x By these means the Commissioner of Taxation was fraudulently deprived of substantial amounts of both company and personal tax revenue."
7 It is clear from the foregoing that neither of the Respondents devised or organised this illegal scheme. If either of the Respondents had been involved in devising or organising the scheme, more serious offences would apply. The Respondents were participants whose sole purpose was taking moneys to which they were not entitled. The companies, with which the Respondents were associated, on the evidence before the Court, were profitable (and much of the scheme's success depended on the profitability of the participants). The size and operation of the companies were such that in the case of companies associated with each Respondent, the amounts involved were relatively significant. They were not large companies able to conceal better their criminal activity. As a consequence of the foregoing the offences, whilst not worst cases, requiring the maximum (or close to it), are very serious incidents of the kind with which the sections deal.
8 There are significant subjective aspects, none of which are challenged, relating to each of the Respondents. Some of those subjective circumstances require comment. Nevertheless, the learned sentencing judge found genuine remorse and contrition and good prospects for rehabilitation in relation to each of the Respondents.
9 In the case of Mr Hili, he was aware that he was acting dishonestly. It would be astonishing if a participant in this scheme was not aware of that fact. He had recently split up with his wife and moved out of the family home and he had begun to drink heavily. This, according to Mr Hili, may have had an impact upon his judgment. His drunkenness led to a brawl from which Mr Hili spent two weeks in hospital in a very serious condition. As is not unusual in white-collar crimes, there were significant references tendered on behalf of Mr Hili, and references were provided for Mr Jones.
10 Mr Jones was interviewed for the purpose of a pre-sentence report in which he set out his family and employment background. He was the second eldest of four siblings with a stable and supportive upbringing. His father passed away in 1989, after a heart attack, and his mother is in a nursing home suffering from dementia. He visits her on a regular basis. In 1997 his older brother committed suicide and this clearly had a marked impact upon Mr Jones, as is clear from the references and other independent evidence. He, too, began to consume alcohol excessively. He is now in a stable relationship, and has been for the past four and a half years.
11 The Crown does not take issue with the findings of fact as to subjective circumstances. As a consequence, I have been most brief in my treatment of them. Ultimately, given there is no challenge to them, those findings are taken as fact. However, I should not pass over the comments of her Honour in dealing with the obvious embarrassment of both of the Respondents. Notwithstanding the lack of challenge by the Crown, it seems that the "embarrassment" of the Respondents stems from being caught for, rather than from engaging in, the criminal conduct. Nevertheless, it is unnecessary and inappropriate to take the matter further. And I pay no regard to that impression. For each offender, this is his first time in prison.
12 I will deal later in this judgment with the issue of assistance given to law enforcement authorities and the discounts associated therewith. There are aspects of the sentencing exercise, and the manner in which the appeal is agitated, which are unsatisfactory.
Revenue offences generally
13 Of late, procedures for the filing of income tax returns have been relaxed and much greater emphasis has been placed upon self-assessment. Such a process reposes on the taxpayer a heavy duty of honesty. The practical restrictions on the capacity of government to apprehend offenders for every offence necessarily requires that the legislature and the courts ensure that deceitful conduct, in a commercial enterprise, once discovered, is appropriately punished. Deterrence looms large.
14 While the analogy is not always appropriate, there is much to be said for the applicability of statements relating to customs duty to offences of this kind. In that regard, I repeat the oft quoted passage from Kitto J in L. Vogel and Son Pty. Ltd. v Anderson, Minister of State for Customs and Excise for the Commonwealth of Australia [1968] HCA 90; (1967) 120 CLR 157 at 164:
"The duty evaded has now been paid, and I understand that when the evasions were discovered the defendants gave the Customs every assistance in their investigations. But when all the considerations relied upon by the defendants have been given due attention the case still cannot be regarded as other than a serious one. Not only are the defendants guilty of a sustained course of conscious wrongdoing, but the offences are in a field in which punishments for deliberate offences must be severe. The Customs laws represent the judgment of Parliament upon an important aspect of the economic organization of the community, and the object of the penal provisions is to make that judgment as effective as possible. It is important to remember that Customs officers have of practical necessity to rely extensively upon the information supplied to them by importers, for the flow of commerce could not be maintained if every importation had to be fully investigated. Moreover, detection of frauds is not always easy. No doubt ordinary conceptions of honesty and of civic responsibility suffice to ensure a great deal of fair dealing with the Customs, but for some people little seems to matter but fear of the consequences of discovery. The Customs Act makes those consequences potentially drastic. It is for the courts to make them, in suitable cases, drastic in fact, for otherwise traders who are not saved by qualms of conscience from willingness to defraud their fellow citizens may weight the profits they hope for against the penalties they have cause to fear and find the gamble worthwhile."
