R v Helena Rule [2003] NSWCCA 97 | Case summary

Judgment 1 BUDDIN J: The applicant pleaded guilty in the District Court to an indictment containing two counts. The first count, which was in the following terms, alleged that she: Between about 20 March 2000 and 21 March 2000 was knowingly concerned in an offence against section 31 of the Financial Transaction Reports Act 1988 namely that Anthony Kendall Marles Hutton between about 20 March 2000 and 21 March 2000 at Sydney in the State of New South Wales, was a party to two or more non-reportable cash transactions as defined in the Financial Transaction Reports Act 1988 , and having regard to the manner and form in which those transactions were conducted, it would be reasonable to conclude that he conducted those transactions in that manner and form for the dominant purpose of ensuring that the currency involved in those transactions was transferred in a manner and form that would not give rise to a significant cash transaction as defined in the Financial Transaction Reports Act 1988. 2 The second count was in identical terms to the first count except that it alleged that the offences there in question had occurred on 6 and 7 April 2000. The applicant asked that a further offence, again of a similar nature, which had been committed on or about 3 December 1999, be taken into account pursuant to the provisions of s 16BA of the Crimes Act (C'th). Each of the offences upon the indictment carries a maximum penalty of five years' imprisonment and/or a pecuniary penalty of $33,000. 3 Having had regard to the provisions of s 16G of the Crimes Act (C'th) which was then in operation, Judge Latham sentenced the applicant on each count to a term of 12 months' imprisonment to date from 29 November 2002. Her Honour directed that the applicant be released after the expiration of 6 months by entering into a recognisance to be of good behaviour for a further period of 6 months. The effect of those orders is that the applicant will be released from custody on 28 May 2003. The applicant seeks leave to appeal against the severity of the sentences thus imposed upon her. 4 Her Honour found the following facts for the purposes of sentencing the applicant: The offences on indictment were committed in late March and early April 2000 respectively. They concern sixteen transfers of cash in amounts of less than $10,000 each to an Israeli bank account, that is, on 20 and 21 March 2000 and eleven transfers of cash in amounts of less than $10,000 each to another Israeli bank account that is on 6 and 7 April. All of these cash transfers were conducted by the prisoner's husband and all of them were into accounts operated by either George Segal or Ida Ronan both clients of the prisoner's accountancy practice. The total sum transferred in respect of all of these transactions was $427,393. The prisoner's husband used false names on each occasion, a matter of which the prisoner was aware according to the transcript of telephone intercepts provided as part of the Crown brief. The extent of her knowledge of these transactions is also evidenced by the telephone intercept transcripts, in particular, conversations with her husband wherein the number of transactions is discussed on a given day, how many transactions were outstanding and when the clients were to hand over the cash and in what quantity. The prisoner also maintained written records of transactions and forwarded those details to the clients. She physically collected moneys from the client which was the subject of transactions referred to in count two on the indictment. This was not criminality of a minor order for the purposes of these offences. True it is that the transactions themselves were confined to a number of days and true it is that there is no evidence to suggest that she was the architect or promoter of a service provided to these clients. But as a chartered accountant of twelve years standing her offending behaviour represents a premeditated flouting of the law. The prisoner appears to have been motivated by financial gain in that her husband took effectively a commission from the sums deposited which benefits himself and the prisoner. 5 With one minor exception those findings were not the subject of complaint. It was submitted however that the sentencing judge erred in finding that the persons Segal and Ronan were "both clients of the prisoner's accountancy practice". I discern no error in what her Honour said, especially as the statement of facts, to which no objection was taken, stated quite specifically, inter alia, that "amongst her clients were…George Segal and Ida Ronan". 6 The purpose of the Financial Transaction Reports Act is apparent from the statement of the Act's objects in s 4 which provides that: (1) The principal object of this Act is to facilitate the administration and enforcement of taxation laws. (2) A further object of this Act is to facilitate the administration and enforcement of laws of the Commonwealth and of the Territories (other than taxation laws). (3) Without prejudice to the effect of this Act by virtue of subsections (1) and (2), a further object of this Act is to make information collected for the purposes referred to in subsection (1) or (2) available to State authorities to facilitate the administration and enforcement of the laws of the States." 7 The Act makes provision for the monitoring of movements of large amounts of cash. Cash dealers are required by s 7 of the Act to report particulars of a "significant cash transaction", which is defined in s 3 to mean "a cash transaction involving the transfer of currency of not less than $10,000 in value". A "non-reportable cash transaction" is defined as a cash transaction (to which a cash dealer is a party) "that is not a significant cash transaction". Section 31 makes it an offence to conduct transactions so as to avoid the reporting requirements of the Act. Such transactions are sometimes referred to as "structuring" transactions. In respect of the two counts on the indictment there were in all 27 separate "structuring" transactions involving transfers of cash on the days nominated in the facts. On only 2 of those occasions was the sum transferred less than $9,000. On those 2 occasions the sums were $8975 and $8775 respectively. There were a further 19 such transactions in respect of the offence which was placed on the schedule. 8 In Leask v The Commonwealth (1996) 187 CLR 579 Dawson J stated that: [T]he mischief with which the Act was designed to deal is identified in the Second Reading Speech to the Cash Transaction Reports Bill as being "the underground cash economy, tax evasion and money laundering". It was intended to "give law enforcement agencies the ability to monitor the movement of large amounts of cash and thus to identify tax evaders and the recipients of proceeds of crime". (at 596-7) 9 In R v Narayan & Anor [2002] NSWCCA 200, Hodgson JA observed that:

The objective of monitoring large cash transactions, so as to combat money laundering and tax evasion, are important objectives,…It is extremely difficult to detect breaches, so the element of general deterrence is extremely important. (at para 89) 10 In R v Hung [2001] NSWCCA 233, Simpson J, with whom Badgery-Parker AJ and Newman AJ agreed, said that general deterrence was of special importance in relation to offences of the present kind because of the objectives of the legislation in "the enforcement of taxation and other laws of the Commonwealth of Australia". (at 3) 11 The applicant's primary submission was that the sentences imposed were manifestly excessive. Allied to this, was a submission that the sentencing judge was not obliged to impose, and should not have imposed, a full-time custodial sentence upon the applicant. 12 It is perhaps convenient to deal first with various subsidiary submissions before returning to the issue which is at the heart of this application. The applicant submitted that the present offences should be distinguished from other "offences such as tax evasion, where there is a direct fraud upon the public purse, and money laundering, where the money is established to be the proceeds of crime". Counsel acknowledged that the authorities make it clear that in cases involving "serious frauds on the revenue", absent exceptional circumstances, a custodial sentence will be imposed. It was then submitted that the sentencing judge may have "inadvertently characterised an offence under s 31 in the same general group of offences which includes direct frauds such as money laundering and tax evasion". The short answer to that contention is that there is nothing whatsoever in her Honour's remarks on sentence which supports such a conclusion. I would accordingly reject the submission. 13 Criticism is then made that "there does not seem to [have been] very significant consideration given to the role played by Ms Rule when compared with that of her husband Mr Hutton". In particular it is submitted that "there does not seem to be any doubt about the fact that it was Mr Hutton who involved [the applicant] in these offences." It was pointed out that the period of his involvement was longer than hers and that he also personally conducted the various transactions in question. So much may be accepted for present purposes, although it may be noted that Mr Hutton has yet to be sentenced. There was however, no evidence before her Honour to support the proposition that is now advanced that the applicant "was involved" by her husband. If there was evidence of that kind available, then it ought to have been called. It was not and I would not, in the circumstances, be disposed to accept this submission. It may be noted that there was no material before the court to indicate how the offences commenced. Nor was there any evidence placed before the court to explain that the applicant's motivation for getting involved in them was other than for monetary gain. The applicant exercised her entitlement not to speak to police upon arrest and did not give evidence at her sentence hearing. One matter which is clear from the evidence however is that the applicant was certainly not in straitened financial circumstances at the relevant time. 14 The sentencing judge specifically took into account on the applicant's behalf those matters which were capable of ameliorating the otherwise appropriate sentence. Her Honour referred to the fact that the applicant had pleaded guilty, albeit only on the day that the matter was fixed for trial. Her Honour found that the pleas "evince a willingness to facilitate the course of justice and she is entitled to a measure of leniency on that basis". Her Honour observed that the pleas also indicated contrition on the part of the applicant. Nevertheless her Honour found, and this finding was not the subject of any challenge, that the Crown case against her was strong and that "the contrition inherent in the pleas must be attenuated by the fact that the prisoner faced a very real prospect of conviction". 15 The sentencing judge referred to the applicant's good character which her Honour described as "undoubted". The applicant had no prior convictions of any kind. Her Honour referred to the evidence which she had heard from the applicant's first husband and from her daughter. Her Honour also referred to other matters which reflected favourably upon the applicant, including the fact that she had established her own accountancy business after the demise of her first marriage and after having raised four children. Her Honour also referred to "a number of compelling testimonials" which went to the applicant's character and reputation. 16 Her Honour also took into account the fact that the applicant suffered from Crohn's disease which had required surgery in 1995, although her Honour noted that the disease was currently in remission. 17 The applicant submits that the sentencing judge made no reference to the fact that she is likely to lose her accreditation as a chartered accountant. It may be observed that the evidence concerning what action (if any) the applicant's professional body would take, in the wake of her court appearance, was somewhat equivocal. Her Honour did nonetheless observe that "her fall from grace obviously weighs heavily upon her". The author of the pre-sentence report which was before her Honour observed that "whilst anticipating she may lose her accountancy practice, [the applicant] is confident she will be able to arrange alternative employment and income". I am not persuaded, in all the circumstances, that her Honour did not give this matter such weight as it deserved. 