Court of Appeal (Vic)|2010-05-05|Before: MAXWELL P, NETTLE, NEAVE, REDLICH and WEINBERG JJA

Markovic v The Queen; Pantelic v The Queen [2010] VSCA 105 (5 May 2010)

R v Markovic (Unreported, County Court of Victoria, Judge Ross, 22 July 2009); R v Pantelic (Unreported, County Court of Victoria, Judge Lacava, 19 May 2009)

CRIMINAL LAW - Appeal - Sentence - Dishonesty offences - Family hardship - Whether reasonably open to conclude that circumstances not exceptional - Whether sentence manifestly excessive - Leave to appeal refused.

CRIMINAL LAW - Appeal - Sentence - Child pornography - Accessing, transmitting, making available - Two years' imprisonment - Release on recognisance after 12 months - Family hardship - Whether circumstances exceptional - Whether sentence manifestly excessive - Leave to appeal refused.

1 There must always be a place in sentencing for the exercise of mercy 'where a judge's sympathies are reasonably excited by the circumstances of the case'.[1] This is a proposition of long standing and high authority, repeatedly affirmed in this Court.[2]

2 The issue raised by these applications concerns the circumstances in which an offender can legitimately seek an exercise of mercy on the ground that his/her imprisonment is likely to cause hardship to members of his/her immediate family or other dependants. (In these reasons we will refer to third party hardship of this kind as 'family hardship'.)

3 It has long been the position at common law that, unless the circumstances are shown to be exceptional, family hardship is to be disregarded as a sentencing consideration. The contention advanced by each of the present applicants, however, was that even if the circumstances of family hardship were not adjudged exceptional, a sentencing court could nevertheless be called on to exercise - on that ground - what is sought to be characterised as a 'residual discretion of mercy'. Indeed, Mr Markovic argued that failure to extend sufficient 'residual' mercy on the ground of family hardship was an appealable error.

4 Because of the importance of this issue for sentencing courts, these applications were heard by a bench of five. At the conclusion of the hearing, we announced that each application would be refused and that we would publish our reasons at a later time. These are our reasons for joining in those orders.

5 We have concluded that the established common law position should be reaffirmed. Our reasons may be summarised as follows:

Reliance on family hardship - that is, hardship which imprisonment creates for persons other than the offender - is itself an appeal for mercy.
Properly understood, therefore, the purpose and effect of the 'exceptional circumstances' test is to limit the availability of the court's discretion to exercise mercy on that ground.
Accordingly, there can be no 'residual discretion' to exercise mercy on grounds of family hardship where the relevant circumstances are not shown to be exceptional.
The effect on the offender of hardship caused to family members by his/her imprisonment raises different considerations, to which the 'exceptional circumstances' test has no application.

6 The case law reveals that the 'exceptional circumstances' test was developed in response to several considerations, as follows. First, it is almost inevitable that imprisoning a person will have an adverse effect on the person's dependants. As the New South Wales Court of Criminal Appeal (Gleeson CJ) said in R v Edwards:[3]

There is nothing unusual about a situation in which the sentencing of an offender to a term of imprisonment would impose hardship upon some other person. Indeed, ... it may be taken that sending a person to prison will more often than not cause hardship, sometimes serious hardship, and sometimes extreme hardship, to another person. It requires no imagination to understand why this is so. Sentencing judges and magistrates are routinely obliged, in the course of their duties, to sentence offenders who may be breadwinners of families, carers, paid or unpaid, of the disabled, parents of children, protectors of persons who are weak or vulnerable, employers upon whom workers depend for their livelihood, and many others, in a variety of circumstances bound to result in hardship to third parties if such an offender is sentenced to a term of full-time imprisonment.

7 Secondly, the primary function of the sentencing court is to impose a sentence commensurate with the gravity of the crime.[4] Thirdly, to treat family hardship as the basis for the exercise of leniency produces the paradoxical result that a guilty person benefits in order that innocent persons suffer less.[5] Fourthly, to treat an offender who has needy dependants more leniently than one equally culpable co-offender who has none would 'defeat the appearance of justice'[6] and be 'patently unjust'.[7] Hence it is only in the exceptional case, where the plea for mercy is seen as irresistible, that family hardship can be taken into account.[8]

8 Thus, in Polterman[9] the applicant contended, on appeal, that he should not have been imprisoned because, as a result of his having been incarcerated, his wife and six month old daughter were living in poverty. Adam J, with whom Starke and Crockett JJ agreed, said in response:

This Court has so often said when one appeals for mercy on the grounds of hardship to a wife or family that the accused ought to have had regard to that before embarking on a life of crime, and the Court cannot be blamed because it deals with an accused on the merits having regard to the gravity of this offence, the past circumstances, and so on. The Court is not so inhuman as not to be very sorry for those placed in the position of this wife and child because of the criminal activities of the husband, but our task is not to yield to pleas based on sentiment or emotion. However humane we may be we have a duty to perform, and that duty we perform as a Court of Appeal in allowing sentences to stand unless we see something has gone wrong in the sentencing.[10]

Hardship to [the applicant's] family and loved ones is not normally a circumstance which can lead a Court to reduce a sentence. There are, no doubt, some occasions when it is appropriate to do so ... The occasions are rare, and I doubt if it is possible to describe them in compendious terms.[12]

10 To the same effect were the observations of Winneke P (with whom Brooking and Charles JJA agreed) in R v Panuccio.[13] In response to a submission that the sentencing judge had failed to give proper weight to the effect that the applicant's incarceration would have upon his elderly and disabled parents, his Honour said:

Although the court is not, both as a matter of compassion and common sense, impervious to the consequences of a sentence upon other members of the family of a person in prison, such factors will need to be 'exceptional' or 'extreme' before the court will tailor its sentence in order to relieve the plight of those other family members. Such a principle is clearly an obvious one, because the court's primary function is to impose a sentence which meets the gravity of the crime committed by the person who is being sentenced. There will rarely be a case where a sentence of imprisonment imposed does not have consequential effects upon the spouse, children or other close family members who are dependent in one form or another upon the person imprisoned.

