Ooi v The Queen [2017] VSCA 221

Receiving a secret commission (Crimes Act 1958 s 176(1))

10 years and 6 months' imprisonment with a non-parole period of 8 years.

A pecuniary penalty order of $2,342,614.06, made by consent

2 Ooi now applies for leave to appeal this sentence on three grounds:

1. The individual sentences, the order for cumulation, the total effective sentence thereby reached, and the non-parole period are each manifestly excessive.
2. The learned sentencing judge erred in assessing the gravity of charge 2.
3. The learned sentencing judge erred in the application of the principle of parity when sentencing for charge 2.

3 Ooi's offending occurred over a period of seven years and occurred during his employment with various Victorian Government departments including the Department of Infrastructure ('DOI'), the Department of Transport ('DOT'), and Public Transport Victoria ('PTV'). The charges arose from 'Operation Fitzroy', an investigation by the Independent Broad-based Anti-corruption Commission ('IBAC') into allegations of corrupt procurement activities within the transport departments.

4 Ooi was a project coordinator responsible for bus infrastructure works with DOI and DOT from October 2004 to January 2012, after which he was employed as a contractor to DOT and PTV from January 2012 to January 2013. He undertook a senior executive role and was responsible for the selection of successful contractors for civil works projects for the DOI, DOT and PTV.

5 Sometime in 2007, when Ooi came under the supervision of Barry Wells ('Wells'), it was suggested by Wells that he could source and supply the government with bus shelters for public transport infrastructure projects. Over the period between 2007 and 2014, Ooi and Wells masterminded a fraudulent scheme whereby transport works were awarded to various businesses covertly controlled by them (the 'managed entities'), with the assistance of compliant family members or business associates. The managed entities mostly sub-contracted the work to other companies managed by co-accused and other associates. The total value of contracts awarded to the managed entities and related subcontractors over the period of the conspiracy was $15,392,850.68. Ooi received profits from these contracts of $2,324,614.06. This is the offending constituting charge 1.

6 Charge 2 relates to interactions between Wells, Ooi and representatives of Furphy's Foundry Sales Pty Ltd ('Furphy's'). Furphy's specialises in manufacturing street and park furniture. In February 2011, outdoor garden furniture valued at $21,406 was supplied to Wells and Ooi at no cost. Invoices found at Furphy's indicated that the furniture had been billed to the DOT at a cost of $21,440 in relation to a Wodonga bus shelter project, but no payments were ever received. The furniture was later found at Wells' and Ooi's homes. The furniture received by Ooi was valued at $6,740. The gift of this furniture was intended to influence Wells and Ooi to show favour to Furphy's in awarding government contracts. Furphy's continued to receive contracts after the gifting of the furniture.

7 In describing the offending, the judge noted that the prosecution did not contend 'that the relevant infrastructure works were not carried out or were not carried out to an appropriate standard'.[2] Further, while the offending made the awarding of the government contracts 'uncompetitive', there was no evidence that the Government paid higher prices than it would have otherwise paid.[3]

8 Rather, the judge characterised the offending as 'clearly contrary to Government procurement processes and rules regarding conflicts of interest, processes and rules of which you were well aware'.[4] He found that the conspiracy:

effectively undermined the public service procurement policies that are designed to protect the revenue and ensure that government contracting works are put out at the most competitive available price. As such, your crime involved corruption of the trust that citizens of this State place in public servants that taxpayer funds will be honestly expended and accounted for in the public interest. Corruption of this kind strikes at the heart of our civilised democracy.[5]

9 The judge came to the view that Ooi's culpability was somewhat, although not significantly, lesser than his co-offender Wells. He found them both to be 'two key figures at the top of a sophisticated conspiracy'.[6] Although Wells was primarily responsible for awarding the contracts and acted as supervisor, Ooi was primarily responsible for the financial management of the scheme, including moving profits between managed entities and making payments to Wells.

10 The judge also found that Ooi 'exerted considerable influence over the other co-conspirators' including his family members.[7]

11 In considering the relevant sentencing objectives, the judge noted that like many 'white collar crimes', the offending was committed on the basis that the risk of the discovery of wrongdoing was low and the ease with which Ooi could take advantage of his position of trust was high. These features increased the importance of general deterrence as a sentencing factor, as well as denunciation. The judge considered that general deterrence of white collar criminality required not only a long head sentence but also a substantial term in custody before release on parole. Further, he was of the view that good character could not be a significant mitigating factor given that white collar offenders are only put in positions where they can commit such offences on the basis of their good character.[8]

12 Ooi's rehabilitative prospects were considered as 'clearly favourable', with prison expected to have a substantial rehabilitative effect.[9] Protection of the community was therefore diminished as a sentencing objective.

