be related to his psychiatric problems to which I have referred again below. In part his behaviour may be explained by those problems but it cannot be excused. 51The Sentencing Judge acknowledged the contrition expressed by the applicant for his offending and for the hurt he had caused his family and others. His Honour acknowledged the assistance given to ASIC and indicated that he would give a discount of the type discussed in R v Ellis (1986) 6 NSWLR 603. He determined the appropriate discount in that regard to be 10 per cent. He also noted that the applicant was prepared to give evidence against another person and thereby was entitled to a further discount in that regard. This discount was determined to be 10 per cent in relation to the sentence for the tipping offences to which his offer to give evidence related. His Honour also accepted that the applicant was entitled to the maximum discount of 25 per cent for his plea of guilty in that he had thereby demonstrated a willingness to facilitate the course of justice. 52The Sentencing Judge was rather more guarded in relation to the prospects of rehabilitation. This was because of the gambling relapse a short time before the sentencing hearing. Had it not been for that situation, it appears that his Honour would have accepted that the applicant was fully rehabilitated. However, his Honour noted that it would be unlikely that the applicant would ever again secure employment in a position where he would be able to trade with inside information in the financial markets. 53Generally, his Honour was critical of that segment of the business world that allowed a person of the applicant's youth and immaturity to be beguiled by the enormous salaries and rewards that were given to him for what was, as his Honour described it, a "responsible clerical position". His Honour adopted Dr Hartman's description of the world in which his son was employed as "plastic". This, according to his Honour, was a world, which, while the applicant was still at university, corrupted his values and resulted in him pursuing "the high life" without regard for whether or not he was committing criminal offences. His Honour was also critical of the lack of effective supervision provided to the applicant. He said: The temptations are so great and the potential rewards so significant that the fall into criminality of individuals is a significant risk. 54The Sentencing Judge took into account the applicant's good character and the fact that he had never come under adverse notice prior to these offences. 55His Honour then imposed the sentences to which we have made reference at the commencement of these reasons. It is clear from his Honour's remarks that his Honour accepted the submissions of the Crown and Mr Game SC that the structure of the sentences should be determined by grouping the two sets of offences and providing concurrency within each group but allowing for accumulation as between them. His Honour said (57-59 ROS): [57] The sentences I propose compared with the extensive criminality of the offender may, to some people, seem to be lenient. This is in large part due to the Crown's concession that I should consider the offences as two sets of offences reflecting the two statutory provisions which were breached and assume a total maximum penalty of ten years imprisonment, being five years for each set. [58] Furthermore, although the offender must be adequately punished and others deterred, I am mindful of his relative youth, psychiatric illness and the possibility, notwithstanding my reservations, of his future rehabilitation. [59] In all the circumstances I have decided that the sentence which I impose for the insider trading offences should be discounted by a total of 25%, the discount for the tipping offences will be 45%. The latter includes a discount of 10% conditional upon the offender giving evidence in the contemplated proceedings against the alleged co-offender and also includes the Ellis discount. Commentary on the Sentences 56As can be seen, count 1 attracted a sentence of three years. Counts 2-19 attracted a sentence of two years each with all sentences to commence on 2 December 2010. Thus, but for the discount of 25 per cent, these sentences would have been four years and two years eight months respectively. 57The Sentencing Judge applied a discount of 45 per cent for the tipping offences which reflected a 25 per cent discount for the plea at the earliest opportunity, the 10 per cent portion of the discount depended upon the applicant giving evidence in accordance with his undertaking in other proceedings and a further discount was given of 10 per cent, being the " Ellis " discount. 58On count 20 the applicant received a sentence of two years and on counts 21-25 he received a sentence of 18 months each, with all to be wholly concurrent. Thus, but for the 45 per cent discount, these sentences would have been just over three years and seven months, and just over two years and eight months respectively. 59The ratio between the non-parole period fixed by his Honour and the overall sentence was 66 per cent. Neither party has suggested any error on his Honour's part in the fixing of the non-parole period (see Hili v R (2010) 85 ALJR 196 which rejected the application of any "norm" involving an accepted ratio of 60-66 per cent between the overall sentence and non-parole period for federal offences).
Resolution of the Appeal 60In relation to grounds 1 and 2, the complaint is made first that no discount was applied to the insider trading sentences to reflect any aspect of the applicant's past assistance to authorities. Secondly, it is said that the composite discount applied to the tipping sentences did not expressly include a discount for past assistance given by the applicant in relation to those offences. 61In its written submissions, and orally before this Court, the Crown, through Mr Beech-Jones SC, conceded that the sentencing Judge had fallen into error in relation to each of these matters. Secondly, although the Crown submitted that the Court might redress the error by simply readjusting the relevant discounts, it was accepted that, as a matter of principle, this Court was bound to re-sentence the applicant and, in so doing, was entitled, if thought appropriate, to approach the re-sentencing exercise from a broad perspective. Given the complexity of the matters involved, we determine that we should approach the imposition of sentence as a full re-exercise of the sentencing discretion.
Additional material available on the re-sentencing exercise 62A considerable body of evidence has been placed before the Court for its use in re-sentencing the applicant. We shall briefly identify this material. 63First, there is Exhibit A, an affidavit from Robert MacAlpine, the senior lawyer in one of ASIC's market integrity deterrence teams. This affidavit provides detail of the assistance that has been given by the applicant to ASIC since the time of his sentence. For obvious reasons, we do not propose in this decision to detail the assistance which has been provided. It is sufficient to say that it has been significant in terms of both time and output. Whether any other person will be prosecuted in relation to the material provided by the applicant has not yet been decided by ASIC. The applicant remains bound by his undertaking to provide assistance in any future criminal or civil proceedings instituted against Mr Curtis for offences of contravening the Corporations Act 2001 . Mr MacAlpine states: I consider that the applicant has made a genuine effort to fully co-operate with ASIC's investigators and lawyers whenever he has been asked for assistance or information. 64Exhibit B is an affidavit by the applicant sworn 8 October 2011. It details his progress in prison. He has made good use of his time completing a real-estate course with TAFE and is presently engaged in a building and construction course with the same educational institution. The applicant has also participated in a prison based addiction program. Although this did not relate to gambling addiction, the applicant has endeavoured to use the program to his advantage, having regard to his own particular problem. There are other courses that he has completed whilst in custody. 65The applicant states that he currently holds the position of head library clerk. This gives him a fairly high degree of responsibility in the prison. His role includes maintaining the library, processing book loans and helping inmates to access library services. He also helps inmates, particularly those of a foreign background or those with poor English skills to understand and type legal documents such as immigration applications. It appears to be accepted that he has been well behaved in custody and there have been no adverse findings against him. 66The applicant is currently housed in a facility which accommodates inmates in protective custody. Regrettably, the applicant's own situation in relation to receiving adequate treatment of a psychiatric nature while in custody is disappointing. He has, despite his efforts, been able to see a psychologist on one occasion only. It took three months to organise and the consultation lasted for about 5 minutes. There does not appear to be any opportunity for regular consultation with a psychiatrist or psychologist in the applicant's present circumstances. The applicant would like (and needs in the interest of rehabilitation) to receive some assistance in custody in relation to therapy or participation in programs that would help him overcome his gambling addiction but regrettably these do not appear to be available. 67The applicant expresses very clearly his remorse in relation to the offences. He also presents a clear understanding of the circumstances which have led to the unfortunate situation in which he now finds himself. Finally, we should mention o element of concern in the affidavit. This relates to the abuse and threats he has received because it is known that he is giving some assistance to the authorities. He has not been, to this point, physically assaulted but has been verbally abused on a number of occasions for assisting authorities in relation to a former friend. He has received several threats of violence. 