NHI -v- THE STATE OF WESTERN AUSTRALIA [2021] WASCA 32 (25 February 2021)

1. For the reasons that follow, while we would not uphold ground 2, ground 1 has been established. We would resentence the appellant to a total effective sentence of 2 years' immediate imprisonment.

1. The facts of the appellant's offending were ultimately not in dispute at sentencing[1]. They can be summarised as follows.
2. In September 2015, the appellant was working as a real estate agent.
3. On 1 September 2015, the appellant and Mr L created the company P and appointed Mr L the sole director. Their intention was to use the company as a vehicle to secure bank loans to purchase four blocks of land in Huntingdale for development. [2]
4. Between 1 September 2015 and 7 October 2015, the appellant and Mr L falsified various documents required to make a loan application for funds to purchase the four blocks of land for development. The documents comprised false payslips, a false tax return and false bank statements, all purportedly of Mr L, and all creating a misleadingly positive impression as to his financial position.[3]
5. On 7 October 2015, the appellant and Mr L attended a mortgage broker to apply for a loan to purchase the four blocks of land in the name of P. The appellant facilitated the meeting and subsequently provided the documents, which he knew to be false, to the broker. After the meeting, the appellant continued to be involved in the loan application process, maintaining contact with the broker and a lawyer.[4]
6. The appellant was aware, throughout the loan application process, that Mr L was having financial difficulties.[5]
7. On 19 November 2015, the Bank approved four loans to P, each of $216,000, for the purchase of the four blocks. Each loan was secured by a first mortgage over the respective block of land. The Bank also approved an offset account linked to the loans.[6]
8. Each loan was the subject of one of the counts on the indictment.
9. The development of the four blocks of land never occurred. The Bank subsequently exercised its rights as mortgagee and sold all four blocks. At the time of sentencing, the sale of three of the blocks had settled. The judge observed that he was not in a position to make a finding as to the extent, if any, of the Bank's loss from the making of the loans.[7]
10. The appellant benefited from the Bank approving the loans because the loans would not have been made to P without the appellant's and Mr L's dishonest activity and, had the development been successful, the appellant would have benefited by earning a commission from the sales of the developed properties as the real estate agent.[8]

1. The appellant was 38 years old at the time of sentencing.[9] He was born and grew up in Perth. The appellant's parents were very hardworking and were rarely present while he was growing up, resulting in him living with extended family and often being responsible for caring for his younger brother and sister. After his parents separated when he was 27 years old, he dealt with the family's major financial decisions, which resulted in him experiencing stress and anxiety.[10]
2. The appellant has had two long‑term relationships, the more recent being a marriage which ended in 2016 due to the offending and his mental health.[11] He has seven children who were between the ages of 3 and 12 years old at the time of sentencing. The appellant lived with his mother at the time of sentencing, but continued to provide financial support to his family and to care for his children while their mother was working.[12]
3. The appellant completed year 12. He also completed the first year of a degree at Curtin Business School.
4. The appellant worked in various jobs after university before purchasing a real estate company in 2011.[13] The company began running at a loss. The appellant pursued property developments and overcommitted himself. Ultimately, the appellant became bankrupt. By the time of sentencing, he had been discharged from his bankruptcy. He has also since gained employment outside the real estate industry.[14]
5. The appellant has a history of mental health issues and drug and alcohol misuse.[15] He commenced using cannabis in high school and continued to use it daily while at university, ceasing use around 2012 - 2013. He then started consuming alcohol excessively, as a way of coping with stress. His abuse of alcohol had an adverse impact on his employment and his relationships.[16]
6. The appellant has a history of anxiety, depression and stress. In 2018, he was diagnosed with anxiety and attention deficit hyperactivity disorder (ADHD), and was prescribed dexamphetamine.[17] At the time of sentencing, he had attended 11 sessions with a psychologist for anxiety and relationship issues.
7. The appellant's criminal history included only road traffic offences.[18] The judge found that the fraud offences were out of character.

