R v Hausman; Hausman v R; R v Rostankovski; Rostankovski v R

Catchwords

[2013] HCA 37 Cahyadi v R (2007) 168 A Crim R 41[2007] NSWCCA 1 Chen v R [2010] NSWCCA 224 CMB v Attorney-General (NSW) (2015) 256 CLR 346[2017] VSCA 305 Elshani v R (2015) 255 A Crim R 488[2015] NSWCCA 254 Fasciale v R (2010) 207 A Crim R 488[2010] VSCA 37 Green v The QueenQuinn v The Queen (2011) 244 CLR 462[2011] HCA 49 Hili v The QueenJones v The Queen (2010) 242 CLR 520[2010] HCA 45 Huang v R (2018) 96 NSWLR 743[2018] NSWCCA 57 Hildebrand v R [2021] NSWCCA 9 Johnson v The Queen [2004] HCA 15 Kentwell v The Queen (2014) 252 CLR 601[2014] HCA 37 Lowndes v The Queen (1999) 195 CLR 665[1999] HCA 29 Macallister (A Pseudonym) v R [2020] NSWCCA 306 Manojlovic v RR v Manojlovic [2020] NSWCCA 315 Markarian v The Queen (2005) 228 CLR 357[2005] HCA 25 McCarthy v R (2011) 206 A Crim R 131 Mill v The Queen (1988) 166 CLR 59[1988] HCA 70 Obeid v R (2017) 96 NSWLR 155[1998] HCA 57 Postiglione v The Queen (1997) 189 CLR 295

Judgment (51 paragraphs)

[1]

d to imprisonment for 10 years and 5 months with a non-parole period of 7 years and 2 months - Hausman sentenced to imprisonment for 8 years with a non-parole period of 6 years - whether patent errors of sentencing principle required intervention in a resentencing exercise for both cross-applicants - error in dealing with Rostankovski's prior good character - Crown conceded disparity between Rostankovski's sentence and Hausman's sentence for blackmail - no lesser sentence warranted in law - appeals dismissed Legislation Cited: Crimes Act 1900 (NSW) Crimes Act 1914 (Cth) Crimes (Sentencing Procedure) Act 1999 (NSW) Criminal Appeal Act 1912 (NSW) Criminal Code (Cth) Crimes Legislation Amendment (Sexual Crimes Against Children and Community Protection Measure) Act 2020 (Cth) Cases Cited: Blake v R [2021] NSWCCA 258 Bugmy v The Queen (2013) 249 CLR 571; [2013] HCA 37 Cahyadi v R (2007) 168 A Crim R 41; [2007] NSWCCA 1 Chen v R [2010] NSWCCA 224 CMB v Attorney-General (NSW) (2015) 256 CLR 346; [2015] HCA 9 Davis v R [2015] NSWCCA 90 Dickson v R [2016] NSWCCA 105 Director of Public Prosecutions (Cth) v Beattie (2017) 270 A Crim R 556; [2017] NSWCCA 301 Director of Public Prosecutions (NSW) v Abdulrahman [2021] NSWCCA 114 Director of Public Prosecutions (NSW) v Burton [2020] NSWCCA 54 Director of Public Prosecutions (Vic) v Swingler (2017) 269 A Crim R 526; [2017] VSCA 305 Elshani v R (2015) 255 A Crim R 488; [2015] NSWCCA 254 Fasciale v R (2010) 207 A Crim R 488; [2010] VSCA 37 Green v The Queen; Quinn v The Queen (2011) 244 CLR 462; [2011] HCA 49 Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45 Huang v R (2018) 96 NSWLR 743; [2018] NSWCCA 57 Hildebrand v R [2021] NSWCCA 9 Johnson v The Queen [2004] HCA 15 Kentwell v The Queen (2014) 252 CLR 601; [2014] HCA 37 Lowndes v The Queen (1999) 195 CLR 665; [1999] HCA 29 Macallister (A Pseudonym) v R [2020] NSWCCA 306 Manojlovic v R; R v Manojlovic [2020] NSWCCA 315 Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 McCarthy v R (2011) 206 A Crim R 131 Mill v The Queen (1988) 166 CLR 59; [1988] HCA 70 Obeid v R (2017) 96 NSWLR 155; [2017] NSWCCA 221 O'Grady v R [2015] NSWCCA 16 Parker v Director of Public Prosecutions (1992) 28 NSWLR 282 Pearce v The Queen (1998) 194 CLR 610; [1998] HCA 57 Postiglione v The Queen (1997) 189 CLR 295; [1997] HCA 26 R v Anquetil [2020] NSWSC 995 R v Anthony James Dickson (No 18) [2015] NSWSC 268 R v Dong [2021] NSWCCA 82 R v Faulkner (1972) 56 Cr App R 594 R v Gent [2005] NSWCCA 370; (2005) 162 A Crim R 29 R v Hammond [2020] NSWSC 888 R v Hernando (2002) 136 A Crim R 451; [2002] NSWCCA 489 R v Huang [2007] NSWCCA 259; (2007) 173 A Crim R 370. R v Issakadis [2018] NSWSC 378 R v Janceski [2005] NSWCCA 288 R v Kennedy [2000] NSWCCA 527 R v Kitson [2019] NSWSC 1109 R v KM [2004] NSWCCA 65 R v Leroy (1984) 2 NSWLR 441 R v Nguyen [2010] NSWCCA 238; (2010) 205 A Crim R 106 R v Rivkin (2004) 59 NSWLR 284; [2004] NSWCCA 7 R v Vo; R v Tran [2006] NSWCCA 165 R v Zerafa (2013) 235 A Crim R 265; [2013] NSWCCA 222 RO v R [2019] NSWCCA 183 Ryan v The Queen (2001) 206 CLR 267; [2001] HCA 60 Sigalla v R [2021] NSWCCA 22 Woods v R [2020] NSWCCA 219 Xiao v R (2018) 96 NSWLR 1; [2018] NSWCCA 4 ZA v R (2017) 267 A Crim R 105; [2017] NSWCCA 132 Texts Cited: DA Thomas, Principles of Sentencing, 2nd ed (1979) Category: Principal judgment Parties: The Crown (Appellant / Cross-Respondent) Daniel Hausman (Respondent / Cross-Applicant) Daniel Rostankovski (Respondent / Cross-Applicant) Representation: Counsel: S McNaughton SC / G Wright (The Crown) P English (Hausman) B Walker SC / T Woods (Rostankovski)

[2]

Solicitors: Commonwealth Director of Public Prosecutions (The Crown) MacDougall & Hydes (Hausman) Longton Legal (Rostankovski) File Number(s): 2017/148647; 2017/148659 Decision under appeal Court or tribunal: District Court Date of Decision: 01 April 2021 Before: Abadee DCJ File Number(s): 2017/148647; 2017/148659

[3]

Judgment

FULLERTON J: On 1 April 2021, following their pleas of guilty to offences committed contrary to the Crimes Act 1900 (NSW) and the Criminal Code (Cth), Daniel Rostankovski and Daniel Hausman were sentenced by Abadee DCJ to the following terms of imprisonment: 1. On an indictment containing three counts (one State offence and two Commonwealth offences), Mr Rostankovski was sentenced to imprisonment for 10 years and 5 months with a non-parole period of 7 years and 2 months. 2. On an indictment containing two counts (one State offence and one Commonwealth offence), Mr Hausman was sentenced to imprisonment for 8 years with a non-parole period of 6 years.
The charges were laid following an investigation by the Australian Federal Police into a largescale conspiracy involving a number of individuals to commit tax frauds (commonly known as the Plutus tax fraud conspiracy) and a conspiracy to deal with the proceeds of those frauds. Neither of the offenders was charged as a co-conspirator in either conspiracy. However, one of the two Commonwealth offences for which Mr Rostankovski was sentenced was the substantive offence of aiding and abetting Adam Cranston (one of the principal conspirators in the Plutus tax fraud conspiracy) to commit a tax fraud contrary to ss 135.1(3) and 11.2(1) of the Criminal Code (Cth).
That offence, referred to for convenience as the "the aid and abet fraud offence" and attracting a maximum term of imprisonment of 5 years, was fully particularised on the indictment as follows: Count 1: Between about 8 August 2016 and about 1 February 2017 at Sydney in the State of New South Wales and elsewhere, [Mr Rostankovski] did aid, abet, counsel or procure the commission of an offence by Adam Cranston against s 135.1(3) of the Criminal Code (Cth), namely that Adam Cranston engaged in conduct with the intention of dishonestly causing a loss to another person, namely the Commonwealth (contrary to s 135.1(3) with s 11.2 of the Criminal Code).
Both offenders were also sentenced for the State offence of blackmail contrary to s 249K(2) of the Crimes Act (NSW). A number of conspirators in the Plutus tax fraud conspiracy, including Adam Cranston, were the victims of that offence.
That offence, referred to for convenience as "the blackmail offence" and attracting a maximum term of imprisonment of 14 years, was particularised as follows: On or about 1 February 2017 and on or about 15 February 2017 at Sydney in the State of New South Wales, did make unwarranted demands with menaces, with intent to obtain a gain by an accusation or a threatened accusation, that Adam Cranston, Jason Onley and Dev Menon had committed serious indictable offences, namely fraud and money laundering (contrary to s 249K(2) of the Crimes Act).

[4]

The proceedings on sentence in summary

Although Mr Rostankovski and Mr Hausman were jointly charged with the State offence of blackmail and with the Commonwealth offence of money laundering, separate sentence proceedings were convened over consecutive dates in March 2021. Separate sentencing judgments were published on 1 April 2021.
The sentencing reasons were structured referable to what the Crown and senior counsel for both Mr Rostankovski and Mr Hausman had identified in their submissions as the provisions under both the State and Commonwealth sentencing regimes that were material to the sentencing exercise. The sentencing regime in Part IB of the Crimes Act 1914 (Cth) governed the sentence to be imposed for the aid and abet fraud offence (as it related to Mr Rostankovski) and the money laundering offence committed by both offenders. The sentencing regime in the Crimes (Sentencing Procedure) Act 1999 (NSW) governed the blackmail offence.
While both offenders were entitled to a discount for their pleas of guilty, Mr Hausman also assisted investigating authorities and was entitled to an additional sentencing discount for that reason. The sentencing judge was obliged to comply with ss 16AC(1) and 16AC(2) of the Crimes Act (Cth) and s 23 of the Crimes (Sentencing Procedure) Act (NSW) by specifying the sentences that would have been imposed for the money laundering offence and the blackmail offence but for the assistance he provided to the authorities.
Senior counsel for Mr Rostankovski submitted that the sentences to be imposed on his client as a co-offender with Mr Hausman in the blackmail and money laundering offences should reflect common law parity principles. [1]
The lengthy statements of agreed facts which comprehend the course of the offending by both offenders, the sentencing judge's findings as to the relative seriousness of the offences committed by each of them, including their relative culpability, and the need for the sentences imposed to reflect the sentencing principles (articulated slightly differently under both sentencing regimes) are set out in largely uniform terms in both sentencing judgments. Necessarily, the subjective cases of both offenders were dealt with separately.
The form of the sentencing orders imposed on both offenders was complex, due in large part to the fact that both offenders were sentenced for State and Commonwealth offences.

