R v Glyn Morgan JONES; R v Anthony Joseph Luis HILI

DECISION: In relation to Glyn Morgan Jones: (i) Appeal allowed in part and otherwise dismissed; (ii) The sentences imposed by the District Court, in this matter, on 13 November 2009, for the contravention of s 29D of the Crimes Act 1914 (Cth) and s 134.2(1) of the Criminal Code Act 1995, are set aside; (iii) In lieu of the sentence imposed, (a) For the contravention of s 29D of the Crimes Act 1914 (Cth), Mr Jones is sentenced to a fixed term of imprisonment of 12 months to commence on 13 November 2009; (b) For the contravention of s 134.2(1) of the Criminal Code Act 1995 (Cth), Mr Jones is sentenced to a term of imprisonment of 2 years and 6 months to commence on 13 May 2010; (c) Mr Jones is to be released after 18 months' imprisonment, namely, on 13 May 2011, upon entering into a recognizance release order pursuant to s 20(1)(b) Crimes Act 1914 (Cth), self surety in the sum of $1,000, to be of good behaviour for the balance of the sentence and to appear to receive sentence and if called upon to do so at any time in respect of any breach within the said period.

CATCHWORDS: CRIMINAL LAW - Crown appeal - sentence - attitude to tax fraud - reduction for plea of guilty and assistance - proportion of mandatory term of imprisonment to head sentence - intuitive assessment of manifest error - manifest inadequacy - appeal allowed - sentence increased

LEGISLATION CITED: Crimes Act 1914 (Cth) Criminal Code Act 1995 (Cth)

Bernier v R (1998) 102 A Crim R 44 FS v R [2009] NSWCCA 301 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 Nahlous v R [2010] NSWCCA 58 Pearce v R [1998] HCA 57; (1998) 194 CLR 610 R v CAK & CAL; ex parte Cth DPP [2009] QCA 23 R v Joseph Sukkar [2006] NSWCCA 92; (2006) 172 A Crim R 151 CASES CITED : R v JW [2010] NSWCCA 49 R v Robertson [2008] QCA 164 R v Ruha, Ruha & Harris; ex parte Cth DPP [2010] QCA 10 R v Tran [2007] QCA 221; 172 A Crim R 436 R v Viana [2001] NSWCCA 171 SZ v Regina [2007] NSWCCA 19 The Queen v Woods [2009] NTCCA 2 Thorn v R [2009] NSWCCA 294

Regina (Applicant) PARTIES: Glyn Morgan JONES (Respondent) Anthony Joseph Luis HILI (Respondent)

COUNSEL: P W Neil SC (Applicant) M W Inglis / R Webb (Respondents)

SOLICITORS: Commonwealth Director of Public Prosecutions (Applicant) Snelgroves Lawyers (Respondents)

LOWER COURT FILE NUMBER(S): 2008/11/1001; 2008/11/1002

IN THE COURT OF CRIMINAL APPEAL 2008/15597; 2008/15601

McCLELLAN CJ at CL HOWIE J ROTHMAN J

14 MAY 2010 R v Glyn Morgan JONES; R v Anthony Joseph Luis HILI Judgment 1 McCLELLAN CJ at CL: I agree with Rothman J. 2 HOWIE J: I agree with Rothman J. 3 ROTHMAN J: Anthony Joseph Luis Hili and Glyn Morgan Jones (the Respondents) cheated on company tax. They paid out on false invoices, thereby avoiding GST and evading income tax, and returned the money to their own personal accounts. They were charged, pleaded guilty and were sentenced by the District Court to a term of imprisonment of 18 months, commencing 13 November 2009, with a recognizance release order at the expiration of 7 months, which order would commence on 12 June 2010. The Crown appeals those sentences and alleges that they are manifestly inadequate. 4 Much of the argument before the Court turned on the calculation of the non-parole period, and the principles that ought to apply, but there are other substantive issues, and calculation of non-parole periods does not seem to me an issue of great contention. Facts 5 As one would expect with a tax scheme, the detailed facts are complex. Because there was a plea of guilty in relation to each of the Respondents, there were agreed facts placed before the sentencing court, upon which the court based its findings. Excluding annexures dealing with particular transfers and particular companies, the agreed facts relating to Mr Hili are contained within a document of 41 pages. Again excluding annexures of a similar kind, the agreed facts document relating to Mr Jones occupies some 35 pages. Her Honour, in sentencing, summarised those facts in approximately 12 pages, not including a statement of the evaluation of assistance. 6 The Crown in its submissions on appeal further summarised the facts in a manner that was not the subject of contest. That summary is in the following terms: "Hili