Thus it has been often stated that it is a general principle of sentencing that the court should usually disregard the impact which the sentence will have upon the members of a prisoner's family unless exceptional circumstances have been demonstrated. The principle has been so often stated that it does not need repeating ... It goes without saying, I think, that the graver the crime for which the prisoner is being sentenced the more difficult it will be to find exceptional circumstances, because the relief usually sought and generally necessary to alleviate the plight of the relevant family members affected will require absolution from incarceration.[14]

11 The exceptional circumstances test has been adopted throughout Australia as governing the position at common law.[15] There is likewise a uniform national position in relation to sentencing for Commonwealth offences. The requirement in s 16A(2)(p) of the Crimes Act 1914 (Cth) - that the Court consider 'the probable effect' of the sentence on family and dependants - has been construed as being subject to the exceptional circumstances test.[16]

Reliance on family hardship is a plea for mercy

12 The applicants' contention - that family hardship attracts a 'residual discretion of mercy' notwithstanding the absence of exceptional circumstances - is founded on a misconception. It fails to recognise that the traditional common law approach treats family hardship as itself raising a question of mercy. As the Court of Criminal Appeal said in Polterman,[17] reliance on family hardship is an 'appeal for mercy'.

13 Properly understood, therefore, the avowed purpose - and the effect - of the 'exceptional circumstances' test is to limit the availability of the court's discretion to exercise mercy on grounds of family hardship. This point was eloquently made by Wells J in R v Wirth:[18]

Hardship to spouse, family, and friends, is the tragic, but inevitable, consequence of almost every conviction and penalty recorded in a criminal court ... . It seems to me that courts would often do less than their clear duty - especially where the element of retribution, deterrence, or protection of society is the predominant consideration - if they allowed themselves to be much influenced by the hardship that prison sentences, which from all other points of view were justified, would be likely to cause to those near and dear to prisoners.

But it has often been remarked that the strength of our law lies in the willingness of judges, when applying a principle, not to carry it past the point where a sense of mercy or of affronted common sense imperatively, demands that they should draw back. So it is proper that I should here add that, in my opinion, hardship likely to be caused by a sentence of imprisonment under consideration ought to be taken into account where the circumstances are highly exceptional, where it would be, in effect, inhuman to refuse to do so. ... . For example, if it were demonstrated to the satisfaction of the court that to send a man to prison would, without much doubt, drive his wife to suicide, it would be a steely-hearted judge who did not, however illogically, at least try to meet the situation by suitably framed orders as to penalty. But further than that, in my judgment, courts should not go.[19]

14 As Redlich JA pointed out during the hearing, family hardship is not a mitigating factor properly so-called, since it concerns neither the offender nor the offence.[20] As we have said, reliance on family hardship is properly to be understood as a request for mercy. Professor Fox made this clear in his illuminating article entitled 'When Justice Sheds a Tear: The Place of Mercy in Sentencing',[21] to which Redlich JA drew the attention of counsel in this appeal. Professor Fox said:

The true privilege of mercy is to be found in the residual discretion vested in each sentencer which allows a downward departure from the principle of proportionality outside the principles of mitigation. It can be utilised in exceptional circumstances to allow weight to be given to factors which are ordinarily not regarded as relevant mitigating considerations. It allows sentencers to give effect to significant, but as yet unaccepted, circumstances which, in their opinion, warrant leniency.[22]

And, more directly relevant to the present question:

Third party hardship is thought to provide a better justification for an act of pure mercy since it arises less out of compassion for the offender than pity for those he or she has directly or indirectly harmed.[23]

15 The common law requirement of 'exceptional circumstances' accepts that an offender is entitled to call for an exercise of mercy on the ground of family hardship, but confines the exercise of that discretion to a case where the circumstances are shown to be exceptional. Once that is understood, it becomes plain that there can be no residual discretion to be 'merciful' on grounds of family hardship in a case where the threshold test of 'exceptional circumstances' is not satisfied. For it is the 'residual discretion' to exercise mercy which is engaged when - but only when - the test is satisfied.

16 On this analysis, the applicants' appeal to the 'residual discretion' of mercy, in the absence of exceptional circumstances, is a contradiction in terms. Ex hypothesi, that appeal has already been made - and rejected.

17 Any other conclusion would rob the test of its utility and subvert its rationale. This can readily be demonstrated by examining the implications of the applicants' argument. As senior counsel for Mr Markovic acknowledged,[24] the approach for which he contended would enable any offender wishing to rely on family hardship to advance two submissions in the alternative. The first submission would be that the circumstances were exceptional; the second would be that, even if the circumstances were not exceptional, they nevertheless called for an exercise of mercy. The sentencing judge would simply have to decide where on the scale of family hardship the circumstances of the particular case fell. As senior counsel explained this approach:

... [I]f one establishes 'exceptional circumstances' it will have the consequence of producing a big reduction in the sentence. If one fails on that and one merely succeeds therefore on mercy, it will produce a lesser sentence but not one reflecting a big reduction but a smaller reduction.

18 In short, acceptance of the applicant's argument would destroy the 'exceptional circumstances' test. As senior counsel acknowledged, there would be little point in the sentencing judge deciding whether the circumstances were 'exceptional', since the judge would need to take the circumstances into account whether they were exceptional or not.