[5]

The proceedings in this Court in summary

On 9 April 2021, Mr Rostankovski and Mr Hausman filed notices of intention to apply for leave to appeal the severity of their sentence pursuant to s 5(1)(c) of the Criminal Appeal Act 1912 (NSW). No grounds of appeal were filed at that time.
On 5 May 2021, the Director filed notices of appeal against the sentences imposed on each the offenders pursuant to s 5D of the Criminal Appeal Act.
Although there is not complete correspondence between the grounds of appeal filed by the Director, the Director contends that the sentencing judge's approach to the application of the principle of totality in the structure of both sentences was flawed, resulting in effective sentences which failed to adequately reflect the totality of the criminality of both offenders.
Even were the Court not persuaded that an error of sentencing principle has been demonstrated, the Director contends that each of the effective sentences is manifestly inadequate.
The Crown submitted that the limiting principles applicable to Crown appeals are properly engaged in each appeal and, as respondents, each of the offenders should be resentenced by this Court. [7]
On 14 July 2021 and 20 July 2021, Mr Rostankovski and Mr Hausman filed notices of leave to appeal their sentence attaching their grounds of appeal.
They each contend that patent errors of sentencing principle were made by the sentencing judge which, both individually and in combination, require the intervention of this Court in a resentencing exercise. [8] Mr Rostankovski complains that the sentencing judge erred in the way in which he dealt with evidence of his good character. Mr Hausman complains that the sentencing judge erred in his application of parity principles and in the way he treated a finding of special circumstances. In addition, he contends that even were there no patent error of sentencing principle, latent error has infected the exercise of the sentencing discretion in an effective sentence of 8 years and 6 months, that is manifestly excessive being unreasonable and plainly unjust in all of the circumstances.
Although separate Appeal Books were filed for each of the Crown sentence appeals, given the considerable overlap in the factual matrix that comprised the agreed facts in each of the sentence proceedings, and the intersection of issues raised by the grounds of appeal relied upon by the Director and the applications for leave to appeal by each of the offenders, the Director's appeals and the applications for leave to appeal were heard together.

[6]

The facts for sentencing purposes

In each of the sentence proceedings the facts were agreed and set out at length in each of the sentencing judgments. [9]
Each of the offences the subject of the sentencing proceedings were committed in connection with a conspiracy committed (by others) to commit fraud on the Commonwealth known as the "Plutus tax fraud conspiracy". The sentence proceedings of each of the offenders were described by the sentencing judge as "satellite or collateral proceedings" to the sentences imposed on various people involved in that conspiracy. [10]
Having regard to the issues raised by the Director's grounds of appeal and the issues raised by the sentence appeals, it will be sufficient to refer to the facts as agreed and the sentencing judge's findings of fact in a summary way.

[7]

The tax fraud offence

The Plutus tax fraud conspiracy involved the establishment and utilisation of a payroll services company, named Plutus Payroll Australia Pty Ltd (Plutus) and related subcontracting companies (second tier companies) controlled by a number of conspirators, principally Adam Cranston and another co-conspirator, Jason Onley, to deprive the Commissioner of Taxation of Pay As You Go Withholding Tax (PAYGW) and Goods and Services Tax.
Over a three-year period between 2014 and 2017, Plutus collected $141,291,923 in PAYGW and GST which it was obliged to remit to the Australian Taxation Office (ATO). An amount just short of $31 million was remitted by the second-tier companies to the ATO with an additional sum of nearly $4.8 million garnisheed by the ATO. The conspirators misappropriated (and dealt with as proceeds of crime) at least $105,625,304.
Between August 2016 and February 2017 (the timeframe of Mr Rostankovski's offending), the money generated by the conspiracy totalled nearly $51 million, of which only about $28.5 million had been remitted to the ATO. The balance was retained by the conspirators. It was accepted for sentencing purposes that Mr Rostankovski knew that Adam Cranston was the ultimate beneficiary of at least $7.5 million of the misappropriated funds.
From mid to late 2015, Mr Rostankovski began working for Adam Cranston doing relatively menial tasks in connection with another business run by Mr Cranston and another conspirator.
From 8 August 2016, Mr Rostankovski transitioned into a role in which he aided and abetted Adam Cranston's fraudulent activities in the Plutus tax fraud conspiracy. His role was to recruit directors, in name only, to manage the "second tier" companies. These "straw directors" were variously unemployed or otherwise relatively unsophisticated people. [11] They played no actual role in the management of the company of which they were a director; instead the companies were controlled by the conspirators. The straw directors were paid to sign various documents as "director" as and when required by the conspirators, including opening personal and company bank accounts with Mr Rostankovski retaining bank cards and other account details which he provided to Mr Cranston.
Mr Rostankovski actively misled the directors as to the tax liabilities that were accruing to the companies in perpetuation of the fraud. If a straw director raised concerns upon receipt of a notification from the ATO about an outstanding tax debt, Mr Rostankovski assured them that matter would be taken care of and that they were not engaging in any illegal conduct. He also discussed paying one second-tier director to leave the jurisdiction for at least a year to avoid that person being questioned by the ATO or the Office of State Revenue.

[8]

The blackmail offence

Between October and November 2016 (that is, during the currency of Mr Rostankovski's role in aiding and abetting Adam Cranston to dishonestly cause a loss to the Commonwealth), Mr Rostankovski and Mr Hausman (with whom Mr Rostankovski had a pre-existing business and personal relationship) discussed and thereafter planned to blackmail the Plutus conspirators by threatening them with media exposure, reputational damage and scrutiny of their fraudulent activities by the ATO and the police, unless they were paid money. Some of the threats were directed to Adam Cranston whose father was at that time a Deputy Commissioner of Taxation.
As the sentencing judge noted in his sentencing remarks, the plan to blackmail the conspirators was devised when Mr Hausman became aware of Mr Rostankovski's role in the tax fraud and of the significant amounts of money that were being transferred through bank accounts controlled by the conspirators and Mr Rostankovski was experiencing increasing dissatisfaction with his "wages" in contrast to the far greater and substantial sums of money the conspirators were receiving. The sentencing judge also noted and accepted the submissions of Mr Rostankovski's senior counsel that the conspirators were "fobbing off" his requests for more money with false explanations for what they claimed was their inability to increase his "wages".
The following is an overview of the facts relating to the joint commission of the blackmail offence by Mr Hausman and Mr Rostankovksi: 1. In November and December 2016, Mr Hausman and Mr Rostankovski discussed threatening Adam Cranston and arranging to execute the blackmail demand with the involvement of Stephen Barrett, a journalist who had worked at 60 Minutes. Mr Hausman emphasised that the timing of the demand was crucial. He recruited Mr Barrett. 2. Mr Hausman discussed with Sevag Chalabian, solicitor, a strategy designed to conceal the funds it was anticipated the Plutus conspirators would agree to pay. He later provided instructions to Mr Chalabian to affect that strategy. 3. On 24 January 2017, Mr Hausman and Mr Rostankovski disclosed their plan to Mr Barrett and discussed with him their understanding of the Plutus tax fraud scheme. 4. On 30 January 2017, Mr Chalabian provided Mr Hausman with his firm's trust account details. Mr Hausman forwarded those details to Mr Rostankovski. On the same day, the offenders discussed their plan to blackmail the conspirators at Clamenz Lawyers' office in Martin Place and the timing of the delivery of their demand. They also discussed the information Mr Barrett should be supplied with and Mr Rostankovski's access to second tier company bank accounts. 5. On 1 February 2017, Mr Rostankovski and Mr Barrett met with Adam Cranston and Dev Menon (principal partner) at Clamenz. Mr Barrett introduced himself as a journalist with 39 years' experience and said he was aware of an allegation of tax fraud involving Plutus and being perpetuated by Mr Cranston and others and that he had been approached by two "shadow directors". Mr Barrett implied that if Mr Menon, Mr Cranston, Mr Cranston's father and Jason Onley declined to be interviewed, he might disclose things to the then Federal Treasurer, Mr Morrison. Mr Rostankovski claimed (falsely) to be in possession of information that the conspirators would be arrested that afternoon. Mr Barrett then left the meeting. 6. Mr Rostankovski also claimed (falsely) that he had members of the Comancheros Motorcycle Club waiting downstairs who were ready to "come up and belt the fuck out of you guys" if they did not cooperate (a threat made without Mr Hausman's knowledge). 7. Mr Rostankovski then telephoned a second-tier director and had him confirm on speaker phone his knowledge of the fraudulent scheme and the names of Adam Cranston, Mr Onley and Mr Menon as perpetrators of the fraud. Mr Rostankovski demanded $5 million as a "gag order". He referred to laptops in his possession containing incriminating correspondence and emails. Mr Anquetil and Mr Onley (two co-conspirators) then joined the meeting and Mr Rostankovski repeated his demand that $5 million be transferred to the Lands Legal trust account (the first blackmail demand). Mr Menon agreed to the demand and that it would be met in payments disguised as Plutus overheads and other expenses involved in operating the second-tier companies. 8. Although Mr Hausman was not present when the first blackmail demand was made, he was party to its design. Mr Hausman's conduct included: 1. Requesting his personal assistant to collect the two laptops containing the incriminating material before the meeting. 2. Keeping Mr Chalabian informed of developments, including Mr Menon's desire to draft a Deed between Plutus and the directors of the second-tier companies, the object of which was to disguise the transfer of the $5 million in a way that disguised the true nature of the payments. 3. Mr Hausman told Mr Rostankovski that he had instructed Mr Chalabian to play "hardball" in his dealings with Mr Menon, not to "settle for anything less than two and half (million) today" and confirming that the monies to be transferred appear as a "commercial thing…(not) being paid as fuckin'… ATO money". 4. Engaging in numerous communications between 1 and 3 February 2017 with Messrs Rostankovski, Chalabian, and Menon in which the Deed was discussed and drafted. 1. On 10 February 2017, Mr Hausman raised with Mr Chalabian the prospect of applying additional pressure on the Plutus conspirators for the payment of an additional $20 million. 2. On 15 February 2017, Mr Hausman sent Mr Rostankovski a draft message of demand for Mr Rostankovski to send to Mr Menon. Mr Rostankovski forwarded the demand the same day (the second blackmail demand). 3. While the message which was sent did not form part of the evidence, the draft prepared by Mr Hausman did. It was as follows ("(b), (c), (d)" being a reference to terms of the Deed): … if their accounts get frozen no problem, the $ continues to minimum $20m under (b) (c) (d) etc and these directors will receive the $20m personally to remit off as they are, under the Act Dev, as you are well aware, personally liable for both super and PAYG which your clients Adam Cranston and Jay Onley would never pay. We are fully aware of GST ends up being worn by the company hence not a liable issue personally. So stop the bullshit and keep up the payments I strongly suggest. 1. Mr Hausman informed Mr Barrett of the second blackmail demand and arranged for him to be "on standby" in case it was necessary to exert pressure on the conspirators to agree to the demand. 2. Mr Hausman informed Mr Chalabian that he and Mr Rostankovski would pay him $20,000 for each million received into his trust account responsive to the second blackmail demand. He also discussed concealing the true nature of the blackmail monies with Mr Chalabian, including the name that would be given to Chalabian's "client file".

[9]

The money laundering offence

The following is an overview of the money laundering offence with which Mr Rostankovski and Mr Hausman were jointly charged: 1. Between 1 February 2017 and 18 May 2017, a total of $24,244,760.64 was paid into the Lands Legal trust account, comprising approximately $4.8 million received between 1 and 15 February 2017 responsive to the first blackmail demand, and approximately $19.4 million received between 16 February and 18 May 2017 responsive to the second blackmail demand. 2. Mr Hausman and Mr Rostankovski provided instructions to Mr Chalabian to disburse those monies. Aside from payments to a number of second-tier company directors, the monies were distributed to entities Mr Hausman controlled or had connections with, including overseas entities. 3. Between 9 and 13 March 2017, Mr Hausman and Mr Rostankovski instructed Mr Chalabian to prepare a Deed of Agreement dated 15 March 2017, according to which the blackmail monies and profits from investment opportunities to which the blackmail monies were committed would be distributed between them. In its essentials, the agreement noted that Rostankovski had access to $25 million and Mr Hausman would be paid 50% of profits from investment opportunities he introduced to Mr Rostankovski.

[10]

The findings of objective seriousness and the relative culpability of the offenders

[11]

The aid and abet fraud offence

The sentencing judge assessed the aid and abet fraud offence committed by Mr Rostankovski at about the mid-range of objective seriousness having regard to the amount of money involved in the fraud, the commission of which he aided and abetted, the degree of planning involved in the role he performed, the duration of his involvement relative to the duration of the overall fraudulent scheme, and the status of the Commonwealth as the victim of the fraud. The sentencing judge accepted the submission advanced by Mr Rostankovski's counsel that he was not a member of "the inner circle" of those who conspired to perpetuate the tax fraud.

