R v Edelbi

Grounds 3 and 4: assessment of objective seriousness of Counts 2-11

1. These two grounds can be dealt with together. They complain, in the alternative, that her Honour failed appropriately to assess the gravity of the individual counts or, if she did assess each of them as falling within the mid-range, that assessment was not open. The grounds arise from her Honour's finding, quoted at [23] above, that Count 1 and the course of conduct represented by the counts on the indictment and the Form 1 matters "fall at around the mid-range of objective gravity for offences of this kind".
2. As to ground 3, Mr Game SC, who appeared with Mr Lange for the applicant, submitted that it is apparent from this passage that her Honour made a "global assessment" of the criminality of the offences, rather than assessing the objective seriousness of each offence individually. He referred to Franklin v R [2016] NSWCCA 319, a case involving a substantial aggregate sentence for a large number of sexual offences committed by that applicant upon his niece over a period of several years. The sentencing judge's assessment of the seriousness of the offences was undoubtedly expressed in global terms. At [65] RA Hulme J, with whom Macfarlan JA and Bellew J agreed, said: "It was a necessary function of his Honour's sentencing task to make some finding as to the gravity of the individual offences: see, for example, Mulato v R at [47]; JM v R [2014] NSWCCA 297; 246 A Crim R 528 at 39; R v Van Ryn [2016] NSWCCA 1 at [133]-[142]. It may be inferred from the indicative sentences that it is a task with which there must have been some intellectual engagement. The problem is that the judge exposed no reasoning on the subject. Lest it be thought that in a case involving sentencing for a large number of offences that would involve an onerous recitation of lengthy and elaborate reasons, it need not. The indicative sentences suggest that the judge must have found a lot of the offences fell within a broadly similar range with a few outliers. If that was his assessment, it could have been stated fairly succinctly."
3. Mr Game submitted that here the objective gravity of each offence individually should have been assessed, as required by Pearce v The Queen (1998) 194 CLR 610. He acknowledged that the fact that the offences were committed as part of a course of conduct was relevant to the assessment of the gravity of the individual offences, but said that that does not detract from the requirement to assess each offence individually.
4. However, as the Crown prosecutor pointed out, the passage complained of in these grounds should not be read in isolation from what her Honour had said earlier about objective gravity. As noted at [22] above, her Honour set out what she saw as the factors relevant to the assessment of the objective gravity of "each offence", referring to the period of time over which the offences were committed, the applicant's motivation and the planning and sophistication of the scheme, as well as the amounts of money involved in Counts 2-11. Apart from the amounts involved, those features were common to all of the offences and, as noted, each of them stood to be assessed as part of a continuing pattern of offending.
5. It is well established that her Honour was not required to assess the gravity of the offences by assigning them to a place within a notional scale but, rather, to identify the "facts, matters and circumstances" bearing upon that assessment: FL v R [2020] NSWCCA 114, per Wilson J (with whom RA Hulme and Hamill JJ agreed) at [59]-[60], citing Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39 at [29]. This her Honour did.
6. It is apparent that, in the course of doing so, her Honour had regard to the relative seriousness of each of the offences. As to Counts 2-6, the offences involving invoices to the lawyers, her Honour specified indicative sentences of 6 months for each of Counts 2, 5 and 6, each of which involved the same amount ($2,240) and a comparable number of invoice items. She specified indicative sentences of 12 months for each of Counts 3 and 4, each involving an amount in excess of $4,000 with significantly larger, but again comparable, numbers of invoice items.
7. As to Counts 7-11, involving the insurers, Count 10 stands apart because in determining the indicative sentence of 2 years for it, her Honour took into account the ten offences on the Form 1. The other four counts involved comparable numbers of fictitious appointment records and were distinguished primarily by the amounts involved. Her Honour specified indicative sentences of 12 months for each of Counts 7 and 11, involving claims of a little over $1,000, which were paid in full. She specified indicative sentences of 6 months for each of Counts 8 and 9. Count 8 involved a claim for $700, of which $578 was paid. Count 9 involved a claim for $1,700, of which $975 was paid.
8. In the circumstances of the case, it cannot be said that the features of each of these offences demanded a greater differentiation in the indicative sentences.
9. As to ground 4, Mr Game submitted that, in any event, it was not open to her Honour to have found each of Counts 2-11 to fall within the mid-range of objective gravity. In pursuing this ground, he acknowledged established authority that the assessment of objective seriousness is an evaluative exercise for the sentencing judge, one in which this Court would be slow to intervene: Mulato v R [2006] NSWCCA 282, per Spigelman CJ at [37] and Simpson J (as she then was) at [46].
10. Nevertheless, Mr Game submitted that her Honour had fallen into error here. While acknowledging that the amount involved in an offence of dishonesty is not determinative of its objective gravity, he cited the example of Count 8, a claim on an insurer for $700 leading to a payment of $578. He observed that the offence under s 192(E) of the Crimes Act embraces "unlimited sums", and he noted the limited period over which this particular offence occurred, from 9 to 10 May 2016. He submitted that it was not open to her Honour to conclude that that offence fell within the mid-range and that the same could be said of the other counts, even though they were objectively more serious.
11. Mr Game suggested an incongruity between a finding of mid-range and the modest indicative sentences in respect of these counts, for the most part 6 or 12 months. However, it is to be borne in mind that the indicative sentences were arrived at after a combined discount of 45%. It is also to be noted, as the Crown prosecutor pointed out, that her Honour did not place the offences squarely at the mid-range but, rather, "at around the mid-range". That expression was presumably intended to embrace some flexibility in the assessment of objective gravity, and is consistent with the variation in the indicative sentences. As the Crown prosecutor fairly pointed out, the differences in the amounts involved in the various counts were significant, but not substantial. Moreover, in assessing the objective gravity of each count, her Honour properly had regard to the features common to all of them: the applicant's motivation and the persistence and sophistication of the enterprise.
12. I am not persuaded that her Honour fell into error in nominating the range she did.