19 Moreover, as Weinberg JA pointed out in the course of argument, the approach for which the applicants contend would create a real risk of inconsistent treatment of offenders. His Honour gave the example of two female offenders, each having children at home. The judge dealing with the first offender applies the exceptional circumstances test and regards herself as obliged to disregard the hardship because, although sympathetic to the difficulties facing the children, she cannot accept that the circumstances are to be regarded as exceptional. The judge dealing with the second offender reaches the same conclusion about the absence of exceptional circumstances but, precisely because he feels sympathy to the children, decides to exercise some 'residual' discretion of mercy. The inconsistency is manifest. By contrast, to maintain the 'exceptional circumstances' test, as the gateway to an exercise of mercy on grounds of family hardship, ensures so far as possible that there will be consistency of treatment.

20 The effect on the offender of hardship caused to family members by his/her imprisonment is a quite separate matter. An offender's anguish at being unable to care for a family member can properly be taken into account as a mitigating factor - for example, if the court is satisfied that this will make the experience of imprisonment more burdensome or that it materially affects the assessment of the need for specific deterrence or of the offender's prospects of rehabilitation.[25] These are conventional issues of mitigation, and they are not subject to the 'exceptional circumstances' limitation.

21 The applicants sought to derive support for their arguments from the decisions of this Court in R v Carmody[26] and, more recently, in R v Lane.[27] It is sufficient for present purposes to say that both of those decisions affirm the centrality of the 'exceptional circumstances' test, the full implications of which we have sought to elucidate in these reasons.

22 On 24 April 2009, the applicant pleaded guilty in the County Court at Melbourne to 11 counts, each involving an element of fraud. He was sentenced as follows:

Attempting to obtain a financial advantage by deception

Non-Parole Period: 1y 6m (s 6AAA: 3y)

23 In broad terms, the applicant, over a period between 2005 and 2007, created and used a number of false documents to defraud various business entities. The false documents so created were used by the applicant, and others who acted with him, to obtain seemingly 'legitimate' forms of identification. These false documents were then used to obtain credit, or other benefits, from the victims of the frauds or, in some cases, were intended to be so used.

24 The counts to which the applicant pleaded guilty were brought under both State and Commonwealth law. However, as is generally the case, a single prosecuting agency assumed responsibility for the carriage of the prosecution. In this case, that happened to be the Victorian Office of Public Prosecutions.

The circumstances of the applicant's offending

25 A brief overview of the applicant's offending in respect of each count is as follows.

Count 1 - Section 83A Crimes Act 1958 (Vic) - Falsification of documents

26 On 14 March 2007, the applicant was intercepted by police in St Albans while driving a Honda Accord motor vehicle which he had obtained fraudulently. The circumstances under which that vehicle was obtained led to the charge under count 8, obtaining a financial advantage by deception.

27 The applicant gave the police a false name and produced a forged driver's licence. He was arrested and the vehicle searched. Located within the boot, police found a computer hard drive, an identity card printer and a large quantity of blank identity cards.

28 A search warrant was then executed at the applicant's home in St Albans. Police there discovered a large number of blank, and forged, identity documents. These included German driver's licences, Serbian Birth Certificates, Australian Citizenship Certificates, photo identity cards, a note written under Commonwealth Bank letterhead, and various Residential Tenancy Agreements. Police also found a number of rubber stamps and other items capable of being used in the creation of false documents.

29 An examination of the applicant's computer hard drives revealed that a number of the false documents used in the commission of the applicant's offences had been saved to that hard drive.

Count 2 - Section 82 Crimes Act 1958 (Vic) - Obtaining financial advantage by deception

30 This was a 'rolled-up' count, encompassing a number of separate frauds which the applicant had perpetrated on Telstra.

31 The applicant, over a period between 9 December 2005 and 20 January 2007, had attended various Telstra stores. On each occasion he produced one or more false documents. These were used to establish Telstra mobile phone accounts in false names. Large bills were run up and never paid.

32 The dates of the offending, and the amounts obtained, were as follows:

Count 3 - Section 82 Crimes Act 1958 (Vic) - Obtaining financial advantage by deception

33 On 14 December 2005, the applicant opened a mobile phone account with Hutchinson 3 under a false name. Once again, a substantial bill was run up, and remained unpaid. As a result, the provider sustained a loss of $3,626.79.

Count 4 - Section 24(6) Financial Transaction Reports Act 1988 (Cth) - Opening account with cash dealer in false name

34 On 3 February 2006, the applicant opened an account with the ANZ Bank, at Brimbank, in a false name. He provided a fraudulent Certificate of Evidence of Australian Citizenship and a false Health Care Card when completing the 100 point identification check required to open a bank account.

Count 5 - Section 82 Crimes Act 1958 (Vic) - Obtaining financial advantage by deception

35 On 29 September 2006, the applicant, again using a false identity, purchased a Harley Davidson motorcycle from Peter Stevens Motorcycles in Elizabeth Street, Melbourne. He obtained finance in the sum of $26,664.89 from Yamaha Motor Finance Australia Ltd for that purchase.

Count 6 - Section 24(6) Financial Transaction Reports Act 1988 (Cth) - Opening account with cash dealer in false name

36 On 29 September 2006, the applicant, again using forged documents, opened an account in a false name at the Commonwealth Bank of Australia, at Brimbank. On this occasion, he provided a fraudulent Certificate of Evidence of Australian Citizenship and a false Health Care Card when completing the 100 point identification check required to open a bank account.

Count 7 - Section 82 Crimes Act 1958 (Vic) - Obtaining financial advantage by deception

37 On 26 October 2006, the applicant, using a false identity, established two separate accounts at the Optus World Store in Essendon. Those accounts were never paid. As a result, Optus sustained a loss of $1,873.59.

