Court of Appeal (Qld)|2009-02-20|Before: Muir JA, Atkinson and P Lyons JJ, Separate reasons, for judgment of each member of the Court, each concurring as to the orders, made
Muir JA, Atkinson and P Lyons JJ, Separate reasons, for judgment of each member of the Court, each concurring as to the orders
Catchwords
CRIMINAL LAW – APPEAL AND NEW TRIAL – APPEAL AGAINST SENTENCE
– GROUNDS FOR INTERFERENCE – SENTENCE MANIFESTLY
EXCESSIVE OR
INADEQUATE – where the respondents pleaded guilty to two counts of
Source
Original judgment source is linked above.
Catchwords
CRIMINAL LAW – APPEAL AND NEW TRIAL – APPEAL AGAINST SENTENCE– GROUNDS FOR INTERFERENCE – SENTENCE MANIFESTLYEXCESSIVE ORINADEQUATE – where the respondents pleaded guilty to two counts ofdishonestly obtaining a financial advantageby deception under the CriminalCode (Cth) – where the respondents were sentenced to three yearsimprisonment to be released after four months upon entering intoa recognizanceof $1000 conditioned they be of good behaviour for remainder of sentence –where the appellant appealed againstthe sentence imposed – whereappellant submitted period to be served before release inadequate anddisproportionate to thehead sentence – whether trial judge erred inallowing an excessive discount in sentence under section 21E of the CrimesAct 1914 (Cth)CRIMINAL LAW – APPEAL AND NEW TRIAL – APPEAL AGAINST SENTENCE– APPEALS BY CROWN – POWER TO BRING APPEALCRIMINAL LAW – PARTICULAR OFFENCES – OFFENCES AGAINST THE
GOVERNMENT – DEFRAUDING THE GOVERNMENT
Crimes Act 1914 (Cth), s 16, s16A, s 19AC, s 20(1)(b), s
21E
Criminal Code 1995 (Cth), s 11.2(1), s 134.2(1)
Criminal
Code 1899 (Qld), s 669A
Judiciary Act 1903 (Cth), s 68(2)
Peel v The Queen (1971) 125 CLR 447
[1971] HCA 59, cited
R v
Bernier (1998) 102 A Crim R 44, cited
R v Gladkowski (2000) 115 A
Crim R 446
[2000] QCA
352, cited
R v Hooper
ex parte Cth DPP [2008] QCA
308, cited
R v Melano
ex parte Attorney-General [1994] QCA 523
[1995] 2 Qd R
186, cited
R v Peterson [2008] QCA
70, cited
R v Tran (2007) 172 A Crim R 436
[2007] QCA
221, cited
York v The Queen (2005) 225 CLR 466
[2005] HCA 60,
cited
Judgment (53 paragraphs)
[1]
CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE - GROUNDS FOR INTERFERENCE - SENTENCE MANIFESTLY EXCESSIVE OR INADEQUATE - where the respondents pleaded guilty to two counts of dishonestly obtaining a financial advantage by deception under the Criminal Code (Cth) - where the respondents were sentenced to three years imprisonment to be released after four months upon entering into a recognizance of $1000 conditioned they be of good behaviour for remainder of sentence - where the appellant appealed against the sentence imposed - where appellant submitted period to be served before release inadequate and disproportionate to the head sentence - whether trial judge erred in allowing an excessive discount in sentence under section 21E of the Crimes Act1914 (Cth)
[2]
CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE - APPEALS BY CROWN - POWER TO BRING APPEAL
[3]
CRIMINAL LAW - PARTICULAR OFFENCES - OFFENCES AGAINST THE GOVERNMENT - DEFRAUDING THE GOVERNMENT
Director of Public Prosecutions (Commonwealth) for the appellant
[15]
Gilshenan & Luton Legal Practice for the respondents
[16]
[1] MUIR JA: I agree with the reasons of Atkinson J and with the orders she proposes.
[17]
[2] ATKINSON J: The respondents, CAK and CAL, were convicted on their own pleas of guilty on two counts of dishonestly obtaining a financial advantage by deception which is an offence pursuant to sections 11.2(1) and 134.2(1) of the Criminal Code 1995 (Cth).
[18]
[3] Each was sentenced on 21 October 2008 to three years imprisonment, to be released after serving four months upon entering into a recognizance in the sum of $1,000, conditioned that they be of good behaviour for the remainder of the sentence. The maximum penalty for each offence is 10 years imprisonment. The Commonwealth Director of Public Prosecutions ("DPP") appealed against the sentence imposed.
[19]
[4] The facts on which they came to be sentenced were set out in a Statement of Facts agreed between the prosecution and the defence. Both CAK and CAL were directors of a company, ABG Pty Ltd, which was trustee for the ABG Trust ("ABG"). They each caused ABG to obtain a financial advantage of $177,333.34 from the Commissioner of Taxation by causing ABG to pay false invoices in the amount of $341,000 thereby reducing the taxable income of ABG. Two hundred and seventy five thousand dollars of the amount paid on the invoices was returned to CAK and CAL and of that amount they returned $200,000 to ABG by crediting the directors' loan account. They also claimed goods and services tax (GST) credits of $31,000 to which ABG was not entitled.
[20]
[5] The reduction in the tax liability of ABG formed the basis of count 1 on the indictment that between 9 October 2002 and 31 May 2003, ABG Pty Ltd, as trustee for ABG, by a deception dishonestly obtained a financial advantage from a Commonwealth entity, namely the Commissioner of Taxation, and CAK and CAL did aid, abet, counsel or procure the commission of that offence.
[21]
[6] Count 2 relates to the lodgement of an amended business activity statement in order to claim a refund for the GST component reflected in the false invoices. The GST claimed was $31,000. That offence took place between 12 and 15 November 2002.
[22]
[7] A tax avoidance scheme was promoted to the respondents by an accountant, SE. The scheme entailed the provision of two false invoices by SE for consultancy services that were never provided. The invoices then formed the basis for the apparent legitimate transfer of funds from the company ABG to entities controlled by SE. The transaction was backdated in order to reduce the tax liability for the 2002 financial year. The company's internal accountant processed the transfers on instructions by the respondents to companies IJ Pty Ltd ("IJ") in the amount of $137,500 and FCA Limited ("FCA") in the amount of $203,500 for "fees due in respect of consultancy services provided to you over the past 11 months in respect to determination of viability of overseas markets ...". The invoice from IJ was backdated to 1 April 2002 and the invoice from FCA was backdated to 16 June 2002. The invoices were false in that no consultancy services had been performed for ABG and the only purpose of the invoices was to reduce the taxable income of ABG in the 2002 financial year. The company's internal accountant unsuccessfully attempted to persuade the respondents to desist from the plan on at least two occasions. He was nevertheless instructed to process and pay the invoices. The internal accountant even went to the extent of photocopying a section of the accountant's manual detailing the offence and the maximum penalty applicable which he showed to the respondents telling them that he believed that what they were doing was unlawful.
[23]
[8] The funds were eventually repatriated from another entity controlled by SE, namely HA Pty Ltd, as well as from IJ to the personal bank accounts of the respondents. A total of $341,000 was paid from ABG to the various entities controlled by SE. An amount of $275,000 was then paid to the respondents who paid $200,000 to ABG as directors' loans. The income tax avoided as a result of the scheme was $146,333.34. The offending was only detected after the Australian Tax Office ("ATO") commenced an audit of the ABG group of companies in January 2004. The total loss to the Commonwealth was $177,333.34.
[24]
[9] On 22 September 2004, ATO officers attended ABG and made enquiries of the defendants and their internal accountant in regard to that company's dealings with SE. At the meeting the internal accountant provided the ATO with copies of the two invoices. Later that day, the ATO received a faxed letter which had been signed by CAK. In the letter CAK stated that the invoices were paid by SE on the basis that the money would be repaid to the defendants' bank accounts and that the defendants would then pay $200,000 to their company loan accounts. This letter was signed by CAK after he and CAL had been advised by their internal accountant that they should disclose their involvement in the scheme. After some discussion, CAK told the internal accountant to draft a letter which he then signed. The internal accountant then faxed the letter to the ATO.
[25]
[10] The loss to the Commonwealth, as well as penalties incurred in the sum of $87,555.45, were repaid to the ATO in two lump sums on 18 May 2005 and 1 November 2005. The offences took place in 2002 but not brought to court for sentencing until six years later in 2008. The respondents had not re-offended during that period.
[26]
[11] The sentencing judge took into account the amount of the loss to the public purse; that the conduct was calculated criminal conduct; the offending was planned and continued in spite of warnings by the internal accountant; both respondents were mature and experienced business men; the conduct was known to be dishonest and persisted with; the offences were caused by greed and not need; the need for deterrence both personal and general; allowance for the plea of guilty on an ex officio indictment; allowance for the fact that CAK and no previous criminal convictions and that CAL had previous offences of stealing which were a long time ago; compensation had been paid in full; and notice was taken of the good references provided. In addition the sentencing judge took into account the assistance that the respondents had undertaken to provide with regard to an impending prosecution of the scheme promoter.