68Exhibit C is material collated by the applicant's solicitor Mark O'Brien. It includes evidence to support the applicant's success in the courses he has been doing through TAFE. Secondly, there is a further reference from Father Sinn. He has visited the applicant in prison on three or four occasions. The letter is very persuasive on the issue of rehabilitation. Father Sinn says: No one wants to be in prison. Having said that, John has made the best of the circumstances. ...John has learnt so much during his time at [prison]; he does not take for granted the love of his family or friends; he has come to understand himself more deeply and to be in touch with his true self, his humanity. It may seem obvious, but out there in the commercial world the humanity of young people is not nurtured. He is aware as never before that he is prone to depression and that gambling is no way to medicate. He is aware of the importance of relationships in his life. This growth and awareness is the foundation that he is building his life on and has given him peace with himself. I look forward to seeing him soon and being part of his life in the years to come. 69A further annexure is an updated report from Professor Jonathon Phillips. This report essentially summarises all of the psychiatric evidence at the sentencing proceedings and addresses the issue of the relationship between the applicant's psychiatric condition and the commission of the offences which have seen him incarcerated. These matters were, of course, raised before the sentencing Judge, but for more abundant caution, Professor Phillips has re-addressed them. It will be sufficient to note paragraph 50 of the report: With respect, and as stated in my first report, I believe it is critical in Mr Hartman's case to note that his criminal behaviour occurred at a time of mental disturbance. The pattern is simple. Mr Hartman had a major depressive disorder of several years duration at the time. He attempted to escape chronic anhedonic feelings by seeking a "rush". He did this through hazardous drinking, the use of elicit psycho-active drugs, gambling and illegal trading. The aim was identical across the activities, simply to achieve a "rush". Seeking the "rush" became a compulsive behaviour over which he had very little control. 70The final affidavit (Exhibit D) annexed a report from Dr Craig Wilson. He had visited the applicant in prison on 3 November 2011. This report sought to provide a current assessment for the applicant's condition. 71There are really two strands to Dr Wilson's observations. First, he expressed disappointment that the applicant had not been able to obtain the type of psychiatric treatment and assistance he had hoped would be available to the applicant in custody. He expressed the opinion that it was "very disappointing" that someone who had had such severe mental illness difficulties in the past has not had any appropriate psychiatric review. Similarly, he was "disappointed" that the prison did not provide any specialised program for people suffering from a gambling addiction. In addition, he noted there had been no psychological intervention to assess, address or explore relapse prevention with regard to the applicant's depressive illness. 72On a more hopeful note, Dr Wilson was pleased with the applicant's present mental state. He noted that there had been no serious resurgence of his depressive symptoms and particularly no aspect of suicidality. His observations were that the applicant was physically well and that mentally he was making the best of his situation in custody. He thought that there was a very low risk of any re-offending. In his report he said: Since the day he made his confession to ASIC, Mr Hartman has gradually regained his previous closeness to his family, has reconnected with his values of integrity and hard work, and reaserted the value of community service in his life. Through his help seeking behaviour he has gained greater insight into his susceptibility to depressive illness and his lifelong vulnerability to gambling addiction in its varied forms. 73In relation to the link between the applicant's depression and the offending behaviour, Dr Wilson said: Addiction illnesses (including gambling addiction) and mood disorders are known to be frequently co-morbid and exacerbate each other's clinical course. From another perspective, the addictive behaviour of both Mr Hartman's illegal trading activities and his gambling can be viewed as coping strategies to deal with dysphoric feelings and mood states associated with depression. They are, of course, inadequate coping mechanisms, but the sense of "rush" or "buzz" that Mr Hartman has described, and problem gamblers in general are known to feel, does serve to compensate for flat, withdrawn and negative feelings of depressive illness. It provides a brief respite from the dysphoric state, but of course has an addictive and compulsive quality directly akin to substance addiction, and ultimately serves to worsen a depressive condition rather than ameliorate it. 74In summary, Dr Wilson said: In my opinion as Mr Hartman's treating psychiatrist he is coping reasonably with the difficulties of incarceration. He is however receiving inadequate care and treatment. It is unfortunate that sufficient and appropriate treatment modalities are not available or provided to Mr Hartman and I am certain that he would be well engaged with and receiving far superior treatment if not in custody. Mr Hartman seems generally remorseful and keen to embrace a future congruent with his re-focused core values. It is my hope that he achieves freedom from custody while he is able to maintain his good spirits and momentum for positive change.
