Liu v Milner [2019] ACTSC 115

Crimes Act 1900 (ACT) s 114C

Crimes (Sentencing) Act 2005 (ACT) ss 7,12, 13, 33

Magistrates Court Act 1930 (ACT) s 216

Barbaro v The Queen; Zirilli v The Queen [2014] HCA 2; 253 CLR 58

Cooper v Corvisy (No 2) [2010] ACTSC 166; 5 ACTLR 151

Dinsdale v The Queen [2000] HCA 54; 202 CLR 321

GAS v The Queen; SJK v The Queen [2004] HCA 22; 217 CLR 198

House v The King (1936) 55 CLR 499

Keen v Tither [2010] ACTSC 130

O'Brien v The Queen [2015] ACTCA 47

R v De Simoni (1981) 147 CLR 383

R v Forrest (No 2) [2017] ACTSC 83

1. This appeal by Mr Borung Liu, the appellant, relates to three charges in the Magistrates Court of the Australian Capital Territory (Magistrates Court) of 'dealing in property which is the proceeds of crime' in contravention of s 114C of the Crimes Act 1900 (ACT) (the Crimes Act).

2. The three charges comprised a number of specific offences, but all related to similar conduct concerning 43 health insurance claims made at three medical centres, the Garema Place Surgery, the Florey Medical Centre and the Jamison Medical and Skin Cancer Clinic over the period March 2013 to November 2014.

3. The claims were made against insurance policies issued by Allianz Global Assistance (AGA), a provider of overseas student healthcare insurance, to university students. Each of the 43 claims made was fraudulent, as the student in whose name the policy was issued had not visited a doctor at the relevant medical centre on the purported date the service was provided. Importantly for this appeal, the appellant was not ultimately charged with the fraud, only with receiving the proceeds of the fraudulent claims.

4. The charges, as ultimately presented following negotiations between the parties in the court below that led to their grouping, were as follows:

(a) CC18/6781 - relating to 21 fraudulent transactions in respect of GP consultations allegedly provided at Garema Place Surgery, valued at $5,205.75;

(b) CC18/6782 - relating to 18 fraudulent transactions in respect of GP consultations allegedly provided at Florey Medical Centre, valued at $5,008.70; and

(c) CC18/6783 - relating to four fraudulent transactions in respect of GP consultations allegedly provided at Jamison Medical and& Skin Cancer Clinic, valued at $1,477.70.

5. The maximum penalty for each offence is a fine of $30,000, imprisonment for two years, or both. The appellant pleaded guilty to each of the three charges.

6. On 9 August 2018, the sentencing magistrate imposed a total sentence (the individual components referable to each charge being discussed below) as follows:

(a) Six months' imprisonment, fully suspended upon the appellant entering into a good behaviour order, pursuant to ss 12 and 13 of the Crimes (Sentencing) Act 2005 (ACT) (Sentencing Act);

(b) A community service order (as part of the good behaviour order) that the appellant carry out 240 hours of community service over a 12 month period; and

(c) A reparations order that the appellant pay AGA the total of the proceeds fraudulently claimed ($11,692.15) within a period of 12 months, at the rate of $1,000 per month, beginning on 10 September 2019.

7. Pursuant to s 216 of the Magistrates Court Act 1930 (ACT) (the Magistrates Court Act), the sentence has been stayed since 6 September 2018, the date when this appeal was lodged.

8. On this appeal, the appellant argues for a number of reasons that the sentence imposed was too severe in respect of the penalty and the total period of imprisonment, notwithstanding that it was fully suspended.

9. The grounds of appeal (in part using the appellant's phraseology contained in his notice of appeal) are as follows:

(a) The sentencing magistrate in the court below made findings of fact unfavourable to the appellant that were not open to him on the evidence (Ground 1).

(b) The sentencing magistrate took such findings of fact into account and then gave the appellant very improper sentences (Ground 2).

(c) Compared with other similar fact cases, the sentences are too heavy (Ground 3).