[12]

The blackmail offence

The sentencing judge assessed the blackmail offence as well above the mid-range and the money laundering offence also above the mid-range. He rejected the Crown's submission that the conduct comprehended by the blackmail offence was in the high range of objective seriousness in circumstances where the impact of the threat made to the Plutus conspirators was of a different magnitude when compared to other cases to which he was referred and where the conspirators were able to absorb their payment of the blackmail monies as an "overhead" of their sophisticated and lucrative criminal enterprise. The sentencing judge also found the threat of exposing tax fraud was of a comparatively lesser order then the threat of exposure of other serious indictable offences, for example sexual assault, murder or violent physical assault.
He was satisfied that the blackmail offence (which involved two separate demands with menaces delivered over a reasonably short period of time and involving multiple victims) involved extensive planning over a period of three months. He also found that the first and second blackmail demands were more effective, and the threats of exposure more credible, because they were made whilst the tax fraud was ongoing. In addition, because the threats involved the revelation of actual criminal wrongdoing, he was satisfied the Plutus conspirators would be more likely to accede to the threat and were unlikely to complain to police.
The sentencing judge found Mr Hausman's role and responsibility in the joint criminal enterprise to blackmail the Plutus conspirators was greater than that of Mr Rostankovski, with the "mechanisms" according to which the blackmail was planned and executed his design. Mr Hausman's greater level of moral culpability was also reflected in his recruitment of Mr Barrett and Mr Chalabian and in his instigation of the second blackmail demand.

[13]

The money laundering offence

The sentencing judge found that the money laundering offence committed by Mr Hausman was well above the mid-range of objective seriousness and towards the high end of that range with the most material factors in that appointment being the sum of money involved, Mr Hausman's knowledge of the illegal source of those monies and what the sentencing judge described as the sophisticated and organised level of planning involved in the commission of the offence in order that the proceeds of the blackmail would be concealed. He also found that Mr Hausman was the architect of the money laundering scheme and that he had the lead role in working with Mr Chalabian to receive and dispose of the proceeds. The sentencing judge rejected the Crown's submission that Mr Hausman's conduct was in the high range of objective seriousness. He found that although Mr Hausman's conduct in the money laundering offence was intimately connected with his role in committing the blackmail offence, and in that sense it was intended to exploit and conceal the product of that offending, it did not form part of any ongoing organised criminal activity.
The sentencing judge assessed Mr Rostankovski's offending in his commission of the money laundering offence as above the mid-range of objective seriousness, being partly a function of his role relative to Mr Hausman. The sentencing judge emphasised, however, that Mr Rostankovski was not a passive investor who merely acquiesced in Mr Hausman and Mr Chalabian's dealings. To the contrary. Mr Rostankovski insisted that he be "kept in the loop" and instructed Mr Chalabian to use a company over which he exercised control as a vehicle for the investment of the proceeds of his offending.
The sentencing judge was satisfied that each of Mr Hausman and Mr Rostankovski gained financially through their profit-sharing agreement.
In sentencing both offenders for multiple, objectively serious offences, the sentencing judge treated general deterrence as fundamental to the sentencing exercise.

[14]

Mr Hausman's subjective case

Mr Hausman was aged 51 of the time of sentence. He had no relevant prior criminal record which the sentencing judge accepted reduced the need for the sentence to reflect specific deterrence.
Mr Hausman had two dependent children from two previous partners. In reviewing the evidence tendered by Mr Hausman to support a finding that his pending incarceration would impact negatively upon each of his children, the sentencing judge was not satisfied that the hardship his family would experience was exceptional. [12] He did however accept that given that Mr Hausman would be experiencing custody for the first time, and that separation from his wife and children would be onerous for that reason, those factors would be taken into account in determining the length of the non-parole periods for both the State and Commonwealth offences.
The sentencing judge noted the medical evidence relating to Mr Hausman's physical and mental health, including that he suffers from Type II diabetes which had been poorly controlled in the year prior to sentence. He also noted Mr Hausman had been diagnosed with a depressive disorder and a substance use disorder which are controlled by medication.
There was no submission advanced on Mr Hausman's behalf that his physical or mental health contributed in any material way to his offending or reduced his criminal culpability. It was submitted, however, that his relatively fragile health status was likely to deteriorate in the custodial environment and that his time in custody would be more onerous for that reason. After reviewing the reports tendered from a range of health professionals, the sentencing judge was not satisfied the evidence was of sufficient weight to allow for a finding that Mr Hausman's health would deteriorate in custody such as might have ameliorated the length of his sentence. He was satisfied that Mr Hausman's rehabilitation may be hindered were his mental health inadequately treated whilst in custody, a matter which the sentencing judge took into account when finding special circumstances existed to justifying varying the statutory non-parole period for the State offence of blackmail. The length of the non-parole period for the Commonwealth money laundering offence was brought into alignment with the ratio applied to the State offence.
The sentencing judge was satisfied that Mr Hausman was contrite and remorseful despite having not given evidence on sentence. He accepted that Mr Hausman's early pleas of guilty entered in the Local Court, his letter to the Court (tendered on sentence without objection) in which he spoke of his shame and self-disgust at being driven to offend out of greed, together with his willingness to cooperate with law enforcement authorities, was eloquent of his remorse. The sentencing judge was also satisfied that Mr Hausman's consent to the forfeiture of various interests in property valued at $17 million in separate forfeiture proceedings reinforced the other evidence of his remorse and enhanced his prospects for rehabilitation.

[15]

Mr Rostankovski's subjective case

Mr Rostankovski had no criminal record. He adduced positive evidence of his good character which the sentencing judge found established. [14] He was aged 27 at the time of the offending and 32 at the date of sentence.
The sentencing judge accepted that Mr Rostankovski was remorseful and contrite, that the likelihood of him reoffending was very low and his prospects of rehabilitation were good.
A report of Dr Dayalan, forensic psychiatrist to whom Mr Rostankovski had given a history of physical and emotional abuse by his father, was tendered. Dr Dayalan expressed the opinion that features of Mr Rostankovski's psychological profile contributed to his offending, including chronic low self-confidence and self-esteem and a sense of inadequacy, making him susceptible to adverse influence from others. Dr Dayalan diagnosed an adjustment disorder which had developed after Mr Rostankovski's arrest.
The sentencing judge accepted that psychological features played a role in Mr Rostankovski's commission of the aid and abet fraud offence by reason of the money he was receiving and the fact that Adam Cranston and the Plutus conspirators appeared to him to be successful business people, which may have had a "dizzying impact", compromising his judgment. However, as the sentencing judge noted, Mr Rostankovski chose to remain involved with Mr Cranston despite becoming aware of the scale of the tax fraud. The sentencing judge found no causal link between any susceptibility Mr Rostankovski had to the influence of others in his commission of the blackmail and money laundering offences
The sentencing judge was not satisfied that Mr Rostankovski had suffered extra-curial punishment in the form of an absence of paid employment since his arrest and his wife losing her employment.
In sentencing for the State offence of blackmail, his Honour made a finding of special circumstances to facilitate Mr Rostankovski's rehabilitation and his effective reintegration into the community following his release and, to a lesser degree, because of hardship to his family.

[16]

The structure of the sentence imposed on Mr Rostankovski

The total effective sentence of 10 years and 5 months with a non-parole period of 7 years and 2 months imposed on Mr Rostankovski comprised an aggregate sentence of 8 years for the two Commonwealth offences of aid and abet a fraud and money laundering and a separate sentence of 4 years for the blackmail offence.

[17]

The aggregate sentence for the Commonwealth offences

After taking into account the pleas of guilty to the two Commonwealth offences and allowing a 20% discount for the timing of the pleas, their utilitarian value and the willingness of Mr Rostankovski to facilitate the course of justice, [15] sentences of 1 year and 7 months for the aid and abet a fraud offence and 9 years and 6 months for the money laundering offences were indicated. Recognising what the sentencing judge described as the need for "a degree of accumulation" between the two indicative sentences due, as he saw it, to the fact that there would not have been any money laundering were it not for Mr Rostankovski's involvement in the tax fraud, and the fact that greed was a motivator in the commission of both offences, an aggregate sentence of 10 years imprisonment was proposed. In the ultimate sentencing order that aggregate sentence was reduced to a term of imprisonment of 8 years and was ordered to commence at the expiration of the non-parole period for the State offence of blackmail.

[18]

The blackmail offence

After applying a discount of 20% for the plea of guilty to the blackmail offence [16] a sentence of 4 years and 9 months was appointed. In the ultimate sentencing order, a term of imprisonment of 4 years was imposed with a non-parole period of 2 years and 5 months. In compliance with s 19(3) of the Crimes Act (Cth) that sentence was ordered to commence first.
Earlier in his sentencing remarks the sentencing judge acknowledged the need for the ultimate sentence to reflect totality principles, qualified by the need to ensure that its overall effect was not "crushing". He said: [198] Because I am sentencing for multiple offences, in the case of this offender, I am required to fix an appropriate sentence for each offence, and thereafter consider accumulation, concurrency and totality. Complexity is also injected by the circumstances of mixed federal and state sentences, with the requirement for separate non-parole periods. [199] I consider that it is important that an element of accumulation is required to comprehend the full extent of the criminality, and recognising the different features of the criminality. Nevertheless, substantial notional concurrency is appropriate. By way of one example, at a time in which the offender was involved in planning the blackmails co-incided with the period for the aid and abetting offence; and the blackmailing could not have occurred but for the knowledge of pertinent information which the offender obtained during course of his aiding and abetting. Further, the money laundering was plainly connected and occurred within a short period of time, and to some degree almost contemporaneously, to the blackmailing. The laundering would not have happened but for the aiding and abetting. I am also conscious, however, that the overall effect of the sentencing should not be 'crushing', and have striven to apply the 'totality' principle in this regard.
The sentencing judge then made the following sentencing order which I set out in full: [201] Because of the complexities surrounding sentencing for the mix of federal and state offences, I propose to aggregate the sentence for the federal offences. [202] The indicative sentences for counts 1 and 3, taking into account the guilty pleas, are as follows: Count 1 [the aid and abet fraud offence]: 1 year and 7 months' imprisonment Count 3 [the money laundering offence]: 9 years and 6 months' imprisonment [203] I impose an aggregate sentence for counts 1 and 3 for the period of 10 years imprisonment, taking into account the pleas. This recognises a degree of accumulation to reflect the circumstance that there would not have been any money laundering but for the aiding and abetting of the frauds and a common motivation of greed. [204] The starting point for the sentence for count 2 is 6 years which, with the 20% discount for the plea, reduces to 4 years and 9 months. [205] Applying the principle of totality, as between aggregate federal sentence and the state sentence result in a notional net effective term of 12 years imprisonment. The aggregate federal offence has been adjusted to provide for a significant measure of concurrency, whilst maintaining some level of accumulation, and to generally reflect the totality principle I have applied. [206] In terms of starting date for the sentence, I factor in the circumstance of the offender having spent a day in custody. … [209] Taking into account the matters I have mentioned I sentence you as follows. [210] On count 2, I sentence you to a term of imprisonment for a term of imprisonment of 4 years, commencing on 31 March 2021 and expiring on 30 March 2025, with a non-parole period of 2 years and 5 months expiring on 30 August 2023. On counts 1 and 3, I sentence you to a term of imprisonment of 8 years, commencing on 31 August 2023 and expiring on 30 August 2031, with a non-parole period of 4 years and 9 months expiring on 30 May 2028. [211] I am required by s 16F of the Crimes Act to explain the aggregate sentence imposed for counts 1 and 3, being the money laundering and aid and abet offences. I have imposed an effective term of imprisonment of 8 years to commence on 31 August 2023 and a non-parole period of 4 years and 9 months. You will commence serving your sentence for the federal offences after your completion of the non-parole period for the sentencing for count 2, being for the blackmail offence. You are eligible for release on 30 May 2028. This means that you will be imprisoned for a period of not less than 4 years and 9 months for the federal offences, immediately upon the expiration of the non-parole period of 2 years and 5 months that you are serving for the blackmail offence. If you are granted parole on 30 May 2028, you will serve the balance of your sentence in the community, but your parole will be subject to conditions determined by the relevant parole authority, which conditions may be amended or revoked. If you fail, without reasonable cause, to comply with the conditions of parole, your parole may be revoked and you may be taken back into custody to serve the remainder of your head sentence.