On 17 August 2009 the Respondent Hili was arraigned in the District Court at Sydney before Morgan DCJ and pleaded guilty to an offence contrary to s.134.2(1) of the Criminal Code Act 1995 (Cth) of by a deception dishonestly obtaining a financial advantage from the Commissioner of Taxation between about 16 January 2002 and about 4 November 2003.

The particulars of the charge established that Hili, within the period of the charge, caused tax returns to be lodged with the Commissioner of Taxation for the companies Kylood Pty Ltd (Kylood) and Hilisa Pty Ltd (Hilisa) (of which he was the sole director and shareholder) which, in respect of the financial years ended 30 June 2001, 30 June 2002 and 30 June 2003, falsely claimed deductible expenses for management and consultancy fees in consequence of which the companies were assessed liable for less tax than they should have been. In addition Hili, by an international round robin scheme, effectively received into his own hands the bulk of the moneys paid out of the companies as false management and consultancy fees, such receipts being assessable dividend income in his hands in respect of the financial years ended 30 June 2002 and 30 June 2003. He dishonestly failed to declare the receipts as assessable income in his personal tax returns in consequence of which he was assessed liable for less tax than he should have been.

The total tax shortfall referable to Hili's criminal conduct was $398,537.82, although the financial loss to the ATO was $376,037.82 because of an adjustment with respect to Hilisa Pty Ltd for the financial year ended 30 June 2004.

On 30 September 2008 the Respondent Jones pleaded guilty before a magistrate in the Downing Centre Local Court to three charges as follows: (1) Between about 11 April 2001 and about 20 April 2001 defrauding the Commonwealth contrary to s.29D of the Crimes Act 1914 (Cth). (2) Between about 7 February 2002 and about 31 October 2003 by a deception dishonestly obtaining a financial advantage from the Commissioner of Taxation contrary to s.134.2(1) of the Criminal Code Act 1995 (Cth). (3) Between about 13 January 2003 and about 21 January 2004 dealing with money to the value of $100,000 or more intending that the money would become an instrument of crime contrary to s.400.4(1) of the Criminal Code Act 1995 (Cth).

Jones was committed for sentence to the District Court at Sydney and came before Morgan DCJ for that purpose on 29 August 2009 when the sentence hearings of himself and Hili proceeded, jointly.

The particulars of the charges established that Jones, within the period of the charges, caused tax returns to be lodged with the Commissioner of Taxation for the company Jiess Building & Carpentry Services Pty Ltd (Jiess) (of which he was the sole director and shareholder) which, in respect of the financial years ended 30 June 2000, 30 June 2001, 30 June 2002 and 30 June 2003, falsely claimed deductible expenses for management and consultancy fees in consequence of which the company was assessed liable for less tax than it should have been. In addition Jones, by an international round robin scheme, effectively received into his own hands the bulk of the moneys paid out of the company as false management and consultancy fees, such receipts being assessable dividend income in his hands in respect of the financial years ended 30 June 2001, 30 June 2002 and 30 June 2003. He dishonestly failed to declare the receipts as assessable income in his personal tax returns in consequence of which he was assessed liable for less tax than he should have been.

The total period of Jones' criminal conduct is between about 11 April 2001 and about 21 January 2004. On 23 May 2001 s.29D of the Crimes Act 1914 (Cth) commenced. The criminal conduct of Jones which commenced on about 11 April 2001 contrary to s.29D ceased at the close of 23 May 2001 and his criminal conduct contrary to s.134.2(1) commenced at the beginning of 24 May 2001. In practical terms there was an uninterrupted continuum of a course of conduct of defrauding the Commissioner of Taxation of tax revenue with respect to Jiess.

On 1 January 2003 Division 400 of the Criminal Code Act 1995 (Cth) commenced operation. Division 400 created money laundering offences including the offence against s.400.4 (1). In the period between about 13 January 2003 and about 21 January 2004 again, as a continuum of the international round robin scheme, Jones caused Jiess to make four telegraphic transfers as follows:

13/1/03 $35,000.00 to Billbury Ltd, ANZ Bank Auckland.

25/2/03 $35,000.00 to Billbury Ltd, ANZ Bank Auckland.

6/6/03 $40,000.00 to Billbury Ltd, ANZ Bank Auckland.

21/1/04 $26,552.54 to Edgecumbe Finance Ltd, ANZ Bank Auckland.

Each payment was the initial step in the implementation of the international round robin scheme relating to that payment and by this conduct Jones committed the s.400.4(1) offence.

The total tax shortfall referable to Jones' criminal conduct was $362,925.24, although the financial loss to the ATO was $331,432.74 because of an adjustment with respect to Jiess.

i The principal scheme promoter and operator is Robert Francis AGIUS, the senior partner of PKF Vanuatu, a chartered accountancy practice and business advisory firm located in Port Vila, Vanuatu.

ii The Australian based promoters and scheme operators were members of Owen T Daniel & Company (OTD Burwood) a chartered accountancy practice located in Burwood NSW.

iii Scheme participants were clients of OTD Burwood comprising profitable trading companies owned and operated by business people such as Hili and Jones, both of whom undertook contract work through their companies in the building industry.

iv The scheme was a Vanuatu based ' round robin ' scheme that operated to enable its participants to evade company and personal tax in Australia by moneys being paid out of the trading companies by telegraphic transfer into the bank accounts of entities nominated by AGIUS at a branch of the ANZ Bank in Auckland, NZ. AGIUS was a signatory and operator of all such accounts. He caused scheme fees to be taken out of the NZ accounts which were remitted to PKF Vanuatu and also caused funds to be transferred between the NZ bank accounts so that the funds transferred out of the Australian companies to NZ, less the fees/commissions that were deducted therefrom, were remitted back to Australia by a different entity from that which received the funds in the first place.

v The funds remitted back to Australia were paid into the personal bank accounts of the controllers of the Australian companies.

vi False invoices were created for bogus expenses such as marketing and consultancy services which matched the amounts paid by the Australian companies to the NZ entities. Further, in order to conceal the true nature of the remittances back to Australia into the hands of the controllers of the companies, documents such as purported international loan agreements were created to falsely represent the payments as loans (which are not taxable).

vii In the cases of Hili and Jones, the payments by their companies of bogus marketing and consultancy expenses were claimed as deductible expenses in the tax returns of the companies, thereby fraudulently reducing the amount of tax the companies were assessed as liable to pay.

viii The moneys received back from overseas by Hili and Jones were disguised by means of false documentation as loans from international lenders and were not declared by them as part of their assessable incomes in their personal tax returns, the moneys having been effectively paid to them out of the retained profits of their respective companies behind the facade of the scheme, thereby evading tax which would otherwise have been assessed on these receipts as assessable dividend income.

ix The company and personal tax returns were prepared by members of OTD who knew that the claims for the deduction from assessable income of the marketing and consultancy expenses was [sic] fraudulent and who also knew that the moneys received by Hili and Jones as purported international loans was assessable income in their hands yet was not included as income in the personal tax returns prepared;

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]:

'Gleeson CJ in Wong v The Queen 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.'