10. During the hearing of the appeal, the appellant was assisted by a Mandarin interpreter, whose clarity and professionalism greatly assisted the work of the Court. Through the arguments of the appellant, Grounds 1 and 2 were put as part of one overarching complaint, namely that the sentencing magistrate was confused as to the conduct that was the subject of the offences with which the appellant was charged. The charges did not allege that the appellant was the person who committed the fraud, yet the sentencing magistrate in his reasons for sentence appeared to have considered the escalating nature of the fraudulent conduct, which he attributed to the appellant, rather than the conduct that constituted only ongoing dealing in proceeds of crime. Consequently, the sentencing magistrate imposed a sentence that was heavier than it should otherwise have been.

11. The orders sought by the appellant are as follows:

(b) The appellant should be 're-sentenced lightly'.

12. The following sets out the principles applicable to aspects of this appeal. None of the principles are controversial. They are set out in detail here primarily for the benefit of the appellant, who was self-represented, appeared by telephone from China with the assistance of an interpreter and did not have the benefit of any written submissions in advance from the respondent, through the Director of Public Prosecutions (Director), so as to be appraised of the Court's likely approach or reasoning process on appeal. This may have been because the appellant had failed to comply with a direction to provide an outline of submissions, but the result is that both the Court and a self-represented litigant from a non-English speaking background had no indication of the respondent's likely arguments based on the grounds of appeal until the hearing.

Approach to be taken on an appeal against sentence

13. Sentences imposed in the Magistrates Court are not to be set aside simply because the appellate court, on hearing the appeal, might have imposed a different sentence: see Cooper v Corvisy (No 2) [2010] ACTSC 166; 5 ACTLR 151 (Cooper) at [8]-[12] per Refshauge J for a more detailed discussion. There is a strong resistance against a court on appeal 'tinkering' with sentences: Dinsdale v The Queen [2000] HCA 54; 202 CLR 321 (Dinsdale) at [62].

14. Error in the exercise of the discretion on sentence must be established. That might be through a specific error, such as the failure to consider a relevant consideration or misapplication of principle: see House v The King (1936) 55 CLR 499 at 505. Alternatively, the error, though not identifiable, might be inferred from the sentence being manifestly excessive or inadequate, unreasonable, or plainly unjust or wrong: Barbaro v The Queen; Zirilli v The Queen [2014] HCA 2; 253 CLR 58 at [26] - [28]; Dinsdale at [6] per Gleeson CJ and Hayne J.

15. If error is established and the appellate court considers that a different sentence is appropriate in all the circumstances, the appeal may be upheld and a different sentence imposed: Keen v Tither [2010] ACTSC 130 at [44] per Penfold J, cited in Cooper at [10].

The Court's approach in considering whether a sentence is manifestly excessive

16. The considerations that apply in relation to the appeal ground that a sentence is manifestly excessive are well settled and were set out in O'Brien v The Queen [2015] ACTCA 47 (O'Brien) at [25]. They include the following:

(a) Manifest excess is a conclusion which does not depend upon attribution of identified specific error in the reasoning of the sentencing judge: Dinsdale at [6] per Gleeson CJ and Hayne J.

(b) The relevant test is whether the sentence is unreasonable or plainly unjust: House v The King [1936] HCA 40; (1936) 55 CLR 499; Dinsdale at [6]; Melham v The Queen [2011] NSWCCA 121 (Melham). A sentence which is unreasonable or plainly unjust for no reason other than that it is manifestly too long is a sentence which is erroneous in point of principle because it has not been imposed according to the rules of reason and justice: Barbaro v The Queen; Zirilli v The Queen [2014] HCA 2; (2014) 253 CLR 58 at [61].

(c) In approaching the question of whether a sentence is unreasonable or plainly unjust, the Court does so within the context that there is no one single correct sentence, but rather the process of sentencing involves due allowance for differences of judicial opinion at first instance whilst still acting in accordance with principle: Melham at [85].