[27]
[12] The appeal is brought pursuant to the power found in s 669A of the Queensland Criminal Code which is able to be exercised by the Commonwealth DPP pursuant to s 68(2) of the Judiciary Act 1903 (Cth).[1]
[28]
[13] The appellant did not submit that the head sentence imposed on each respondent was in error. The head sentence imposed was that sought by the prosecutor and is supported by relevant authority.[2] Rather the appellant submits that the period of four months to be served prior to release was manifestly inadequate in that it was disproportionate to the circumstances of the offending and the head sentence imposed and because the judge had allowed a discount for s 21E of the Crimes Act 1914 (Cth) which was excessive.
[29]
[14] An important principle to be observed in this case is consistency in sentencing of Commonwealth offenders. As Keane JA observed in R v Tran [2007] QCA 221; 172A Crim R 436 at [8]:
[30]
"Gleeson CJ in Wong v The Queen[3] said of the administration of criminal justice: "It should be systematically fair, and that involves, amongst other things, reasonable consistency." Where the system of criminal justice is enforced by the judicial power of the Commonwealth, State courts exercising that power should strive for reasonable consistency in the sentences imposed throughout the Commonwealth. That objective will usually require recognition of decisions of other States where those decisions concern like cases.[4]"[5]
[31]
[15] Matters that a sentencing court is required to consider and apply are set out in s 16A of the Crimes Act 1914 (Cth). Subsection (1) provides:
[32]
"In determining the sentence to be passed, or the order to be made, in respect of any person for a federal offence, a court must impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence."
[33]
[16] Amongst the matters relevant to discounting the sentence which would otherwise be imposed in a case such as the present the court must take account of are "the degree to which the person has shown contrition for the offence by taking action to make reparation for any injury, loss or damage resulting from the offence" (s 16A(2)(f)(i)), the fact that the person has pleaded guilty to the charge (s 16A(2)(g)), the degree to which the offenders have co-operated with law enforcement agencies in the investigation of the offence or of other offences (s 16A(2)(h), and the prospect of rehabilitation of the offenders (s 16A(2)(n)).
[34]
[17] The recognizance release order was made in respect of the sentence imposed pursuant to s 19AC of the Crimes Act 1914 which applies where a person is convicted of a federal offence and the court imposes on the person a sentence that does not exceed three years. The court in such a case is required to make a recognizance release order in respect of that sentence unless it gives reasons for not doing so. Section 16(1) provides that a "recognizance release order" means an order made under paragraph 20(1)(b). Section 20(1)(b) provides that where a person is convicted of a federal offence, the court before which he or she is convicted may, if it thinks fit, sentence the person to imprisonment in respect of the offence. The court must direct, by order, that the person be released, upon giving security, with or without sureties, by recognizance or otherwise. The court must be satisfied that he or she will comply with conditions that he or she will be of good behaviour for such a period, not exceeding five years, as the court specifies in the order, pay any reparation, restitution, compensation or costs or pecuniary penalty ordered by the court and any other conditions set out in the order including orders in relation to supervision by a probation officer. The recognizance release order may be made either forthwith or after the offender has served a specified period of imprisonment in respect of the federal offence.
[35]
[18] The norm for non-parole periods and periods required to be served before a recognizance release order for Commonwealth offences is generally considered to be after the offender has served 60 to 66 per cent of the head sentence.[6] The precise figure may be outside this range as it is a matter of judicial discretion and is not necessarily capable of precise mathematical calculation,[7] but that is the usual percentage of the sentence. A sentence that was well outside that range would have to have most unusual factors to justify it. In this case taking into account the offenders' early pleas of guilty, by way of ex officio indictment, the past co-operation by the respondents, the payment of the loss sustained to the Commonwealth by the respondents and their apparent rehabilitation, the appropriate period before a recognizance release order was appropriate would have been towards the lower end of that range in the region of 60 per cent or after serving 21 and a half months imprisonment.
[36]
[19] The learned prosecutor during sentencing submitted that a period of 18 months imprisonment was appropriate prior to the recognizance release order taking into account all of the matters under s 16A of the Crimes Act. Given that this is an appeal by the prosecution it would in my view be inappropriate to place the respondents at jeopardy of a higher period of imprisonment prior to the imposition of a recognizance release order. The appellant accepted that it should be bound by its submission before the sentencing judge. Accordingly in my view the period of imprisonment before the release on a recognizance release order which should have been imposed prior to the consideration of the matters under s 21A of the Crimes Act is 18 months.