[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:

'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.'

[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. 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, 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." (Per Atkinson J, with whom Muir JA and P Lyons J agreed.) 37 In R v Robertson [2008] QCA 164, the Queensland Court of Appeal was dealing with a special situation, which may have been dealt with no differently in this State. The appellant was 67 years of age and in receipt of an invalid pension, paid to her at the single rate, even though she was married. In those circumstances, the Queensland Court of Appeal determined that the New South Wales judgments, establishing a norm for mandatory imprisonment term, were not comparable. There can be little doubt that the circumstances facing the Court in that matter were special. The principles, embodied in the line of judgments in this State on this issue, have never required extraordinary or exceptional circumstances in order to depart from the "norm". They have required special circumstances, namely circumstances that take the individual out of the ordinary situation. 38 The analysis of the Queensland Court of Appeal judgments for which the Respondents contend is an analysis with which the Queensland Court of Appeal has, itself, dealt. In R v Ruha, Ruha & Harris; ex parte Cth DPP [2010] QCA 10, the Court dealt with the line of authorities supporting and departing from a "norm" of 60 to 66% for non-parole periods in Commonwealth offences. Their Honours (Keane and Fraser JJA and Atkinson J) said: "[45] Sections 16A(1) and (2) make it plain that all of the circumstances, including the matters in the non-inclusive list in s 16A(2), must be taken into account in making recognizance release orders just as they must be taken into account in imposing a sentence of imprisonment. In particular, it is relevant to note in these appeals that the necessary deterrent and punitive effects of sentences for serious tax fraud must be reflected both in the head sentence and also in any provision for earlier release from custody.

[46] But it does not follow that the same weight should be afforded to each matter in imposing the sentence of imprisonment and in making a recognizance release order. The differences between the function of the sentence of imprisonment and that of a recognizance release order must be taken into account in assigning weight to the relevant factors. Making due allowances for the relatively slight differences identified above between non-parole periods for sentences longer than three years but less than ten years on the one hand, and release on recognizance for such sentences or for sentences of three years or less on the other hand, the principles applicable in the former case are also generally applicable to recognizance release orders. Those principles were summarised by Buss JA, with extensive reference to authority, in Bertilone v The Queen : provisions for early release confer a benefit upon the offender but such provisions are made in the interests of the community; the non-parole period is the minimum period of imprisonment that justice requires the offender to serve; it mitigates the offender's punishment in favour of rehabilitation through conditional freedom after imprisonment for the minimum period; and relevant factors to be taken into account in determining the length of the non-parole period include the length of the head sentence and its position in the permissible range, the seriousness of the offence and the prospects of rehabilitation, and the need to ensure that the sentence reflects the criminality involved and does not lose the important significant effect of general deterrence.

[47] Accordingly, and because the relevant factors and the relative differences in the weight to be afforded to each factor in the different aspects of the overall sentencing process may differ according to infinitely variable circumstances, there can be no 'mechanistic or formulaic' approach which requires sentencing judges to ensure that the proportion which the pre-release period bears to the sentence of imprisonment must or must usually fall within a range which is substantially narrower than the whole period of the imprisonment, which is the range the statute expressly contemplates for recognizance release orders. The proportions commonly encountered in the decided cases should themselves be the results of application of conventional sentencing principles to the particular circumstances of each case: the appellant's argument inverts that proper approach by requiring that the sentence in a particular case be substantially dictated by a pre-determined range unless there are unusual factors.