Ground 2: breach of trust?

1. As noted above at [22], her Honour characterised the offences as "a significant breach of trust by the offender in the performance of his duties as sole director of the company". Mr Game submitted that a finding of breach of trust was not open. He referred to the examination of the concept of breach of trust in sentencing by Hulme J in R v Stanbouli [2003] NSWCCA 355; (2003) 141 A Crim R 531, at [34] (539): "The cases where, traditionally, breach of trust has been regarded as exacerbating criminality are where it is the victim of the offence who has imposed that trust - an employer defrauded by his employee, a solicitor who appropriates trust funds to his own use - or where the criminality involves a breach of that which the offender was engaged or undertook to do, e.g. a teacher or baby-sitter who indecently deals with the subject of his or her charge. Another example is afforded by the case of R v McLean (unreported, CCA, 31 March 1989) where a customs officer employed in the investigations section of the department had conspired to import heroin and cannabis. The offence there was in direct contravention of what the offender had been employed to do."
2. Breach of trust or authority in relation to the victim is an aggravating circumstance in s 21A(2)(k) of the Crimes (Sentencing Procedure) Act. In relation to that provision Howie J, with whom McClellan CJ at CL and Hislop J agreed, said in Suleman v R [2009] NSWCCA 70 at [22] and [25]: "22. This aggravating factor is not made out simply because the victim trusted the offender for some reason or other, such as because of the offender's standing in the community or he appeared to be a successful businessman. Nor is it made out because the persons with whom the offender dealt were "commercially naïve people". The relevant factor is that there was at the time of the offending a particular relationship between the offender and the victim that amounted to "a position of trust". It is a special relationship existing between them and transcends the usual duty of care arising between persons in the community in their everyday contact or their business and social dealings…. … 25. But the common law does not recognise, for the purposes of sentencing, that a position of trust arises simply because the two persons are involved in a commercial relationship. There must be some peculiar aspect of the relationship that imposed a position of trust on one or both of the participants…."
3. Mr Game noted her Honour's description of the offending as "the activities of the group related to processing of claims against compulsory third party insurers under the provisions of the Motor Accidents Compensation Act 1999". As he correctly observed, the deception was perpetrated by the lodgement of claims for treatments which had not been provided or had been provided by persons other than the practitioners named in the claims. Typically this was done through the law firm, of which most of the patients were clients. Mr Game submitted that there was no trust reposed by the compulsory insurers in the practice which the applicant ran. On the contrary, the practice did not have a direct relationship with the insurers, the deception for the most part occurring indirectly through the law firm.
4. However, her Honour's reference to breach of trust should be understood in the light of what she said thereafter, set out at [23] above, referring to society's expectation that providers of health services would not abuse the trust placed in them, and adding that making claims for services not provided is "obviously a serious fraud committed on the community". It is in this sense that I understand her Honour to have used the expression "breach of trust". Neither Mr Game nor Mr Lange appeared for the applicant in the District Court. However, counsel who did appear acknowledged in written submissions that s 21A(2)(k) "might be relevant insofar as it can be said that health practitioners are expected by the government and public to behave with honesty in relation to matters such as claims of this kind…."
5. In Ridley v R [2008] NSWCCA 324; (2008) 192 A Crim R 139, the applicant had been convicted of a number of offences of dishonesty under Commonwealth legislation arising from false claims for refunds for goods and services tax in activity statements submitted to the Australian Taxation Office. In his reasons for sentence the trial judge held that the offences were a breach of trust, involving fraud on "all members of the community who pay their taxes". That approach was upheld by this Court. Allsop P (with whom Johnson and Price JJ agreed) noted at [84] evidence of the self-assessment system which had been the relevant taxing regime for some years and which relied on "the honesty of individual taxpayers". His Honour said at [85]: "This is in terms a kind of trust. Members of the community rely on each other for honesty for the operation of the tax system. It was a legitimate comment by the primary judge and an entirely legitimate consideration."
6. So it is here. Members of the community contribute to the provision of compulsory third party insurance and have an interest in the integrity of the system. Whether or not the present case falls within the precise terms of s 21A(2)(k), her Honour's finding of a breach of trust in this context was open and was appropriate.