[19]

The structure of the sentence imposed on Mr Hausman

Mr Hausman was also sentenced for the State offence of blackmail and the Commonwealth offence of money laundering offence. The total effective sentence comprised what the sentencing judge described as "the notional starting point for the head sentences of both the State and Commonwealth offences of 10 years and 15 years respectively" to each of which he applied a 50% discount to reflect the combined value of Mr Hausman's pleas of guilty (25%) and his assistance to the authorities (20% for future assistance and 5% for past assistance [17] ) from which was derived what the sentencing judge described as "the appropriate sentences [of] 5 years (for the blackmail offence) and 7 years, 6 months (for the money laundering offence)". He went on to say: [139] In my view the notional starting point for head sentences should be 10 years' imprisonment for the blackmail offence and 15 years for the money-laundering offence, respectively. But after the combined discount (50%) that I have referred to has been factored into for each of those sentences, the appropriate sentences are 5 years (for the blackmail offence) and 7 years, 6 months (for the money laundering offence) respectively. Then, applying the totality principle, factoring in notional concurrency and some notional accumulation, the notional total effective head sentence would be 10 years' imprisonment. The separate sentences I impose will reflect the application of that principle in the way I have indicated. [140] As indicated, I consider that the same non-parole period should apply to both offences.
Earlier in his sentencing remarks the sentencing judge acknowledged, as he did when sentencing Mr Rostankovski, the need for the ultimate sentence to reflect totality principles qualified by the need to ensure that its overall effect was not "crushing". He said: [136] I consider that it is important that an element of accumulation is required to comprehend the full extent of the criminality, and recognising the different features of the criminality. The money laundering was plainly connected and occurred within a short period of time, and to some degree was planned before or almost contemporaneously, to the blackmailing. Both offences shared the common motivation of greed. I am also conscious, however, that the overall effect of the sentencing should not be 'crushing'.
The sentencing judge then made the following order which I set out in full: [142] You are convicted of counts 1 and 2 on the indictment. [143] Having taken into account, for each offence, your pleas and your past and future assistance to law enforcement authorities (yielding a combined discount of 50%): On count 1, you are sentenced to a term of imprisonment for 5 years, commencing on 30 March 2021 and ending on 29 March 2026, with a non-parole period of 3 years expiring on 29 March 2024. On count 2, you are sentenced to a term of imprisonment for 5 years, commencing on 30 March 2024 and ending on 29 March 2029, with a non-parole period of 3 years, expiring on 29 March 2027. [144] I am required to set out the period of imprisonment and non-parole period I would have imposed in relation to count 2, being the money laundering offence, but for your undertaking to assist in the future (s 16AC of the Crimes Act) for your future assistance to authorities. But for your undertaking (yielding a 20% discount), I would have imposed a period of imprisonment of 6 years and 3 months' imprisonment for count 2, being the money laundering offence, with a non-parole period of 3 years and 9 months. If you do not adhere to your undertaking to assist in the future, the Commonwealth Director of Public Prosecutions may appeal against the adequacy of the reduced sentence I have imposed under s 16AC(3) of the Crimes Act. [145] I am also required to state the penalty that would have been imposed in relation to count 1, the blackmailing offence, but for your assistance. In contrast to the requirements of federal sentencing law, however, the requirement to state the impact of your assistance extends to both the past and the future (s 23(4) of the CSP Act). The discount on this sentence, for past and future assistance, is a combined discount of 25%. That means that but for your past and future assistance, you would have received a sentence of imprisonment on the blackmail offence of 6 years and 8 months.

[20]

The Crown appeals

The grounds of appeal filed by the Director against the sentences imposed on the respondents were particularised differently.
The Director relied on the following grounds of appeal in its appeal against Mr Rostankovski's sentence: 1. The sentencing judge erred in his application of the totality principle. 2. The following components of the sentence imposed by the sentencing judge are manifestly inadequate: 1. The individual sentence on Count 2; 2. The aggregate sentence for Counts 1 and 3; 3. The total effective head sentence; and 4. The total non-parole period. Particulars of Ground 2 1. There was a disparity between the sentences imposed and what was necessary to reflect the objective gravity of each of the offences. 2. The excessive allowance for totality resulted in manifestly inadequate sentences.
The Director relied on the following grounds of appeal in the appeal against Mr Hausman's sentence: 1. The sentencing judge erred in his application of the totality principle. 2. The sentencing judge erred in specifying the sentence that would have been imposed but for the reduction made for the respondent's undertaking to co-operate with law enforcement authorities. 3. The following components of the sentence imposed by the sentencing judge are manifestly inadequate: 1. The individual sentence on Count 2; and 2. The total effective head sentence.
Despite the Director's contention in the second ground of Mr Rostankovski's appeal that error in the application of the totality principle (at least by reason of an excessive allowance for totality) resulted in a manifestly inadequate sentence, and although a contention in similar terms was not made in the Director's appeal against Mr Hausman's sentence, because the first ground in both appeals contends that a discrete and patent sentencing error was committed in the sentencing judge's application of totality principles, an error which, if established, and subject to the principles applicable to Crown appeals, would require this Court to resentence both respondents, it is convenient to deal with the first ground in both appeals before considering whether the Director has demonstrated that the effective sentence imposed on each of the respondents is manifestly inadequate in any event, either because the sentences imposed for the individual offences are themselves manifestly inadequate and/or because the total effective head sentence suffers from that flaw.

[21]

Did the sentencing judge err in the application of totality principles?

At the hearing of the appeal there was no disagreement as to the principles that emerge from the authorities concerning the totality principle, not least that its application in any given case is discretionary. Those principles should, however, be briefly restated.
In Mill v The Queen (1988) 166 CLR 59; [1988] HCA 70 (Mill) at 63, the totality principle was identified as a recognised principle of sentencing to assist the court when structuring a sentence involving multiple offences. By adopting the following statement from Thomas, Principles of Sentencing, [21] its operation was described by the High Court [22] as follows: The effect of the totality principle is to require a sentencer who has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed and each properly made consecutive in accordance with the principles governing consecutive sentences, to review the aggregate sentence and consider whether the aggregate is 'just and appropriate'. The principle has been stated many times in various forms: 'when a number of offences are being dealt with and specific punishments in respect of them are being totted up to make a total, it is always necessary for the court to take a last look at the total just to see whether it looks wrong[']; 'when ... cases of multiplicity of offences come before the court, the court must not content itself by doing the arithmetic and passing the sentence which the arithmetic produces. It must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences'.
In the immediately following passage, the Court in Mill noted the language used by Lord Parker LCJ in R v Faulkner (1972) 56 Cr App R 594 that the question whether the imposition of cumulative sentences was commensurate with the gravity and totality of the criminal conduct was accompanied by taking what has been described as "a last look" at the total sentence to see whether it looks wrong. [23]
In Pearce v the Queen (1998) 194 CLR 610; [1998] HCA 57, McHugh, Hayne and Callinan JJ (at 623-624), citing Mill, expressed the effect of the totality principle, albeit from the offender's perspective: To an offender, the only relevant question may be "how long", and that may suggest that a sentencing judge or appellate court should have regard only to the total effective sentence that is to be or has been imposed on the offender. Such an approach is likely to mask error. A judge sentencing an offender for more than one offence must fix an appropriate sentence for each offence and then consider questions of cumulation or concurrence, as well, of course, as questions of totality.

[22]

The Crown's analysis of the sentence imposed on Mr Rostankovski

The first step in the Crown's analysis of Mr Rostankovski's sentence concerns the aggregate sentence imposed for the two Commonwealth offences: 1. In fixing an aggregate sentence of 10 years (which translated into a notional accumulation of 6 months between the indicative sentences of 1 year and 7 months and 9 years and 6 months' imprisonment), the sentencing judge recognised that there was what he described as "a degree of accumulation" (between the two Commonwealth offences) to reflect the fact that there would not have been any money laundering offence were it not for Mr Rostankovski having aided and abetted Mr Cranston's commission of the Plutus tax fraud. [27] The Director submitted that "downward adjustment" (from full accumulation of 11 years and 1 month to 10 years) reflected the application of totality principles and, having made that "downward adjustment" [28] in the process of aggregating the indicative sentences for the two Commonwealth offences, it was not open to the sentencing judge to make any further allowance for totality in the ultimate sentence imposed for those offences. In the Director's submission where there is nothing revealed in the sentencing reasons to justify or explain the process by which the aggregate term of imprisonment of 10 years reduced to 8 years in the ultimate sentencing order (a term of imprisonment which the Crown emphasised was less than the 9 years and 6 months indicated for the money laundering offence) this Court would conclude that there must have been an error in the application of totality principles by double counting its effect. 2. The next step was the appointment of a sentence of 4 years and 9 months for the blackmail offence after allowance for the plea of guilty. Although the Director's second ground of appeal contends that a starting point of 6 years before the application of the discount for the plea of guilty against a maximum penalty of 14 years' imprisonment reveals latent error, that submission was not articulated by the Director in developing the argument that the sentencing judge misapplied totality principles. 3. The next step in the Director's analysis concerns what the Director submitted the sentencing judge must be taken to have intended when he described "a notional net effective term of 12 years" (for all three offences) applying the principle of totality. Although precisely what the sentencing judge meant by a "notional net effective term" of imprisonment is unclear, the Director accepted that his Honour did not mean to convey, and did not in fact convey, that the total effective sentence should result in an effective sentence of imprisonment of 12 years, it being clear from the sentencing remarks that he intended to provide, and did in fact provide, for a measure of concurrency between the aggregate Commonwealth sentence of 10 years and the sentence for the State offence of blackmail of 4 years and 9 months (to the extent of 2 years and 9 months), and that he did so in the application of totality principles because he said as much. 4. The Director reserved her ultimate complaint for what was said to be a further downwards adjustment in the 12 year "notional net effective term" to 8 years. That sentence was, as the Director pointed out, less than one of the indicative sentences. This additional allowance for totality was then exacerbated by the sentencing judge allowing the aggregate Commonwealth sentence to be served partly concurrently with the State blackmail offence by fixing the commencement date for aggregate sentence at the expiration of the non-parole period for the State offence. The Director submitted that this had the effect of allowing for an additional degree of concurrency (to the extent of 1 year to 7 months) between the State and Commonwealth offences which flowed through to the non-parole periods. 5. In the Director's submission, although the sentencing judge did not explain why he made that further downwards adjustment in the aggregate sentence when making the ultimate sentencing order, to the extent that he might have been labouring under the misapprehension that the operation of s 19(3) of the Crimes Act (Cth) obliged him to order that the Commonwealth aggregate sentence commence immediately upon the expiration of the non-parole period for the State sentence, that did not explain why the sentence for the State offence was also reduced from 4 years and 9 months to a term of 4 years.