Re-sentencing the applicant 75We turn now to re-sentence the applicant. 76First, we bear in mind (as did the sentencing Judge) that the statutory obligation (s 16A(1) Crimes Act (Cth) ) is to impose a sentence that is of a severity appropriate in all the circumstances of the offence. Secondly, we acknowledge the need to take into account a number of the relevant aspects of s 16A(2) of the Act . In particular, there is a need in the present re-sentencing exercise to consider the following matters especially: The applicant's contrition and remorse in relation to his offending; The applicant's plea of guilty and its circumstances; His co-operation with authorities "in the investigation of the offence or other offences"; His youth, relative immaturity and his psychiatric condition; The applicant's prospects of rehabilitation; The need to ensure the applicant is adequately punished for the offence. 77Thirdly, it is necessary to acknowledge that general deterrence, although not listed in s 16A(2), is an important general principle of sentencing and needs to be taken into account ( Director of Public Prosecutions (Cth) v El Karhani (1990) 21 NSWLR 370; 51 A Crim R 123; Lodhi v The Queen [2007] 179 A Crim R 470 at [81] per Spigelman CJ). Indeed, all of the well known objects established by common law principles apply to the sentencing of a Federal offender: Johnson v The Queen (2004) 78 ALJR 616 per Gummow, Callinan and Heydon JJ at 622 [15]. 78With those matters in mind, we begin with an acceptance of the proposition that the circumstances of the present offence satisfy us that no sentence other than imprisonment is appropriate. Of course, the offender has already been in prison for nearly a year. However, we consider that the sentencing Judge was correct in recognising that a sentence of full time imprisonment was appropriate in the present matter. This was accepted on the applicant's behalf at the original hearing and there is no dispute with the proposition upon appeal. 79Secondly, we accept the argument of the Crown that the offences in the indictment (and the offences in the table) are serious offences as was the general course of criminal conduct engaged in by the applicant. With one addition, we respectfully adopt the sentencing Judge's statement at paragraph 44: The offender engaged continuously in serious criminal conduct over a period of 19 months. His offences were serious. His conduct was both in breach of the law and contrary to his obligations to his employer. He was aware of those obligations which had been communicated to him in writing. Furthermore he had responded to questions from his employer asking whether he was trading on his own account by lying and falsely stating that he was not trading. 80The addition to which we have made reference arises out of the evidence of Dr Wilson and Professor Jonathan Phillips. This evidence establishes to our satisfaction that there was a nexus between the applicant's psychiatric condition, his gambling addiction and the commission of these offences, especially the insider trading offences. We accept that there is a foundation for it in the applicant's evidence (see para 48 above) although we acknowledge, as the Crown submitted, that an important aspect of the applicant's motivation in committing both groups of offences was to make profits for himself. 81In DPP (Cth) v De La Rosa (2010) 205 A Crim R 1; [2010] NSWCCA 194 McClellan CJ at CL helpfully set out at [177] in short form the principles which have been developed and applied in sentencing an offender who was suffering from a mental illness, an intellectual handicap or other mental problem. Two aspects of the summary are relevant in the present matter and bear repetition: · Where the state of a person's mental health contributes to the commission of the offence in a material way, the offender's moral culpability may be reduced. Consequently the need to denounce the crime may be reduced with a reduction in the sentence [authorities omitted]. · It may also have the consequence that an offender is an inappropriate vehicle for general deterrence resulting in a reduction in the sentence which would otherwise have been imposed [authorities omitted]. 82The Crown argued that the factual situation in the present matter did not compel this Court to disregard general deterrence. In that regard, the Crown referred to the observations by Gleeson CJ in R v Engert (1995) 84 A Crim R 67 where his Honour said: ... in truth however, for the reasons given at the commencement of this Judgment, the question of the relationship, if any, between the mental disorder and the commission of the offence, goes to circumstances of the individual case to be taken into account in the application of the relevant principles. The existence of such a causal relationship in a particular case does not automatically produce the result that the offender will receive a lesser sentence, any more than the absence of such a causal connection produces the automatic result that an offender will not receive a lesser sentence in a particular case. 83Gleeson CJ had earlier said, at the commencement of his judgment, (at [69]): It is therefore erroneous in principle to approach the law of sentencing as though automatic consequences follow from the presence or absence of particular factual circumstances. In every case, what is called for is the making of a discretionary decision in the light of the circumstances of the individual case, and in light of the purpose to be served by the sentencing exercise. 