(d) It is not enough that the members of the appeal court would have imposed a different sentence: Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [28]; R v Abbott [2007] VSCA 32; (2007) 170 A Crim R 306 at [14]; Balthazaar v The Queen [2012] ACTCA 26 at [61].

17. In relation to the fixing of sentences for multiple offences and the consideration of totality, the applicable principles were also set out in O'Brien at [26]. They include the following:

(a) When sentencing for multiple offences, the sentencing judge must fix an appropriate sentence for each offence and then consider questions of accumulation or concurrence, as well as totality: Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610 at 623-624.

(b) The principle of totality requires the sentencing judge to review the aggregate sentence, look at the totality of the criminal behaviour and consider whether the aggregate is "just and appropriate" for all the offences: Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59 at 63.

(c) A countervailing factor is the need to ensure that there does not emerge a perception that there is no difference between a person who commits one or two offences and a person who commits six or seven offences: R v Wheeler [2000] NSWCCA 34 at [36]. The Court must avoid any suggestion that what is being offered is a discount for multiple offending: R v Knight [2005] NSWCCA 253; (2005) 155 A Crim R 252 at [112]; R v MAK [2006] NSWCCA 381; (2006) 167 A Crim R 159 at [18].

(d) Where offences are discrete and independent, the sentence for one offence cannot comprehend and reflect the criminality of the other. In such circumstances, the sentences should be at least partly cumulative; otherwise there is a risk that the total sentence will not reflect the total criminality of the two offences. Where, however, the offences are not separate and distinct, but are part of a single episode of criminality with common features, it is more likely that the sentence for one of the offences will reflect the criminality of both, in which case the sentences should be concurrent, or at least partly concurrent: Cahyadi v R [2007] NSWCCA 1; (2007) 168 A Crim R 41 at [27].

18. The proceedings in the court below were conducted by the Director of Public Prosecutions on behalf of the respondent (the informant who laid each of the charges). A statement of facts was tendered and not disputed by the appellant. The following is taken from that statement.

19. The appellant was the recipient of funds that flowed from a fraudulent insurance claim scheme. The scheme involved the use of personal details of overseas students the majority of whom were enrolled at the Australian National University (ANU) and one who was enrolled at the University of Canberra (UC). Each student had taken out a health insurance policy with AGA.

20. Fake medical receipts were produced using the details of these students by an unknown person for non-existent medical services provided at the various Canberra medical clinics, so as to found claims for reimbursement by AGA.

21. Two methods were then used for reimbursement. The first method involved the appellant attending the ANU Student Exchange or the UC Student Central buildings where he produced a receipt for medical services and his claim was processed on the spot. The appellant was provided with a voucher which was later redeemed for cash at an Australia Post outlet.

22. The second method involved claims submitted online by an unknown person logging onto a website using details pertaining to another policy holder. Prior to submitting the claim, the unknown person changed personal details of the student policy holder to those pertaining to the appellant. AGA was sent a copy of the fake receipt for medical services by email, post or both. The money from the claim was then deposited into one of a number of bank accounts in the name of the appellant or a similar derivative of his name. After the claim was processed, an unknown person changed the personal details back to the original details of the policy holder.

23. In total, 43 fraudulent transactions resulted in some $11,692.15 being deposited into bank accounts in the appellant's name over the period 12 March 2013 to20 November 2014.

24. In the court below, the appellant had claimed that approximately half of these funds were then shared with a person referred to as 'Jennifer', although the sentencing magistrate noted during the hearing that there was no evidence about that fact.

25. The sentencing magistrate delivered oral reasons, part of which were as follows:

The defendant was identified as the person who received the money from the fraudulent claims. The Australian Federal Police were asked to investigate and they discovered that between those dates, 12 March 2013 and 21 November 2014 the defendant received a total of 43 payments which totalled a net figure of $11,692.15. The defendant used two different methods. One was to attend the ANU or the University of Canberra, he'd produce a receipt, he'd claim, the claim was processed on the spot. He was given a voucher and then he ... [went to] Australia Post to redeem the voucher.