13 The judge concluded that 'the principal sentencing objectives in your case are those of general deterrence, punishment and denunciation.'[10]

14 The judge then went on to give his reasons as to why he considered the crimes committed to be serious examples of the offences. The critical paragraphs of the judge's reasons are at [43]and [44]. These paragraphs are relevant to the application for leave to appeal and especially the issue raised under ground 2 as to whether the judge erred in his assessment of the gravity of charge 2. There is a question of whether in these critical paragraphs the judge assessed the gravity of both offences in an undifferentiated way. The judge stated:

As reflected by the maximum penalties available for them, the crimes of which you have been convicted are very serious crimes. The Crown submits that your conduct was a serious example of such offending. I will now tell you why I agree with that submission. Your offending was over a period of some seven years, an important factor in consideration of its seriousness.

Your crimes were committed with a sophisticated degree of orchestration and planning that involved you taking advantage of your senior position of trust and your influence within the public service to defraud large sums of money from the State of Victoria. You did not act alone. Your crimes involved others cooperating together, and you were one of the central figures, a leader in the criminal operation. I am satisfied beyond reasonable doubt that you were one of two directing minds of the conspiracy and you directed others down the line as to how the scheme was to be executed.[11]

15 Immediately after these paragraphs, the judge referred to the significant financial advantage Ooi had enjoyed by reason of his crimes. He said:

The quantum of the financial advantage you dishonestly accrued is also very significant. The sums of money that passed through your hands as a result of your offending were in the millions of dollars, with the total value of contracts awarded pursuant to the fraudulent design totalling over $15 million. You have agreed to a pecuniary penalty order in the sum of $2,342,614.06. Given that you and Wells shared equally in the spoils, your corrupt scheme must have netted at least $4.6 million.[12]

16 The judge identified the motive of the offending which, in the absence of an alternative motive, he described as personal greed.[13]

17 In mitigation, the judge considered four matters relied upon by Ooi's counsel: Ooi's guilty plea and remorse; his undertaking to give evidence against other co-accused; the additional hardship he would face in prison due to his age, personality and health; and the punitive impact of the delay between the discovery of the offending and sentencing.[14]

18 The judge was satisfied that Ooi's early guilty plea indicated genuine remorse and that there was a utilitarian benefit of an early guilty plea.[15] The judge accepted the significance of Ooi's extensive statement and assistance to authorities, his character references as well as the remarks from his treating psychiatrist and psychologist. The judge stated that he would give Ooi 'a significant discount' for his guilty plea given that Ooi 'admitted [his] wrongdoing, accepted responsibility and displayed genuine remorse'.[16] Similarly, the judge considered Ooi's undertaking to give evidence against his co-offenders required 'a substantial discount'.[17] On this aspect he said:

The law recognises the need to encourage others to assist the authorities in the investigation and prosecution of criminal behaviour and the need to do justice having regard to the particular circumstances of the case, including by way of a sentence discount, to an individual who has done so. Such assistance by the provision of significant and reliable evidence has been described as a powerful consideration favouring exceptional leniency in the sentence imposed particularly in areas of organised crime and the exposure and prosecution of corrupt officials, hidden organisers and financiers.[18]

19 The judge described the personal circumstances of Ooi, including that he was born in Malaysia in 1950, emigrated to Australia alone as a teenager, and had been employed in the public transport sector since completing a Bachelor of Engineering at the University of Melbourne. Ooi's strong family relationships were emphasised.

20 The judge noted that, even though good character carries less weight in sentencing for white collar crimes, it was 'not irrelevant' and he accepted that Ooi's prior good character informed 'aspects of personal deterrence, rehabilitation, adequateness of punishment and the genuineness of [Ooi's] asserted contrition'.[19]

21 Letters from Ooi's treating psychiatrist and treating clinical psychologist provided information about Ooi's mood disorder, anxiety, sleep disorder and major depressive episode attributed to psychological stressors arising from the public exposure. Ooi was found to suffer also from hypertension, thyroid problems and moderately severe obstructive sleep apnoea. In combination, the judge held that Ooi's age, mental health, physical health and personality would render custody more onerous that its impact on other offenders without such factors. He accepted that principles 5 and 6 of Verdins would apply.[20]

22 At the oral hearing the focus was largely on ground 2 and the question of whether the judge correctly assessed the gravity of the offending involved in charge 2, the offence of receiving a secret commission. Ooi submits that the judge made findings of culpability that addressed the two charges in an undifferentiated way. In particular, he relies on paragraphs [43]-[44], extracted above,[21] and submits that, if the judge did intend to refer to both offences, it was not open to him to make the finding that the secret commission offence was a 'serious example of such offending' or that, in the circumstances, it was 'committed with a sophisticated degree of orchestration and planning'. Ooi submits that there is no evidence that could legitimately lead to such findings when Ooi had been offered, and had received, what was presented to him as some 'left over furniture' with a value of $6,740. He submits that the gift of a left-over product that did not occur at Ooi's request cannot be assessed as sophisticated, orchestrated, planned or as a serious example of the offence. Ooi submits further that if paragraphs [43]-[44] do not represent the judge's assessment of the gravity of both offences, there is no assessment of the gravity of charge 2, because although the circumstances of the offending are described by the judge at paragraph [30] of the reasons there is no separate assessment of the criminality of charge 2.