Count 8 - Section 82 Crimes Act 1958 (Vic) - Obtaining financial advantage by deception

38 On 26 December 2006, the applicant, using a false identity, purchased a 2006 Honda Accord sedan from the Westside Honda dealership at Hoppers Crossing. He obtained finance from Esanda Finance Corporation Ltd. As a result, that company suffered a loss of $48,554.30.

Count 9 - Section 24(6) Financial Transaction Reports Act 1988 (Cth) - Opening account with cash dealer in false name

39 On 29 December 2006, the applicant, using a false identity, opened an account in a false name at the National Australia Bank, at Preston. He provided a fraudulent South Australian driver's licence and a fraudulent Yugoslav Birth Certificate in order to complete the 100 point identification check required to open a bank account.

Count 10 - Sections 321M & 82 Crimes Act 1958 (Vic) - Attempt to obtain financial advantage by deception

40 On 15 January 2007, the applicant attended a Telstra shop, at Werribee, and sought connection to a mobile phone service. He provided a false name and a forged Birth Certificate. However, he declined to provide a home address or employment details. As a result, Telstra refused to establish the connection.

Count 11 - Section 82 Crimes Act 1958 (Vic) - Obtaining financial advantage by deception

41 On 29 January 2007, the applicant attended a Mobile World store, at Victoria Gardens in Richmond. Using a false identity he established a Vodafone mobile phone account. Vodafone sustained a loss of $398.21.

42 The applicant had previously been convicted at the Melbourne Magistrates' Court, in October 1998, of obtaining property by deception, obtaining a financial advantage by deception, using a false document and making a false document. He was fined a total of $1,000 in respect of all of those offences.

43 When the applicant came to be sentenced, he was 43 years of age. He had been born and brought up in Yugoslavia, and came to this country in 1989. He became an Australian citizen in 1994. He had worked in a variety of unskilled positions. At one point, he had operated a café in Sunshine, though that business had lasted for only about a year. It was said, on the applicant's behalf, that the business had been sold because his mother had suffered a stroke and needed his help.

44 A report prepared by Mr Jeffrey Cummins, a forensic psychologist, was tendered on the plea. The applicant told Mr Cummins that the reason that he committed these offences was to help his brother pay off drug debts. The sentencing judge, quite rightly, regarded that explanation as providing no excuse for the applicant's offending.

45 Mr Cummins indicated that there was nothing out of the ordinary about the applicant's mental state. In his opinion, the applicant fully appreciated the wrongful nature of his conduct. There was no suggestion that his moral culpability should be regarded as in any way diminished by virtue of any mental impairment. However, Mr Cummins did note that the applicant had concern for the health and well-being of both his parents. That concern had resulted in a depressive condition for which he had been prescribed medication.

46 On the plea, particular emphasis was given to the hardship that a custodial sentence would cause to the applicant's parents. His mother was then aged 67, and his father 75. They were in Australia on Bridging Visas, and did not have permanent resident status. That meant that they were not entitled to any pensioner benefits. Their only income was a small sum of about $180 per month, paid by the Serbian Government.

47 The parents had previously owned a property in Belgrade, however, it had been sold in 2003 to raise money for treatment of their other son's drug addiction. It was said that the applicant's parents were in dire need, having been reduced to living in a dilapidated caravan at the rear of a property belonging to some friends. The caravan had inadequate heating, and no bathroom facilities. It was claimed that the friends had indicated that they wanted the parents to move out as soon as possible.

48 It was next said that the applicant's mother was wheelchair bound. She suffered from diabetes, hypertension, and kidney failure. As previously indicated, she had suffered a stroke, which resulted in paralysis of the left side of her body. It was submitted that she was now in need of full-time care.

49 As regards the applicant's father, the evidence was that he was too old to care for his wife. The applicant's brother was, of course, addicted to drugs and unable to assist.

50 Finally, it was submitted that the applicant had three children, all of whom were in the care of his estranged wife, and who would be harmed by his incarceration. Previously, he had had frequent contact with his children. His eldest daughter suffered from epilepsy, though the condition appeared to be controlled through medication. His second child suffered from asthma. Sadly, his third child had learning difficulties.

51 It was submitted on the plea that these facts, taken together, amounted to 'exceptional circumstances' of a kind which the law recognised as warranting an extraordinary sentencing disposition. The sentencing judge was invited to take the wholly unusual course of not sending the applicant to prison, but imposing instead a suspended sentence.

52 That submission was rejected. His Honour was not persuaded that the circumstances set out above were, in any relevant sense, 'exceptional'. Although his Honour was not prepared to find 'exceptional circumstances', he did say that the evidence justified 'some merciful tempering' of the sentence to be imposed. He then said that he took into account the applicant's plea of guilty, which entitled him to a discount, primarily on a utilitarian basis. He also had regard to the delay which had ensued from the time of the applicant's arrest. However, he did not regard that delay as 'inordinate'.[28]

53 His Honour described the applicant's offending as indicative of 'persistent and deliberate criminality'.[29] He said that the applicant's clear intent had been to present traders with forged identification documents that could not be traced back to him. While the individual amounts defrauded may not have been large, the applicant's criminality was not to be judged solely by reference to that criterion.

54 The sentencing judge concluded that the scale and nature of the applicant's offending did not allow for a wholly suspended sentence. He then sentenced the applicant as set out earlier in these reasons for judgment.

