Fresh evidence
77 For the reasons given above, this appeal must fail unless the evidence proffered as fresh evidence on appeal makes a difference.
78 As recorded earlier in this judgment, two of the applicant's principals in his investment adviser business were Financial Wisdom Limited (1993-1998) and Security Financial Planning Pty Limited (1998-2000). The evidence proffered on the hearing of the appeal consists essentially of two letters, one from each of those two companies. We allowed the tender of the letters on the basis that we would consider their admissibility as fresh evidence in the light of the submissions which were then to be made. Having heard the submissions I doubt that evidence of insurance payouts made subsequent to sentencing and a prospect of further payouts arising after sentencing qualifies as admissible fresh evidence. Arguably, it does not contribute to knowledge of facts existing at the time of sentencing and may not be admissible on that account. I will assume, however, that the evidence is admissible.
79 The first letter is from Financial Wisdom. It is dated 16 July 2002. It indicates that the company has received 32 claims from former clients of the applicant involving close to 60 individuals. Of these, ten have been settled in favour of the claimants, two have been referred to Security Financial Planning, five have been rejected and 15 remain outstanding. To date, approximately $1.8m has been paid out by Financial Wisdom, about 25 per cent of which related to interest and legal fees. Potential liability in respect of the remaining 15 live claims is approximately $2.12m not including interest and legal fees. It is possible therefore that the final compensation figure will be in the order of $4.5m including interest and legal fees. All payments to date have been made by Financial Wisdom itself. A grant of indemnity has not yet been received from Financial Wisdom's insurers. There is a deductible of $1m. It is uncertain whether the claims will be aggregated for that purpose.
80 In its letter dated 18 July 2002, Security Financial Planning states that 20 investors who were the subject of the proceedings have made investments during the time that Security Financial Planning was the principal. (Some of these may have been couples representing one claim.) The company has ceased to trade with minimal assets available for distribution. It is estimated that the company is good for between $0.25 and $0.46 in the dollar. The company's insurer, HIH Casualty and General Insurance Ltd was placed in provisional liquidation in March 2001. There is provision for payment of 90 per cent of claims made and approved by the Government funded HIH Claims Support Limited, but it would be necessary to establish liability by judicial proceedings to gain access to that fund. Such access is currently precluded by a court decision in May 2001 refusing an application for leave to proceed against Security Financial Planning.
81 It is apparent from the fresh evidence that a substantial number of the investors affected have been or will be reimbursed with interest. It is also apparent that a substantial number of investors affected will not be reimbursed fully and might not be reimbursed at all.
82 For the purpose of determining the effect of the fresh evidence which has been admitted, it is necessary for me to state my understanding of the meaning and operation of s 6(3) of the Criminal Appeal Act 1912, which provides as follows:
On an appeal under section 5(1) against a sentence, the court, if it is of opinion that some other sentence, whether more or less severe is warranted in law and should have been passed, shall quash the sentence and pass such other sentence in substitution therefor, and in any other case shall dismiss the appeal.
83 In my understanding, the section operates as follows in the ordinary case, that is, a case not involving fresh evidence. If the sentence is manifestly excessive, in the sense that it exceeds the proper exercise of sentencing discretion, the statutory formula is satisfied and the appellate court must quash the sentence and re-sentence the offender. Where the sentence is not manifestly excessive, the appellate court must quash the sentence and re-sentence the offender if - and only if - (a) the sentence imposed below is vitiated by error, and (b) the sentence is more severe than the appellate court would have imposed and, necessarily, would now impose on re-sentencing the offender.
84 The following passage from Simpson [2001] NSWCCA 534, at [79] is in point.
Sentencing appeals in this Court frequently proceed as if the statutory trigger for the quashing of a sentence were expressed as follows: "If it is of the opinion that error has occurred in the sentencing process." That is not the statutory formulation. By s6(3) this Court must form a positive opinion that "some other sentence… is warranted in law and should have been passed". Unless such an opinion is formed, the essential pre-condition for the exercise of the power to "quash the sentence and pass such other sentence in substitution therefore" is not satisfied. As the judgments in Dinsdale [(2000) 202 CLR 321] to which I have referred indicate, the exercise of the power in s6(3) further requires the identification of error in the requisite sense.
85 There is an efficiency built into s 6(3). In an appeal against the severity of sentence, there is no need to resolve a question of error which has been raised as a ground of appeal if re-sentencing by the appellate court would not result in a lesser sentence irrespective of that question.
86 At this point, I should introduce a qualification. What I have said concerning the operation of s 6(3) is, I believe, correct in the generality. However, in special circumstances, some refinement is necessary. For example, if there were error in the sentencing process below which cannot have made any material difference to the result, the appellate court would not intervene, even if it would have imposed a less severe sentence were it re-sentencing the appellant. That is, of course, unless the sentence below was manifestly excessive, in which case the sentence would be set aside on that account and the appellate court would then re-sentence the appellant.
87 That situation is covered if one reads "error" in what I have written as meaning - as I intend it to mean - error contributing to the result.
88 Another example of a special case would be an error which has a narrow and discrete effect on the result, such as, for example, an omission to make an order that the offender is to be released on the expiration of the non-parole period where the sentence is not more than three years. In such a case, the sentence is relevantly more severe than it should have been, in that the offender might be required to serve longer than the non-parole period contrary to law. The appeal would be allowed in such a case, and the error would be corrected by adding the necessary order without the need to re-sentence the appellant afresh, even if the appellate court would have imposed a different sentence were it re-sentencing the appellant afresh. Again, that would be the situation unless the sentence was manifestly excessive, in which case the sentence would be set aside on that ground and the appellant would be re-sentenced.
89 It follows that where fresh evidence has been admitted on an appeal against sentence, that does not mean that the sentence should necessarily be quashed and the offender re-sentenced by the appellate court, even if it is thought that the new material would or might have led the sentencing court to a different result. As Sully J said in W [2001] NSWCCA 172, at [26]:
It is one thing to say that the primary sentencing Judge, had his Honour been aware of this material, ought to have taken into account, and might well have come on that basis to an end result more favourable to the applicant than the result reached. It is an entirely different thing to say that it necessarily follows in such a case that this Court will, without more, interfere with what in fact happened in the Court below.
90 In an appeal against sentence based on fresh evidence, s 6(3) operates in the following way in the ordinary run of such cases.
91 If, taking into account the fresh evidence, the sentence is manifestly excessive - in the sense that the sentence, if passed on the evidence before the sentencing court together with the fresh evidence, would be in excess of the proper application of sentencing discretion - the appellate court must quash the sentence and re-sentence the offender. If, however, that is not the case, the appellate court must dismiss the appeal unless, on the evidence before the sentencing court together with the fresh evidence, the appellate court would impose a less severe sentence. In that event, the appellate court should allow the appeal but only if there is also the additional element of material error.
92 The fact - if it be the fact - that the fresh evidence may have resulted in a lesser sentence below, or even that it would have done so, does not mean that the appeal must be allowed and that the applicant must be re-sentenced by the appellate court. I repeat: if the appellate court is of the opinion that it would not impose a less severe sentence on the whole of the evidence, including the fresh evidence, the appeal must be dismissed unless the sentence is manifestly excessive in the sense in which I have used that expression.
93 I return to the present case. As previously indicated, the legal effect of reimbursement by a third party is limited. It does not sound in mitigation. It is not to be seen as alleviating the aggravating factor that, in the relevant sense, the whole of the misappropriated moneys has been lost. That is because reimbursement by a third party does not expunge the loss, merely moving the loss from one party to another. The reimbursement is to be seen only as alleviation of the personal hardship suffered by individual investors in consequence of the misappropriations. It seems that a substantial number of investors affected will not or may not be compensated, and those who are compensated will have suffered the hardship of being deprived of their funds pending settlement. All will have suffered worry and upset as a result of the misappropriations. On any view, the personal hardship caused by the course of conduct giving rise to these proceedings has been substantial.
94 I would not impose a lesser sentence than the one under appeal taking into account the evidence before the sentencing court and the fresh evidence admitted on appeal. That being so, the appeal should not be allowed on the ground of fresh evidence.