1. The judge identified the following aggravating factors:

(1) The appellant and Mr L created a number of falsified documents for the sole purpose of securing the loans to purchase and develop the four blocks of land.[19] This involved a significant level of deception;[20] and

(2 The fraudulent activity was persistent and premeditated, as it occurred over a period of time and involved dealing with the mortgage broker who was dealing with financial institutions.[21]

1. The judge found the following mitigating factors:

(1) The appellant pleaded guilty to the four charges at the earliest reasonable opportunity;[22]

(2) The appellant was genuinely remorseful for his offending behaviour;[23]

(3) The appellant was a person of previous good character;[24]

(4) The appellant had made positive steps to rehabilitate himself and had good prospects of rehabilitation.[25] The judge commented that the appellant had attended 11 rehabilitation sessions with a psychologist and intended to lead a normal life and make good with investors to whom he owes money;[26] and

(5) The appellant made a written statement to police dated 9 September 2019 and also gave an undertaking to give evidence in relation to the prosecution of Mr L.[27]

1. The judge was unable to find whether the appellant's previous diagnoses of ADHD and bipolar disorder significantly impacted on his offending behaviour, however his Honour gave it some limited weight.[28]
2. The judge found that the appellant was at a low risk of reoffending.[29]

1. Pursuant to s 9AA of the Sentencing Act 1995 (WA), the judge applied a discount of 25% for each of the appellant's pleas of guilty.[30]
2. As to the appellant's assistance prior to the date of sentencing, the judge commented that his written statement made full disclosure of his involvement in the offending.[31] This disclosure assisted in the prosecution of the charges against Mr L as well as the prosecution of the charges against himself. [32] The judge commented that the appellant's assistance was substantial.
3. At the time of sentencing, it was expected that the prosecution against Mr L would proceed to trial.[33] As to the appellant's future assistance, the judge commented that what is contained in his written statement means that his evidence at Mr L's trial will be significant.
4. The judge also found that the appellant's assistance was evidence of his remorse and confirmed the positive steps he was taking towards rehabilitation.[34]
5. The judge applied a discount of 10% for the appellant's past assistance and, in accordance with s 8(5) of the Sentencing Act, 10% for the appellant's future assistance, producing a total of 20% for his cooperation.[35] His Honour observed that the 10% discount for future cooperation amounted to a reduction of 3 months and 2 weeks.[36]

1. The maximum penalty for the offence of gaining a benefit by fraud is 7 years' imprisonment.[37]

1. The appellant conceded that imprisonment was the only appropriate sentence in respect of the offences.[38]
2. After reducing each sentence for the mitigating factors referred to in [23] above, the judge imposed a sentence of 16 months' imprisonment for each of the f[39]r counts.39
3. The judge stated that general deterrence was a matter that required significant weight, as the appellant's fraudulent activity involved a significant amount of money and struck at the heart of the commercial finance and credit systems.[40]
4. The judge found that it was not appropriate to suspend the sentences of imprisonment.[41] There is no challenge on appeal to that conclusion.
5. The judge considered the totality principle in deciding the total effective sentence.[42]
6. The judge set the sentence for count 1 as the head sentence, and ordered that the sentence for count 2 be served cumulatively and the sentences for counts 3 and 4 be served concurrently.[43] This produced a total effective sentence of 2 years 8 months' immediate imprisonment.
7. The appellant was made eligible for parole.[44]

1. The appellant advances two grounds of appeal. Ground 1 asserts that the total effective sentence of 2 years 8 months' immediate imprisonment breaches the first limb of the totality principle. Ground 2 asserts that the discount for cooperation was manifestly inadequate, particularising that the discount for prior cooperation and the discount for promised future cooperation were each manifestly inadequate.
2. It is convenient to deal with ground 2 first.

1. The appellant asserts that the 10% discount for past cooperation was manifestly inadequate, taking into account the following matters:

(1) The appellant disclosed the involvement of his alleged co‑offender at a time when the police were unaware of Mr L's involvement.

(2) That disclosure demonstrated the appellant's willingness to provide information in circumstances where the police, being unaware of the information, were not pressuring him to divulge or elaborate the information.

(3) Without the appellant's statement, the co‑offender would not have been charged.

(4) The appellant gave full and frank disclosure of the co‑offender's actions and his involvement in the crimes.

(5) The appellant gave full and frank disclosure of his own involvement, leading to amendments to the charges against him.

(6) The appellant's full and frank disclosure was part of what demonstrated his genuine remorse.