55 The applicant relied upon the following grounds in support of his application for leave to appeal:

The learned sentencing judge erred in finding as a fact that the Applicant had himself personally made each and all of the false documents the subject of Count 1.
The learned sentencing judge erred in finding as a fact that the Applicant 'ran up the bills' the subject of the telephone accounts the subject of Counts 2, 3 & 7.
The learned sentencing judge erred in failing to classify the circumstances in the case before him as occasioning 'exceptional hardship' to the Applicant's parents such as to:

(a) constitute a matter in mitigation of sentence; and

(b) reduce the period of imprisonment required to be immediately served by the Applicant.

The learned sentencing judge erred in failing to extend mercy, or a sufficiently greater degree of mercy, to the Applicant by reason of the circumstances of the Applicant's parents, even if those circumstances fell short of 'exceptional circumstances'.
The learned sentencing judge failed to give any, or sufficient, weight to the hardship which would be suffered by the Applicant's parents consequent upon the incarceration of the Applicant.
The sentence imposed (namely, both the Total Effective Sentence and the non-parole period) is, in all the circumstances of the case, manifestly excessive.

Ground 1 - Count 1 - Applicant not personally responsible for creation of all false documents

56 In his reasons for sentence, the sentencing judge said:

This was quite brazen, deliberate and sustained criminal conduct and it was involved in phases of the behaviour proven against you. I refer to Count 1 which would appear to involve you obtaining the stamps and templates of the false documents and going to the trouble to make them and then using them to obtain the financial advantage as you frequently did...[30]

57 It was submitted that the sentencing judge had erred by over-stating the applicant's role in relation to count 1. Counsel submitted that, although the applicant may have acted in concert with others who manufactured the forged documents, there was no evidence that he personally had done so. Moreover, it was submitted that this in fact was not the case. It was contended that this amounted to a material error, and meant that the sentencing discretion had miscarried.

58 In response, the Crown submitted that, when the sentencing judge spoke of the applicant having 'made' the documents, he had not intended to state that as a literal fact. All that his Honour meant was that the applicant was complicit in the manufacture of these documents. That was an accurate statement.

59 In that regard, counsel referred to Osland v The Queen,[31] where McHugh J observed that 'each of the persons acting in concert is equally responsible for the acts of the other or others'.[32]

60 A mis-statement as to a material fact is, of course, capable of vitiating the exercise of a sentencing discretion.[33] However, not every error of that kind will have that effect.

61 In our opinion, there is nothing to indicate that the sentencing judge misapprehended the applicant's moral culpability in respect of count 1. In any case which rests upon complicity through acting in concert, each participant in the commission of the offence is equally liable for the acts of his or her co-offenders.

62 There may be some cases where the levels of moral culpability differ. For example, in an armed robbery, it might be said that the driver of the getaway car is less culpable, for sentencing purposes, than those who enter the bank wielding guns. It is the gun wielding which more directly leads to the trauma to victims, a central aggravating feature in such crimes.

63 Falsification of documents, as alleged in count 1, seems to us to be in a different category. In such a case, where there is a plan for the false document to be used as part of a systematic fraud, it matters little who, physically, created it. In that context, each participant in that plan would ordinarily be as culpable as the others.

64 In addition, we note that it was not submitted to the sentencing judge on the plea that the applicant should receive a lesser sentence on count 1 because he personally did not manufacture the falsified documents. Nor was it submitted that he played any lesser role than his co-offenders in the commission of that offence. In those circumstances, we would be reluctant to entertain this point.

Ground 2 - Counts 2, 3 & 7 - The statement that the applicant 'ran up the bills'

66 In his reasons for sentence, the sentencing judge said:

The offending to which you pleaded guilty comprises examples of you using this bogus identification material to dishonestly mislead and disadvantage a number of businesses ... Count 2 is a rolled up count alleging seven occasions between 9 December 2005 and January 2007 where you used examples of the various false identity documents to which I have referred to dupe Telstra mobile telephone service provider. You obtained the service, ran up bills, did not pay and the accounts were suspended. For some time you effected the purpose for which you used these false documents, that is as far as is possible to avoid identification.

The Crown summary asserts that you obtained some $35,000 credit from this scam and Schedule B attached to the presentment sets out the false names and addresses you used for those purposes.

Count 3, you obtained some $3626 credit from the 3 Mobile phone company using this bogus identification.

...

Count 7, you obtained credit for two accounts with Optus Australia for mobile telephone services. You ran up a bill for $1873 which was unpaid.[34]

Considering the bulk of the counts to which you have pleaded guilty, the only potential [personal] benefit that would appear to have been received from the offending would appear to be the use of mobile phones or perhaps some use of the car or the motorcycle that has disappeared.[35]

68 As was the case with ground 1, the applicant submitted that the sentencing judge had over-stated his role in relation to counts 2, 3 and 7, when he said that the applicant 'ran up the bills'. It was submitted that, although the applicant had established the telephone accounts, it was not he, but his co-offenders, who were responsible for defrauding the telecommunication providers. Once again, it was submitted that this error vitiated the exercise of the sentencing discretion.

69 We are not persuaded by that submission. If the applicant himself did not 'run up the bills', he was certainly a key player in a scheme which was intended to do just that. There is no doubt in our minds that he was fully aware that bills of this order would be incurred. His culpability for these offences was in no way diminished by the fact that his confederates, and not the applicant personally, went on to perpetrate the frauds that were committed. The applicant armed them with the means of doing so, with full knowledge of what was to occur.

70 Finally, we note again that no attempt was made on the plea to rely upon the fact that the applicant did not personally carry out the ultimate fraud, as mitigation. The point was not regarded as having any significance below, and should not now be given any credence.

71 It was for these reasons that we concluded that ground 2 was devoid of merit.

72 Ground 3 complains that the sentencing judge erred in declining to accept that there were 'exceptional circumstances' in this case.