Ground 1: failure to consider an intensive correction order

1. The aggregate sentence of 3 years was within the limit allowing for consideration that it be served by way of an intensive correction order: s 68(2) of the Crimes (Sentencing Procedure) Act. The effect of this ground, complaining of a failure to have regard to the requirements of s 66 of that Act, is that her Honour failed appropriately to consider that option.
2. In written submissions in the District Court, counsel then appearing submitted that the offending should be regarded as below mid-range in terms of objective seriousness, and also argued that an overall discount of 45% was appropriate for the applicant's plea of guilty and his assistance to the authorities. He added that, if those submissions were accepted, "it is suggested that the sentencing range that might be considered would be such as to allow for a sentence to be imposed which could be served in the community". He noted that a sentencing assessment report which her Honour received conveyed that the applicant would be suitable for release on a "supervised order".
3. In the course of oral submissions, her Honour raised this matter with the prosecutor, who argued that such an outcome would be inadequate given the seriousness of the offending. Counsel for the applicant made no oral submission about the matter, including in reply, but at the end of submissions her Honour said that she had not come to any final view about it. However, she said that her initial reaction was that service of a sentence in the community was not appropriate and that the applicant should not be under any misapprehension, while adding, "I will carefully consider the matter and, of course, I have to set out my indicative sentences too which will be the decisive fact".
4. However, in her reasons for sentence her Honour made no reference to the option of an intensive correction order. Towards the end of her reasons, before passing sentence, she did say, "Taking all matters into account, a fulltime custodial sentence is the only appropriate sentence for each count". Having announced her decision to impose an aggregate sentence, she added that the single non-parole period she would fix "represents the minimum period that the offender should spend in custody having regard to all the elements of punishment, including the objective seriousness of the offence, specific and general deterrence, denunciation and his subjective circumstances".
5. Intensive correction orders are dealt with in Part 5 of the Crimes (Sentencing Procedure) Act. Section 64 provides that the Part applies "in circumstances in which a court is considering, or has made, an intensive correction order". Section 66 provides: 66. Community safety and other considerations (1) Community safety must be the paramount consideration when the sentencing court is deciding whether to make an intensive correction order in relation to an offender. (2) When considering community safety, the sentencing court is to assess whether making the order or serving the sentence by way of full-time detention is more likely to address the offender's risk of reoffending. (3) When deciding whether to make an intensive correction order, the sentencing court must also consider the provisions of section 3A (Purposes of sentencing) and any relevant common law sentencing principles, and may consider any other matters that the court thinks relevant.
6. Mr Game submitted that s 66 applied here because her Honour was "considering" an intensive correction order within the meaning of s 64. Thus, he argued, her Honour was bound to consider the issues raised by s 66.
7. Mr Game referred to Blanch v R [2019] NSWCCA 304, in which this Court found that a trial judge was in error in failing appropriately to deal with the issue of an intensive correction order, which had been raised in the proceedings. That applicant had been sentenced for drug supply offences. The sentencing judge made no reference in his reasons to s 66, and, indeed, had not referred in terms to an intensive correction order. What he did say is recorded in [37] of the judgment of Campbell J, with whom Hoeben CJ at CL and Price J agreed. It is sufficient to set out part of the passage in the sentencing judge's reasons which Campbell J quoted at [37], as follows: "…No sentence other than imprisonment is appropriate to fulfil the purposes of sentencing in this case. Although the effective sentence will be such that alternatives to full-time imprisonment would be open, the objective seriousness of the offences and the subjective circumstances of the offender are such that only full-time imprisonment will be appropriate to fulfil the purposes of sentencing, including, particularly, the need for general deterrence, protection of the community and recognition of the harm caused to the community."