1. The appellant submits that the discount for future promised cooperation was manifestly inadequate, taking into account:

(1) The appellant had given an undertaking to give evidence at the trial of his alleged co‑offender.

(2) That undertaking was part of what demonstrated his genuine remorse.

(3) The prosecution described the level of the appellant's cooperation as significant and the extent and value of his evidence as significant.[45]

1. The appellant refers to the principles stated in, and the discounts for cooperation reflected in, a number of cases, including: Nannup v The State of Western Australia;[46] A Child v The State of Western Australia;[47] MXP v The State of Western Australia;[48] Ungureanu v The Queen;[49] Barany v The Queen;[50] The State of Western Australia v Tran[51] and BWE v The State of Western Australia.[52]

1. The respondent submits that the cases referred to by the appellant provide no real assistance in evaluating the adequacy of the discount in this case, given that the other cases relate to offenders who faced different charges and who provided different assistance.
2. The respondent accepts that the appellant gave a full disclosure of both his involvement and that of his alleged co‑offender and that his evidence would form a significant aspect of the State's case against the co‑offender. The respondent emphasises that the appellant was not an offender who played a minor role in the offences, but rather was a principal who acted together with the co‑offender. The respondent submits that the discount of 20% was a substantial discount adequately reflecting the appellant's past and future cooperation.

1. The principles relating to the significance of cooperation with authorities to the fixing of an appropriate sentence are well established.[53] In Nannup, Buss JA (with whom McLure P and Mazza JA agreed) said as follows:

It is well-established that substantial discounts in sentencing may be allowed to recognise the value of an offender's cooperation with law enforcement agencies. When deciding upon the appropriate level of discount in a particular case, the court must consider the value of the offender's cooperation and the risk to his or her personal safety, while ensuring that the discount does not result in a sentence which is, in all the circumstances of the offending and the offender, obviously inadequate or an affront to community standards [34].

1. In Ma v The Queen,[54] Roberts-Smith J (Steytler J agreeing) reviewed numerous authorities on discounts for cooperation with law enforcement agencies. His Honour summarised the principles he had extracted from the authorities, as follows:
   1. A substantial discount must be given to an offender who gives useful information or assistance to law enforcement or assistance to law enforcement authorities irrespective of whether that demonstrates remorse or contrition. That is because of the public policy consideration of encouraging criminals to do so.
   2. Where the information or assistance does demonstrate genuine remorse or contrition the discount should be greater.
   3. The information or assistance does not have to have been effective in the law enforcement process, although the discount will be greater where it has been.
   4. The greater the disclosure and the more potentially useful it is to the authorities, in the comprehension of the offender, the greater should be the discount [118].
2. As Wheeler and McLure JJA noted in A Child, the allowance for discounts in sentencing an offender in circumstances of cooperation with law enforcement agencies reflects two underlying principles:

One is that assistance to the authorities, and the offer of future assistance, may be one of the most unequivocal and practical demonstrations of genuine remorse and rehabilitation. The other is that there is a clear public interest in giving a significant discount, since it is to the advantage of ordinary law-abiding citizens that crime should be detected and successfully prosecuted [12].

1. There is no standard percentage discount for an offender who cooperates. Rather, the discount depends upon all the circumstances of the individual case, including the nature and extent of the cooperation, as well as the nature and extent of the offending behaviour.[55]
2. There are limits on the available discount for cooperation arising from the need to impose a sentence commensurate with the seriousness of the offence in accordance with the dictates of s 6(1) of the Sentencing Act.[56] As has recently been observed in this court:[57]

Where a separate discount is provided for a guilty plea there is less scope to provide a large reduction for assisting authorities. There is only 'limited room to discount a sentence without going below the bottom line' [SZ v The Queen [2007] NSWCCA 19; (2007) 168 A Crim R 249 [6]] - that bottom line, in the present context, being a sentence that is commensurate with the seriousness of the offence. Thus the application of one discount for one purpose may impact on the extent to which another discount can be applied to achieve a different purpose [DGF v The Queen [2021] WASCA 4 [66]].