15 Each of the offences to which the Respondents pleaded is a serious offence and carries a significant penalty. The maximum penalty for a contravention of s 134.2(1) of the Criminal Code Act 1995 (Cth) ("the Code") committed by Mr Hili (by operation of s 4AA and s 4B(2) of the Crimes Act 1914 (Cth) ("the Act") is imprisonment of 10 years and/or a fine of $66,000.
16 In relation to Mr Jones, the contravention of s 29D of the Act carries a maximum penalty of 10 years' imprisonment and/or a fine of $110,000. The contravention of s 134.2(1) of the Code carries a maximum penalty of imprisonment for 10 years and/or a fine of $66,000 and the offence again s 400.4(1) of the Code carries a maximum penalty of 20 years' imprisonment and/or a fine of $132,000.
Money-laundering offence
17 I have included under the heading of "revenue offences" the contravention of s 400.4 of the Code. This is a money-laundering offence. On one view, the correct view, none of the offences to which the Respondents pleaded were "revenue offences". The other breach of the Code involves dishonestly obtaining a financial advantage by deception and the breach of the Act requires a defrauding of the Commonwealth. In the latter, there is a requirement for the Commonwealth to have been deprived dishonestly of valuable assets, including money. In the case of the former, as the short description of the offence indicates, it requires each of the Respondents obtaining a financial advantage by deception. It is impossible to imagine how either one of these offences could be committed (particularly given the facts in this case) without necessarily giving rise to facts that would amount to a consequential breach of the money-laundering offence. It is not suggested that some additional criminal act was to be performed with the money received at the end of the "round robin".
18 This matter was not raised by the Respondents in this Court or in sentencing in the District Court, but there are serious issues relating to double jeopardy in charging the money-laundering offence over and above the criminal offence from which the money was necessarily derived: Nahlous v R [2010] NSWCCA 58 at [13]-[17]; Thorn v R [2009] NSWCCA 294. Given the absence of an appeal from either one of the Respondents, there is little avenue to correct this issue. In a practical sense, because of the total concurrence of each of the sentences imposed, no greater period of imprisonment has been, or is to be, suffered as a consequence. But there are serious issues of principle involved in such a course. However, given the absence of any challenge to this charge and its lack of practical impact the Court should not intervene.
Discount for assistance
19 As earlier stated, the Crown did not challenge the view that her Honour's allowance for past and future assistance was appropriate. Her Honour allowed a 50% discount, of which 12.5% was referable to future assistance. It would seem that the future assistance is still necessary and I would not interfere with the assessment for future assistance.
20 However, there are serious issues associated with allowing a 50% discount for the plea of guilty and assistance to law enforcement agencies. This Court has, on a number of occasions, stated, quite categorically, that two quite distinct situations arise, when calculating a discount for a plea of guilty and assistance.
21 The first such situation is a circumstance where the offender to be sentenced will spend that sentence, or a substantial part of that sentence, in more onerous conditions than the general prison population, on account of the assistance given. In those circumstances, a reduction for the plea of guilty and assistance, if one were granted, should be no more than 50%, unless very exceptional circumstances are disclosed. Onerous conditions of imprisonment are not exceptional circumstances.
22 The second situation complements the first. This situation applies when the offender to be sentenced will not, on account of the assistance given, serve any, or any substantial part, of the sentence to be imposed, while suffering more onerous conditions of imprisonment than the general prison population. In those circumstances the reduction for the plea of guilty and assistance should be no more than 40%, unless one can show exceptional circumstances: see, inter alia, R v Joseph Sukkar [2006] NSWCCA 92; (2006) 172 A Crim R 151 at [8], per Howie J; SZ v Regina [2007] NSWCCA 19 at [7] and [8], per Howie J and at [52] and [53], per Buddin J; and FS v R [2009] NSWCCA 301 at [21].
23 It is not suggested that, because of the assistance they have given or are to give, either of the Respondents will serve their prison sentences in conditions that are more onerous than the general prison population. Nor do any of the extensive facts (nor findings of her Honour) disclose exceptional circumstances that would warrant a reduction greater than the uppermost otherwise allowed. In those circumstances, no reduction greater than 40% is consistent with principle.
24 Because the Crown has, in order to ensure consistency with that which was before the sentencing judge, not sought to challenge the discount, there are limitations on what this Court should do, if this were the only issue. Given the attitude of the Crown and the function of this Court to correct error, this issue of principle will not be a basis for disturbing the sentences.