8. At [60] Campbell J said that the findings of the sentencing judge might have justified a decision to impose a sentence of fulltime imprisonment instead of an intensive correction order. His Honour continued at [60]-[61]: "60 … However, I am also of the view that the circumstance that the whole gravamen of the case presented on behalf of the applicant at first instance was that (a) a sentence of imprisonment was inevitable; but (b) it was appropriate to order that it be served in the community by intensive correction order, required his Honour to direct himself as to the applicable principles, specifically s 66, governing the decision whether to make an ICO. The section, whether he referred to it expressly or only by implication, required him to consider as a paramount consideration the requirements of community safety by reference to which of an ICO or full-time detention would more likely address the offender's risk of re-offending. 61 His Honour would also have been required to consider the provisions of s 3A and other relevant principles and matters in accordance with s 66(3). He may well have come to the same conclusion adopting the approach required by the statute. But by by-passing, as his Honour appears to have done, the requirements of ss 66(1) and (2), and, in effect, proceeding directly to s 66(3), his Honour has not applied the relevant principles of law which govern the exercise of the statutory power invoked by the applicant's submissions before him. With great respect to his Honour he did not even refer to an ICO in terms."
9. Campbell J observed at [62] that the question of an intensive correction order "was squarely raised and seriously put and should have been considered in terms". He added that, as to s 66, it was "not necessary for his Honour to set out the section, or to refer to it in express terms, but as his reasons made clear his Honour did not direct himself in substance by reference to the principles it establishes which govern the decision whether to make an ICO".
10. At [68] his Honour stressed that he was not suggesting that it was necessary for a sentencing judge to go through this process "in every case in which a short sentence of imprisonment is under consideration for an offence" for which an ICO might be available (referring to s 67, which excludes that sentencing option in relation to certain offences).
11. Citing the judgment of Basten JA in R v Fangaloka [2019] NSWCCA 173 at [60], his Honour said that there "must be some relevant material, which could include a cogent argument advanced by counsel, before the court to engage a requirement to consider the matter". As to the case at hand, his Honour said at [69]: "What enlivened the necessity for his Honour to consider, and in the event explain if he was not persuaded, specifically, that an ICO was appropriate was the argument put by counsel. If the argument was to be rejected, his Honour was required to deal with the matter in accordance with the statutory stipulations governing the power to make such an order."
12. Mr Game referred to the affirmation of Campbell J's reasoning by McCallum JA, with whom Meagher JA and Simpson AJA agreed, in Wany v DPP [2020] NSWCA 318, a case of judicial review of the decision of a District Court judge in an appeal against a sentence imposed by a magistrate. At [52], after referring to the judgment of Campbell J in Blanch at [68]-[69], her Honour said that "the obligation to consider making an ICO may be enlivened (as a requirement of practical justice if not a matter of legal duty) where a cogent argument is advanced for taking that course". She added that there would be "cases in which it will be open to the sentencing judge to reject such an argument without adjourning the proceedings to obtain a sentencing assessment report". As to s 66, her Honour said at [60]: "… That section provides that, where the court is considering an ICO, the paramount (mandatory) consideration is community safety; in considering that issue, the sentencing court is required by s 66(2) to make an assessment as to 'whether making the order or serving the sentence by way of full-time detention is more likely to address the offender's risk of reoffending'."