1. Absent any express error, an appellant who challenges the extent of the discount for cooperation must demonstrate implied error in the

House v The King[58] sense, in other words, that the extent of the discount was unreasonable or plainly unjust.[59] 2. We accept the respondent's submissions that other cases provide no real assistance in evaluating the adequacy of the discount in this case. That is because the appropriate discount is, as already indicated, sensitive to all the circumstances of the individual case, including the nature and extent of the cooperation, as well as the nature and extent of the offending behaviour. The other cases concern offenders who provided different assistance and who faced different charges. 3. The appellant's cooperation, which was entirely voluntary and was full and frank, both provided and would provide significant assistance to the prosecution case against Mr L. Consequently, that cooperation warranted a substantial discount. However, the appellant's assistance was, unlike some cases in which much higher discounts have been given, limited to identifying the co‑offender of the offence the appellant committed - it did not extend to assisting the prosecution of other offences. Also, the appellant's cooperation did not place his welfare at risk, unlike some of the cases in which much higher discounts have been given. In all the circumstances, and bearing in mind that the judge applied a 25% discount for the plea of guilty and also treated remorse as a separate mitigating factor, we are not satisfied that the discount of 20% for the appellant's cooperation is so low as to reveal implied error. 4. Consequently, while we would grant leave to appeal on ground 2, the ground is not made out.

1. The appellant refers to a number of what are said to be comparable cases in support of his contention that his total effective sentence infringes the first limb of the totality principle. Among other cases, he relies on: Skelly v The State of Western Australia;[60] Rofail v The State of Western Australia;[61] Pflug v The State of Western Australia;[62] Smallbone v The State of Western Australia;[63] Deville v The State of Western Australia;[64] and Anderson v The State of Western Australia [No 3].[65]
2. The appellant submits that when proper regard is had to the following factors, his total effective sentence breached the totality principle:[66]

(1) the circumstances of the offending, including that:

(b) the appellant was not to be the main beneficiary of the offending;

(c) the loss to the bank was limited to no more than $27,000, which was considerably less than in many of the comparable cases; and

(d) the bank was always protected from substantial loss by its rights as first mortgagee of the land;[67]

(5) the extensive lengths to which he had gone to address his offending behaviour;

1. The respondent emphasises that (i) individual cases provide a yardstick or reference point, but are not controlling; and (ii) the dismissal of an appeal against sentence does not fix the boundaries of an appropriate sentence.
2. The respondent submits that the most closely comparable case to the present one is Anderson, with which it submits the appellant's sentence is broadly consistent. The respondent submits that in most of the other cases on which the appellant relies, there are significant differences in the circumstances of the respective offending and offenders, as against the present case, so that those cases provide little assistance.
3. The respondent emphasises that the extent of the loss to the Bank in the present case is a misleading and incomplete basis for evaluating the appropriateness of the sentence imposed on the appellant. The respondent emphasises that the gravamen of the appellant's offending is in the fraudulent obtaining of the benefit of four loans totalling $864,000. Bearing that in mind, and bearing in mind the integral role of the appellant in the offending, including his creation of several false documents, the respondent submits that the total effective sentence of 2 years 8 months' immediate imprisonment is not unreasonable or plainly unjust.[68]

1. The general principles governing appeals contending that error should be inferred on the basis that the total effective sentence infringes the totality principle are well established:

(1) Sentencing is a discretionary exercise. An appellate court can intervene only if the appellant demonstrates either an express or implied material error. Express error involves acting on a wrong principle, for example by mistaking the law or facts or taking into account an irrelevant matter. Implied error arises where the end result is so unreasonable or unjust that the court must conclude that a substantial wrong has occurred. Thus, an appellate court cannot substitute its own opinion for that of the sentencing court merely because the appellate court would have exercised a sentencing discretion differently.

(2) The first limb of the totality principle requires that the total effective sentence imposed on an offender who has committed multiple offences bears a proper relationship to the overall criminality involved in all of the offences (including those, if any, in respect of which the offender is still serving or is yet to serve a term of imprisonment), viewed in their entirety, having regard to all relevant facts and circumstances including those referable to the offender personally (and including, for example, the desirability of accommodating any wish to rehabilitate), all relevant sentencing factors and the total effective sentences imposed in comparable cases.