18 The sentencing judge observed that the applicant "was a member of the profession charged with the responsibility of observing and maintaining proper accounting practices". The applicant submits that "there is a risk that a factor which would otherwise attract credit, namely the hard work that [the applicant] has done to obtain her qualifications and establish her practice, is being used as a factor which effectively increased the punishment she must suffer". 19 As I have observed, the sentencing judge did give the applicant credit for her professional achievements, in the context of assessing the weight to be given to her character and antecedents. However it is not without significance that in addition to being a practicing chartered accountant, the applicant was also a registered tax agent. Her Honour was quite correct, in my view, in thus drawing attention to the fact that the applicant had a responsibility, not only as an ordinary citizen, but also as a person with relevant professional qualifications and experience, to uphold the particular law in question and, more particularly, not to do anything which effectively undermined it. Accordingly I discern no error in her Honour's approach to this aspect of the matter. 20 Before pronouncing the sentences to which I have referred, her Honour said that: Whilst her good standing in the community before these offences is to her credit the criminality inherent in these offences requires nothing less, in my view, than a full time custodial sentence. I gave anxious consideration to the forceful submissions of the prisoner's counsel. With some regret I have come to the view that the leniency inherent in a sentence of periodic detention would not be appropriate to the circumstances of this matter. 21 Section 17A of the Crimes Act (C'th) provides that a court may only pass a sentence of imprisonment on a person if, having considered all other available sentences, it is satisfied that no other sentence is appropriate in all the circumstances. In light of the submissions advanced on behalf of the applicant during the sentencing proceedings and her Honour's conclusion upon that question, there can be no substance in the submission that the sentencing judge did not have proper regard to that section. The question nevertheless remains as to whether it has been demonstrated that her Honour erred in the exercise of her discretion by imposing a full-time custodial sentence upon the applicant. 22 In this court reference was made to statistics held by the Judicial Commission. As Mr Byrne SC acknowledged, the sample is very small, there being only 9 recorded cases. That material suggests that only 2 of those persons were sentenced to full-time imprisonment. As statistics do not provide any greater detail than an indication of the actual sentence imposed, I do not find them to be of any particular assistance. They do not in my view, indicate, that the sentencing judge fell into error. 23 The court was also referred to a number of cases, which were said to bear some comparability to the present case, and in which it appeared that other offenders had been treated more leniently than the present applicant. Whilst some assistance may be derived from an examination of similar cases, there is a limit to the utility of such an exercise, particularly when the distinguishing features of each case are taken into account. I am not persuaded that the cases to which we have been taken, demonstrate that the sentences imposed in the present case were outside the range of sentence for offences of this kind. 24 Before leaving the subject of comparable cases, it is helpful to make further brief reference to this Court's decision in Hung. The applicant in that case had been dealt with in respect of four offences contrary to s 29(4) of the Financial Transaction Reports Act in that he had, in requesting the transfer of a total of $400,000, falsely identified the sender of the funds as a film making company. That applicant received an effective sentence of two years' imprisonment of which 15 months was to be spent in custody. An argument was advanced on his behalf that those offences, which carried the same maximum penalty as the present case, warranted a non-custodial sentence. Simpson J in rejecting that submission, observed that "the amounts of money involved were large, the criminal activity was designed to defeat the objects of the Act under which the offences were charged, they constituted a course of criminal conduct, and the applicant provided no explanation for his involvement". (at 4) Her Honour's remarks are, with due respect, apposite to the present case. 25 The applicant told the author of the pre-sentence report that her role in these offences was a "minor one" and that "at the time she had forgotten the laws related to financial transactions reporting". Those statements cannot be reconciled with what appears in the transcripts of the various intercepted telephone conversations to which the applicant was a party. They can therefore be safely put to one side. 26 On the contrary, the overall objective evidence established that the applicant played an important role in these offences. She facilitated their commission by providing a link between her husband, who physically conducted the transactions, and the persons who owned the money and wanted the transactions to be undertaken. In doing so, she willingly involved herself in activities that were blatantly dishonest. 27 In my view, Judge Latham was quite entitled to conclude, as her Honour did, that "this was not criminality of a minor order". That being so, I am not persuaded that the sentences which her Honour imposed were manifestly excessive. Accordingly I propose that leave to appeal should be granted but that the appeal be dismissed. 28 SULLY J: I agree. 29 LEVINE J: I also agree. 30 SULLY J: The orders will be as proposed by Buddin J. **********

R v Helena Rule

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