Jane Maria Sakovits v R Ronald Rudolf Sakovits v R

Ground 1 - The learned sentencing judge erred in his determination of the hardship of a custodial sentence to members of the applicants' family and to the applicants

The evidence 8Evidence was given in the sentence proceedings by the applicants' daughter-in-law, Simone Sakovits, in relation to Mrs Potts' health. Ms Sakovits, who was a registered nurse with experience in aged and palliative care, told the court (commencing at T4 L45) that Mrs Potts: (i)was 85 years old; (ii)had been admitted to hospital about one week previously, having lived independently in her own home up until that time; (iii)suffered from an obstructive pulmonary disease which affected her breathing and which had necessitated the installation of a continuous oxygen supply at her home; (iv)had advanced osteoporosis which had resulted in her sustaining two crushed vertebrae for which she had been prescribed oral morphine to control her pain levels; (v)had been diagnosed with pneumonia; and (vi)had been found to have a mass in her right lung, further investigation of which could not be undertaken due to her inability to be administered the anaesthetic necessary to conduct a biopsy. 9Ms Sakovits described Mrs Potts' condition as one of "severe frailty". She explained that prior to her admission to hospital, the applicants had provided Mrs Potts with assistance on 4 days of each week, with a registered nurse doing so on the remaining 3 days. She said that she thought it unlikely that Mrs Potts would be able to return home once she was discharged from hospital and that as a consequence, she was about to commence enquiries as to the availability of care facilities. Ms Sakovits explained that there were no family members other than the applicants who could assist her in that regard. 10In terms of the health of the applicants, two reports of Dr Lachlan Soper were tendered before his Honour. In relation to the applicant Ronald Sakovits, Dr Soper reported (inter alia): "The stress of this situation over a number of years has resulted in him having clinical stress, anxiety and depression. In May 2011 I referred him to see Dr Asha Yourell, clinical psychologist. This stress may have contributed to his heart attack which he had on 18 April 2010, for which he was later stented in November 2010...He has left rotator cuff tears for which Dr Graeme McDonald has recommended he undertake shoulder surgery as soon as his trial is finished." 11Dr Soper then set out the medications which had been prescribed for the applicant, before noting that his past medical history included: (i)hypertension; (ii)peripheral neuropathy; (iii)hypercholesterolemia; (iv)restless leg syndrome; (v)urinary urgency; (vi)osteoarthritis; (vii)heart attack; (viii)exostoses. 12In relation to the applicant Jane Sakovits, Dr Soper reported (inter alia): "Our first appointment was because she was sent to me by her solicitor because of anxiety, headaches, insomnia and depression. I referred her to Dr Kathy Rooney, psychologist that day and put her on Efexor XR antidepressant on our follow up consult in October 2008. I have seen her about 10 times a year since that point and a lot of the focus has been around her anxiety and stress. We have needed to double her Efexor XR dose to 150mg and have failed to be able to successfully reduce the dose". 13Dr Soper then set out the medications which had been prescribed for the applicant, before noting that her past medical history included: (i)depression and anxiety (which he noted was "probably off and on for most of her life"); (ii)hypercholesterolemia; (iii)hyperlipidaemia; (iv)obstructive sleep apnoea; (v)diabetes; (vi)urinary frequency; (vii)periodontitis.

The findings of the sentencing judge 14In terms of the health of Mrs Potts, and the effect upon her of any custodial sentence imposed upon the applicants, his Honour concluded (at [62]): "I turn to another personal circumstance which concerns the poor health of Mrs Sakovits' mother. The evidence called at the sentence hearing established that Mrs Sakovits' mother is elderly and in a very ill condition. Section 16A(2)(p) of the Crimes Act, entitles and requires that I am to bring into account family consequences subject to one condition. The circumstances may not be given substantial weight in the sentencing determination unless they can be characterised as "exceptional": R v Togias [2001] NSWCCA 522 at [9]-[17]; R v Hinton [2002] NSWCCA 405; 134 A Crim R 286 at [31]; R v Agius [2012] NSWSC 978 at [87]. It appears likely that Mrs Sakovits' mother will not return home and will be admitted to an appropriate care institution. Whilst the impact, in particular, upon Mrs Sakovits of her mother's condition is understandably a matter of great and serious concern, on the construction which the relevant case law authorities have placed upon the provisions of s 16A(2)(p), the evidence does not enable me to make a finding that the circumstances can be characterised as "exceptional" for the purposes of applying that provision." 15As to the age and health of each of the applicants, his Honour made specific reference (at [49]) to the reports of Dr Soper before concluding (at [51]-[53]): "51 It is apparent that both offenders will require ongoing medical attendances and supervision and monitoring in relation to a number of medical issues and the prescription of required medications. 52 It is accepted that an offender's psychological and medical health and age may increase the hardship of a sentence and may therefore be taken into account in deciding what sentence is appropriate, but that consideration is limited by the necessity of maintaining proper standards of punishment: R v Hart [1999] NSWCCA 204 per Sperling J at [8]. 53 Whilst a sentencing judge is entitled, in arriving at the appropriate penalty, to take into account an offender's age, health, generally speaking, those factors of themselves do not mean that a term of imprisonment should not be imposed if it is otherwise warranted. They are factors that may, instead, affect the length of a custodial sentence. In the present proceedings, I consider that the evidence as to the age and states of health of each of Mr and Mrs Sakovits are matters that must be taken into account in the sentence determinations in accordance with the provisions of s 16A(2)(m)."

The submissions of the applicants 16Counsel for the applicants accepted that before the sentencing judge could take into account, under s. 16A(2)(p) of the Act, the probable effect upon Mrs Potts of custodial sentences imposed upon the applicants, it was necessary to establish that such effect was exceptional (see R v Zerafa [2013] NSWCCA 222). He submitted that in concluding that the probable effect in the present case was not exceptional, the sentencing judge had erred. 17Counsel submitted that the effect of the applicants' incarceration upon Mrs Potts went beyond that which was typical. It was submitted that this was because the applicants were, in effect, Mrs Potts' primary carers and that the inevitable result of their incarceration was that Mrs Potts was deprived of their care, as well as their companionship, at a time in her life when she was seriously ill and facing the prospect of transition from hospital into some other care facility. 18To the extent that this ground asserted an error on the part of the sentencing judge in his determination of the hardship of a custodial sentence upon the applicants themselves, counsel emphasised that the applicants had been married for more than 40 years and now found themselves separated from each other. He submitted that whilst separation from other family members may be an inevitable consequence of a person's incarceration, that situation was to be distinguished from the present because the applicants had been separated from one another. In this regard, counsel sought to draw an analogy between the position of the applicants, and that of a foreign national incarcerated in this country following sentence. He further submitted that the impact of the sentence upon the applicant Jane Sakovits was rendered even greater because she had been separated from an elderly parent. The submissions of the Crown 19The Crown submitted that the sentencing judge was obviously mindful of the principles governing the operation of s. 16A(2)(p), had properly applied them, and had correctly concluded that the effect of the applicants' incarceration upon Mrs Potts was not exceptional. To the extent that the applicants would not be able to care for Mrs Potts if incarcerated, it was submitted that other family members had apparently been available to administer care in the event that the need to do so arose. 20As to the separation of the applicants from each other, the Crown firstly pointed out that no such submission had been made to the sentencing judge. The Crown further submitted that although the applicants were not able to contact each other, they were nevertheless able to receive visits from other family members and acquaintances. In these circumstances, the Crown submitted that a clear distinction was to be drawn between the position of the applicants and that of a foreign national serving a sentence of imprisonment in Australia. The Crown further submitted that even if such an analogy was drawn, the fact of separation would be a circumstance deserving of limited weight (see R v Ferrer-Esis (1991) 55 A Crim R 231).

Determination 21Section 16A(2)(p) of the Act provides as follows: Matters to which court to have regard when passing sentence (1) In determining the sentence to be passed, or the order to be made, in respect of any person for a federal offence, a court must impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence. (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: ... (p) the probable effect that any sentence or order under consideration would have on any of the person's family or dependants. 22In Zerafa (supra) Hoeben CJ at CL and Latham J concluded that the "probable effect" to which reference is made in s.16A(2)(p) must be exceptional. In particular their Honours said (at [93]): "93 In relation to s16A(2)(p) it is not appropriate for this Court to overrule or depart from cases such as Togias and Hinton. As the respondent accepted, the "exceptional hardship" approach has been followed in Queensland and Victoria, and to a limited extent in South Australia and Western Australia. It is only the ACT which has refused to follow that line of authority. As Spigelman CJ acknowledged in Togias: "17 If there is to be any change in this position, and that was not put in this case even on a formal basis, only the High Court can effect it." 23In our view, for a number of reasons, the sentencing judge's conclusion that the probable effect of the applicants' incarceration on Mrs Potts was not exceptional was correct. 24Firstly, on the evidence before his Honour it was virtually inevitable that Mrs Potts would no longer be able to live independently, and would be transferred from hospital to some other facility within which she would be provided with appropriate care. That would have rendered it unnecessary for the applicants to administer any day to day care. To the extent that enquiries had to be undertaken about the availability of such facility, they were able to be undertaken by Ms Sakovits without the need for assistance from the applicants. 25Secondly, even if Mrs Potts had been able to return home from hospital (which, on the evidence, was most unlikely) the care which had been provided by the applicants was limited in any event. Moreover, there was at least one other family member, namely Ms Sakovits, who would seemingly have been available to provide care in lieu of the applicants, and who was exceptionally well qualified to do so. All of these circumstances tended wholly against the proposition that the effect upon Mrs Potts of the applicants' incarceration was exceptional (as to which see Eken v R [2007] NSWCCA 320 at [52] per Hidden J (Handley AJA and Hoeben J (as his Honour then was) agreeing); Pham v R [2009] NSWCCA 25; (2009) 193 A Crim R 190 at [49]-[50] per Latham J (Giles JA and Mathews AJA agreeing); R v Bateson [2011] NSWSC 643 at [43] per Buddin J). 26Thirdly, as a general proposition, the fact that the parents of members of the prison population may be ill or disabled is not uncommon (see Pham (supra) at [51] per Latham J). 27To the extent that Ground 1 relied upon the hardship to the applicants resulting from their own separation, s. 16A(2)(p) had no application. Moreover, no such submission was put to the sentencing judge by senior counsel then appearing for the applicants. Generally speaking, a party will be bound by counsel's conduct of proceedings at first instance (see generally Zreika v R [2012] NSWCCA 44; (2012) 223 A Crim R 460 at [79]-[80] per Johnson J (McClellan CJ at CL and Rothman J agreeing); Beldon v R [2012] NSWCCA 194 per Johnson J (at [36]) (McClellan CJ at CL and Hammerschlag J agreeing). 28In any event, separation of two co-offenders who happen to be married is an unavoidable consequence of incarceration. Even if a submission based upon that circumstance had been put to the sentencing judge, it would have been deserving of little weight. 29For all of these reasons, his Honour's conclusion that the effect of the applicants' incarceration upon Mrs Potts was not exceptional was correct and no appealable error has been demonstrated. It follows that ground 1 is not made out.

Ground 2 - The sentences imposed in respect of count 2 in each case were manifestly excessive.

The submissions of the applicants 30In support of this ground counsel for the applicants relied firstly upon sentences imposed in other cases of similar offending including, in particular R v Mascall (unreported 11 May 2012 District Court of NSW). He submitted that the proper application of sentencing principles demanded that the sentences imposed "accord with legitimate community expectations whilst at the same time lean towards mercy". 31In written submissions it was put on behalf of the applicants that the sentences were manifestly excessive in light of the "particular subjective circumstances of the appellants". Those subjective circumstances were said to include: (i)the age of the applicants; (ii)the fact that they were each in need of ongoing medical attention; and (iii)the deprivation of contact with each other. 32In oral argument, counsel for the applicants submitted that there were "unique features" in the present case, although in doing so he again concentrated upon the hardship arising from the applicants' separation from each other. The submissions of the Crown 33The Crown submitted that there were features which differentiated the present case from those relied upon by the applicants for comparative purposes, and that reference to those cases did nothing other than confirm that the sentences imposed upon the applicants were within the proper range of sentencing discretion. 34The Crown further submitted that all of the relevant subjective features had been taken into account by the sentencing judge and that when regard was had to the seriousness of the offending, the applicants had failed to demonstrate that the sentences imposed were manifestly excessive.