13. At [61], her Honour referred to "a separate controversy" as to the proper construction of that section, but added that "on any view, it requires the sentencing magistrate or judge to form a view as to which method of serving the sentence of imprisonment (by ICO or in detention) is more likely to address an offender's risk of re-offending". The controversy to which her Honour referred relates to the provision in s 66(3) that, in deciding whether to make an intensive correction order, a court must also consider the provisions of s 3A (relating to the purposes of sentencing) "and any relevant common law sentencing principles…."
14. In Blanch Campbell J referred to the same controversy at [52]. Neither he nor McCallum J found it necessary to resolve that issue; nor is it here. The difference of opinion relates to what might be termed the more restrictive view of s 66 espoused by Basten JA in Fangaloka at [63]ff and the more liberal view of the section expressed by Beech-Jones J in Cassella v R [2019] NSWCCA 201 at [107]-[108]. Recently, in Mandranis v R [2021] NSWCCA 97, Simpson AJA, with whom Garling and N Adams JJ agreed, favoured the more liberal approach.
15. Mr Game argued that there was significant material in the applicant's subjective case to call for the examination of the option of an intensive correction order, particularly his remorse, not only expressed but demonstrated by his assistance to the authorities. Mr Game also noted the sentencing assessment report, referred to above, which conveyed the applicant's suitability for "a period of imprisonment by way of intensive correction".
16. In response, the Crown prosecutor noted that the submission of counsel for the applicant in the District Court was expressed to be contingent upon a finding that the objective seriousness of the offending was below mid-range. (She also observed that the submission did not refer to an intensive correction order in terms. However, it is clear that what was at issue was the service of a term of imprisonment in the community, which could not have been anything else.) The Crown prosecutor also observed that that option had been the subject of only brief reference in the written submissions and counsel for the applicant had not addressed it at all in oral argument, even after her Honour had raised it with the prosecutor. She submitted that the issue could not be said to have been "squarely raised" or the subject of "cogent argument", contrasting the present case with Blanch and Wany, in which the issue had been front and centre.
17. Generally, the Crown prosecutor questioned whether the applicant's favourable subjective case fairly raised the issue of an ICO, noting the observation of Fullerton J in Karout v R [2019] NSWCCA 253 at [94] that, in relation to that applicant, his good prospects of rehabilitation and a finding that he was unlikely to reoffend "did not dictate that an ICO was the appropriate sentencing outcome".
18. This ground has troubled me, and I acknowledge the force of the Crown prosecutor's submissions. However, I have decided that the ground is made out.
19. What cannot be denied is that the option of service of a prison term in the community was raised in written submissions on behalf of the applicant. True it is that the submission was made on the basis that the objective seriousness of the offending should be regarded as "below mid-range". Her Honour found it to be "around mid-range". Both expressions are inherently imprecise, and there is not necessarily a marked difference between them. (Indeed, debates such as this call into question the utility of reference to ranges generally.)
20. I do not see it as significant that in oral submissions counsel for the applicant did not address the issue, given that it had been raised succinctly and clearly in the written submissions. Nor do I see it as significant that counsel said nothing more about it in oral submissions after the Crown prosecutor expressed his opposition to it. This meant no more than that, as would be expected, issue had been joined between the parties about the matter. Most importantly, her Honour expressly undertook to give it careful consideration.
21. In the event, in her reasons for sentence her Honour did not deal with the issue, addressing the considerations raised by s 66, in accordance with the approach enshrined in Blanch and Wany. It should be observed that she was not referred to Blanch, and Wany was decided after this sentence was passed. Of course, it would have been open to her Honour, having assessed those matters, to decide that fulltime imprisonment was inevitable. Nevertheless, the case was one in which an ICO was worthy of consideration, and in failing to address it in accordance with those authorities, she was in error.
22. Accordingly, it falls to this Court to consider the appropriate sentence in the exercise of its own discretion.

