LY v REGINA

LEGISLATION CITED: Crimes Act 1914 s29(D) Criminal Code Act 1995 s134.2

R v Acosta [1999] NSWCCA 334 R v Bernier (1998) 102 A Crim R 44 CASES CITED: R v PP (2003) 142 A Crim R 369 R v Storey (1996) [1998] 1 VR 359 at 366 Webb v O'Sullivan (1952) SASR 65

PARTIES: Huy Hoang LY REGINA

COUNSEL: P Byrne QC with J R Young (Applicant) L K Crowley (Crown)

SOLICITORS: Bilias & Associates (Applicant) Commonwealth Director of Public Prosecutions (Crown)

IN THE COURT OF CRIMINAL APPEAL 2006/2747

ADAMS J HOWIE J PRICE J

16 February 2007 Huy Hoang LY v Regina Judgment 1 ADAMS J: On 23 June 2006 the applicant, Huy Hoang (Peter) Ly, pleaded guilty to eighteen charges under s29D of the Crimes Act 1914 of defrauding the Commonwealth of Australia, eighteen charges under s134.2 of the Criminal Code Act 1995 of obtaining a financial advantage by deception, five charges of attempting to defraud the Commonwealth under ss7 and 29D of the Crimes Act 1914 and one charge of attempting to obtain a financial advantage by deception under ss11.1 and 134.2 of the Criminal Code Act 1995, in all, fifty-five charges. They involved various sums of money and were committed on a number of occasions in 2000 and 2001. The applicant pleaded guilty on committal and adhered to his pleas in the District Court. In respect of counts 1, 2, 6, 10, 14, 15, 17, 18, 22, 23, 25-31, 34 and 38-55, the applicant was sentenced to imprisonment for a period of two years to date from 7 July 2006 and expire on 6 July 2008. In respect of counts 3-5, 12, 13, 16, 20, 21, 24, 33, 36 and 37, the applicant was sentenced to a period of two years and six months' imprisonment to date from 1 January 2008 and expire on 30 June 2010. In respect of counts 7-9, 11, 19, 32 and 35 the applicant was sentenced to a term of imprisonment for three years to commence on 7 July 2009 and expire on 6 July 2012. The overall term was, therefore, a sentence of six years' imprisonment. A non-parole period of four and a half years commencing on 7 July 2006 and expiring on 6 January 2011 was imposed and an order directing the applicant to be released to parole on 6 January 2011 was made. The applicant was also ordered to make reparation to the Commonwealth by way of payment of money in the sum of $328,692.27. 2 Following the imposition of these sentences, the learned sentencing judge explained that he had divided the charges into three groups. In the first group, where a sentence of two years' imprisonment was imposed, were those offences where the applicant obtained or sought to obtain sums of money up to $7,000. The second group of charges comprised those where the amounts obtained or sought to be obtained exceeded $7,000 but were less than $15,000. The third group of sentences comprised those charges where the amounts obtained or sought to be obtained exceeded $15,000. It seems that this intention was not entirely effected, since the first group of sentences contained one (count 34) which involved the sum of $7,602.03. This may have been a mistake for count 32 which was included in the third group but which involved only $381.50. In the second group, charge 33 related to an attempt to defraud the Commonwealth of $19,664.98 and, according to the sentencing scheme, should have been in the third group. It may be that the count specified 33 was a mistake for count 34 which, as I have already mentioned, involved $7,612.03. I think that these were merely errors of transcription and, since the appeal is current in this Court, ought to be corrected to give effect to what, if I may say so, was a rational scheme which the learned sentencing judge intended to apply. Ignoring the amount of fine able to be imposed, the maximum term of imprisonment for all offences was ten years.

The Facts 3 An agreed statement of facts was tendered. The following is a brief summary of those to which the learned sentencing judge referred. The applicant was a tax agent who lodged false income tax returns on behalf of taxpayer clients who had left Australia and in respect of a company over which he had complete control. As a consequence, forty-nine tax refunds totalling $328,692.27 was paid to the applicant. But for the intervention of the Australian Tax Office, the applicant would have obtained further refund payments amounting to $66,426.99. None of these moneys has been recovered by or reimbursed to the Commonwealth. The applicant was on bail after his arrest until the date of his sentence. The learned sentencing judge set out in some detail the modus operandi of the applicant. For present purposes, it is unnecessary to say more than that the claims made on the Australian Tax Office for refunds were fictitious and involved invented taxation returns using the applicant's clients' personal details.

Subjective Features 4 The applicant is now forty years of age and was aged thirty-three at the time of the first of the offences. He had no prior criminal record. The applicant gave evidence on his sentence proceedings. His Honour said that he "was impressed by his evidence, in that I am satisfied of the contrition and remorse that he has demonstrated at least since the time when the matter was presented to the Local Court and as reflected in his early pleas of guilty". At the same time, the learned sentencing judge noted (and I think, with respect, rightly) that his contrition had not extended to assisting the prosecution in the investigation of the matter as, for example, by submitting to an interview before or when he was charged. 5 The applicant was born in Vietnam, in what was then Saigon, and is the third eldest of six children, all males. He has a son aged three and a half years at the time of sentence and appropriate arrangements had been made between him and his partner concerning access. The learned sentencing judge noted that the applicant would find it distressing to have his access to his young son limited by virtue of his imprisonment. The applicant and his family came to Australia in 1979 in difficult circumstances. His parents' assets in Vietnam had been confiscated and, had they not escaped, they would have been required to perform forced labour. The family managed to get to Indonesia where they spent nine months in a refugee camp and then came to Australia as refugees in May 1979. When the applicant arrived he spoke only Cantonese and Vietnamese. However, he learnt English, attended high school and began studying towards admission to a science degree, during his university years working as a kitchen hand and selling from a fruit stand at Flemington Markets. He changed his academic goal to accountancy and was ultimately awarded an associate diploma of accountancy. Whilst studying he obtained employment with an accounting firm at Campsie and was issued with a tax agent's licence in 1997. 6 Regrettably, the applicant did not succeed as an accountant, at least, not to the extent which he desired. He especially felt his lack of success by comparing the successes of his brothers. Despite working hard, indeed up to seven days a week for twelve hours a day, he did not manage to earn more than $20,000 to $30,000 a year. He felt a failure. He commenced to gamble in order to obtain money for business activities but it is clear that he became addicted, gambling more and more and, as is almost invariably the case, seeking unsuccessfully to recover that which he continued to lose. He said that in the years 2000 and 2001 he was spending every night at the casino and was also betting through the TAB. 7 The applicant became aware that the Taxation Office was investigating him when a search warrant was executed at his office. He said in his evidence that he was not aware of the seriousness of his gambling up until the execution of the search warrant but, as his Honour accepted, he demonstrated some insight by having himself voluntarily excluded from the casino at a sports club where he would gamble on occasions. When he took this action he was advised by casino staff to see a counsellor about his gambling and he eventually saw a psychologist, Mr Jacmon, whose "very comprehensive" report was tendered. As his Honour noted, however, the applicant's consultations with Mr Jacmon occurred in May and June 2006. There is nothing to suggest that he had sought counselling assistance at an earlier time. 8 The applicant expressed shame for his conduct in respect of both himself and his family and his Honour accepted that he had gained significant insight about his attitude to success and thought that, on release, the applicant "would pursue aspirations at a more realistic level and not be so motivated by what he perceives to be the contrast between his success and the greater success…of his siblings". The learned sentencing judge was impressed by the applicant's candour, mentioning in particular the depression about which Mr Jacmon wrote in his report, that began when the search warrants were executed and his wrongdoing was exposed. His Honour was impressed by the lack of any attempt by the applicant to attribute his criminal conduct to this condition. 9 The older brother of the applicant, a solicitor in New South Wales since 1996, gave evidence about the family circumstances. In particular, he agreed that he would guarantee the payment of $100,000 offered by the offender in part payment of his fraud, to be obtained by loans from family members. Although his Honour was initially sceptical about the applicant's offer in this regard, and the guarantee by his brother, he concluded that in the circumstances some weight should be given to the representation. In my view, the effect of the language used in this respect by the learned sentencing judge is that he believed and gave some significance to the offer of partial recompense. 10 The learned sentencing judge accepted, I think, the truthfulness of the evidence of a friend of the family and statements contained in a number of written testimonials as to the otherwise positive character of the applicant and the support available to him from his family. His Honour set out the following as a fair summary of the applicant's situation - "Mr Ly views his future and current circumstances as extremely dire. He accepts full responsibility for his offending behaviour and has discussed his situation openly and frankly with his service. He has identified some contributing factors including pressure he felt from his community and the demands imposed upon himself to have the appearance of success. In spite of these factors, he ultimately blames himself for the offence. He starkly describes his grim view of his future and poor potential for employment, however denies a suicidal ideation." 11 It is submitted in this appeal that the material before the sentencing court, including especially the report of Mr Jacmon, established a powerful case that, at the time the applicant committed the offences, he was suffering from such a serious depressive condition that his judgment was severely impaired. It is contended that his objective criminality was therefore diminished and that this should not be regarded as a case in which the applicant's fraudulent conduct was motivated purely by greed but, rather, one where an essentially decent person engaged in serious crime in order to overcome what appeared to have been a severe case of depression. The learned sentencing judge's analysis of Mr Jacmon's report was, with respect, both careful and thorough. His Honour concluded - "As a reflection of the present circumstances of the offender the report may well have some value. However, it is a report prepared in respect of someone who was assessed four years after the misconduct which has brought him before the court. The stress and anxiety that the offender has no doubt experienced between 31 July 2002 and up to the present time when he is anticipating incarceration has no doubt had a significant impact upon whatever tests he undertook and the clinical presentation of which Mr Jacmon writes. The conclusions that are expressed in the report in my assessment do not sit comfortably with the organisation and execution of the various frauds committed by the offender in this case. Nor do they sit well with the assessment of the offender's brother and the representations in the pre-sentence report and the written references and what I perceive to be the perception of the offender held by his family as presented to me by way of the evidence given by his brother … " 12 In my view, his Honour was entitled to conclude that the applicant was not significantly affected by any compromising mental condition at the time he committed the offences. His Honour accordingly concluded that, accepting the evidence of the applicant, the offences "were committed by a young man who, with his family, left the most difficult of circumstances and at great risk made his way to this country where the family has prospered…[where his] siblings…are driven to succeed…[and] the offender, who has not been as successful, might have suffered in his perception of self-worth and…[fell] into the trap of embracing a philosophy for success in which he sought to present an image of success and access to wealth which was no more than that, a mere image". In my opinion, this characterisation of the applicant's motivation was both fair and accurate. 13 His Honour noted that the applicant's fraud involved planning, and organisation, the creation of false particulars of employment, income and tax deduction and the provision of facilities for the receipt and distribution of the money paid out by the Tax Office. More than one methodology in the perpetration of the frauds was employed. 14 With respect, I can see no error in his Honour's characterisation of either the objective circumstances of the applicant's offences or the subjective features affecting him. Accordingly, I would reject the contention that greater weight should have been given by the learned sentencing judge to the applicant's psychological condition. 15 It is also contended that the learned sentencing judge did not give sufficient weight to the offer of part recompense. As the extracts from the above reasons for sentence demonstrate, this contention should not be accepted. At all events, the offer cannot have much significance in the assessment of the appropriate sentence in the circumstances of this case.

The overall sentence 16 The learned sentencing judge said that he would have imposed an overall sentence of eight years but for the allowance of a utilitarian discount of 25%. His Honour said that the "ratio between the non-parole period and the parole period should be one of two-thirds". It will be seen, that this proportion would have resulted in a non-parole period of four years rather than the non-parole period of four and a half years in fact imposed. It may be that his Honour simply meant that the balance of term was to be one-third of the non-parole period, this being the result of his Honour's calculation. The applicant contends that, generally speaking, the non-parole period in Commonwealth offences should be set within a range of approximately 60% to 66% of the head sentence, citing in support of that contention R v Bernier (1998) 102 A Crim R 44, where the Court said (at 49) - "…The norm for non-parole periods is in the range of about 60 percent to 66 and two-thirds percent. One factor which may be material is the length of the head sentence and the position in the permissible range. Circumstances may exist which make it appropriate to move outside the usual range for non-parole periods. The process is not mathematical or rigid, and often requires a finely tuned assessment. The determination of the appropriate non-parole period, as of the head sentence, should be approached … with caution and flexibility …" 17 It seems to me, that his Honour had the upper range specified in Bernier in mind and, with respect, either miscalculated or misapplied the ratio. It was said in R v Acosta [1999] NSWCCA 334 at [12] that a non-parole period which represented 75% of the sentence "should be reserved for the worst class of case". It seems to me that the likely explanation is that his Honour simply miscalculated. Be that as it may, I would be disposed to correct the sentence by varying the ratio to accord with his Honour's expressed intimation that it should comprise two-thirds of the total sentence. 18 The applicant also contends that the sentence is manifestly excessive, pointing in this regard to the starting point for the overall sentence of eight years. The objective circumstances were serious. The number of offences was considerable and the offending extended over a lengthy period, involving the creation of false returns. The taxation system depends upon the Australian Tax Office being able to trust returns submitted by tax agents, and the applicant abused the privilege extended to him in this regard. He also abused the confidentiality of the private information given to him by his clients for the purpose of preparing and submitting taxation returns on their behalf. 19 The applicant does not contend that the individual sentences were inappropriate (although it is difficult and, I think impossible to justify a sentence of two years imprisonment for charge thirty two, which involved only $381.50). 20 This Court has, over time, been required to consider the propriety of sentences in a significant numbers of cases involving frauds on the revenue (especially taxation, Medicare and social security), frauds by professional persons such as accountants, solicitors and investment advisers and frauds by employees of banks and other financial institutions. A number of these cases have been cited to the Court by the parties. It is unnecessary to analyse them. It is sufficient to state that the overall sentence passed on the applicant is within, although at the top, of the range of sentences demonstrated in those appeals, assuming that the learned sentencing judge took as his starting point for assessing the total criminality involved in the offences as a term of eight years' imprisonment. Of course, the mere fact that a sentence is within the statistical range of other sentences imposed for similar offences does not demonstrate that it is an appropriate exercise of judicial discretion in the particular case, just as a sentence that is outside that range is not thereby necessarily wrong. However, I am not persuaded that in the circumstances here an overall term of eight years, before application of the utilitarian discount, is so excessive as to demonstrate that the discretion of the learned sentencing judge miscarried. 21 I wish to comment, in parenthesis, that I find it difficult to see why all the requirements of sentencing tending to increase a sentence - retribution, denunciation, general and personal deterrence - would not have been adequately satisfied by an overall sentence (before discount) of six years or even somewhat less. I am fortified in this view by a review of the Judicial Commission statistics relating to the offences involving multiple armed robberies. To my mind it is important to impose sentences that are the minimum required to satisfy all the purposes of criminal justice, accepting as I do that different minds might quite reasonably differ on what sentence in particular circumstances satisfies those requirements. This principle, called the principle of parsimony in the judgment of Napier CJ in Webb v O'Sullivan (1952) SASR 65 at 66 and commonly used in Victoria (see, eg, R v Storey (1996) [1998] 1 VR 359 at 366; R v PP (2003) 142 A Crim R 369 at 374) seems to me to be useful notion against which to check whether a sentence is greater than is really called for. After all, to impose a more severe sentence than is necessary in the particular circumstances is, ex hypothesi, to intrude other inappropriate purposes into the administration of criminal justice. 22 However, it follows from what I have already said that the overall sentence was not manifestly excessive and, in respect of what I might usefully call the head sentence, the appeal must be dismissed. The non-parole period should be adjusted to conform to the learned sentencing judge's expressed intention to impose a non-parole period of two thirds of the overall sentence. We should also correct the transcription errors to which I have referred.

Proposed orders 23 I propose the following orders -

(i) leave to appeal is granted; (ii) the sentence on count 32 is quashed and substituted therefor is a sentence of two years' imprisonment commencing on 7 July 2006 and expiring on 6 July 2008; (iii) the sentence on count 33 is quashed and substituted therefor is a sentence of three years' imprisonment commencing on 7 July 2009 and expiring on 6 July 2012; (iv) the sentence on count 34 is quashed and substituted therefor is a sentence of two years' and six months' imprisonment commencing on 1 January 2008 and expiring on 30 June 2010;

(v) the non-parole period is quashed and substituted in lieu thereof a non-parole period of four years commencing on 7 July 2006 and expiring on 6 July 2010, which is the earliest date upon which the applicant is eligible to be released on parole;

(vii) in other respects the appeal is dismissed. 24 HOWIE J: I agree. 25 PRICE J: I agree.

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.