[23]

Mr Rostankovski's submissions as respondent to the first ground of the Director's appeal

In oral submissions, Mr Walker submitted that although the identification of a "process error" in the structure of a sentencing order can be a valuable way of exposing an error of principle of the kind contended for by the Director, on this appeal no error of that kind has been demonstrated. He further submitted that to the extent that the process error (so-called) is a product of the sentencing judge misunderstanding the operation of s 19(3) of the Crimes Act (Cth), the Director cannot avail itself of that error, if it is an error, when it likely sources from the Crown's submissions on sentence.
Senior counsel submitted that the fact that there was partial accumulation between two Commonwealth offences at (a) in the Director's analysis could not conceivably be the endpoint of the application of totality considerations when what his Honour described as "the starting point" for the state offence of blackmail (the next step in the Director's analysis at (b) above) had not been accounted for in a sentencing exercise which involved three separate and distinct offences embracing two distinct statutory sentencing regimes.
Senior counsel submitted that the sentencing judge made it clear beyond question that it was only after nominating 4 years and 9 months for the blackmail offence that he ultimately turned to totality considerations when he said: Applying the principle of totality, as between aggregate federal sentence and the state sentence result in a notional net effective term of 12 years imprisonment. The aggregate federal offence has been adjusted to provide for a significant measure of concurrency, whilst maintaining some level of accumulation, and to generally reflect the totality principle I have applied. [29]
Mr Walker submitted that the sentencing reasons reflect a clear and deliberate exercise of a sentencing discretion which necessarily incorporated considerations of concurrency and accumulation in the ultimate sentencing order and in the appointment of starting dates in compliance with the Commonwealth governing law. Mr Walker accepted that the sentencing judge's reasons were unclear. However, he submitted that the Director's stepped analysis of the sentencing reasons and the deconstruction of the language used by the sentencing judge as a means of identifying an arithmetic double-counting of totality considerations is artificial. In his submission, it undermines the intuitive synthesis which is the hallmark of the exercise of the sentencing discretion which was made more complex in this case given the Director's election to lay both Commonwealth and State offences and the obligation of the sentencing judge to comply with the statutory language of s 19(3) of the Crimes Act (Cth) in a principled approach to considerations of totality.

[24]

The Crown's analysis of Mr Hausman's sentence

The Director submitted that a stepped analysis of the sentencing reasons in Mr Hausman's case exposes an error of the same kind as was exposed in the analysis of Mr Rostankovski's sentence: 1. The first step in that analysis was what the sentencing judge described as "a notional starting point" of 10 years' imprisonment for the State blackmail offence and 15 years for the Commonwealth money laundering offence, with the disparity between the "notional starting points" of both sentences relative to the sentences indicated for the same offences in the appointment of an aggregate sentence in Mr Rostankovski sentence proceeding reflecting Mr Hausman's greater culpability and on account of him having played a "more causative role" in the commission of both offences. 2. The next step was the application of a combined discount of 50% to both offences resulting in a discounted sentence of 5 years' imprisonment for the blackmail offence and 7 years and 6 months for the money laundering offence. 3. After applying what his Honour described as "the totality principle and factoring in notional currency and some notional accumulation" to reflect the fact that the money laundering offence was "to some degree planned before or almost contemporaneously to the blackmail offence", a "notional total effective head sentence" of 10 years was specified. Again, the Director submitted that precisely what his Honour meant by a "notional total effective head sentence of 10 years" was unclear. However, as with the deployment of the equally opaque concept of a "notional net effective term of imprisonment" when sentencing Mr Rostankovski, the Director accepted that his Honour intended to provide for a measure of concurrency between the State and Commonwealth offences in recognition of totality principles, again because he said as much. On that analysis, the Director accepted that in using the qualifying word "notional" in describing a "net effective term of imprisonment" the sentencing judge should not be taken to convey that the total effective sentence ultimately imposed would be a term of imprisonment of 10 years. In the Director's submission, however, it is equally clear that in nominating a head sentence of 10 years, the sentencing judge had factored in considerations of concurrency and accumulation as a reflection of totality principles given that full accumulation between the two counts would have resulted in a head sentence of 12 years and 6 months. 4. As with the Director's ultimate complaint in the appeal against the sentence imposed upon Mr Rostankovski, the Director's ultimate complaint in its appeal against Mr Hausman's sentence was directed to what was said to be the further downward adjustment in the effective sentence when the ultimate sentencing order was made. Although the Director accepted that the basis for that further downwards adjustment in Mr Hausman's case was also unexplained, some clarity might be gleaned from the way in which the sentencing judge explained the sentence to Mr Hausman where he said: [30] … the term for your sentence for the money laundering offence has been adjusted having regard to the length of your sentence for the blackmailing offence. 1. The Director submitted those remarks would tend to suggest that the reduction of the sentence for the money laundering offence (from 7 years and 6 months to 5 years) was a further and additional allowance for totality resulting in a total effective head sentence of 8 years with an effective non-parole period of 6 years resulted.

[25]

Mr Hausman's submissions as respondent to the first ground of the Crown appeal

In Mr English's submission the Director's analysis of the sentence does not expose the error of principle contended for. In his submission, prior to making the ultimate sentencing order the sentencing judge was at pains to explain the structure of the sentence making it clear that he applied totality considerations when he reduced the discounted sentence for the money laundering offence of 7 and 6 months to 5 years in the ultimate sentencing order. Counsel submitted that while reducing the sentence for that offence on account of totality may be an unorthodox approach, it was nonetheless a permissible approach which did not preclude the sentencing judge from also taking the additional step of allowing for a measure of concurrency between that sentence and the sentence for the blackmail offence in order to avoid a crushing sentence.
In counsel's submission, that approach did not disclose an error of sentencing principle. In his submission, on a proper analysis of the Director's submissions, the first ground of appeal is a complaint that the sentencing judge gave undue weight to the operation of totality principles in imposing a total effective sentence of 8 years with a non-parole period of 6 years. While counsel accepted that complaint might be called in aid of a submission that the sentence is manifestly inadequate, it is not a submission that is available to the Director in seeking to demonstrate a patent error of sentencing principle.
Counsel further submitted that this Court would not find favour with the Director's submission that, having lowered the sentence for the money laundering offence, the sentencing judge should have revisited the extent to which that sentence should be served concurrently with the sentence for the blackmail offence in circumstances where the sentencing judge was, at the very least, encouraged by the Crown at the time of sentence to commence the Commonwealth offence at the conclusion of the non-parole for the State offence. [31]

[26]

Consideration of the first ground of the Director's appeal

In my view, the Director's analysis of the sentencing reasons relied upon to demonstrate error in the application of totality principles in the sentences imposed on both Mr Hausman and Mr Rostankovski has failed to expose that error. Although the sentencing judge's use of the concept of a "net" or "notional net effective terms of imprisonment" was opaque, the contention that there was a double counting of totality considerations in the sentencing reasons which followed his use of those terms, is not sustainable, or at least not sustainable with sufficient certainty to expose a sentencing error.
Further, although an arithmetic analysis of the steps through which the sentencing judge appeared to notionally pass before arriving at the ultimate or effective terms term of imprisonment imposed on each of the respondents gives rise to an appearance or suggestion of a "double counting" for totality considerations, I am not persuaded that the patent error of sentencing principle for which the Director contends has been made out. Even were there a process error in the application of totality principles of the kind contended for by the Director, in the circumstances of this case where there is at least a real risk that the Crown may have unwittingly contributed to that error, in the exercise of this Court's residual discretion I would decline to re-exercise the sentencing discretion.
Finally, it is deserving of emphasis that there is no single method mandated by the authorities according to which the principle of totality must be applied, or that an approach which involves lowering an individual sentence precludes a sentencing court from taking the additional step of allowing for a measure of concurrency between the individual sentences when the sentencing order is made. The passage extracted from Johnson above makes that clear. Furthermore, where, as here, the gravamen of the Director's complaint is that the rationale for the final adjustment of the individual sentences is unclear and that, for that reason, the sentencing reasons are legally deficient without that complaint being a separate ground of appeal, I am not persuaded that the error of principle the subject of the first ground of appeal has been made out.
I would dismiss the first ground of appeal in the Director's appeal against the sentences imposed on both Mr Rostankovski and Mr Hausman

[27]

Are the effective sentences imposed on the respondents (or either of them) manifestly inadequate?

Although Ground 2 of the Director's appeal against the sentences imposed on Mr Rostankovski and Ground 3 of the appeal against the sentence imposed on Mr Hausman are also differently expressed, in essence the Director contends that both the individual sentences (and in Mr Rostankovski's case the aggregate sentence for the two Commonwealth offences) and the total effective head sentences imposed are manifestly inadequate.
The legal principles that apply to a ground of appeal contending that a sentence is either manifestly excessive or manifestly inadequate are well established. [32] They have been regularly restated to require the applicant to establish that the sentencing discretion has miscarried resulting in a sentence that is unreasonable or plainly unjust. [33]
An important limiting principle where either manifest excess or manifest inadequacy is asserted provides that appellate intervention is not justified simply because the result arrived at in the sentencing court is markedly different from sentences imposed in other cases, or that the appellate court may have exercised the sentencing discretion differently. Both as a matter of sentencing principle and as a reflection of the breadth of the sentencing discretion there is no single correct sentence that may be imposed in a given case. Intervention is only warranted where the sentence imposed allows for no conclusion other than that there must have been a misapplication of sentencing principle or where the sentence imposed exceeds a sentencing range to the extent that error must have infected the sentencing discretion.

[28]

Is Mr Rostankovski's sentence manifestly inadequate?

[29]

The Director's submissions

The Director submitted that the sentences indicated for the two Commonwealth offences, each of which incorporated a 20% discount for the plea of guilty, are erroneously below the range of sentences that could be justly indicated for offending of objective seriousness: for the aid and abet fraud offence a sentence of 1 year and 7 months was indicated against a maximum sentence of 5 years for offending assessed at the mid-range of objective seriousness and 9 years and 6 months against a maximum sentence of 25 years indicated for the money laundering offence assessed at above the mid-range of objective seriousness.
Were the Court not satisfied that the indicative sentences were erroneously low, the Director submitted that the aggregate 8 year sentence ultimately imposed for the Commonwealth offences is the clearest indication that error has infected the process of aggregation since the indicative sentence for the money-laundering offence is 18 months higher than the aggregate sentence and where the two offences were separated in time and involved different and distinct criminality with minimal overlapping conduct.
In the Director's submission, the money laundering offence, which involved a joint enterprise to receive and disburse $24 million through a solicitor's trust account, funds which derived from a successful blackmailing of members of a criminal syndicate in which the respondent had played a accessorial role, necessitated that general deterrence, public denunciation and community protection carried very significant weight in the sentencing exercise. In the Director's submission, none of these factors was adequately reflected in an 8 year aggregate sentence.
The Director further submitted that an undiscounted sentence of 6 years against the maximum penalty of 14 years imprisonment for the blackmail offence, also assessed by the sentencing judge at above the mid-range of objective seriousness, was erroneously low. In the Director's submission the unexplained reduction of the discounted sentence of 4 years and 9 months imprisonment to imprisonment to 4 years, with a non-parole period of 2 years and 5 months, also reflected a separate error of sentencing discretion.
In the Director's submission, the compounding effect of inadequate sentences for three separate and distinct episodes of serious offending by Mr Rostankovski has resulted in a total effective head sentence and non-parole period that is manifestly inadequate.

[30]

Mr Rostankovski's submissions

Mr Walker submitted that the Director's central contention that the undiscounted sentences for each of the three offences fell below what the Director describes as "an available range" was, notably, unsupported by the Director inviting the Court to consider any comparative cases. [34] Mr Walker also emphasised, and in my view correctly, that the so-called starting point or undiscounted sentence nominated by the sentencing judge in the process of structuring a sentencing order necessarily incorporates factors that operate in mitigation of sentence. He described Mr Rostankovski's subjective circumstances as compelling, emphasising that they were not the subject of any challenge by the Director either at first instance or in this Court.
Issue was also taken with the Director's submission that there was minimal overlapping criminality in the offending comprehended by the money laundering offence and the blackmail offence when, as was appropriately recognised by the sentencing judge, they were closely linked contextually and where the money laundering offence was wholly contingent upon the blackmail monies being paid by the Plutus conspirators.
Mr Walker also submitted (again, in my view, with some force) that against the relatively low maximum penalty of 5 years imprisonment for the aid and abet fraud offence, a discounted sentence of 1 year and 7 months, into which was factored the weight of Mr Rostankovski's subjective circumstances, including the sentencing judge's finding that psychological factors played a role in his commission of that offence, was not eloquent of latent error in the exercise of a broad sentencing discretion.
Given the discretion of the sentencing judge in endeavouring to synthesise competing or contradictory factors in determining the length of the effective sentence of full-time imprisonment and the minimum period Mr Rostankovski should serve in custody before being eligible to be released to parole, Mr Walker submitted the Crown had failed to demonstrate that an effective sentence of 10 years and 5 months with a non-parole period of 7 years and 2 months, comprehending both the totality of the respondent's offending and the weight of his subjective case, is manifestly inadequate in the sense that it could fairly be described as wrong or plainly unjust or an afront to the administration of justice.

[31]

Consideration

I accept those submissions. Although the aggregate sentence of 8 years imprisonment ultimately imposed for the two Commonwealth offences has the appearance or suggestion of latent error, particularly when, in the anterior process of aggregation 10 years was appointed, having determined, for the reasons set out above, that the first ground of the Crown appeal which alleged a patent error of sentencing principle in the application of totality principles (in large part focusing on that 8 year aggregate sentence) has not been made out, I am unprepared to find that latent error has infected the sentencing discretion.
I will have something further to say about the Director's failure to cite any comparative cases when dealing with the challenge to Mr Hausman's sentence for the money laundering offence.

[32]

The Director's submissions

The Director did not challenge the undiscounted sentence of 15 years imprisonment for the money laundering offence or the discounted sentence of 7 years and 6 months. [35]
The Director's challenge was limited to the sentence of 5 years ultimately imposed for that offence when assessed against the maximum penalty of 25 years imprisonment. The Director submitted that the objective seriousness of Mr Hausman's offending as party to the joint criminal enterprise to launder the proceeds of the blackmail offence, assessed by the sentencing judge as well above the mid-range and towards the high end of the range for offending of that kind on the basis that Mr Hausman was found to be the architect of the money laundering scheme in which he directed others and used associates to facilitate the movement and investment of the blackmail monies into Australian and overseas accounts, necessitated that the discounted sentence of 7 years and 6 months was not adjusted further and that to reduce that sentence to 5 years without any explanation amounted to a latent error warranting the intervention of this Court.
The Director also submitted that the significant degree of concurrency between the discounted sentences of 5 years ultimately imposed for both the money laundering offence and the blackmail offence, resulting in a total effective head sentence of 8 years with a non-parole period of 6 years, failed to adequately reflect the totality of Mr Hausman's criminality. The Director submitted that of the two offences, although sequential in the sense that the money laundering offence could not have been committed but for the commission of the blackmail offence, the money laundering offence continued for a significant period after the objective of the blackmail had been achieved and, in that sense, the offences were separate and distinct episodes of objectively serious criminality which were inadequately reflected in the effective sentence imposed.
The Director repeated the submissions advanced in support of its appeal against the inadequacy of Mr Rostankovski's sentence set out above at [131] and following, including that this Court's discretion to intervene and set aside Mr Hausman's sentence is engaged to ensure that an unjust sentence is not left undisturbed.

[33]

Mr Hausman's submissions

Mr English's submissions were, unsurprisingly, not dissimilar to those advanced on behalf of Mr Rostankovski.
In his written submissions he repeated the generalised complaint made by Mr Walker in oral argument that the Director had failed to cite any comparable cases which might have allowed this Court to trace the limits of the available range of sentences for the offence of money laundering, in order to consider the Director's submission that the sentence of 5 years imprisonment imposed on Mr Hausman was so far below the range of sentences that could be justly imposed for offending of the kind committed by him as to warrant this Court's intervention.
In contrast, Mr English offered an analysis of a number of sentencing decisions which involved a contravention of s 400.3(1) of the Criminal Code or a conspiracy to commit the offence. He submitted that those cases, set out below, supported the proposition he advanced that a pre-discount starting point of 15 years imprisonment for the money laundering offence (ultimately lowered to 5 years on account of totality in the ultimate sentencing order) was not so far below the range of sentences that could be justly imposed as might warrant this Court's intervention. [36]

[34]

Consideration of the Director's contention that the sentences imposed on Mr Rostankovski and Mr Hausman were manifestly inadequate

It has been repeatedly stated that consistency in sentencing is not demonstrated by numerical equivalence but is the product of the consistent application of relevant sentencing principles. [37] Although the cases cited by Mr English produce only a broad indication of the approach of sentencing courts to serious contraventions s 400.3(1) of the Criminal Code, they have been of some assistance in allowing me to meaningfully compare what the sentencing judge found Mr Hausman did in the commission of the offence, including the quantum of the money laundered and the extent of planning that was entailed in the commission of that offence and, to a limited extent, the relative subjective circumstances of other offenders. In the result, I accept that an undiscounted head sentence of 15 years, although not identical to the sentences imposed upon other offenders, is not so markedly different from them to enable me to find that it is so far outside the range of available sentences to constitute a sentencing error.
Neither am I persuaded that there has been an excessive allowance for totality in the appointment of an effective head sentence of 8 years with a non-parole period of 6 years such as might enliven this Court's discretion to intervene to vary that sentence.

[35]

The second ground of the Director's appeal against Mr Hausman's sentence

The essence of the second ground of the Director's appeal against the sentence imposed upon Mr Hausman is the contention that in discharging his obligation in Part IB of the Crimes Act (Cth) and Part 3 of the Crimes (Sentencing Procedure) Act (NSW) to specify the sentences that would have been imposed were it not for Mr Hausman's assistance to the authorities, the sentencing judge erroneously adopted the sentences of 5 years he imposed for each of the Commonwealth and State offences as the point of reference.
In the Director's submission there can be no question from the concluding paragraphs of the sentencing order which I have set out in full above and which I extract again below, that the sentencing judge took that approach. The only question is whether that was an error which this Court should correct. [144] I am required to set out the period of imprisonment and non-parole period I would have imposed in relation to count 2, being the money laundering offence, but for your undertaking to assist in the future (s 16AC of the Crimes Act) for your future assistance to authorities. But for your undertaking (yielding a 20% discount), I would have imposed a period of imprisonment of 6 years and 3 months' imprisonment for count 2, being the money laundering offence, with a non-parole period of 3 years and 9 months. If you do not adhere to your undertaking to assist in the future, the Commonwealth Director of Public Prosecutions may appeal against the adequacy of the reduced sentence I have imposed under s 16AC(3) of the Crimes Act. [145] I am also required to state the penalty that would have been imposed in relation to count 1, the blackmailing offence, but for your assistance. In contrast to the requirements of federal sentencing law, however, the requirement to state the impact of your assistance extends to both the past and the future (s 23(4) of the CSP Act). The discount on this sentence, for past and future assistance, is a combined discount of 25%. That means that but for your past and future assistance, you would have received a sentence of imprisonment on the blackmail offence of 6 years and 8 months.
Sections 16AC(1) and (4) of the Crimes Act (Cth) (set out below) provide for what a sentencing court is to do when sentencing an offender who has undertaken to cooperate with law enforcement agencies, and what is to occur where an offender has failed, in whole or in part, to comply with that undertaking without reasonable excuse. Where there has been a complete failure to comply with an undertaking the original sentence is to be restored if the failure to comply is in part only, any substituted sentence is a matter for the sentencing court in the exercise of discretion. [38] 16AC Reduction for cooperation with law enforcement agencies (1) This section applies if a court imposing a sentence, or making an order, for a federal offence: (a) reduces the severity of the sentence or order; or (b) reduces the non‑parole period in relation to the sentence (if applicable); because the offender has undertaken to cooperate with law enforcement agencies in proceedings (including confiscation proceedings) relating to any offence. … (4) The court hearing the appeal: (a) if it is satisfied that the person has failed entirely to cooperate in accordance with the undertaking - must substitute for the reduced sentence, reduced order or reduced non‑parole period the sentence, order or non‑parole period that would have been imposed, made or fixed but for that reduction; and (b) if it is satisfied that the person has failed in part to cooperate in accordance with the undertaking - may substitute: (i) for the reduced sentence or reduced order such a sentence or order, not exceeding in severity the sentence or order that could be imposed or made under paragraph (a), as the court thinks appropriate; or (ii) for the reduced non‑parole period such a non‑parole period, not exceeding the parole period that could be fixed under paragraph (a), as the court thinks appropriate.

[36]

Consideration

The cases to which Mr English referred [39] confirm that the quantification of the sentencing discount for an offender's assistance to authorities is in the discretion of the sentencing judge. They do not, however, support the proposition that having appointed (or allowed for) that discount, application of the "but for" test as it arises under both sentencing statutes admits of any further calculation as a matter of sentencing discretion.
I am satisfied the error the subject of the Director's second ground of appeal is made out. It will be obvious from the orders I propose in the ultimate disposition of the Director's appeal and Mr Hausman's severity appeal as concerns s 23(4) of the Crimes (Sentencing Procedure) Act (NSW) that the error can be corrected by a recasting of the concluding paragraphs of the sentencing order without any alteration to the effective sentence.

[37]

The first ground of appeal: the sentencing judge erred in his application of the parity principle giving rise a justifiable sense of grievance

The applicant complains about a marked and unjustifiable disparity between his undiscounted sentence of 10 years for the blackmail offence and 15 years for the money laundering offence when compared with Mr Rostankovski's undiscounted sentences of 6 years and 11 years and 10 months, respectively, for the same offences.
I accept the submission advanced by Mr English that since Mr Hausman was entitled to a combined discount of 50% in contrast to Mr Rostankovski who was entitled to a discount of 20% limited to his pleas of guilty, when considering whether, as a matter of substance rather than form, a complaint about disparity is made out it is the starting point (or undiscounted sentence) that is the focus. There was no submission from the Director that any other approach should be taken.
Mr English advanced the further submission that this Court would be satisfied that the sentencing judge's failure to give proper effect to the parity principle is demonstrated by the "relative similarity" between an effective sentence imposed on Mr Hausman of 8 years with a 6-year non-parole period (derived after application of a combined discount of 50% with 25% of the discount attributed to his willingness to assist the authorities) compared with an effective head sentence of 10 years and 5 months with a non-parole period of 7 years and 2 months imposed on Mr Rostankovski who did not assist the authorities and who was also sentenced for the additional offence of aiding and abetting the tax fraud.
Mr English also submitted that inconsistency in the sentencing judge's appointment of the ratio between the head sentence and non-parole periods (in Mr Hausman's case a ratio of 75% compared to 68.8% in Mr Rostankovski's case) also added to Mr Hausman's justifiable sense of grievance.
In short, Mr Hausman submitted that in circumstances where the offences for which he was sentenced were committed by him in the course of a joint criminal enterprise with Mr Rostankovski, the degree of disparity between the undiscounted sentences for both offences and between the overall effective sentences was not justified in the exercise of the sentencing judge's discretion. That submission was supported, in part, by the contention that the sentencing judge's findings of Mr Hausman's relative greater criminal culpability because of what the sentencing judge found was the leading role he played as the architect of the money laundering scheme was not justified and that, in material respects, that finding was inconsistent with the facts agreed for sentencing purposes. In addition, at least insofar as the blackmail offence is concerned, Mr English drew the Court's attention to the fact that the Crown on sentence submitted that although Mr Hausman's criminality was "somewhat higher" than that of Mr Rostankovski's it was not "significantly higher".

[38]

Second ground of appeal: the sentencing judge erred by failing to give effect to a finding of special circumstances

In support of this ground of appeal it was submitted that although the sentencing judge expressly stated that a finding of special circumstances specific to the blackmail offence would apply with "the same proportion" to the money laundering offence (a non-parole period of 3 years ultimately being fixed against a sentence of 5 years for each offence) that 60% ratio was not preserved in the process of the sentencing judge ultimately imposing an effective head sentence of 8 years with a non-parole period of 6 years.
The applicant submitted that the ratio of 75% between the effective non-parole period and head sentence reflected a failure on the part of the sentencing judge to give effect to his express finding that the applicant should serve a longer period on parole given his concern that Mr Hausman's rehabilitation may be hindered by the failure to provide him with treatment in custody and, in addition, because of hardship to his family.
In Woods v R [2020] NSWCCA 219, the Court dealt with a similar argument involving sentences for both State and federal offences, where the sentencing judge's finding of special circumstances in respect of a State offence (for the purposes of s 44 of the Crimes (Sentencing Procedure) Act (NSW) was said to have been overlooked when the sentencing order was made.
In that case, Wright J, with whom Bathurst CJ and Garling J agreed, stated at [62]-[63]: [62] It has been established in relation to the setting of a non-parole period for more than one state offence, after a finding of special circumstances, that: (1) an appropriate starting point when considering a ground of appeal asserting error in relation to the ratio of the overall non-parole period to the effective sentence is to ascertain "what can be gleaned of the judge's intention from the sentencing remarks"; (2) the focus should not be solely upon the percentage proportions that the non-parole and parole periods bear to the total term. The actual periods involved are equally, and probably more, important; and (3) intervention by this Court has generally been in situations where the sentencing judge has not given effect to a finding of special circumstances through inadvertence or miscalculation. [63] In the present case, there are multiple federal as well as state sentences. Nonetheless, in my view the same general principles should be applied in relation to the overall sentence involving both federal and state components, but bearing in mind that there is no statutorily or judicially established "norm" or starting point for the ratio between the non-parole period and the head sentence for federal sentences. (Citations omitted.)