Resentence

1. The sentence passed by her Honour commenced on the day it was imposed, 12 May 2020. Accordingly, the applicant has now served (in round figures) 13 months of fulltime imprisonment. That, of course, is a matter to be taken into account on the issue of resentence.
2. The Crown prosecutor submitted that, if error were established, this is a case where no lesser sentence than the fulltime imprisonment her Honour imposed was warranted. However, after careful consideration, I am of the view that this Court should resentence. While I do not perceive any need to express the objective gravity of the offences by reference to a range, they are undoubtedly serious for the reasons identified by her Honour, summarised at [22] above. Sentence for them must appropriately reflect retribution and deterrence, both general and specific (although it is clear that specific deterrence plays a lesser role here).
3. It is not in issue that they merit a sentence of imprisonment, and I consider that the aggregate term of 3 years set by her Honour is the appropriate sentence. Like her Honour, I would allow a combined discount of 45% for the applicant's pleas of guilty and his assistance to the authorities, and I would adopt the indicative sentences set by her Honour. However, I have concluded that the aggregate sentence should be served by way of intensive correction in the community.
4. The applicant has already served a significant period of fulltime imprisonment. I have regard to his favourable subjective case, particularly his good prospects of rehabilitation, his remorse and his assistance to the authorities. Of course, that assistance has been taken into account in arriving at the sentence, but it also demonstrates his remorse and his rehabilitation prospects. I also note that at the end of both reports, the psychologist, Dr Milic, recommended that he continue with psychological treatment over the next 12 months.
5. Having regard to s 66(2), it is my assessment that the applicant's risk of reoffending is more likely addressed by an ICO. Accepting the paramountcy of community safety in accordance with subs (1), and having regard to the other sentencing factors embraced by subs (3), I consider that this is an appropriate case for that course.
6. There are to be found in the authorities two approaches to how this Court, having decided to intervene and impose an ICO, should take into account a period of fulltime custody which the applicant had already served. Section 70 of the Crimes (Sentencing Procedure) Act provides that the term of an ICO is "the same as the term or terms of imprisonment in respect of which the order is made", and s 70(1) provides that an ICO commences on the date on which it is made.
7. In Blanch, at [91]ff, Campbell J examined those provisions, together with s 47 of the Crimes (Sentencing Procedure) Act and s 5 of the Criminal Appeal Act 1912 (NSW), and concluded that this Court could backdate the ICO to the date of commencement of the sentence in the District Court, so as to embrace the period which had been served. However, in Mandranis, Simpson AJA, at [56]ff, decided that the effect of ss 70 and 71 is that an ICO made by this Court must date from the day on which it is made, but the sentence could be reduced to take account of the period of fulltime custody served. That was the course taken in that case.
8. It appears that in Mandranis the Court was not referred to Blanch. However, I respectfully share the view of Simpson AJA, particularly in the light of the requirement in s 70 that the term of the ICO be the same as the term of imprisonment in respect of which it is made. I propose to adopt her Honour's approach in Mandranis.
9. Accordingly, I would reduce the 3 year aggregate sentence by 13 months and impose a term of 1 year and 11 months, to be served by way of an ICO. The material before her Honour, including the sentencing assessment report, provides sufficient material for that purpose, and no further report is required. Apart from the standard conditions under s 73 of the Crimes (Sentencing Procedure) Act, I would impose an additional condition that the applicant receive any psychological treatment recommended to him: s 73A(2)(e).

Orders

1. I would grant leave to appeal and allow the appeal. I would quash the sentence passed in the District Court and, in lieu, would sentence the applicant to imprisonment for 1 year and 11 months to be served by way of intensive correction in the community, commencing on 16 June 2021 and expiring on 15 May 2023. That order would be subject to the following conditions: 1. the applicant must not commit any offence; 2. the applicant must submit to supervision by a community corrections officer; 3. the applicant must receive any psychological treatment recommended to him.

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