(3) The range of sentences customarily imposed for a crime does not establish the range of a sound exercise of the sentencing discretion. Sentences customarily imposed in comparable cases provide a yardstick or reference point for ensuring broad consistency in sentencing, bearing in mind the scope for significant variations in relevant sentencing factors, and that there is no single correct sentence. What is important is the unifying principles which sentences imposed in comparable cases reveal and reflect.

(4) When this court dismisses an appeal against sentence and when it resentences on a successful appeal, its decision does not fix the upper or lower limit of the range.

(5) Where there is a challenge on totality grounds, the severity of a sentence imposed on an individual count generally falls to be assessed in light of the sentences imposed in respect of the other counts and its contribution to the total effective sentence. A heavy individual sentence (which is not manifestly excessive) may be softened by an order that it be served concurrently with sentences imposed in relation to the other counts. A relatively light sentence (which is not manifestly inadequate) may, as a practical matter, have increased severity if it is ordered to be served cumulatively. The real question is whether the total effective sentence is unreasonable or plainly unjust.

1. There is no doubt that the appellant's offending, in fraudulently inducing the Bank to make substantial loans, was serious. As Mazza J said (Martin CJ & McLure P agreeing) in Pollock v The State of Western Australia:[69]

This was a case where general deterrence had to be the dominant sentencing consideration. The borrowing of money from banks and other financial institutions is an everyday and necessary activity of commerce. Lenders are entitled to expect that a borrower will act honestly and that the information and documentation provided to it in support of an application for finance will be truthful and genuine. If a lender was required to check the honesty and accuracy of statements made, or the genuineness of the documentation presented to it by a prospective borrower, the cost, speed and efficiency of doing business would be adversely affected, to the detriment of the general community. The appellant's offending struck at the heart of the commercial financing and credit systems. Courts must do what they can to stop the type of behaviour engaged in by the appellant in this case. When such behaviour is established, significant penalties will generally follow.

1. We accept the respondent's submission that the gravamen of the offences lies not in the ultimate loss (if any) that may be sustained by the lender, but rather in the fraudulent obtaining of the loans in the first place.[70] In fraudulently causing the lender to lend money in circumstances when it otherwise would not have, the offender thereby wrongfully exposed the lender to the risk of the loss of the funds lent. The appellant's fraudulent conduct induced the Bank to lend a total of $864,000.
2. Further, the appellant's offending is aggravated by its persistence. His offending involved the creation of several false documents and a course of conduct extending over a period of more than two months.
3. Nevertheless, we are persuaded that the total effective term of 2 years 8 months was, in all the circumstances, so high as to reveal error. The most material considerations leading to that conclusion are set out below.
4. While the appellant's offending conduct caused four loans to be obtained, giving rise to four offences, the appellant's offences arose from a single course of conduct. Consequently, there were very substantial common elements in the four counts, engaging the need to avoid double punishment.[71] In so saying, we accept that a degree of accumulation was open and appropriate.
5. The appellant had very substantial mitigating factors in his favour. He pleaded guilty at the earliest reasonable opportunity, for which he was given a 25% discount for the sentences on each individual count. That discount does not directly translate to an equivalent discount on the total effective sentence. Nevertheless, the mitigating benefits of the pleas of guilty required a substantial reduction in the total effective sentence that would otherwise have been appropriate. While the appellant's good character might fairly be seen as not unusual in cases of this kind, the appellant also had the mitigatory benefit of a finding of genuine remorse coupled with having already taken substantial steps towards his rehabilitation. Finally, and significantly, the appellant had provided substantial past assistance and had promised substantial future assistance, for which he was given a 20% discount for the sentences on the individual counts. Again, while the 20% discount was not to be directly applied to the total effective sentence, the appellant's substantial cooperation called for a significant further reduction in the total effective sentence that would otherwise have been appropriate.
6. Having regard to:

(a) the maximum penalty for the offences committed by the appellant;

(b) the overall criminality involved in all of the offending, viewed in its entirety, including having regard to the personal circumstances of the appellant and the very substantial mitigating factors referred to in [66] above;

(c) the total effective sentences imposed in prior cases involving offending with some of the features of the appellant's offending; and

(d) all relevant sentencing factors and principles,

we are satisfied that the total effective sentence of 2 years 8 months' immediate imprisonment was not merely high, but was unreasonable or plainly unjust.