[39]

Consideration of Ground 2

It is clear that when making the ultimate sentence in order the sentencing judge followed through with his earlier stated intention that the non-parole period for the Commonwealth offence of money laundering should reflect the alteration in the ratio between the non-parole period and the balance of term for the state offence of blackmail. It is less clear however whether after the sentencing judge made the final adjustment to the sentence in application of totality principles (an adjustment which resulted in an effective sentence of 8 years imprisonment with a non-parole period of 6 years) his failure to preserve the ratio between the head sentence and the non-parole period imposed was a matter of miscalculation or inadvertence as distinct from His Honour determining at that time that the appropriate minimum period Mr Hausman should serve in custody for two serious criminal offences should be 6 years.
Given the close consideration the sentencing judge gave to the structure of Mr Hausman's sentence, and the synthesising of competing considerations entailed in arriving at the sentence ultimately imposed, I am not satisfied that an effective non-parole period of 6 years relative to a head sentence of 8 years (a ratio of 75%) was the result of inadvertence or miscalculation on the part of the sentencing judge.
I would dismiss Mr Hausman's second ground of appeal.

[40]

Ground 3: The sentence for the blackmail offence was manifestly excessive resulting in an overall sentence that was manifestly excessive.

Although Mr English accepted that the fundamental question raised by the third ground of appeal is whether the sentence ultimately imposed for the blackmail offence is manifestly excessive, he also submitted that where, as here, there was no issue between the parties that the combined discount for assistance and the early plea of guilty was correctly calculated at 50%, it is open to him to make good his contention that the blackmail offence is manifestly excessive by focusing on the undiscounted sentence.
He submitted that even accepting the sentencing judge's finding that Mr Hausman's criminality was well above the mid-range of objective seriousness, when his very favourable subjective case is taken into consideration, an undiscounted sentence of 10 years imprisonment against a maximum penalty of 14 years was unreasonable and plainly unjust. In his submission where the serious indictable offence the subject of the demand with menaces was a tax fraud, and where the co-conspirators were prepared, without apparent hesitation, to pay the monies demanded of them, in effect because they could be readily absorbed as "an expense" associated with the continuing tax fraud, an undiscounted sentence of 10 years is manifestly excessive.
In circumstances where the discounted sentence of 5 years for the blackmail offence represented a significant portion of the total effective sentence, Mr English submitted that if the sentence for that offence is found to be manifestly excessive it follows that the total sentence is infected by the same latent error.
The Director submitted that both the undiscounted sentence for the blackmail offence and the sentence ultimately imposed after the combined discount of 50% was applied were within the discretion of the sentencing judge. The Director submitted that the challenge to the undiscounted sentence for the blackmail offence on the basis that the co-conspirators to the tax fraud were willing to submit to the demands made of them in order that their criminal offending might continue is not to the point. The Director submitted that it was open to the sentencing judge to find that it was that state of affairs which gave both offenders critical leverage when making the first blackmail demand and that the same state of affairs motivated Mr Hausman to make the second blackmail demand.

[41]

Mr Rostankovski's application for leave to appeal his sentence

I agree with Hamill J that Mr Rostankovski should be granted leave to appeal his sentence but that the appeal should be dismissed.
I agree also with his Honour's reasons set out in his judgment at [223]-[271] below for so finding.

[42]

The question of Mr Hausman being resentenced

Mr Hausman relied upon an affidavit sworn by him and dated 17 September 2021 in support of his submission that in the event that the one or more of his three grounds of appeal are made out, and the Court is satisfied that error has been demonstrated, a lesser effective sentence is warranted in law, the Court would structure the sentence by appointing an undiscounted sentence for both offences less than the undiscounted sentences appointed by the sentencing judge and adjust the effective sentence to reflect that fact.
The affidavit addresses in general terms the conditions of his current custody. As at the date of swearing the affidavit, he was in protective custody which entails limited contact with other inmates and disentitles him from participating in customer-focused courses or work within prison.
He gives evidence that his physical health is monitored with medication as is his mental health and that his blood sugar levels are also monitored.
He complains about the quality of the food he receives as an inmate which has resulted in rapid weight loss and dehydration. I note that on one occasion he was hospitalised due to ill health.
I note that the impact of COVID-19 has limited his face-to-face contact with his partner and children to the extent that since June 2021 his contact with his family is via a video link once a week.
Whilst not irrelevant to the question of resentence I am not of the view that the affidavit evidence supports a conclusion that a lesser effective sentence than that imposed by the sentencing judge is warranted.
In considering Mr English's submission that it would be open to this Court in considering the sentencing discretion afresh to appoint undiscounted sentences for both offences less than those appointed by the sentencing judge (namely less than the sentence of 10 years for the blackmail offence and 15 years for the money laundering offence), I have undertaken a review of the evidence tendered before the sentencing judge. I am satisfied that the findings of fact made by the sentencing judge comprehensively set out in the sentencing judgment and reproduced, in summary, in this judgment are well supported by the evidence. I am also of the opinion that the objective seriousness of Mr Hausman's offending in the joint criminal enterprise in which he participated was fairly appointed by the sentencing judge.

[43]

Orders

I propose the following orders:
R v Rostankovski 1. The Director's appeal against the sentence imposed on Mr Rostankovski be dismissed.
R v Hausman 1. The Director's appeal against the sentence imposed on Mr Hausman be dismissed except to vary the sentencing order made by Abadee DCJ on 1 April 2021 in the following limited respect: I am required pursuant to s 16AC of the Crimes Act to set out the period of imprisonment and non-parole period I would have imposed in relation to Count 2 (being the money laundering offence) but for Mr Hausman's undertaking to assist authorities in the future. Accordingly, but for Mr Hausman's undertaking (yielding a 20% discount), I would have imposed a period of imprisonment of 12 years imprisonment for Count 2 (being the money laundering offence) with a non-parole period of 7 years. If Mr Hausman does not adhere to his undertaking to assist in the future, the Commonwealth Director of Public Prosecutions may appeal under s 16AC(3) of the Crimes Act (Cth) against the adequacy of the reduced sentence I have imposed. I am also required to state the penalty that would have been imposed in relation to count 1, the blackmailing offence, but for your assistance. In contrast to the requirements of federal sentencing law, however, the requirement to state the impact of your assistance extends to both the past and the future (s 23(4) of the CSP Act). The discount on this sentence, for past and future assistance, is a combined discount of 25%. That means that but for your past and future assistance, you would have received a sentence of imprisonment on the blackmail offence of 7 years and 6 months with a non-parole period of 4 years and 6 months. [Variation in bold].
In every other respect, the sentence imposed by Abadee DCJ is confirmed.
Hausman v R On Mr Hausman's application for leave to appeal the severity of his sentence: 1. Grant leave to appeal. 2. Appeal dismissed.
Rostankovski v R On Mr Rostankovski's application for leave to appeal the severity of his sentence: 1. Grant leave to appeal. 2. Appeal dismissed.
ADAMSON J: I have had the considerable benefit of reading the respective reasons of Fullerton and Hamill JJ in draft. I agree with the orders their Honours propose, substantially for the reasons expressed, and wish to add only the following brief observations.

[44]

Concurrence with Fullerton J

I agree with Fullerton J that the Director's appeals against the asserted inadequacy of the sentences must be dismissed, except to the limited extent relating to ground 2 (in Mr Hausman's case) as explained by Fullerton J at [156]-[165] and in her Honour's re-structuring of the sentence. I also agree with her Honour's reasons for that conclusion. While the sentencing Judge approached the issue of totality in a somewhat unorthodox manner, he correctly applied the relevant principles. The authorities referred to by Fullerton J establish that there is no inflexible rule as to how the totality principle is to be applied in any given case, especially one with the complications involved here. As to the assertion that the sentences were manifestly inadequate, I accept that the total effective sentences were at the very low end of any "range" that might have been expected given the gravity of the criminality involved in the case of each of the offenders. However, when account is taken of the individual circumstances of the two men and consideration is given to the undiscounted starting points of the sentences and their accumulated effect, it cannot reasonably be concluded that the sentences were plainly wrong or unjust.
I also agree with Fullerton J's approach to Mr Hausman's application for leave to appeal against the sentence imposed on him. I can discern little merit in the second and third grounds, for the reasons given by Fullerton J. I agree with Fullerton J that the parity ground is meritorious in terms of a bare comparison between the undiscounted sentence imposed on the two men for the blackmail offence. So much was essentially conceded by the Director. However, as Fullerton J explains, the approach taken by the sentencing Judge to the issue of totality and the extent to which the sentences were ordered to be served concurrently resulted in the disparity in the total effective sentence not being such as to warrant appellant intervention. In other words, once the re-sentencing exercise is undertaken in accordance with the approach explained by Fullerton J, there is no remaining justifiable sense of grievance in terms of the total sentence imposed on the two men. That conclusion may be different if the Court intervened to reduce Mr Rostanovski's sentence, the matter to which I now turn. Subject to that issue, I agree that Mr Hausman's appeal against sentence should be dismissed although, clearly enough, leave to appeal should be granted.

[45]

Mr Rostankovski's application for leave to appeal his sentence

As Fullerton J has observed, Mr Rostankovski filed a notice of intention to appeal on 9 April 2021 and a single ground of appeal was notified on 14 July 2021 in the following terms: "The sentencing judge erred by finding that the applicant's prior good character assisted him in the commission of the offending."
Mr Rostankovski accepted that the sentencing Judge was correct to find that "denunciation, punishment and general deterrence" are "especially important" in "tax fraud cases". However, he submitted that the Judge erred by diminishing the weight given to his prior good character and lack of criminal history on the basis of a finding that "his prior good character contributed to the commissioning of the aiding and abetting offence". Similarly, it was put that his Honour erred in finding that "the [Prosecutor's] point about prior good character assisting in the accumulation of profit by illegal means retains force". At the heart of the submission was the contention there was no evidence that Mr Rostankovski's good character played any part in his ability to commit the offences to which he pleaded guilty.
The Director submitted that the approach taken by the sentencing Judge did no more than apply established authority to the facts of the case and that his Honour "was entitled to give less weight to prior good character on the basis of the seriousness of the offences, the importance of general deterrence, the frequency with which offences of tax fraud and money laundering are committed by persons of good character and the pattern of repeat offending over a significant period of time." The Director relied on a submission that the sentencing Judge indicated that his decision to give less weight to the good character applied "especially so for the aid and abet fraud offence" and that the Judge did not treat the good character as "an aggravating feature" but rather as a "mitigating feature, albeit the degree of mitigation was lessened".
Mr Rostankovski's submissions under this ground must be accepted and the Court should consider the sentence imposed on him afresh in accordance with the decision in Kentwell v the Queen (2014) 252 CLR 601; [2014] HCA 37, in order to determine whether, pursuant to s 6(3) of the Criminal Appeal Act 1912 (NSW), his appeal against sentence should be allowed.