84The Crown also made reference to the remarks of Hunt CJ at CL in R v Wright (1997) 93 A Crim R 48 at [52]. In that decision the Chief Judge had discussed the accepted principle of sentencing that general deterrence should often be given very little weight in the case of an offender suffering from a mental disorder or abnormality on the basis that such an offender could not to be regarded as an appropriate medium for making an example to others. At the end of the discussion, his Honour had said: The means by which the courts give effect to that principle (as an instrument of social administration) is to moderate the consideration of general deterrence to the circumstances of the particular case. But, if the offender acts with knowledge of what he is doing and with knowledge of the gravity of his actions, the moderation need not be great. 85The Crown placed particular emphasis on this last paragraph. 86For our part, we do not consider that the particular paragraph relied on by the Crown in the reasons of Hunt CJ at CL carries with it the notion that, in a situation where an offender acts with knowledge of what he is doing and is aware that it is wrong, his mental condition will have no impact on the issue of general deterrence and may accordingly be disregarded. Nor do we consider that, when read in context, his Honour's remarks suggested that the significance of psychiatric condition in such a case will always be minimal. 87In the earlier part of the discussion Hunt CJ at CL had said: It is an accepted principle of sentencing that general deterrence should often be given very little weight in the case of an offender suffering from a mental disorder or abnormality because such an offender is not an appropriate medium for making an example to others. In most of the cases in which that principle is applied, the offender has suffered from a significant mental illness or retardation, but such a condition is not a necessary condition for the principle to be applied . Considerations of general (or even personal) deterrence are not rendered completely irrelevant, and the significance of the offender's mental incapacity is to be weighed and evaluated in the light of the particular facts and circumstances of the individual case . [our emphasis] 88It might be observed in the same case that Gleeson CJ, while in general agreement with Hunt CJ at CL's reasons said : My views on the significance, for sentencing purposes, of the presence of a psychiatric condition in an offender, are set out in the case of Regina v Engert , and it is not necessary to repeat them. The particular reason given by Hunt CJ at CL which constitutes the basis of my agreement with the orders he proposes, is that, in the present case, the learned sentencing judge allowed the subjective features of the respondent to outweigh the significance properly to be attached to the extremely serious objective circumstances of the case. 89In Engert , Gleeson CJ had cited with approval the remarks of Badgery-Parker J in R v Letteri (NSW CCA unreported 18 March 1992): The principle then is clear enough. It is correctly stated as follows: that whereas general deterrence is a relevant consideration in every sentencing exercise, it is a consideration to which less weight should be given in the case of an offender suffering from a mental disorder or severe intellectual handicap. In an extreme case, the proper application of this principle may produce the result that considerations of general deterrence are totally outweighed by other factors. In every case it is a matter of balancing the relevant factors in a manner no different from that which is involved in every sentencing exercise. 90Gleeson CJ "emphasised" the concluding sentence in this passage. 91Our conclusions on this matter may be shortly stated. First, there is no doubt that the applicant knew what he was doing and knew that his actions were wrongful. Secondly, his actions were in part motivated and prompted by a wish to make profits from his own trading and the trade initiated by Mr Curtis. Thirdly, he was throughout the period suffering from a genuine and long term depression spectrum from which he sought relief in gambling and other dangerous activities. Fourthly, his psychiatric condition contributed to his compulsive trading activity which, in his perception, gave him temporary but misguided relief from his major depressive symptoms. This trading activity was in fundamental respects a form of highly leveraged gambling akin to the other types of gambling in which he had engaged. It led on occasions to significant profits but it also led on other occasions to significant losses. Accordingly, there was a mixed and highly complex group of motivations for his illegal activity part of which was rightly attributed to his psychiatric condition. His own evidence before the sentencing Judge establishes the nature of the transient "buzz" that his illegal activities gave him. 92It follows, in our opinion, that, while the offences were undoubtedly serious, there must be some moderation given to the aspect of general deterrence because of the applicant's mental condition (s 16A(2)(m) Crimes Act 1914 (Cth) ). Moreover, to a limited degree, the applicant's moral culpability is accordingly lessened. 