Sentence structure and parity
25 Another issue arises in relation to the structure of the sentence imposed on Mr Jones. The sentencing judge adopted the approach undertaken, because the Crown submitted, firstly, that the separate offence under s29D of the Act arose only in relation to conduct over the first few months of what was otherwise continuous conduct affecting four tax years for the companies and three tax years for the individual. As a consequence, the Crown submitted that no accumulation ought apply. Secondly, the Crown submitted before her Honour that there should be no differentiation in the sentence imposed on Mr Hili and Mr Jones.
26 There are difficulties with the foregoing submissions of the Crown. The Crown has not sought to resile from the submissions. Nor has any criticism been levelled, by the Crown, at her honour's sentence on the basis that her honour accepted those Crown submissions: see R v JW [2010] NSWCCA 49 at [148]-[150].
27 Nevertheless, the first proposition is directly inconsistent with the principles in Pearce v R [1998] HCA 57; (1998) 194 CLR 610. While concurrency may be appropriate for one course of criminal conduct, each act of fraud required a separate intention to commit a known criminal act. Further, the course proposed puts at naught the injunction to determine separately the appropriate sentence for each offence and to reflect the degree of total criminality by adjusting the extent to which the sentences are concurrent or cumulative. Separate acts of criminality ought to be reflected by some appropriate separate punishment.
28 Because, once more, the parties have not dealt with this issue, other than to confirm (or not to depart from) the submissions below, the Court ought not alter the parity position between Mr Hili, on the one hand, and Mr Jones, on the other. However, Mr Jones' offences cover a longer period of time and a greater number of tax returns.
29 The Court should not be seen to countenance a departure from the principles in Pearce, supra, and will therefore separate out the two effective sentences (i.e. not the money-laundering matter). The offence under s 29D of the Act was for a short period and, because it will be served as the first part of a larger sentence, ought not to have a recognizance release order, separate from the overall order. For those reasons I do not consider a recognizance release order, in relation to that particular sentence, is appropriate: see s 19AB(4) and s 19AC(4) and (5) of the Act.
30 For the purpose of ensuring the continuing parity between the offenders, as submitted by the parties, and the reasons of totality, there will be a consequential lessening of the sentence imposed for the Code offence.
Ratio of non-parole period to head sentence
31 Much time and effort was taken up during argument, in both written submissions and orally, on the appropriate ratio between a non-parole period and the head sentence. The Crown has submitted that the non-parole period should be between 60% and 66% of the total sentence. This, according to the Crown, is in accordance with principle. The respondents deny the existence of any such principle.
32 Under the statutory regime that exists in relation to State offences in New South Wales, there is a minimum statutory ratio, the effect of which is that the non-parole period must be no less than 75% of the total sentence, unless the sentencing judge finds the existence of special circumstances. No such statutory ratio or formula exists in relation to Commonwealth offences.
33 This Court dealt with the issue in Bernier v R (1998) 102 A Crim R 44 and has consistently applied that guideline. As Meagher JA (with whom Wood CJ at CL and Studdert J. agreed) stated in R v Viana [2001] NSWCCA 171 at [3]:
"The principles of law applicable in this area have been laid down by this court in Bernier v R (1998) 102 ACrimR 44. There is in fact no statute which requires the non-parole period to bear any particular proportion in relation to the head sentence, nor is there any mandatory precedent in this Court which requires a fixed sentence. The most that can be said is that this Court has usually in cases of this sort, thought the proportion ought to be somewhere between 60 and 66 percent. That is not to say that higher percentages cannot stand."
34 Statements of this kind, and to this effect, are of long-standing. It should be noted that, while the Court contemplated higher percentages than 66%, there was no contemplation of lower percentages than 60%. Of course, circumstances that are special to a particular individual may give rise to considerations that would allow a court, when sentencing, to provide, as part of an overall sentence, a longer than usual potential parole period (or period of supervision under a recognizance release order). This would ordinarily be for the purposes of facilitating rehabilitation. But special circumstances may arise from a number of factors.
35 The Respondents have raised a series of judgments, emanating mostly, it is said, from Queensland, which, it is submitted, have questioned the proportion outlined above. In my view, there is little or no divergence in principle, and the authorities, upon which the Respondents rely, provide no basis for reconsidering the above approach.
36 The commencement point of an analysis of the Queensland authorities is R v CAK & CAL; ex parte Cth DPP [2009] QCA 23, in which the Court repeated, at [18], that the normal non-parole period is between 60% and 66% of the head sentence. For that proposition, their Honours cited a number of judgments of this Court. They also cited the comments of Keane JA (as he then was) in R v Tran [2007] QCA 221; 172 A Crim R 436. Their Honours, in a Crown appeal, quashed the recognizance release order and replaced it with a mandatory imprisonment term more than double the amount set by the sentencing judge at first instance. The Queensland Court of Appeal said:
"[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]: