R v Milne

The timeline to prosecution 13In February 2008 Mr Milne was arrested and charged with the conduct comprehended by the count to which he pleaded guilty before me (an offence committed on or about 7 December 2006) together with other criminal conduct for which he was sentenced by Johnson J in December 2010. He was released on bail following his arrest. He has not spent any time in custody in relation to the offending the subject of this sentencing proceeding. 14On 13 July 2009, after defended committal proceedings, he was committed to stand trial in respect of all offences charged by the issue of court attendance notices following his arrest in February 2008. In September 2009 an indictment containing multiple counts and drafted to comprehend all offences upon which he was committed for trial was filed in this Court. In September 2009, following correspondence between the parties, the Commonwealth Director of Public Prosecutions agreed to sever the indictment and to proceed to trial on two indictments. There were apparently sound reasons for proceeding first with the indictment which included a money laundering offence and a related breach of s 135.1(1) of the Code given the relative complexity of the evidence relating to proof of those offences and the legal issues to which they gave rise. 15On 17 December 2010, after a trial that extended over four weeks, Mr Milne was sentenced by Johnson J to an effective term of imprisonment of 8 years with a non-parole period of 4 years and 9 months for a money laundering count contrary to s 400.3(1) of the Code, the subject of the first count on the indictment, and a breach of s 135.1(1) of the Code charged as the second count. His Honour imposed a sentence of 3 years and 6 months on the second count which he partially accumulated on the sentence of 7 years for the money laundering count. Mr Milne is currently eligible to be considered for release to parole on 16 September 2015. 16On 28 February 2011 the trial on the second indictment, listed to commence before Johnson J, was vacated by consent. Counsel informed me from the bar table that his Honour accepted that neither of the parties were in a position of readiness at that time. On 2 December 2011 the trial listed to commence on 13 February 2012 was also vacated. It is not clear why there was a delay of 12 months between the first application to vacate the trial and the second application, save only that it appears Mr Milne was having difficulties in securing private representation for his trial after retaining private counsel for his appeal against conviction and sentence heard in August 2011. 17On 2 March 2012 the Court of Criminal Appeal dismissed the appeal at which time the second trial was listed to commence on 12 November 2012. 18On 3 May 2012 Mr Milne's then solicitors filed a notice of motion seeking a permanent stay on the basis that he was unable to afford representation, an application which was abandoned in June on the issue of a grant of legal aid. 19On 31 October 2012 (two weeks before the trial was due to commence before me) I was informed that the parties were in discussion with a view to Mr Milne entering a plea of guilty to a reformulated single count and the preparation of a fresh indictment in substitution for the indictment containing six counts which was to have been the subject of the second trial.

The issue of delay and its impact on the principle of totality 20It was not submitted that the delay of six years from arrest to the date of sentence (which does not seem to me to be unduly lengthy) was the result of any dilatoriness by the Crown or obstruction by Mr Milne. The investigation which resulted in Mr Milne's arrest appears to have been conducted with appropriate efficiency with the delay in the ultimate presentation of the reformulated indictment on 12 November 2012 a direct consequence of the need for the indictment to be severed and two trials ordered in the otherwise orderly progress of the criminal proceedings in this Court. While the delay of two years from the severing of the indictment to the presentation of the reformulated indictment was undesirable, it is explicable. That said, I accept that sentencing for an offence of some age calls for flexibility in approach, in particular where an offender has demonstrated some rehabilitative progress in the intervening period (see Blanco v R [1999] NSWCCA 121; 106 A Crim R 303 per Wood CJ at CL at [2]) or where an offender has been subject to some uncertainty as to their fate because of a lengthy postponement in the ultimate resolution of past criminal offending, whether as a result of interstate offending or for other reasons (see R v Todd [1982] 2 NSWLR 517 at 519-520). As McColl JA (with whom Levine and Hidden JJ agreed) observed in R v Kay [2004] NSWCCA 130 at [33], the impact of delay on sentence will turn on the circumstances of each case. 21There was no evidence led in the proceedings before me that Mr Milne has made any particular progress since his incarceration towards his ultimate rehabilitation (or, for that matter, before that time), save perhaps for the fact that he has demonstrated a preparedness to assist other inmates gain educational qualifications through his work in the prison library. It may be that his continuing lack of contrition (about which I will have something to say later) is impeding any progress he may otherwise have made. On the other hand, the impact of his psychiatric condition which, in Dr Hampshire's view is directly referable to the difficulties Mr Milne has encountered as a man in his late 50s with a sub clinical psychiatric disorder making the transition to prison life, may either have retarded or camouflaged his progress. 22Although in one sense Mr Milne was in a state of suspension following the issue of court attendance notices in February 2008 and the ultimate resolution of all matters by his plea of guilty to the reformulated charge in November 2012 - a state of affairs readily distinguished from cases (of which Kay is an example) where an offender has remained silent whilst his earlier offending was under investigation in the hope that his conduct would not ultimately attract a charge - Mr Milne could have been in no doubt that the offending, at one time the subject of six counts on the second indictment, would be prosecuted given the consistent position of the Commonwealth Director of Public Prosecutions. 23In the result, while I accept that there has been some potential for delay to have interrupted Mr Milne's rehabilitative progress, and although I propose to give some weight to the impact of an overhang of uncertainty as to the ultimate charges that would be proceeded with, I do not consider that delay will operate, independently of other considerations, to ameliorate the sentence to any significant degree. 24Delay has a more significant bearing upon the application of totality principles if I am of the view that the reformulated charge is of the same or similar character to either of the offences for which he has been sentenced and if they were committed in the same episode of criminality. As Giles JA (with whom RS Hulme and Adams JJ agreed) observed in Wu v R [2011] NSWCCA 102; 211 A Crim R 88, in those circumstances the imposition of a further term of imprisonment, imposed cumulatively, needs careful consideration. 25As to that issue, in Mr Dhanji's submission the offending the subject of these proceedings, and that charged in the second count in the trial before Johnson J, should be seen as "forming part of a single, albeit multifaceted, episode of criminality". The Crown submitted that save for the fact that the conduct concerned dishonesty in the lodgement of tax returns containing false information, and that both counts were prosecuted as breaches of s 135.1 of the Code, the context in which those offences were committed were sufficiently dissimilar, and the criminality sufficiently distinct, that it is inappropriate to treat them as part of one course of conduct. That being the case, the Crown submitted that although it would be open to me to moderate the degree of accumulation to account for the delay and its impact on Mr Milne as a serving prisoner (and, it was conceded, to some considerable degree), proper application of the principle of totality nevertheless requires an extension of the existing non-parole period.

The offending the subject of these proceedings 26The Crown tendered a comprehensive statement of facts on sentence which was admitted without objection. Although the facts were not agreed, Mr Milne accepted, through his counsel, they would form the basis of my factual findings for sentencing purposes. What follows is a summary of those facts which I am satisfied are established beyond reasonable doubt. 27Mr Milne was the director and chairman of the Board of Directors of Talisman Technologies ("Talisman") between January 2000 and December 2001. The company was incorporated in the British Virgin Islands where it had its registered offices. Talisman's holding company Xhosa Ltd, was a company incorporated in Ireland. 28In March 2000 Talisman's Board of Directors entered into a consulting agreement with Xhosa Enterprises ("Xhosa"), a company incorporated in Switzerland, under which Mr Milne would provide consultancy services to Talisman on Xhosa's behalf at the rate of US$200,000 per annum payable in equal monthly instalments. 29Between 1 January 2000 and 30 June 2000 Mr Milne received fees under the consultancy agreement in the amount of US$99,999.98 (equivalent to AU$171,273.58). On 7 December 2006, when he lodged his tax return for the year ended 30 June 2000, he failed to declare that income. He signed the taxpayer's declaration on the return to the effect that he had truthfully and accurately shown all his income for tax purposes, knowing that declaration was false. The tax properly payable to the Commonwealth for the 2000 tax year on the omitted income was $73,669.89. 30Between 1 July 2000 and 30 June 2001 Mr Milne received fees under the consultancy agreement from Talisman in the total amount of $357,301.08. On 7 December 2006 when he lodged his tax return for the year ended 30 June 2001 he failed to declare that income. He signed the taxpayer's declaration on that return, to the effect that he had truthfully and accurately shown all his income for tax purposes, knowing that declaration was false. The tax properly payable to the Commonwealth for the 2001 tax year on the omitted income was $160,670.98. 31On 8 July 2003 Mr Milne was appointed executive director/acting CEO of Global Technology Australasia Ltd and its subsidiaries. On 10 January 2003 the company changed its name to Admerex Ltd ("Admerex"), a publicly listed company providing management software, management services and specialty applications to companies to better manage their receivables, loans, credit cards and other forms of credit. On 21 December 2004 Admerex resolved to pay Mr Milne a fee of $400,000 for consultancy services provided to it. At the meeting when that resolution was passed it was noted that Mr Milne would sever his links with Admerex, resign as a director of the company on 31 December 2004 and assume the role of corporate adviser based in the company's Sydney office. 32On 5 January 2005 an amount of AU$400,000 was transferred from an offshore bank account in the name of Admerex (Ireland) Limited (a subsidiary of Admerex) which was opened on 23 December 2004 in the name of a nominee company. Mr Milne signed the account opening documents. He was one of two signatories to the account but effectively in control of it. An equivalent amount was then transferred into another account where it was held in Mr Milne's name to satisfy Admerex's obligation to pay his consultancy fees. 33On 6 January 2005 AU$400,000 was transferred to another offshore account. Although a third party was authorised to operate the account Mr Milne was the beneficial owner of any funds held in that account. Prior to the transfer of the funds no previous transactions had been conducted on the account. On 7 January 2005, immediately following the transfer, $395,000 was withdrawn leaving a balance of $5000. That same day Mr Milne tendered his resignation from the Board of Directors of Admerex and its subsidiaries effective immediately. 34On 7 December 2006, when Mr Milne lodged his tax return to the year ended 30 June 2005 he failed to declare as income the $400,000 received from Admerex as consultancy fees. Neither was it included in his income tax returns for the years ended 30 June 2004 or 30 June 2006. He signed the taxpayer's declaration on that return to the effect that he had truthfully and accurately shown all his income for tax purposes knowing that declaration was false. The tax properly payable to the Commonwealth for the 2001 tax year on the omitted income was $181,134.02 35The total income which Mr Milne failed to declare in the tax years 2000, 2001 and 2005 amounted to $928,574.66 and the total tax payable on the omitted income amounts to $415,474.89 36On 27 May 2005 Mr Milne engaged Grant Thornton Services (NSW) Pty Ltd ("Grant Thornton") to provide advice and assistance in the lodging of his personal income tax returns and the business tax returns of his company Barat Advisory Pty Ltd ("Barat Advisory"). Admerex was an audit client of Grant Thornton. The officers of Grant Thornton agreed between themselves that it would be appropriate to coordinate that work with Mr Milne's personal tax affairs. 37On 9 June 2005 William Shew wrote to Mr Milne (and to Barat Advisory) formalising Grant Thornton's retainer to prepare: (a) books of accounts and financial statements for Barat Advisory for the years ending 30 June 2004 and 30 June 2005; (b) income tax returns for Barat Advisory for the years ending 30 June 2004 and 30 June 2005; and (c) personal income tax returns for Mr Milne for the year ending 30 June 2005 and all prior years as required. 38The letter also advised Mr Milne that it was his responsibility and that of the company to provide accurate and complete information within agreed time frames. On 15 June 2005 Mr Milne acknowledged the contents of the retainer letter. 39On 9 August 2005 the Australian Taxation Office advised Mr Milne of his Tax File Number. 40On 12 September 2005 Stephen Thurn sent an email to Mr Milne's assistant listing a number of issues he and Mr Shew wanted to discuss with Mr Milne. Under a heading "Admerex", he asked, "What arrangements did Michael have with Admerex - salary/consulting fees/directors fees? How much was earned?". 41On about 1 October 2006 Colin Samuel, a manager with Grant Thornton, took over the review of the tax returns for both Barat Advisory and Mr Milne from Mr Thurn. 42On 27 October 2006 Mr Shew sent an email to Mr Milne in which he advised Mr Milne as follows: I have reviewed the figures to 30 June 2005 and have discussed the situation with Colin. If I were the ATO I would have a hard time accepting the figures given no income has been derived (not saying that there is any income but we need to be prepared). ... The key issue here is why you did what you did for no pay (ie consulting with Admerex, Barat Advisory work re Hamilton etc.) I think it would also be good for your (sic) to build a timeline of events and transactions that support your financial position. ie ... You provided consulting work to YY during the period - no fees charged because. (sic) 43On 31 October 2006 Mr Milne met with Mr Samuel and Mr Shew to discuss a timeline of his business and income earning activities between 1987 and 2006. Mr Milne did not at that meeting, or at any other time, advise Grant Thornton that he had received income in the form of consultancy fees from Talisman or Admerex. Further, he informed the accountants at that meeting, and at various other times, that he had no taxable income for the tax years 2000, 2001 and 2005. 44Grant Thornton resolved that it did not have sufficient reliable information from Mr Milne to allow them to prepare his tax returns for the 1999 to 2006 financial years and advised him accordingly. Mr Milne requested that Mr Samuel email to him the blank tax returns for the relevant tax years. 45Between about 10 November 2006 and 21 November 2006 Grant Thornton completed Mr Milne's personal details on page 1 of each of the income tax returns and forwarded further copies of the returns to him. 46Between about 10 November 2006 and 21 November 2006 Mr Milne forwarded his completed personal income tax returns to Grant Thornton with instructions that they should be lodged with the Australian Taxation Office. Each of the income tax returns was signed by him. Grant Thornton did not sign the income tax returns as tax agent for Mr Milne. 47On 29 November 2006 the Australian Taxation Office identified that Mr Milne had failed to sign the taxpayer's declaration, declaring that all the information he had given was true and correct and advised Mr Samuel of that fact. 48During the period between 29 November 2006 and 7 December 2006 Mr Milne signed the taxpayer's declaration on each tax return and returned them to Grant Thornton for lodgement with the Australian Taxation Office.

The facts upon which Mr Milne was sentenced by Johnson J on Count 2 on the indictment 49The second count on the indictment at trial was in the following terms: Michael John Milne on or about 13 November 2006 at Sydney in the State of New South Wales did, with the intention of dishonestly obtaining a gain from the Commonwealth, cause to be lodged an income tax return in the name of Barat Advisory for the year ending 30 June 2005 containing false information, namely that the net capital gain from the sale of shares in Admerex Limited was $4,597.00 50In his remarks on sentence (R (Cth) v Milne (No. 6) [2010] NSWSC 1467) Johnson J made the following findings of fact for sentencing purposes on that count: [177] The verdict of guilty in relation to the second count means that the jury was satisfied that the Offender dishonestly failed to include the capital gain from the disposal of the 48 Million Admerex shares in the income tax return of Barat Advisory for the year ended 30 June 2005. It follows that the Offender was found to have deliberately withheld information from the Grant Thornton accountants, notwithstanding the various efforts made by them to ascertain the facts relating to the financial dealings of the Offender and Barat Advisory, and the true circumstances surrounding the disposal of the 48 Million Admerex shares, in order to avoid the payment by Barat Advisory of capital gains tax. [178] The Offender intended to obtain a gain for Barat Advisory from the Commonwealth, by Barat Advisory keeping the capital gain derived from the disposal of 48 Million Admerex shares, and by Barat Advisory, not paying tax on that capital gain. [179] The jury was directed (Trial MFI40, paragraph 48) that the Crown must prove that the inference that the Offender acted dishonestly by deliberately not telling the accountants this information was the only reasonable inference available from the evidence, and that it was not sufficient for the Crown to prove that any omission or failure by the Offender to provide this information to the accountants was inadvertent or negligent or was based on an honest belief that he was entitled to rely on the advice of Ms Harley. [180] Accordingly, the jury's verdict leads to the stark conclusion that the conduct of the Offender in his dealings with the Grant Thornton accountants, over a period of months, was dishonest and deliberate, culminating in the signing by the Offender of the relevant return, to be lodged with the ATO, containing that false statement. [181] The dishonest statement was false in a gross respect in that the net capital gain from the sale of the Admerex shares was not $4,597.00, but a sum of at least $6.5 million.

Was the offending part of the one course of criminal offending? 51Unlike the situation in the proceedings before Johnson J where the Crown accepted that that there was some overlap in the criminal offending across the two counts on the indictment and, for that reason, there was a need to guard against the risk of double punishment (see [182]-[198] of his Honour's sentencing remarks), the conduct comprehended by the second count on the indictment before his Honour, and the conduct comprehended by the count to which Mr Milne entered a plea of guilty before me, does not overlap in that sense. Separate offences were committed, albeit within weeks of each other, when four separate tax returns were lodged, three in Mr Milne's name and one in the name of the company he controlled. That does not mean, however, that the separate offences might not be viewed as part of one episode of criminal offending. It is necessary to identify such similarities and differences as are discernible between the offences, and the context in which they were committed, in order to resolve that question. 52The offence with which I am concerned is characterised by Mr Milne acting dishonestly by deliberately failing to include in the personal income tax returns he prepared for lodgement, income in the total amount of almost $1 million from which he stood to gain directly by not having income tax levied against it. By contrast, as his Honour's findings make clear, the second count on the indictment at trial involved the deliberate provision of false information to Mr Milne's accountants concerning the disposal of Admerex shares with the joint objective of minimising the payment by the company of capital gains tax and securing a financial gain for the company over which he exercised control. In addition, although Mr Milne utilised the financial and accounting services of Grant Thornton for tax advice both on his own behalf and on behalf of his company (at least in part, in an attempt to conceal and facilitate his criminal objectives), because the accountants were apparently alive to the risk that he was not providing them with accurate information about his personal tax affairs they declined to prepare his personal tax returns. In contrast, they were actively deceived by him into preparing the false return for the company. 53Despite obvious differences in the particulars of charge and the precise mechanisms by which the offences were committed, I am satisfied that Mr Milne's dishonest dealings with his accountants from August 2005 to December 2006 (by which time each of the four tax returns were prepared and advice given in preparation for their lodgement), was part of the one course of criminal conduct, constituted by his deliberate dishonesty in causing to be lodged tax returns containing false information. Were his personal tax returns lodged at a time proximate to the financial years ended June 2000, June 2001 and June 2005, and the company tax return also lodged relative to the 2005 tax year in which the Admerex shares were traded, I would likely have come to a different conclusion. However, where, as here, the criminal conduct in offending against the revenue attaches to the time the tax returns were lodged, and where they were lodged within weeks of each other, I am satisfied the offending can be fairly described as comprehended by a single, albeit episodic, course of criminal conduct. 54That does not dictate that a wholly concurrent sentences should be imposed or an order confirming the existing non-parole period should be made. In the absence of any general rule that determines how sentences for multiple offences are to be served (see R v SBR [2012] NSWCCA 233 at [24]), the critical question in this case is whether, after determining upon an appropriate sentence in accordance with the legislative scheme in Part 1B of the Crimes Act (Cth), I am satisfied that the subject offending is sufficiently accounted for in the sentence imposed by Johnson J or, to put it another way, whether I am satisfied that the existing sentence embraces the total criminality involved across the course of offending in breach of s 135.1(1) of the Code. If it does not, the sentencing discretion would miscarry were the sentences to be served concurrently (see R v AEM Snr; KEM; MM [2002] NSWCCA 58). 55Mr Dhanji submitted, and I accept, that it is not to the point to postulate what Johnson J would have done were his Honour to have sentenced Mr Milne should pleas of guilty have been entered to some or all of the charges on the second indictment, if for no other reason than different sentencing considerations intrude in this sentencing process. What Mr Dhanji did submit was that the aggregate sentence imposed by his Honour (that is, a sentence of 8 years and 6 months with a non-parole period of 4 years and 9 months) was of sufficient severity that there is little room for a further penalty to be imposed two years in to his existing sentence. He relied upon a number of decisions of this Court where it was held to be within the discretion of a sentencing judge to impose a sentence of imprisonment for a later offence which did not extend an existing sentence. 56In R v MMK [2006] NSWCCA 272; 164 A Crim R 481 the respondent was serving a sentence of 22 years with a non-parole period of 13 years for multiple aggravated sexual assault offences. He was subsequently convicted of a single count of sexual assault without consent of a child under 16 years and sentenced to a fixed term of 1 year that was ordered to be served wholly concurrently with his existing sentence. The Crown appeal was dismissed. The Court (Spigelman CJ, Whealy and Howie JJ) said at [14]: There will be cases, of which, in Hidden J's opinion, this was one, where the criminality of offences committed by an offender is so great and the punishment imposed for those sentences is justifiably so harsh in order to reflect that criminality that there is little, or no, room for a further penalty to be imposed upon the offender to achieve an appropriate purpose of punishment in the circumstances of the particular case. In the present case those circumstances included the relatively low criminality involved in the offence on the indictment having regard to the relationship between the applicant and the complainant, the age differential between them and the fact that intercourse was consensual. It was also a highly relevant matter than any further actual punishment could not take effect until the expiration of the non-parole period fixed by Sully J some 15 years after the offences were committed. 57Their Honours continued at [18]: In light of the seriousness of the offences for which the respondent was sentenced by Sully J and the length of the sentences imposed upon him in order to promote the purposes of punishment in relation to those crimes, it was well within the discretion of Hidden J to determine that the principle of totality required him to order that the sentence for the offence before him be served completely concurrently with the sentences imposed by Sully J so as not to increase the period to be served by the respondent before he might be released to parole in 2015. 58Mr Dhanji also submitted that because the amount of unpaid tax in the amount of $415,474.89 represents approximately 20 per cent of the unpaid tax the subject of the second count on the indictment at trial - which was between $1.9 million and $2.4 million - or within the range of uncertainty between those two figures, the approach taken in R v Scott [2005] NSWCCA 152 at [32] provides an additional basis for the imposition of a concurrent sentence. 59The accused in that case (the respondent on the appeal) was charged with three offences contrary to s 176A of the Crimes Act where, as a director of a body corporate, he presented false invoices with intent to defraud. The total amount defrauded was $4.7 million. The victim of the fraud was a finance company. The offences were committed on separate occasions over a period of some months as part of a planned course of deception using forged documents and false statutory declarations. The first offence concerned an amount of $787,000, the second $3.38 million and the third $315,392. These funds were used in an attempt to restore a failing business operated by the respondent which ultimately went into voluntary liquidation with debts totalling over $18 million. Against a statutory maximum of 10 years imprisonment the sentencing judge imposed concurrent sentences of 2 years and 6 months with a non-parole period of 1 year and 10 months to be served by way of periodic detention. The Court of Criminal Appeal quashed the order for service of the sentence by periodic detention but rejected the Crown's submission that there was error in the order that the sentences be served concurrently. As to that question, in Scott Howie J (with whom Grove and Barr JJ agreed) said at [32]: ... In the present case, because the three offences were similar in the type of criminal conduct employed, they were part of a single course of conduct and because the Suncorp offence [the second count] was by far the most serious in that involved almost three quarters of the total amount of the loss occasioned by the offences, there was no error in the Judge determining that the sentence for the second count could embrace the total criminality of the three counts. If there were any error in this regard, it could only be that his Honour thought that 5 years was appropriate for each of the offences despite the considerable difference in the amount of money defrauded. 60Finally, in relation to the issue of totality, Mr Dhanji submitted that the impact of any extension to Mr Milne's existing sentence after a considerable part of the non-parole period has been served, is liable to have a disproportionate impact upon him which also justifies an order for concurrency. In R v MAK; R v MSK [2006] NSWCCA 381; (2006) 167 A Crim R 159, the Court of Criminal Appeal (Spigelman CJ, Whealy and Howie JJ) said at [16]: The severity of a sentence is not simply the product of a linear relationship. That is to say severity may increase at a greater rate than an increase in the length of a sentence. As Malcolm CJ said in R v Clinch (1994) 72 A Crim R 301 at 306: ... the severity of a sentence increases at a greater rate than any increase in the length of the sentence. Thus, a sentence of five years is more than five times as severe as a sentence of one year. Similarly, while a sentence of seven years may be appropriate for one set of offences and a sentence of eight years may be appropriate for another set of offences, each looked at in isolation. Where both sets were committed by the one offender a sentence of 15 years may be out of proportion to the degree of criminality involved because of the compounding effect on the severity of the total sentence of simply aggregating the two sets of sentences.

Section 16A(1) 61Section 16A(1) of the Crimes Act (Cth) requires me to impose a sentence that is of a severity appropriate in all the circumstances of the offence. There was no dissent by Mr Dhanji from the proposition that in the sentence to be imposed in this case appropriate weight must be given to the principle of general deterrence. As the High Court recognised in Hili v R; Jones v R [2010] HCA 45; 242 CLR 520 at [63], a deliberate fraud on the revenue is a serious offence that affects the entire community such that a punitive and deterrent penalty should be reflected both in the imposition of a head sentence and the determination of the period of imprisonment an offender must serve in custody. In Milne v R [2012] NSWCCA 24 at [296], the Court referred with approval to Director of Public Prosecutions (Cth) v Gregory [2011] VSCA 145; 211 A Crim R 147 where the Victorian Court of Appeal (Warren CJ, Redlich JA and Ross AJA) stated at [57]: A sentence imposed for fraud upon the taxation revenue is intended to reaffirm basic community values that all citizens according to their means should fairly share the burden of the incidence of taxation so as to enable government to provide for the community, that the revenue must accordingly be protected and that the offender should be censured through manifest denunciation. When these considerations are not reflected in the responses of the courts, the criminal justice system fails to achieve its objectives. 62Where, as here, I am satisfied that Mr Milne was motivated by personal greed; where his conduct in causing the false tax returns to be lodged was planned, deliberate and deceitful, and where the tax evaded cannot on any view be described as insignificant, I am unable to conclude otherwise than that his offending is objectively serious. Although the need for the sentence in those circumstances to reflect general deterrence might be sufficiently reflected in the sentence imposed, with the question of how it is to be served directed to other considerations, some of which constrain the sentencing exercise in this case, the need for the sentence to denounce Mr Milne's offending and to punish him for it cannot be overlooked. 63The Crown also invited me to take into account in the assessment of objective seriousness the length of time during which the income earning activity took place; the fact that the payments arose from what counsel described as "related party consultancy transactions" and the fact that the income was paid into offshore bank accounts which helped conceal the fact that the payments had been made and received. While those features of the offending are of some contextual relevance, they do not, in my view, add materially to the objective seriousness of the offending constituted by Mr Milne's lodgement of three deliberately false income tax returns. For avoidance of doubt, I am not able to conclude to the criminal standard that his income earning activities as a consultant over five years was undertaken with the intention that it would not ultimately be declared or that he set up a structure within which to perpetrate a deliberate fraud on the revenue at that time. That said, I am satisfied beyond reasonable doubt that at the time of receiving the income, and at all times thereafter, he was in no doubt that the payments received from Talisman and Admerex arose from personal exertion on his part and were declarable as income and that as at the date of lodgement of the returns he was being deliberately dishonest in failing to declare that fact.

Section 16A(2) of the Crimes Act (Cth) 64Section 16A(2) of the Crimes Act (Cth) requires me, in addition to any other matters that may have a particular bearing on sentence, to take into account certain specified matters to the extent that they are relevant and have application in the sentencing process. Some of the itemised matters in s 16A(2)(a)-(p) might loosely be described as bearing upon an offender's subjective circumstances whilst others focus on the offence itself. 65Dealing first with those matters material to the offence, s 16A(2)(a) requires me to take into account its nature and the circumstances of its commission. These are reflected in the findings of fact I have made above and I do not repeat them save as to emphasise that the offending constituted a serious breach of Mr Milne's obligation as a tax payer to share the burden of tax for the benefit of the common good. 66Section 16A(2)(c) of the Crimes Act (Cth) requires me to consider whether the offence forms part of a course of conduct, consisting of a series of criminal acts of the same or a similar character, and, if so, to take into account that course of conduct. For the reasons expressed above, I regard the offending constituted by the filing of deliberately false personal income tax returns as part of a course of conduct which included lodging a deliberately false income tax return in the name of Barat Advisory a few weeks earlier. 67The principles in Pearce v R [1998] HCA 57; 194 CLR 610, and the many authorities that have confirmed its application, require me to impose a sentence for the subject offending which properly reflects all relevant considerations before questions of concurrency or accumulation arise, and this is so whether or not the offences represent discrete acts of criminality or can be regarded as part of a single episode of criminality and whether the sentences are imposed at the same or different times. In addition, sentences must bear a proper relationship to each other having regard to their different degrees of criminality. I acknowledge the sentence to be imposed in relation to the present offence must bear a proper relationship to the sentence on the second count at trial, in particular, given the differences in quantum and the relative lack of sophistication in the offence with which I am concerned, as compared to the high degree of sophistication in the mechanisms employed by Mr Milne in committing the offence he was convicted of at trial. In that regard I note Johnson J made the following findings: I accept that, in this case, the Offender utilised the advantages of his considerable resources, experience and expertise in business and finance, and established and misused a sophisticated offshore structure for the specific purpose of avoiding payment by Barat Advisory of a substantial amount of tax. This course of conduct commenced in June 2004 and continued until November 2006. (At [257]). The Offender's course of criminal conduct may be characterised appropriately as being planned, deliberate and deceitful, requiring for its implementation a sustained period of deception by the Offender of the Grant Thornton accountants, culminating in the operative lie to the ATO contained in the Barat Advisory tax return filed in November 2006. (At [247]). 68Section 16A(2)(e) of the Crimes Act (Cth) requires that I take into account any injury, loss or damage resulting from the offence. The loss to the revenue of the amount of $415,474.89 is substantial. Mr Dhanji did not submit otherwise. 69Section 16A(2)(j) requires me to take into account the deterrent effect that any sentence may have on Mr Milne and s 16A(2)(k) the need to ensure that he is adequately punished for the offence. In light of the sentence he is currently serving (in the imposition of which Johnson J took account of the need for specific deterrence) I propose to give the need for the sentence I impose to deter him from further offending only minimal weight. He has 2 years and 9 months to serve on his existing non-parole period before he will be eligible for release to parole at which time he will be 60 years of age. Although he may still earn an assessable income upon his release, he is unlikely to take the risk of a further fraud of the revenue by under declaring that income or other offences of dishonesty. The more significant consideration is to ensure the sentence imposed satisfies the legislative requirement that the sentence is sufficiently punitive in keeping with the overwhelming weight of authority to similar effect. 70There was no material before his Honour and no material in the proceedings before me indicative of any expression of contrition or remorse. I do not regard the consent orders made under the Proceeds of Crime Act 2002 (Cth) in September of this year as indicative of any contrition on Mr Milne's part as may have been the case were he to have offered to make good the loss to the revenue by this offending, irrespective of whether proceedings were commenced against him for a pecuniary penalty order. Moreover, save only to the extent that the consent orders might reflect cooperation on his part, s 320 of the Proceeds of Crime Act (Cth) expressly prohibits regard being given to the making of the pecuniary penalty order when passing sentence or its terms. As to that question I accord minimal weight to the fact that consent orders were entered as reflecting any genuine willingness on Mr Milne's part to cooperate with the authorities given the date of lodgement of those proceedings and their ultimate resolution. (I note Johnson J took the then pending proceedings into account in Mr Milne's favour as he was entitled to since orders had not been made at the time of sentence.) 71As I indicated earlier in these reasons, Mr Milne's subjective circumstances in December 2010 differ only from his subjective circumstances in this sentence proceeding by reason of his having been a serving prisoner over the last two years, a state of affairs which has, predictably enough, impacted on him most directly and on his family indirectly. 72The testimonials tendered before his Honour and identified by him at paragraph [200] (which, as I have noted, were also tendered before me) were supplemented in the proceeding before me only by a letter dated 30 November 2012 from Mrs Milne directed to her current circumstances, and those of their children, and what she claims to be the added hardship she will suffer were her husband's release date redetermined. 73In addition to the personal testimonial Dr Hampshire prepared for the purpose of the earlier sentence proceedings, he prepared a forensic report for these proceedings directed to Mr Milne's current mental functioning and mental health which, as I noted earlier, the Crown submitted should not be afforded the weight that might otherwise attach to a report from a consulting psychiatrist in sentence proceedings. I do not regard the current or past restrictions on Dr Hampshire's practice as a consultant psychiatrist as undermining the weight of his professional opinion. The Crown did not submit that Dr Hampshire's relationship with Mr Milne (both predating the offences and continuing to the date of the report) had any material bearing on the weight I should give his evidence. In the body of his report Dr Hampshire acknowledged his friendship of long standing with Mr Milne and his family and, for that reason, that the report was not wholly impartial. He went on to say, however, that he had self consciously straddled what he described as "the difficult world of writing an accurate and honest forensic psychiatric report for someone that I know and have known prior to the charges and have had as a friend". 74In his evidence in chief he was asked the following question: In terms of the prior relationship that you had with Mr Milne are you able to tell us how that, if it did at all, impacted on your capacity to write a report of this nature? 75After describing Mr Milne as a person who was somewhat guarded when speaking of his "inner world", Dr Hampshire said: Do I think I was disadvantaged by knowing him previously? No. It is different seeing someone for a one-off consultation and seeing a friend as a therapist, that would be difficult. If anything I felt that advantaged him in his trust. I hope I have done my best to him in what I have written.