73 As previously indicated, his Honour rejected the submission that he should impose a wholly suspended sentence because of the hardship that imprisonment would cause to the applicant's parents. He said:

Mr Georgiou argued that these facts constituted exceptional circumstances. It is clear that any incarceration will impose hardship on the household which would appear to comprise your mother, your father and your brother. However, in my judgment, the material does not establish exceptional circumstances such as would deflect the court away from a term of imprisonment and in this conclusion I have regard to the provisions of the Victorian and Commonwealth legislation, which statutes require the court to consider the impact of a term of imprisonment on family members. However, the awareness of your mother's predicament, in particular the difficulties that your household will encounter, and your children's loss of contact with their father, I do believe justifies some merciful tempering of the sentence to be imposed and I have endeavoured to do that.[36]

74 The matters relied upon on the plea as amounting to 'exceptional circumstances' were as follows:

his parents' impecuniosity and lack of social security entitlements;
the fact that his parents had no medical or health insurance;
his mother's paralysis, and lack of mobility;
his mother's need for constant care, which her husband could not provide; and
the dire situation in which his parents found themselves as regards their accommodation, and squalid living conditions.

75 The sentencing judge - who, it must be said, is very experienced in criminal matters - concluded that the parents' situation, sad as it no doubt was, did not give rise to 'exceptional circumstances', and certainly did not warrant the applicant's receiving a wholly suspended sentence.

76 That gives rise to an initial difficulty. There is some uncertainty as to whether his Honour should be understood as having concluded that there were no 'exceptional circumstances' as such, or whether he was doing no more than saying that - whatever the circumstances might have been, 'exceptional' or not - they were not of sufficient weight to avoid the need to impose an immediate custodial sentence. Ground 3 is predicated upon the proposition that his Honour intended to say that there were no 'exceptional circumstances' as such. The ground goes on to contend that if his Honour so concluded, he erred in doing so.

77 Whether or not, in any particular case, family hardship gives rise to 'exceptional circumstances' must be a question of fact and degree. In answering that question, it is necessary to have regard to the admonition, often stated in the authorities, that such cases will be 'rare'. A sentencing judge should also have regard to the many examples in the decided cases of undoubted hardship which have, nonetheless, been held by appellate courts to fall short of 'exceptional circumstances'.[37]

78 In approaching the matter in this way, we are of course conscious of the fact that there are some examples in the authorities where family hardship, including the needs of elderly parents, has been regarded as giving rise to 'exceptional circumstances',[38] and therefore as warranting leniency.

79 The applicant's case seemed to us to be one which approached the threshold of 'exceptional circumstances', but could not be said unequivocally to cross it. It was not a case, for example, where the imprisonment of both parents would leave young children without any parental care,[39] which has often been cited as an example of circumstances which may be viewed as 'exceptional.'[40] Although, as we have indicated, the applicant's parents will undoubtedly suffer significantly as a result of his incarceration, it was properly open to the sentencing judge to conclude that the hardship his imprisonment would cause them fell short of what would amount to 'exceptional circumstances'.[41]

80 We note that senior counsel for the applicant expressly conceded, during the course of argument, that this Court should approach the question as to whether the sentencing judge erred in finding that there were no 'exceptional circumstances' in exactly the same way as it would in determining whether a sentence was manifestly excessive. That is, the judge's finding could only be interfered with if it were shown not to have been reasonably open. That is the approach which has been adopted in New South Wales.[42]

81 In the present case, we accept that it may have been open to the sentencing judge to have found 'exceptional circumstances'. But we are far from persuaded that this was the only conclusion reasonably open to him.

82 It was for those reasons that we rejected ground 3.

83 In substance, grounds 4 and 5, taken together, contend that even if there were no 'exceptional circumstances', the sentencing judge erred in: (a) failing to extend mercy, or a sufficient degree thereof, to the applicant, or - which is much the same thing - (b) failing to give sufficient weight to the hardship that his parents would suffer from his incarceration.

84 We rejected these grounds for the reasons given in Part I of this judgment.

85 The offences to which the applicant pleaded guilty involved organised fraud on a significant scale. He had prior convictions for fraudulent conduct. The individual sentences imposed, the total effective sentence, and the non-parole period were all, in our opinion, well within the range for offences of this kind.

87 On 19 May 2009, Mr Pantelic pleaded guilty to three child pornography offences and was sentenced as follows:

Use of a carriage service to access child pornography material (Criminal Code Act 1995 (Cth) s 474.19(1)(a)(i) )

Use of a carriage service to transmit child pornography (Criminal Code Act 1995 (Cth) s 474.19(1)(a)(iii) )

To be served concurrently with count 3 but cumulatively on count 1

Use of a carriage service to make child pornography material available (Criminal Code Act 1995 (Cth) s 474.19(1)(a)(iv) )

To be served concurrently with count 2 but cumulatively on count 1.

Recognizance: After serving 12 months, to be released on a recognizance in the sum of $5,000 without surety to be of good behaviour for a period of 12 months.

Sentenced as a serious sexual offender on count 3.
Reporting conditions for life pursuant to Sex Offenders Registration Act 2004 (Vic).

88 On 14 March 2008, a covert Australian Federal Police ('AFP') online investigator used an online user name to begin conversations relating to online pornography with the applicant. The applicant provided still and video child pornography images to the AFP investigator (count 2). The applicant also provided the AFP investigator with a password so that the investigator could access some of the files containing child pornography on Mr Pantelic's own computer (count 3). A meeting was organised between the applicant and the investigator, in order to exchange child pornography material and, as the applicant owned his own painting business, to arrange a quote for a paint job at the investigator's office. The applicant was arrested at the meeting.

89 Three computers were subsequently seized from the applicant's residence. Count 1 related to the following evidence, as revealed on examination of three computers seized at the applicant's residence:

• 6, 979 shared images and 104 shared child pornography video files.

• Internet history files revealed that seven child pornography websites had recently been accessed.

90 The total number of images involved in the applicant's offending was 7,952; the total number of videos was 229. The images and videos were categorised into five groups:

1 4,910 images and 25 videos depicting erotic posing by children with no sexual activity.

2 321 images and 51 videos depicting sexual activity between children and solo masturbation by a child.

3 504 images and eight videos depicting sexual activity between adults and children, including sexual penetration of female babies under twelve months of age.

4 2046 images and 137 videos depicting penetrative sexual activity between children and objects.

5 171 images and eight videos depicting sadism or bestiality involving children.

91 A fuller description of these images and videos is given in the sentencing reasons.[43] The description is horrific. As the sentencing judge noted, the images were 'repugnant and abhorrent'. The sentencing judge stated that, although the Crown had 'conceded' that the volume of images was 'not substantial', that fact was 'outweighed by the nature of the imagery and the high level of depravity depicted in them'. (In fact, the Crown prosecutor had said that the number of images 'is not as substantial as a number of matters which have previously been before this Court'. The number of video images was at the 'higher end'.) The applicant was 45 years of age at the time of sentencing.

92 On 31 July 2009, after hearing the application for leave to appeal, Maxwell P gave reasons for concluding that grounds 1-3 were not reasonably arguable. By reason, however, of the family hardship question raised by ground 4, his Honour referred the leave application for hearing by a bench of five. Grounds 1-3 were argued afresh before us but we rejected them, essentially for the reasons given by Maxwell P on 31 July 2009, as follows.

Ground 1: The sentencing judge erred in not ordering at least some concurrency with the sentence on count 1

93 Section 19(2) of the Crimes Act 1914 (Cth) empowers a court to cumulate sentences wholly. It provides that:

Where

(a) a person is convicted of 2 or more federal offences at the same sitting; and

(b) the person is sentenced to imprisonment for more than one of the offences;

the court must, by order, direct when each sentence commences, but so that no sentence commences later than the end of the sentences the commencement of which has already has been fixed or of the last to end of those sentences.

94 The applicant's chief complaint was that the full cumulation of the sentences - between count 1 on the one hand and counts 2 and 3 on the other - was not reasonably justifiable, given that there was what he described as a 'complete temporal overlap' in the offending. In our opinion, temporal proximity is only one of the factors relevant to cumulation. The central issue in cumulation is whether and to what extent the separate counts involve separate criminality which needs to be reflected in the sentencing.

95 It is clear from what the judge said in his reasons that his Honour regarded the offending on count 1 as involving criminality separate and distinct from the offending on counts 2 and 3. In [25] of the Reasons, his Honour stated that:

Whilst the offending in Count 1 alone in normal circumstances might be done in private and therefore confined, to then go on and enable others to access the fruits of that offending or to send the fruits of that offending to others is, I think, conduct that needs to be stopped. It is the kind of conduct that seeks to involve others in the perverted sense of sexual gratification where the victims are young children with whom you will never know and in whom you have no regard whatsoever. The children being unable to look after themselves, the courts must step in to protect them by deterrence when the laws have been shown to have been breached by those who offend as you have.

In our opinion, his Honour was fully entitled to reflect that differentiation in the sentence. It is one thing to look at pernicious material of this kind. It is quite another to involve others and to facilitate access by others to material of this kind.

96 It is not to be forgotten that the amount of cumulation on the sentence on count 1 was only six months (the maximum being ten years.) In the end, the question had to be approached by reference to the second part of the applicant's argument, which was: 'Was there an error in application of the principle of totality?'. That was the issue raised by the second ground.

Ground 2: The sentencing judge erred by failing to properly apply the sentencing principle of totality

97 Counsel for the applicant stated in the outline of submissions that the sentencing judge

does not appear to have made reference (at least explicitly) to the totality principle at any point in his reasons for sentence. It may be that had the judge correctly applied the totality principle, the errors contended for in respect of the orders for concurrency and cumulation might have revealed themselves.

98 Although it is clear that his Honour made no express reference to totality, he had to turn his mind to totality when answering the s 6D question under the Sentencing Act 1991 (Vic). Mr Pantelic was being sentenced on count 3 as a serious sexual offender. His Honour could not have reached the conclusion which he did (that there was 'no need for a disproportionate sentence') unless he had considered what total effective sentence was appropriate for the offending in question. In doing so, his Honour had to take into account the requirement of s 6D(a), that the Court 'must regard the protection of the community from the offender as the principal purpose for which the sentence is imposed [on the serious sexual offender offences]'.

99 Even if that were not the right inference, this ground would only have succeeded if it could have been shown that the sentence imposed in fact breached the principle of totality. It would need to have been shown that the cumulation had produced a result which was manifestly excessive in the sense that it was disproportionate to the criminality involved. Manifest excess was the applicant's third ground.

Ground 3: The individual sentences, the total effective sentence and the minimum custodial term are manifestly excessive

100 We were not persuaded that the individual sentences, the total effective sentence or the minimum term were manifestly excessive. That ground could only have succeeded if it had been shown that no reasonable judge could have imposed this sentence on this person for these offences in these circumstances.[44]

101 In sentencing the applicant, his Honour took into consideration that the applicant:

• had made an early plea of guilty, with full and frank admissions in the applicant's record of interview;

• was a low risk of reoffending, and his chances of rehabilitation 'good';

• had an elderly mother requiring assistance with her daily activities;

• owned his own business, which employed seven people full-time;

• was 'not of limited intelligence', not 'limited socially' and not suffering from any 'psychological disturbance'. The applicant was also in good health.

102 In assessing the gravity of the applicant's offending, his Honour found that the applicant:

• 'displayed pride in what [he] had and seemed to receive pleasure in being able to facilitate another having access to it';

• was 'deliberately visiting [child pornography] sites';

• was 'ego driven'. His offending was not 'passive'. He 'embraced' child pornography;

• 'clearly got some gratification from the child pornographic material [he] accessed on the internet ... and gratification from transmitting it to another person and facilitating that other person to have access to [his] material'. His Honour went on to say that '[t]hat is the essence of these charges'.

103 In sentencing Mr Pantelic, his Honour also referred to the underlying vice of the offences, that is, the very great damage which the making of these images inflicts on the children used in the making of them. Such images are only created because people like Mr Pantelic create a market for the viewing of such images. The importance of general deterrence is well recognised.[45]

104 Having regard to the horrifying nature of the material, the grave crime which underpins child pornography and the applicable maximum penalties, it could not reasonably be said that the individual sentences, the total effective sentence or the minimum custodial term were manifestly excessive.

Ground 4: The learned judge erred by finding that at the time of sentence the applicant's wife was in employment

105 The fourth ground concerned a factual error, which was acknowledged as such by the Crown. The judge said in his sentencing remarks: 'Your wife is in employment'. At the time, the applicant's wife was not in employment. The argument for the applicant was that it was not possible to say with any confidence that the sentence would have been no different had that mistake not been made.

106 The sentencing judge said: 'Should you go to prison, your wife will suffer, as will your business.' The applicant's complaint is that there were likely to be adverse impacts on the family home because of the applicant being the breadwinner and it not being possible for him to service the mortgage when imprisoned, and that it was therefore significant that his wife was unemployed.

107 It is clear from the reasons - and indeed from the argument on the plea - that the question of the hardship for others which would result from the applicant's imprisonment was addressed correctly by the learned sentencing judge. The appropriate concession was made by defence counsel that, whatever hardship was contended for, it could not fall within the very limited category of 'exceptional circumstances'. As noted earlier, that is what s 16A(2)(p) of the Crimes Act 1914 (Cth) has been interpreted as requiring, consistently with the common law.[46]

108 Counsel for the applicant sought to argue, nevertheless, that there was scope for an exercise of the residual discretion of mercy. For the reasons given in Part I, that argument had to be rejected.

[1] R v Osenkowski (1982) 30 SASR 212, 212-3 (King CJ).

[2] Cobiac v Liddy [1969] HCA 26; (1969) 119 CLR 257, 269; R v Kane [1974] VicRp 90; [1974] VR 759, 766; R v Clarke [1996] VICSC 30; [1996] 2 VR 520, 523 (Charles JA, with whom Winneke P and Hayne JA agreed); Director of Public Prosecutions (Cth) v Carter [1998] 1 VR 601, 607 (Winneke P); R v Miceli [1997] VSC 22; [1998] 4 VR 588, 592 (Tadgell JA), 594 (Charles JA). For a recent example, see DPP v Najjar [2009] VSCA 246, [11].

[4] R v Polterman (Unreported, Court of Criminal Appeal Victoria, 2 August 1974) ('Polterman'); R v Panuccio (Unreported, Court of Appeal Victoria, 4 May 1998).

[5] Professor Richard Fox, When Justice Sheds a Tear: The Place of Mercy in Sentencing [1999] MonashULawRw 1; (1999) 25 (1) Monash University Law Review 1, 17.

[6] R v Pozvek (Unreported, Court of Criminal Appeal, Victoria, 2 September 1983); Yates v The Queen (1998) 99 A Crim R 483, 487.

[8] R v Wirth (1976) 14 SASR 291, 294 (Bray CJ).

[9] (Unreported, Court of Criminal Appeal Victoria, 2 August 1974).

[11] (Unreported, Court of Criminal Appeal Victoria, 2 June 1987).

[13] (Unreported, Court of Appeal Victoria, 4 May 1998).

[14] Ibid 6-7 (emphasis added); see also Holland [2002] VSCA 118; (2002) 134 A Crim R 451, 452, 454, 460-1.

[15] R v Wirth (1976) 14 SASR 291, 295-6 (SASCFC); Boyle v The Queen (1987) 34 A Crim R 202, 205-6 (WACCA); R v Edwards (1996) 90 A Crim R 510, 516-7 (NSWCCA).

[16] R v Carmody (1998) 100 A Crim R 41, 45; R v Togias [2001] NSWCCA 522; (2001) 127 A Crim R 23, 25-6 and the cases there cited.

[17] (Unreported, Court of Criminal Appeal Victoria, 2 August 1974).

[18] (1976) 14 SASR 291, 295-6 (emphasis added).

[19] See Yates v The Queen (1998) 99 A Crim R 483, 486; R v Holland [2002] VSCA 118; (2002) 134 A Crim R 451, 452_; R v X_ [2004] NSWCCA 93, [22]; and R v Nguyen [2006] NSWCCA 369; (2006) 166 A Crim R 124, 129-130.

[20] R v Berlinsky [2005] SASC 316, [72].

[24] Counsel's arguments on the general issue were adopted by counsel for Mr Pantelic.

[25] See R v Williams [2004] VSC 429, [16].

[28] R v Markovic (Unreported, County Court of Victoria, 22 July 2009, Judge Ross), [21].

Markovic v The Queen; Pantelic v The Queen [2010] VSCA 105

At a glance

Court

Decision date

Before

Source

Judgment (214 paragraphs)

Markovic v The Queen; Pantelic v The Queen [2010] VSCA 105 (5 May 2010)

Legislation Cited (3)

Cases Cited (6)