23 In its written submissions, the Crown submits that paragraphs [43]-[44] were clearly directed at charge 1, the references to planning and orchestration, the co-offenders and large sums of money involved all relate to charge 1. It submits that nevertheless charge 2 is a serious offence, carrying a not insignificant maximum penalty, and it was not to be treated as an isolated act of dishonesty, occurring as it did in 2011, in the middle of the duration of the conspiracy (2007-2014).

24 At the oral hearing, the Crown made an alternative submission to the effect that at paragraphs [43]-[44] the judge was realistically bringing the two forms of criminality together (that involved in charge 1 and that involved in charge 2). It accepted that there was no separate consideration by the judge of the gravity of charge 2 but this was because charge 2 is 'part and parcel of the conspiracy' and its gravity stood to be assessed in light of that.

25 In my view, it is reasonably arguable that the judge erred in his assessment of the gravity of charge 2. In the absence of any separate assessment by the judge of the criminality represented by charge 2, reliance must be placed on the descriptions in paragraphs [43]-[44] and this raises the question of whether it was open to the judge to describe the receipt of surplus outdoor furniture of a modest value as a serious example of receiving a secret commission involving a sophisticated degree of orchestration and planning. I grant leave to appeal with respect to ground 2.

26 The considerations relevant to ground 2 are, in my view, underscored by the circumstances relating to the challenge to parity of sentencing in ground 3. The person who gave the furniture to Ooi, as well as other furniture to Wells valued at $14,660, and who was also sentenced for making a false document, received a fine of $20,000, without conviction, in the Magistrates' Court. This compares to the sentence imposed on Ooi for charge 2 of one years' imprisonment with 6 months' cumulation on the sentence imposed on charge 1. The Crown submits that there is a profound difference between a provider of services giving a secret commission and a government official who receives the secret commission. In my view, it is reasonably arguable that there has been a breach of the parity principle. I grant leave to appeal with respect to ground 3.

27 The underlying grievance with respect to charge 2 also supports the view it is reasonably arguable that the individual sentence imposed on charge 2, and the cumulation which the judge ordered, are manifestly excessive. Insofar as the sentence on charge 2 affected the non-parole period it is also reasonably arguable that the non-parole period is manifestly excessive, especially in light of the judge's assessment that Ooi has good prospects for rehabilitation[22] and in light of the hardship he may experience in custody, particularly to his mental health.[23]

28 With respect to the sentence imposed on charge 1, Ooi submits that it is manifestly excessive because he had no prior criminal history, limbs 5 and 6 of Verdins had application, there was a plea of guilty and profound remorse, there was significant co-operation, the quantum of loss to the public purse could not be demonstrated, and there was an absence of any significant aggravating factor. He also submits that the sentence was contrary to principle as reflected in a trio of comparable cases arising from a conspiracy to defraud the Nauru Phosphate Trust. The conspirators fraudulently induced the trust to invest $US61m in investments that did not exist in order to obtain money for their benefit. The cases are: R v Walsh[24] (seven years' imprisonment held not to be manifestly excessive in circumstances where there was delay, no plea of guilty, no undertaking to assist, no remorse, Verdins had no application, a massive loss was established and Walsh had a prior conviction for a dishonesty offence); R v Nair[25] (four years' imprisonment, delay, massive loss, Verdins had no application, Nair demonstrated remorse and gave an undertaking to assist) and R v Powles[26] (two years and six months' imprisonment wholly suspended, large sum obtained, massive loss, application of the equivalent of Verdins principles, delay, plea of guilty, demonstrated rehabilitation, and undertaking to assist).

29 The Crown accepts that Walsh, Nair and Powles are comparable cases but are distinguishable because although the sum of money lost in those cases was significant, the period of time over which the conspiracy lasted was considerably shorter. Moreover, Ooi is in the distinctive position of being a trusted public servant and he abused that trust.

30 In my view, it is reasonably arguable that the sentence imposed with respect to charge 1 is manifestly excessive. In those circumstances, and in the light of my observations above with respect the claim of manifest excess, I would grant leave to appeal on ground 1.

31 I cannot conclude that there is no reasonable prospect that a different sentence would be imposed by this Court.

[1] R v Ooi [2017] VSC 157 ('Reasons').

[21] See [14] above.

[22] See [12] above.

[23] See [21] above.

[24] [2002] VSCA 98; (2002) 131 A Crim R 299 ('Walsh').

[25] [1999] VSC 339 ('Nair').

[26] [1999] VSC 268 ('Powles').