93We do not agree, however, that, in the circumstances of this matter, the applicant's youth and relative immaturity have any role to play in downgrading or lessening the importance of general deterrence. We recognise that in some cases these factors may be both relevant and important on the issue ( MS2 and Ors v Regina [2005] NSWCCA 397; (2005) 158 A Crim R 93 per Simpson J at [9]; Adams J at [15]-[16]; BP v R [2010] NSWCCA 159; (2010) 201 A Crim R 379 per Hodgson JA at [3]-[6], but see, Johnson J at [74]-[75]; R v Hearne [2001] NSWCCA 37; (2001) 124 A Crim R 451 at 458; KT v R [2008] NSWCCA 51; (2008) 182 A Crim R 571 at 577-578). We do not consider in the present matter that they are relevant and important in that way. The applicant was operating in the adult sphere of business and commerce in every respect, and of course he was himself an educated and worldly young adult in every sense of the word. The Court cannot lose sight of the need to deter young adults from taking the significant financial advantages offered by the contemporary business world in circumstances where, at the same time, they reject the legal and moral constraints properly imposed upon their commercial behaviour. 94Mr Game also argued that the applicant's choice of trading, namely, off-market highly geared derivatives, might be viewed as less culpable than if he had been trading in the underlying shares. We are unable to accept this argument. It needs to be remembered that insider trading not only has the capacity to undermine the integrity of the market, it also has the potential to undermine aspects of confidence in the commercial world generally. The principles of confidentiality and trust are fundamental to the operation of many commercial transactions. As the applicant's employer recognised, advance knowledge by its employees of proposed trades of a significant kind required, as a matter of trust, that they remain in the realm of confidentiality. Insider trading is a form of cheating. Put bluntly, it is a form of fraud, even though its consequences may be more opaque than general fraud ( McQuoid [2010] 1 Cr App R (S) 43; R v Rollins [2011] EWCA Crim 1825). 95We do not consider that the applicant is entitled to an Ellis discount in relation to the insider trading charges although we acknowledge that we should take into account, as part of his assistance and co-operation with the authorities, the fact that he voluntarily attended ASIC and made full admissions before any formal investigation commenced into those matters. 96The assistance and co-operation provided by the applicant to ASIC was and is considerable in the present matter. We take this into account as required by s 16A(2)(h) of the Act and we do so in our recognition of the difficulties involved in investigating, prosecuting and proving insider trading offences. 97We also take into account and recognise the contrition expressed in practical terms by the applicant since January 2009 and his continuing expressions of remorse. While recognising the difficulties he will have upon release from custody in relation to combating his gambling addiction, we consider overall that his prospects of rehabilitation are good. He will have the support of his partner, his family, Father Sinn and others who care for him and these will be important factors in his rehabilitation. 98It is desirable, in the circumstances of the present matter, that we specify a discount of 25% for the plea of guilty. In relation to the applicants undertaking to co-operate and provide for future assistance to the authorities, it is necessary for us to specify a discount. There is no reason to depart from the discount of 10% arrived at by the sentencing Judge in his decision and accordingly we ascribe that percentage for future assistance. 