[49] R v Tran confirmed that in fixing upon an appropriate sentence, including the terms of any recognizance release order, it is desirable to aim for reasonable consistency in sentences which, in the case of sentencing for Commonwealth offences, will usually require recognition of the decisions both of this State and of other States where those decisions concern similar circumstances. That principle is not confined to sentences for drug importation. Keane JA referred to the statement by Gleeson CJ in Wong v The Queen (2001) 207 CLR 584 at 591, that the administration of criminal justice, 'should be systematically fair, and that involves, amongst other things, reasonable consistency'. It follows that if there are authoritative sentencing decisions of the courts of this State or the other States and the Territories which concern comparable circumstances the sentencing court should take those decisions into account in affording weight to the generally desirable aim of imposing like orders in like cases. That serves the underlying value of equality under the law.

[50] But that general approach does not support the appellant's contention that for all sentences for all Commonwealth offences (or even for particular offences such as that in issue in these appeals) there must be a most unusual factor to justify a pre-release period or a non-parole period which falls well outside a fixed range of 60 - 66 per cent of the head sentence. Part 1B of the Crimes Act , under which sentencing judges are given a discretion to direct release on recognizance at any time from the commencement to the end of the term, is consistent with the application of the general principle that material differences between particular cases might justify materially different sentences, including in the specification of the pre-release period; yet the very limited range proposed by the appellant as a sentencing 'norm' (only about six percentage points as a proportion of the head sentence) and of the circumstances which might justify substantial departure from it (only 'most unusual factors') would confine the sentencing discretion within such narrow limits as to suggest that cases which are substantially different one from the other might attract materially indistinguishable recognizance release orders. Thus, for example, for a head sentence of three years the length of the pre-release period ordinarily could be influenced only to the extent of about two months by the presence or absence of usual factors which a sentencing judge in the particular case otherwise might think justified greater relative weight in setting the pre-release period.

[51] Nor is the approach advocated for the appellant necessary to meet its intended aim of achieving reasonable consistency in sentencing for Commonwealth offences: appropriate recognition of decisions throughout the Commonwealth which are sufficiently like the instant case to afford guidance in sentencing will itself promote the aim of consistency in Commonwealth sentences. Furthermore, the approach advocated by the appellant would tend to distract attention from the determination of the proper sentence in all the circumstances by requiring that attention be directed to the different question whether particular circumstances are so 'unusual' as to justify substantial departure from the suggested norm.

[52] Nor is the appellant's argument supported by the decisions of the New South Wales Court of Criminal Appeal relied upon for it. These decisions were cited in R v CAK & CAL , not for the proposition that sentences outside the suggested range must have most unusual factors to justify them, but for the proposition that there was a 'norm' for non-parole periods. In Bick v R , Price J (with whose reasons Hodgson JA and Howie J agreed) quoted with approval an observation by Meagher JA (Wood CJ at CL and Studdert J agreeing) in R v Viana :