[37]
[20] Section 21E of the Crimes Act deals with future co-operation which has been promised by an offender. As the Queensland Court of Appeal said in Gladkowski [2000] QCA 352; (2000) 115 A Crim R 446 at 448:
[38]
"There is a difficulty in the application of s 21E of the Crimes Act. The specification that the section requires from the court seems to be in respect of future co-operation of the offender rather than co-operation that has already been provided to the time of sentence. Co-operation of the latter kind is recognised as a relevant matter in s 16A(2)(h). That provision includes co-operation in the form of self-incrimination, and also co-operation already given to law enforcement agencies in relation to their offences up to the time of the sentence. Co-operation of those kinds has no part to play in s 21E. The purpose of s 21E (2) and (3) is to enable an appeal court to know what variation to make to the sentence in the event that the future co-operation "in proceedings", presumably against other persons, is not forthcoming. Past co-operation therefore plays no part in this particular exercise.
[39]
A reference to "co-operation" of an offender may encompass at least three relevant matters - self-incrimination, incrimination of others up to time of sentence, and a promise or undertaking to provide further co-operation in other proceedings. The past aspects (self-incrimination and incrimination of others up to the time of sentence) are encompassed in s 16A(2)(h), and the future aspect relating to the offender's undertaking to co-operate in proceedings encompassed in s 21E. In combination those sections require the court to take all such matters into account in the sentence which it actually imposes, but the benefit in relation to the undertaking is potentially reversible under s 21E."
[40]
[21] The significance of future co-operation is recognized even in the case of crimes such as the present, that is defrauding the Commonwealth, commonly referred to as white collar crime. In Gladkowski the offences were for defrauding the Commonwealth in respect of the avoidance of taxation that would be otherwise owed to the Commonwealth. In that case, the implication by Gladkowski of another, the provision of signed statements against five co-offenders and the provision of an undertaking under s 21E of the Crimes Act to co-operate and give truthful evidence in any prosecution was the co-operation provided. The court held in respect of that co-operation at 447:
[41]
"In these circumstances the applicant is entitled to a substantial informer's discount for his extensive co-operation, which should take into account the risk of incidental retributive violence against him whilst incarcerated. ... It is well recognised that co-operation of this kind, particularly where society benefits from it and it places the informer in a position of danger, calls for "very substantial discount" (McGookin(1986) 20 A Crim R 438 and 449). The necessity of encouraging persons to inform so that offenders may be convicted is regarded as a matter of 'high public policy'. The benefits of such a policy are not likely to ensue without substantial inducement (compare Golding(1980) 24 SASR 161; 3 A Crim R 26; Pang(1999) 106 A Crim R 474 at 477). Discounts of one-third or even one-half of the sentence that would otherwise be appropriate are not uncommon, according to the value and risk of the assistance rendered (Golding; Thomson[1994] QCA 393; (1994) 76 A Crim R 75; Demir (unreported, Court of Appeal, Qld, No 13 of 1995, 4 August 1995)). In Pang, Wood CJ at CL, without purporting to cover the field, described the discount "customarily given" in New South Wales as ranging between 20 and 50 per cent. Other decisions including Thompson recognise the possibility of the discount exceeding 50 per cent, but at the same time the court must ensure that the reduction does not result in a sentence that is an affront to community standards."
[42]
[22] In the unusual case of York v The Queen [2005] HCA 60 the extensive co-operation afforded by the offender and the consequent extreme danger to her resulted in the sentence of five years imprisonment being wholly suspended. In Gladkowski the reduction of the head sentence on account of s21 E alone was 23 per cent from three years three months to two years six months; the reduction of the recognizance release date was 38 per cent from thirteen months to eight months.
[43]
[23] There is nothing in this case to suggest that the customary discount on the recognizance release date should not be allowed. No reduction of the head sentence was sought. A reduction in the recognizance release date of 20 to 50 per cent would result in an actual term of imprisonment before the recognizance release order of between nine and 15 months imprisonment. Given the caution which applies on appeals against sentence by the prosecution,[8] it would be appropriate to impose a sentence at the bottom of that range, that is nine months imprisonment. The imposition of a recognizance release order after four months imprisonment was manifestly inadequate.
[44]
[24] The appeal should be allowed. The sentences below should be varied only to the extent of replacing the recognizance release orders after four months with recognizance release orders after nine months. The recognizance is to be in the sum of $1,000 conditioned on the respondents' being of good behavior for a period of 27 months. Under s 21E of the Crimes Act, it is declared that the sentences are reduced for the reason that the offenders have undertaken to co-operate with law enforcement agencies in proceedings, and that the sentences that would have been imposed but for this reduction would have been three years with a recognizance release order after 18 months.
[45]
[25] P LYONS J: I agree with the reasons for judgment of Atkinson J and the orders proposed by her Honour.