Determination 35In order to establish that the sentences were manifestly excessive, the applicants must establish that such sentences were unreasonable or plainly unjust (see Markarian v R (2005) 228 CLR 357; [2005] HCA 25 at 370-371; [25]). 36It is not necessary, for the purposes of determining this ground, to canvass the facts and circumstances of the sentences imposed in the other cases to which the Court was referred. It is sufficient for present purposes to state that such cases are distinguishable on various bases. They do not, in our view, provide any support for the proposition that the sentences imposed upon the applicants are manifestly excessive. 37The sentencing judge gave careful and comprehensive consideration to every aspect of the subjective case of each applicant, including: (i)their otherwise unblemished character; (ii)their mental and physical health; (iii)their age; and (iv)the delay in prosecuting the matter which, he concluded, would have caused extreme anguish to each of the applicants, particularly given their respective states of health. 38At the same time, his Honour properly pointed out (at [52]) that it was necessary to balance particular subjective circumstances, such as the applicants' mental health, against the necessity to maintain a proper standard of punishment (see R v Hart [1999] NSWCCA 240 at [8] per Sperling J, Meagher JA and Simpson J agreeing). 39The necessity to maintain a proper standard of punishment obviously required his Honour to take into account the circumstances of the offending. The Crown submitted to the sentencing judge that the offending was "not particularly complicated". That was correct, in the sense that at its most fundamental level the conspiracy involved: (i) the transmission of money from Australia to Vanuatu; (ii)the deduction of certain amounts and their transmission to the promoter of the scheme; and (iii)the return of the balance of the monies to the applicants. 40However as evidenced by the following, the Crown's labelling of the offending in that way ran the risk of understating its true seriousness. 41Firstly, the conspiracy required the incorporation of IPPI in Vanuatu. 42Secondly, it required the opening of a bank account in Vanuatu into which the payments could be made. As his Honour pointed out (at [34]) the use of Vanuatu, a well known tax haven, as the place for IPPI's incorporation was a factor which assisted the applicants in concealing their involvement in the offending. 43Thirdly, this was not a case in which a single bank account was utilised for the purpose of putting the conspiracy into effect. Leaving aside the accounts in Australia which were used to facilitate the return of the money, diagrammatic spreadsheets tendered by the Crown before the sentencing judge established that in 2001, 2002 and 2004 respectively, money transferred to IPPI in Vanuatu was subsequently directed to: (i)an account in the United States, operated in the name of Interglobal Waste Management Inc., which was under the control of one or both of the applicants; (ii)another account in the United States, operated in the name FBO Material Technologies Inc., which was similarly under the control of one or both of the applicants; and (iii)the purchase, in Chile, of items connected with the business of the applicant Ronald Sakovits. 44Fourthly, the money which was directed from the account of IPPL in Vanuatu back to the applicants in Australia was not directed to a single account. Amounts were variously deposited into a personal account and a trust account, and additional amounts were accessed by cash withdrawals made through Automatic Teller Machines. The only available conclusion is that this method of distribution, along with the direction of other amounts to accounts and entities overseas, was adopted by the applicants in an effort to conceal their involvement in the conspiracy. 45Fifthly, the implementation and conduct of the conspiracy required the creation of invoices which falsely represented that expenses had been incurred by Inform Promotions when this was in fact not the case. These documents were obviously created in an attempt to ascribe some air of legitimacy to the transfers which were made to IPPL. 46Sixthly, the creation of those invoices gave rise to the necessity to construct the accounts of Inform Promotions in a manner which was correspondingly false and misleading. 47Seventhly, over the period of the conspiracy, the applicants repeatedly lodged personal taxation returns which were false, and caused company taxation returns to be lodged which were similarly false. 48When viewed in this way, the conspiracy in which the applicants engaged, whilst not particularly complicated in one sense, was (as his Honour correctly found at [32]) nevertheless sophisticated. His His HIts implementation necessarily involved a degree of planning, and its continuation involved a multiplicity of acts which were obviously designed to ensure, as far as possible, that the involvement of the applicants would not be detected. 49There were other matters which were also relevant to the determination of an appropriate sentence. Neither applicant demonstrated any contrition. His Honour found (at [34]) that they were motivated by self interest. The conspiracy in which they engaged extended over a period of more than five years and resulted in a significant loss to the revenue. The extent of that loss was an obviously significant factor (see R v Hawkins (1989) 45 A Crim R 430 at 435 per Lee J, Newman J and Loveday J agreeing). His Honour took all of these factors into account (at [32]) having correctly observed (at [29]) that general deterrence assumed particular significance (see for example Director of Public Prosecutions (Cth) v Gregory [2011] VSCA 145; (2011) 211 A Crim R 147 at [53] per the Court (Warren CJ, Redlich JA and Ross AJA). 50On any view, the applicants' offending warranted condign punishment. In Hili v R; Jones v R (2010) 242 CLR 520; [2010] HCA 45 the majority of the High Court (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ) made the following relevant observations (at [63]): "The applicants' offending was sustained for a long time. It was planned, deliberate and deceitful requiring for its implementation the telling of many lies. The applicants acted out of personal greed. The amount of tax evaded was not small. Detection of offending of this kind is not easy. Serious tax fraud which this was, is offending that affects the whole community. As was pointed out in Ruha [2010] QCA 10, the sentences imposed had to have both a deterrent and punitive effect, and those effects had to be reflected in the head sentences and the recognizance release orders that were made". 51Those observations are directly apposite to the present case. 52In our view, the sentences imposed upon each of the applicants were entirely appropriate. 53It follows that ground 2 is not made out. ORDERS 54The Court makes the following orders in each case: (1)Leave to appeal is granted; (2)The appeal is dismissed. 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: 20 June 2014