99We have taken into account, as we have said, the high degree of the applicant's co-operation and assistance given to date in relation to both groups of offence. We have also taken into account the past assistance given in relation to the investigation by ASIC into possible offences committed by another person. In relation to the tipping offences, a further measure of leniency is extended to the applicant for the Ellis factor but, as with the other matters we have mentioned in this paragraph, there is no need for us to quantify this aspect. Given the multiplicity of the charges and the fact that, if the appropriate discounts were accumulatively applied without qualification, the resulting sentences would be manifestly too lenient so that further adjustment of the sentences would be necessary, we do not think that it would be useful to quantify the discount ultimately provided more than to indicate that it is substantial. It should also be noted that, having regard to the number of distinct offences committed and the lengthy period they covered the degree of concurrency we provide also extends a further degree of leniency. 100What then is the appropriate sentence to be imposed? We agree with the sentencing Judge that the 16BA Schedule offences in relation to the insider trader offences should be considered in relation to count 1. In the same way, the tipping offences in the Schedule should be considered in relation to count 20. In our view, having regard to all the matters we have considered, and taking into account all the factors we have mentioned, an appropriate sentence in relation to count 1 is a term of 2 1/2 years imprisonment commencing on 2 December 2010 and expiring on 1 June 2013. In relation to counts 2-19 we consider that the appropriate sentence is a term of 2 years imprisonment each term to commence on 2 December 2010 and to expire on 1 December 2012. 101In relation to the first tipping offence (count 20), and having regard to the Schedule offences in respect of that count, an appropriate sentence is a term of 18 months imprisonment to commence on 2 June 2012 and expiring on 1 December 2013. 102In relation to counts 21-25 we consider an appropriate term of sentence for each count is 16 months each term to commence on 2 June 2012 and expiring on 1 October 2013. 103As a consequence, the overall term of the sentence will be 3 years. The terms of s 19AC of the Crimes Act 1914 (Cth) require that we make a recognisance release order in those circumstances. This section allows for conditional release of an offender after conviction. Section 19AB of the Act requires that we direct, by order, that the applicant be released after he has served a specified period of imprisonment in respect of the offences. The terms of the recognisance for the purposes of the release will require the applicant to comply with conditions set by the Court. There has been, we have been informed, considerable discussion between the Crown and the appellant's legal representatives in that regard. There has been liaison in relation to appropriate terms with the probation and parole service. As a consequence, while the Crown is not conceding that such an order should be made, the Court has been provided with a document containing 14 draft conditions of an order that is generally thought appropriate as between the parties and the probation and parole service. 104In arriving at an appropriate pre-release period of imprisonment in the present matter, we particularly take into account two matters: first, the highly favourable material provided for the purposes of the re-sentencing exercise and secondly, the stringent nature of the conditions provided for in the document we have referred to in the preceding paragraph. As to the first, we stress the applicant's rehabilitation in custody, his continued remorse and his level of continuing assistance to the authorities. As to the second, we note that the conditions are aimed at preventing the applicant's relapse into criminal behaviour but, more significantly, they provide a regime of treatment which, it appears, is not available to him in custody and which will, in the nature of things, promote and enhance his re-entry into the wider community. In the exceptional circumstances of this matter, and for all the reasons outlined in this decision, the pre-release period we have selected is 15 months. 105We propose to specify a single pre-release period of imprisonment of 15 months to commence on 2 December 2010 and to expire on `1 March 2012. This means that we shall order the release of the applicant to take effect on 1 March 2012 upon the proviso that he enter into a recognizance to comply with the conditions contained in the draft document that is annexed to these reasons. The period during which the conditions will operate and in respect of which compliance is required is to be 18 months. 106The orders of the Court are:
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. Decision last updated: 12 December 2011
Hartman
R
Category: Principal judgment Parties: Applicant - John Joseph Hartman Respondent - Commonwealth Director of Public Prosecutions Representation: Applicant - Mr T Game SC/S Buchen Crown - Mr R Beech-Jones SC Applicant - Johnson Winter Slattery Crown - Commonwealth Director of Public Prosecutions File Number(s): CCA 2010/65592 Decision under appeal Citation: R v Hartman (2010) 81 ACSR 121; [2010] NSWSC 1422 Date of Decision: 2010-12-02 00:00:00 Before: McClellan CJ at CL File Number(s): 2010/65592
(1990) 21 NSWLR 370
(2010) 85 ALJR 196
(2004) 78 ALJR 616
(1986) 6 NSWLR 603