[46]

Relevant statutory provisions

The relevant Commonwealth provisions are in s 16A of the Crimes Act 1914 (Cth). Section 16A(2) provides a non-exhaustive list of matters that must be taken into account in determining an appropriate sentence. Section 16A(2)(m) refers to "(m) the character, antecedents, age, means and physical or mental condition of the person". Sub-paragraph (n) refers to the prospects of rehabilitation, a matter often informed by the existence or absence of a history of offending. The Director referred to sub-para (ma) which provides: "(ma) if the person's standing in the community was used by the person to aid in the commission of the offence--that fact as a reason for aggravating the seriousness of the criminal behaviour to which the offence relates."
The Director acknowledged that this provision was inserted by the Crimes Legislation Amendment (Sexual Crimes Against Children and Community Protection Measure) Act 2020 (Cth) and came into force after the offending and had no application. However, it was suggested "it may be helpful in elucidating that prior good character was not treated as an aggravating feature".
Section 16A(2)(ma) is of no relevance to an assessment of this ground. It is self-evident that that a person of good character with no previous criminal antecedents should generally have those matters taken into account as mitigating features. There may be exceptions to that general proposition as the following analysis demonstrates, but the starting point is that a person with no criminal history, or a person of prior good character, is entitled to expect a less severe sentence than a recidivist offender.
Turning to relevant New South Wales legislation, s 21A of the Crimes (Sentencing Procedure) Act 1999 (NSW) provides a list of aggravating and mitigating features. Sub-section (2) provides a list of aggravating factors including: "(d) the offender has a record of previous convictions (particularly if the offender is being sentenced for a serious personal violence offence and has a record of previous convictions for serious personal violence offences)."
Within its non-exhaustive list of mitigating factors, sub-s (3) of s 21A provides: "(e) the offender does not have any record (or any significant record) of previous convictions, (f) the offender was a person of good character, (g) the offender is unlikely to re-offend, (h) the offender has good prospects of rehabilitation, whether by reason of the offender's age or otherwise includes."

[47]

Authorities concerning circumstances where an offender's good character may be found to have less weight

There are several circumstances where it has been held that an offender's prior good character may receive less weight and, perhaps in an extreme case, be disregarded. Some of the cases were summarised by the parties in their written submissions. In R v Kennedy [2000] NSWCCA 527 Howie J (with whom Simpson J, as her Honour then was, agreed) said at [21]: "Generally speaking such a situation might arise where general deterrence is important, the particular offence before the court is serious and it is one frequently committed by persons of good character. Another situation may be where the prior good character of the offender has enabled him or her to gain a position where the particular offence can be committed."
Howie J continued at [22] by referring to cases "where there is a pattern of repeat offending over a significant period of time", a circumstance that frequently arises in child sexual assault offences. While R v Kennedy was a decision of a two-member bench, the principles outlined by Howie J are not controversial and were not contested on the hearing. Rather, the issue was whether such principles applied to Mr Rostankovski's case and whether the sentencing Judge erred in their application.
By reference to R v Gent [2005] NSWCCA 370 at [55]-[59]; (2005) 162 A Crim R 29 at 42-43, the Director submitted "it is well established that good character carries less weight with respect to certain classes of offences" and identified fraud and money laundering as two such offences because of the need for "denunciation, punishment and general deterrence." Reliance was placed on the judgments in R v Rivkin (2004) 59 NSWLR 284; [2004] NSWCCA 7 and R v Huang [2007] NSWCCA 259; (2007) 173 A Crim R 370.
Another kind of offence where it has sometimes been held that the offender's good character played a role in their ability to commit the offence are those involved in drug trafficking: see, for example, R v Leroy (1984) 2 NSWLR 441 and R v Nguyen [2010] NSWCCA 238; (2010) 205 A Crim R 106. In R v Leroy, Street CJ observed that some offenders in the chain of drug trafficking are selected because their clean records enable them to escape suspicion and detection. Typically, this might involve those chosen to be couriers crossing international borders with large quantities of narcotics.

[48]

Resolution of the ground of appeal

The applicant was born in May 1989 and was 27 years of age during the period of the offending. He was 31 at the time of sentence. The only matter on his criminal history was an offence of driving while his licence was suspended from 2008 for which he received a 12 month bond without conviction. He was married with two children aged 2 and 5 and tendered an impressive array of testimonials attesting to his good character. These came from family members, school and family friends, work colleagues and others. He had a solid history of employment including during the period of remand and a letter from the company that employed him, with the knowledge of the pending charges, spoke highly of him. There was no dispute that he was a person of good character and the sentencing Judge, having referred to that evidence, said: "They all speak of the offender's good personal qualities. Having regard to that evidence, and his absence of prior criminal record, I accept that prior good character is established."
In the part of his written submissions dealing with "Character and antecedents", Senior Counsel for Mr Rostankovski submitted before the sentencing Judge: "79. Whilst prior good character has sometimes been considered to be of less weight in these types of matters, it is of note that the offender's good character was not something that assisted him in the commission of his offences."
Under a heading referring to the "Crimes Act [(Cth)], s 16A(2)(f), (m) and (n) and the Crimes (Sentencing Procedure) Act, s 21A(3)(e), (f), (g), (h) and (i)", the Prosecutor at first instance submitted: "78. While it is accepted that he has no criminal record of relevance, good character is of less significance for 'white collar crimes' as it is that fact which normally places the offender in the position to offend."
Reference was made to the decision in R v Rivkin (2004) 59 NSWLR 284; [2004] NSWCCA 7 at [410] where it was said: "410 Subjectively, reliance was placed upon the appellant's position as a person of hitherto impeccable character and integrity, who had not been previously found to have transgressed any law regulating the securities industry, who had played a significant and active role in community and charity organisations, and who was well respected. His Honour did not overlook that circumstance, it being a matter specifically addressed in the reasons for sentence. However, the relevance of good character is of lesser significance for white-collar crimes, since it is that factor which normally places the offender in a position whereby he or she is able to commit the offence: R v El Rashid, NSWCCA 7 April 1995 per Gleeson CJ at 3."

[49]

Exercising the sentencing discretion afresh

The correct approach to re-sentencing and s 6(3) of the Criminal Appeal Act was described by the High Court in Kentwell v The Queen in the following terms at [43]: "After having identified specific error of the kind described in House, the Court of Criminal Appeal may conclude, taking into account all relevant matters, including evidence of events that have occurred since the sentence hearing, that a lesser sentence is the appropriate sentence for the offender and the offence. This is a conclusion that that lesser sentence is warranted in law. The result of the Court of Criminal Appeal's independent exercise of discretion may be the conclusion that the same sentence or a greater sentence is the appropriate sentence. In neither case is the Court required to re-sentence. Nor is the Court required to re-sentence in a case in which it concludes that a lesser sentence is appropriate for one or more offences, but that a greater sentence is appropriate for another or other offences, with the result that the aggregate sentence that it considers warranted in law exceeds the aggregate sentence that is the subject of appeal. The occasions calling for the Court of Criminal Appeal to grant leave, allow an offender's appeal and substitute a more severe sentence are likely to be rare. Were the Court to grant leave in such a case, convention would require that it inform the appellant of its intended course so that he or she might abandon the appeal"
Simpson J (as her Honour then was) explained this Courts function once error is established in Davis v R [2015] NSWCCA 90 at [79]-[84]: 79. Any sentence that falls within the available range may be said to be "warranted in law". However, a sentence imposed following a legally flawed sentencing exercise is not "warranted in law" - unless, in the exercise of its independent discretion, the Court of Criminal Appeal determines that that is the appropriate sentence for the offence and the offender. 80. Reliance by the Crown on a contention that "no lesser sentence is warranted in law" is apt to mislead. Unless the contention is that the sentence imposed lay at the bottom of the available range, then the submission is simply wrong. Where the sentence imposed is other than at the very bottom of the available range, some lesser sentence is, as Kentwell makes plain, "warranted in law". That does not mean that it must be imposed. But the fact (if it be the fact) that the sentence imposed lies within the available range also does not relieve this Court of its obligation to exercise its own sentencing discretion, independently of the sentences selected at first instance. 81. Once error has been identified and this Court is required to re-sentence, a proposition that no lesser sentence is warranted in law is largely irrelevant, and, as I have suggested, apt to mislead. It is apt to mislead because it has the capacity to suggest that this Court ought not to exercise its own independent sentencing discretion, but to take its guidance from the sentence imposed at first instance - a sentence which is, ex hypothesi, legally flawed (even if it is "within range"). To accord primacy to the sentence selected by the sentencing judge, a selection that was based on an understanding of the law now shown to be erroneous, is to deflect this Court from the task it has to perform - which is "a genuine re-exercise of the discretion which extends to all matters relevant to sentencing": Liles v R (Cth) [2014] NSWCCA 289. 82. The sentence imposed by the sentencing judge continues to have relevance for two purposes. First, should the sentence selected by this Court be more severe than that imposed at first instance, it must inform the applicant that it is giving consideration to increasing the sentence: Kentwell at [43]; Parker v Director of Public Prosecutions (1992) 28 NSWLR 282 at 290. 83. Secondly, the original sentence is relevant to the order the Court makes. Where the sentence the Court would impose is the same as that imposed at first instance, the correct course is, notwithstanding that error is found and leave granted, to dismiss the appeal: Criminal Appeal Act, s 6(3). 84. In my opinion, the practice of the Crown relying on those words in s 6(3) ("no lesser sentence is warranted in law") ought to cease. The task of this Court, once error is established, is to exercise its own sentencing discretion. Its task is not to ask whether the sentence imposed at first instance as "within range" and, if it is, to re-impose that sentence. That would be an abdication of the responsibility to exercise afresh the sentencing discretion. In the exercise of that discretion, it may or may not come to the conclusion that the appropriate sentence for the offence and the offender is that which was imposed at first instance. That is not the result of concluding that "no lesser sentence is warranted in law", but the result of an independent consideration of all relevant sentencing factors.

[50]

Endnotes

The sentencing judge expressly referred to the principle of parity in both sentencing judgments (Mr Rostankovski [187]-[190] and Mr Hausman [133]-[134]).
Crimes Act (Cth) s 19AJ: see Hildebrand v R [2021] NSWCCA 9.
Crimes Act (Cth) ss 19(3) and 19(4).
The sentencing judge did utilise an aggregate sentencing approach when sentencing Mr Rostankovski for the aid and abet fraud offence and the money laundering offence: see Director of Public Prosecutions (Cth) v Beattie (2017) 270 A Crim R 556; [2017] NSWCCA 301.
Director of Public Prosecutions (Vic) v Swingler (2017) 269 A Crim R 526; [2017] VSCA 305 at [63].
Mr Hausman complains in Ground 2 of his application for leave to appeal the severity of his sentence that the sentencing judge did not translate a finding of special circumstances into the final sentencing order.
See Lowndes v The Queen (1999) 195 CLR 665; [1999] HCA 29, Green v The Queen; Quinn v The Queen (2011) 244 CLR 462; [2011] HCA 49, Bugmy v The Queen (2013) 249 CLR 571; [2013] HCA 37.
Kentwell v The Queen (2014) 252 CLR 601; [2014] HCA 37.
Sentencing remarks: Mr Rostankovski [7]-[75], Mr Hausman [7]-[53].
R v Anquetil [2020] NSWSC 995 at [89]; R v Kitson [2019] NSWSC 1109 at [43]; and R v Hammond [2020] NSWSC 888 at [46].
This was a characterisation of the character and status of the straw directors in the Statement of Agreed Facts. The extent to which Mr Rostankovski prevailed upon the straw directors to assume the roles given to them was the subject of submissions in support of his application for leave to appeal.
The sentencing judge cited Elshani v R (2015) 255 A Crim R 488; [2015] NSWCCA 254. See also R v Zerafa (2013) 235 A Crim R 265; [2013] NSWCCA 222 at [93].
The sentencing judge noted that the State and Commonwealth sentencing regimes differ as to the need to specify the discounts for assistance and the way in which the sentencing court is to assess the value of the assistance.
The sentencing judge diminished the weight given to these factors due, in part, to the offences committed. This was the subject of Mr Rostankovski's application for leave to appeal his sentence and will be discussed later.

[51]

Amendments 10 August 2022 - Names removed from catchwords 09 August 2023 - non-publication order revoked - judgment re-published 09 August 2023 - Names re-inserted in catchwords DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 August 2023

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