1. Consequently, we would uphold ground 1 and resentence the appellant.

1. This court has all the necessary materials to enable it to resentence the appellant.
2. Like the judge, we would allow a discount of 25%, pursuant to s 9AA of the Sentencing Act, on the head sentence we would otherwise have imposed on each count, for the plea of guilty. We have also reduced the sentence we would otherwise have imposed on each count to recognise the other mitigating factors referred to at [66] above, including a reduction of 20% on account of the appellant's past and future cooperation. Subject to totality, we would, having regard to all relevant sentencing factors and principles, impose a term of 14 months' immediate imprisonment on each individual offence.
3. In order to arrive at a sentence which we consider properly reflects the overall criminality of the appellant's offending, in all its circumstances and taking into account the appellant's personal circumstances - namely, 2 years' immediate imprisonment - we would order that the sentence on count 2 be reduced to 10 months, to be served cumulatively on the sentence on count 1. We would order the sentences on counts 3 and 4 be served concurrently with the sentence on count 1.
4. Thus, the total effective sentence is 2 years' immediate imprisonment.
5. We would order that the appellant be eligible for parole, and that the new total effective sentence be taken to have commenced on 13 March 2020.

1. For the above reasons, we would make the following orders:
   1. Leave to appeal on grounds 1 and 2 is granted.
   2. The appeal be upheld.
   3. The sentences imposed on 13 March 2020 be set aside, and, in substitution, the appellant be sentenced as follows:

(a) on count 1 - 14 months' immediate imprisonment;

(b) the sentence on count 2 be served cumulatively on the sentence on count 1;

(c) the sentences on counts 3 and 4 be served concurrently with the sentence on count 1;

(d) the new total effective sentence is taken to have commenced on 13 March 2020;

1. The appellant will be eligible to be considered for release on parole when he has served 1 year in custody calculated from 13 March 2020.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] ts 51. An apparent dispute as to whether and to what extent the Bank had suffered a loss was resolved following an adjournment of the sentencing proceedings.

[35] ts 76. The judge referred to s 37A of the Sentencing Act, but the reference is evidently intended to be to s 8(5).

[37] ts 68; Criminal Code (WA), s 409(1).

[46] Nannup v The State of Western Australia [2011] WASCA 257.

[47] A Child v The State of Western Australia [2007] WASCA 285.

[48] MXP v The State of Western Australia [2010] WASCA 215; (2010) 41 WAR 149.

[49] Ungureanu v The Queen [2012] WASCA 11; (2012) 272 FLR 84 [33].

[50] Barany v The Queen [2000] WASCA 240; (2000) 114 A Crim R 426.

[51] The State of Western Australia v Tran [2008] WASCA 183.

[52] BWE v The State of Western Australia [2016] WASCA 197.

[53] For a recent summary, see SYL v The State of Western Australia [2021] WASCA 16 [72] ‑ [83].

[54] Ma v The Queen [2001] WASCA 325; (2001) 125 A Crim R 349.

[55] A Child [13]; MXP [8], [54], [56]; MSO v The State of Western Australia [2015] WASCA 78 [67].

[56] MXP [52]; MSO [69]; SYL [81] ‑ [82].

[58] House v The King (1936) 55 CLR 499.

[60] Skelly v The State of Western Australia [2020] WASCA 3.

[61] Rofail v The State of Western Australia [2019] WASCA 214.

[62] Pflug v The State of Western Australia [2018] WASCA 65; (2018) 272 A Crim R 376 and the cases referred to in that decision.

[63] Smallbone v The State of Western Australia [2008] WASCA 167; (2008) 187 A Crim R 57.

[64] Deville v The State of Western Australia [2004] WASCA 264.

[65] Anderson v The State of Western Australia [No 3] [2014] WASCA 190.

[66] Appellant's submissions [35]; appeal ts 2 - 3.

[68] Respondent's submissions [33] - [34]; appeal ts 3 - 4.

[69] Pollock v The State of Western Australia [2011] WASCA 133 [69].

[71] Cotterill v The State of Western Australia [2013] WASCA 52 [26] - [28]; Hunter-Aragu v The State of Western Australia [2015] WASCA 80 [33].