'The principles of law applicable in this area have been laid down by this court in Bernier v R (1998) 102 A Crim R 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.'" 39 In my view, the Queensland Court of Appeal have, with great respect, accurately recounted the principles applied by this Court, namely, that the "norm" for a period of mandatory imprisonment under the Commonwealth legislation is between 60 and 66%, which figure will be affected by special circumstances applicable to a particular offender. On any analysis, there is no basis upon which this Court ought to depart from its approach to non-parole periods. 40 Ultimately, whatever "norm" is utilised, the task of the sentencing court is to fix and impose a sentence that appropriately fulfils the goals of punishment, deterrence (general and specific), retribution and reform. It is difficult to imagine, in circumstances where, pursuant to s 17A of the Act, a sentencing judge has come to the conclusion that a sentence of imprisonment is appropriate (and therefore that no other sentence is appropriate), that a mandatory term of imprisonment of less than 60% would be warranted, other than in special circumstances. For any serious offence, any lesser mandatory period of imprisonment would not seem properly to reflect the criminality of the conduct, except in special circumstances. Conclusion 41 The Court is here dealing with a Crown appeal. Any appeal against sentence (whether by the Crown or the offender) is an appeal against an exercise of discretion and will be successful only on one of the well-known bases for interfering with an exercise of discretion. This Court's task is to correct error and not to substitute one exercise of discretion for another, where error has not been shown. That error must be either identifiable or manifest from the sentence imposed: House v The King [1936] HCA 40; (1936) 55 CLR 499. Manifest error is not to be equated with mere inadequacy or excess. But manifest error is fundamentally intuitive. It arises because the sentence imposed is out of the range of sentences that could have been imposed and therefore there must have been error, even though it is impossible to identify it. 42 In my view, the sentence imposed in these matters is so far outside of the range of sentences available that there must have been error. I have already indicated that, in my view, there was error in the fixing of an inappropriately generous reduction for assistance and the plea of guilty. However, that error resulted from a concession by the Crown below and is not challenged in this Court. Accordingly, I have not had any regard to it in resolving this appeal: R v JW [2010] NSWCCA 49 at [148]-[150]. 43 I would allow the appeal. I would fix a sentence at the low end of the available range to take account of the obvious desire of the sentencing judge to fix a low sentence and in order to take account of the subjective features on which her Honour so heavily relied. I agree with the submission that the appropriate sentences, without reductions for plea and assistance, are six years. Because of the attitude of the Crown, I will apply a reduction in the sentence of 50% to account for the plea of guilty and assistance. I continue the allowance of 12.5% for future assistance under s 21E of the Act. 44 I would not interfere with her Honour's approach to fixing a lower than usual proportion in terms of mandatory imprisonment period as I accept that there are grounds upon which her Honour could find that there are special circumstances that warrant fixing such a period as low as 50% (but no lower) and I continue her Honour's approach. Those special circumstances include: that this is the first time these offenders will be in prison; the good prospects of rehabilitation; and the necessity to ensure assistance in assimilating back into the community and dealing with their past alcohol issues. 45 For the foregoing reasons, the sentencing judge's exercise of discretion has miscarried and requires correction. I am satisfied that a more severe sentence is warranted and I propose that the Court make the following orders:

A. In relation to Anthony Joseph Luis Hili: (i) Appeal allowed; (ii) The sentence imposed by the District Court, in this matter, on 13 November 2009, is set aside; (iii) In lieu of the sentence imposed, for the contravention of s 134.2(1) of the Criminal Code Act 1995 (Cth), Mr Hili is sentenced to a term of imprisonment of 3 years to commence on 13 November 2009, to be released after 18 months upon entering into a recognizance release order pursuant to s 20(1)(b) Crimes Act 1914 (Cth), self surety in the sum of $1,000, to be of good behaviour for the balance of the sentence and to appear to receive sentence if called upon to do so at any time in respect of any breach within the said period.

B. In relation to Glyn Morgan Jones: (i) Appeal allowed in part and otherwise dismissed; (ii) The sentences imposed by the District Court, in this matter, on 13 November 2009, for the contravention of s 29D of the Crimes Act 1914 (Cth) and s 134.2(1) of the Criminal Code Act 1995, are set aside; (iii) In lieu of the sentence imposed, (a) For the contravention of s 29D of the Crimes Act 1914 (Cth), Mr Jones is sentenced to a fixed term of imprisonment of 12 months to commence on 13 November 2009; (b) For the contravention of s 134.2(1) of the Criminal Code Act 1995 (Cth), Mr Jones is sentenced to a term of imprisonment of 2 years and 6 months to commence on 13 May 2010; (c) Mr Jones is to be released after 18 months' imprisonment, namely, on 13 May 2011, upon entering into a recognizance release order pursuant to s 20(1)(b) Crimes Act 1914 (Cth), self surety in the sum of $1,000, to be of good behaviour for the balance of the sentence and to appear to receive sentence if called upon to do so at any time in respect of any breach within the said period.

03/09/2010 - Amended in accordance with R v Glyn Morgan JONES; R v Anthony Joseph Luis HILI (No 2) [2010] NSWCCA 195. - Paragraph(s) 3, 44

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