The information which he had given them was false. The information related to another policy holder and the medical service had never been provided. He also made a number of online claims which was submitted to the AGA website. He'd log on using the details of another policy holder, a foreign student, he'd submit the claims that the defendant had produced. He'd change the details of the policy holder, their phone number, their address, and banking details. And once the money was paid into his account he would change back those details to that of the original policy holder. It can be seen from that it's a fairly sophisticated fraud in which he was involved. The defendant says the day that - - -

26. At this point, counsel representing the appellant intervened:

Ms Taylor: I'm sorry, Your Honour, I'm loathe to interrupt you, and I apologise for interrupting you, but where you're reading from, you have referred to as "he" when in fact the statement of facts refers to an unknown person. The director isn't alleging that that is Mr Liu on those occasions, but that was somebody unknown.

His Honour: All right. Well, that change is made there. The defendant says that he became involved because he was approached by a person called Jennifer. He said he [was] greedy and stupid to get involved in the manner in which he did.

27. Later in the reasons however, the sentencing magistrate said:

The fraud seems to have started out relatively small at the beginning in March 2013... However, towards the end of the period and before the defendant stopped the activities, he was engaging an increased number of offences.

He has no antecedents, so he comes before the court until this time as a person of good character. However, it's clear that he engaged in a serious form of fraud and that it was sophisticated in the manner in which it was conducted.

So what I propose to do is this - can you stand up for a moment, please. In respect of charge 6781 - and I should say this, I've taken a global view of the defendant's offending and looked at it and crafted a sentence based on totality. I've also taken the view that his offending towards the end of his activities towards November 2014 were becoming more serious at that stage and more frequent, and for that reason there is a difference between the penalties in respect of three.

28. The sentencing magistrate then imposed the following:

(a) With respect to CC18/6781 - In respect of the first charge, that is the offending committed between 12 March 2013 and 18 November 2014 you will be convicted. I will sentence him to a term of imprisonment of two months. That would have ordinarily commenced on 9 August 2018 and finished on 8 October 2018. It will be fully suspended. He will be placed on a good behaviour order for a period of 12 months. He's to accept - he's to be placed on probation and subject to the supervision of the director of Corrective Services and obey all reasonable directions of the said director for a period of 12 months or such less a period. He is to perform community service work of 70 hours within a period of 12 months.

(b) With respect to CC18/6782 - In respect of the next charge, which is the offence between 8 August 2013 and 18 November 2014 - in respect of that offence, he will be sentenced to three months' imprisonment. That sentence would otherwise commenced on 9 September 2018 and finished on 8 December 2018. However, that will also be filly suspended. It will be on the same terms and conditions that he's subject to - probation period for a period of 12 months and to attend such educational, vocational, psychological, psychiatric assessments, or other assessments and programs as directed. And he's, in respect of that matter, to perform 80 hours of community service within 12 months.

(c) With respect to CC18/6783 - In respect of the third offence, which is the one on 22 October 2014 and finished on 20 November 2014, he will be sentenced to four months' imprisonment. That would otherwise have commenced on 9 October 2018 and finish on 8 February 2019. It, however, will be fully suspended on the same terms and conditions which I indicated before. He is to perform 90 hours of community service within a period of 12 months.

29. The sentencing magistrate then proceeded to make the reparations order referred to above.

Ground 1: Did the sentencing magistrate make findings of fact not open on the evidence?

30. The emphasised passages from the transcript demonstrate that, notwithstanding the attempts of the counsel for the appellant to correct the position, the sentencing magistrate did erroneously consider that the appellant had engaged in 'a serious form of fraud' when speaking of the appellant's conduct in its entirety.

31. Fraud was not an element of the offences with which the appellant had been charged, and more importantly, the appellant had not pleaded guilty to fraud.

32. Any facts beyond what is necessarily involved as an element of the offence must be proved by evidence or admitted formally or informally: GAS v The QueenR; SJK v The Queen [2004] HCA 22; 217 CLR 198 at [30]. No one should be punished for an offence of which he has not been convicted: R v De Simoni (1981) 147 CLR 383 at 389 per Gibbs CJ.

33. On the statement of facts that had been tendered, the only involvement in the online claims for reimbursement admitted by the appellant was the receipt of the funds. It was therefore not open to the sentencing magistrate to make factual findings of the appellant engaging in fraud in relation to the totality of the payments that were made and Ground 1 must succeed.

Ground 2: Was the factual finding of fraud by the sentencing magistrate material to the sentence imposed?

34. Ground 2 of the appellant's argument is essentially directed to the materiality of the erroneous factual findings to the sentence imposed by the sentencing magistrate. Again, the extracts emphasised above indicate that the sentencing magistrate's reasoning toward the ultimate sentence in respect of each of the charges was influenced by an erroneous view as to the appellant's fraudulent conduct.

35. It cannot be said that any error with respect to attributing fraudulent conduct to the appellant was immaterial to the sentence imposed, and Ground 2, to the extent that it was a separate ground, must also succeed.

Ground 3: Was the sentence otherwise manifestly excessive?

36. Given my findings above, it is unnecessary to deal with the appellant's third ground of appeal.

37. It is necessary to resentence the appellant for each of the three charges. The Sentencing Act applies to any resentencing, and the purposes of sentencing are referred to in s 7 of that Act.

38. In accordance with s 33 of the Sentencing Act, which goes to the nature and circumstances of the offences, I have had regard to the statement of agreed facts, the key parts of which are set out above in my reasons at [19] - [23].

39. In the court below, the sentencing magistrate referred in his reasons to a number of matters arising from the pre-sentence report. One such consideration was the fact that the appellant had already spent time in custody as a consequence of the revocation of his bail. This was factored into the sentence imposed by the sentencing magistrate, and must also be taken into account in any sentence now imposed.

40. The sentencing magistrate also referred to the appellant's apparent support from his family in addition to three references of support, the appellant's previous good character and lack of any criminal history and his expressed regret for his behaviour. Each of these are factors which suggest that the appellant possesses strong prospects of rehabilitation. In addition, the appellant did ultimately plead guilty and this must be taken into account in the sentence imposed.

41. The sentencing magistrate also considered the loss or damage resulting from the offences, being $11,692.15, which represented harm to the corporate victim by unlawfully depriving it of funds.

42. It is appropriate to adopt the discussion of the appellant's personal circumstances set out by the sentencing magistrate and the factors to which I have referred that do not appear to have been affected by any findings of fraud.

43. The sentence for each charge must nevertheless reflect the public denunciation of the unlawful conduct of the appellant and the objective of general deterrence. The appellant's motive was greed and the conduct occurred over a lengthy period of time. The charges were not isolated events or 'oneoff' aberrations. On the contrary, the charges taken together are indicative of a course of conduct and criminality which is significantly more serious than any of the individual charges if they were to be considered in isolation. The overall offending therefore is objectively more serious and this may have a bearing on accumulation and concurrency: R v Forrest (No 2) [2017] ACTSC 83 at [164].

44. I have had regard to s 33(r) of the Sentencing Act as to whether the imposition of any particular penalty would cause particular hardship to the appellant. By consent and with the Court's leave, the appellant and the respondent led further evidence before this Court of the fact that upon conviction and sentence, the appellant was requested by the Australian Border Force to leave Australia by a certain date, otherwise he would be taken into detention with a view to deportation. The request was made before the appellant had exhausted his right of appeal and before the appellant had otherwise served the sentence that had been imposed. It appears to have been premature, particularly in light of the fact that the appellant has been successful on appeal.

45. It is also not clear why the Director did not take steps to ensure the continued presence of the appellant in the Territory for the duration of the criminal justice process. As the appellant submitted, this could have been achieved by the Director making an application for a Criminal Justice Stay Certificate to the Department of Home Affairs, and the appellant indicated that he had made such a request after he was approached by Australian Border Force regarding his deportation. For whatever reason, as no such application was made, the appellant had little option other than to leave Australia and do what he could to prepare and present his case from China.

46. The respondent provided the Court with statistics for sentences imposed on male offenders 21-25 years who have contravened s 114C of the Crimes Act, where there are multiple offences and they have entered plea of guilty. Although these statistics show that a good behaviour order and fully suspended sentence was the sentence imposed in five out of the six cases, in the present case, I do not consider them to be of great assistance in resentencing. This is because there are so few cases from which to gauge any appropriate range and I am not aware of whether the offenders in each of those cases had any mitigating features similar to the appellant's circumstances, such as a lack of any criminal history and good prospects of rehabilitation.

47. Taking all these matters into account, I am of the view that no sentence other than a term of imprisonment is appropriate; that each charge warrants a period of two months' imprisonment; that, having regard to the principle of totality and the rolled-up nature of the charges, the sentences should be partly concurrent (in respect of CC18/6781 and CC18/6782) and partly cumulative (in respect of CC18/6783); and that each sentence should again be fully suspended upon the entering into of a good behaviour order.

48. Lest there be any doubt about it from the orders set out below, the aggregate period of imprisonment, fully suspended, is 3 months, from 8 May 2019 to 7 August 2019.

49. As to the period of community service, the appellant offered to perform any order of community service in China as a means of complying with an order that will presently be unenforceable against him due to him now being outside of the jurisdiction. In my view, increasing the amount of community service hours to be performed in respect of each charge, should the appellant ever return to Australia, is not warranted either to properly reflect the criminality of the charge or as a means of general or specific deterrence. The appellant's service to the community as a means of punishment should be significant, but there comes a point where nothing further will be gained by increasing the hours of service the appellant should give back to the community. I consider the appropriate balance to be 50 hours in respect of each charge, or 150 hours in total. Any hours that the appellant had served by way of community service prior to leaving Australia should be taken into account as part of that total service.

50. As the reparations order made in the court below reflected the monetary amount of the loss to AGA, I consider that an order in the same terms should be made.

(1) The appeal is upheld and the orders of the Magistrates Court on 9 August 2018 are set aside.

(2) In respect of charge CC18/6781, the appellant is sentenced to imprisonment for a term of two months commencing on 8 May 2019 and ending on 7 July 2019, to be fully suspended upon the appellant entering into a good behaviour order for a period of 12 months. The appellant is to be placed on probation and subject to the supervision of the director of Corrective Services and to obey all reasonable directions of the said director for a period of 12 months or such lesser period as deemed appropriate by the said director. The appellant is to perform community service work of 50 hours within a period of 12 months.

(3) In respect of charge CC18/6782, the appellant is sentenced to imprisonment for a term of two months commencing on 8 May 2019 and ending on 7 July 2019, to be served concurrently and fully suspended upon the appellant entering into a good behaviour order for a period of 12 months. The appellant is to be placed on probation and subject to the supervision of the director of Corrective Services and to obey all reasonable directions of the said director for a period of 12 months or such lesser period as deemed appropriate by the said director. The appellant is to perform community service work of 50 hours within a period of 12 months.

(4) In respect of charge CC18/6783, the appellant is sentenced to imprisonment for a term of 2 months commencing on 8 June 2019 and ending on 7 August 2019, to be fully suspended upon the appellant entering into a good behaviour order for a period of 12 months. The appellant is to be placed on probation and subject to the supervision of the director of Corrective Services and to obey all reasonable directions of the said director for a period of 12 months or such lesser period as deemed appropriate by the said director. The appellant is to perform community service work of 50 hours within a period of 12 months.

(5) The appellant is to make reparation to Allianz Worldwide Partners, of 74 High Street in Toowong, in the sum of $11,692.15, within 12 months from the date of this order at the rate of at least $1000 per month, with the first of such payments to be made by 4pm on 8 June 2019 and each month thereafter.

I certify that the preceding fifty-one [51] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Associate Justice McWilliam.