Dr Hampshire's report and evidence 76Dr Hampshire's report dated 28 November 2012 was prepared on the basis of a consultation with Mr Milne on the day of the report and from his visits with him on two earlier occasions, at Mrs Milne's request, because of her concerns about her husband's mental health. 77In the course of the consultation, and having regard to Dr Hampshire's full appreciation of the factual matrix preceding Mr Milne's incarceration and the impact on his family after that date, he noted that Mr Milne was markedly thinner having lost approximately 20 kilograms; that he was unshaven and malodorous; that he spoke in a monotone and had a significant psychomotor retardation. Although there was no evidence of formal thought disorder, Dr Hampshire reported that his affect was flat and blunt but his cognitive testing remained within normal limits. 78Dr Hampshire concluded the following diagnoses were available utilising DSM IV TR Operational Criteria: (i) Recurrent panic attacks, which have their origins in a very serious motor vehicle accident Mr Milne suffered when he was 30 years of age, having triggered a post-traumatic stress disorder with fears associated with being confined in the relatively airless environment of police transit vans; and (ii) A major depressive disorder. 79Dr Hampshire did not suggest that there was any risk of further decompensation or any aggravation of Mr Milne's mental health or functioning because of his custodial environment although he did opine that Mr Milne is at risk of an overvalued idea of suffering physical harm in prison which, coupled with other thought patterns which he holds with "unshakeable conviction", does suggest that they may be delusions of a paranoid type connected with the related diagnosis of a severe depressive illness, as to which he reported as follows: This man is suffering from a Major Depressive Disorder (and recurrent Panic Attacks) using the DSM IV TR Operational Criteria. His depression warrants pharmacotherapy at the least, and in my opinion whilst he remains incarcerated he should be reviewed by the Forensic Psychiatric Department at Long Bay Hospital with a view to admission since there may be a psychotic element to his depression, however he would not accept this form of therapy and a schedule would not be effective or operational unless he were to become frankly psychotic. 80He concluded, in summary: Mr Milne's incarceration appears to have had a marked detrimental effect on his psychological health which appears to have worsened in the last six months to the state that he now has a Major Depressive Disorder with pre-psychotic features and an increased fear of but not frequency of Panic Attacks... 81In considering the interrelationship between Mr Milne's, character, age and antecedents in s 16A(2)(m) of the Crimes Act (Cth) for sentencing purposes, I have both different evidence from that which was before his Honour, in particular on the issue of Mr Milne's mental health. I have also come to a different view on the question of the significance of what I am prepared to regard as his prior good character despite the fact that he comes before me as a convicted person. Unlike his Honour's findings at [217]-[221], I am not persuaded that Mr Milne's good character either enabled him to commit the fraud on the revenue perpetrated in his own name or that it rendered its commission any easier or less liable to detection. On the other hand, the predominant need for the sentence to reflect general deterrence does displace, to some degree, the advantage he can claim by his previous good character. 82I accept, as did his Honour, that prior to his arrest and over the course of his professional life Mr Milne was a hard-working businessman who provided well for his family and who was regarded by many in the business world as honest and honourable. Although, as I have noted, there is no evidence before me of Mr Milne's rehabilitative progress over the past two years, I do not come to any different view to that of his Honour as to Mr Milne's ultimate prospects of rehabilitation as he progresses through the balance of his sentence. I also accept that there is no prospect of his reoffending upon his eventual release given his age and life circumstances. These findings will be taken into account on sentence in his favour. 83Section 16A(2)(n) of the Crimes Act (Cth) requires me to take into account the probable effect that any sentence under consideration would have upon an offender's family or dependents. As Johnson J observed at [223], and as I expressly endorse, "it is the regrettable and almost invariable consequence of the imprisonment of a father that adverse consequences will result to his family from that imprisonment". His Honour went on to note that at common law the hardship experienced by family members as a result of imprisonment of an offender must be exceptional before it can be given substantial weight, a requirement that has been held to apply in the case of Commonwealth offenders (see R v Nguyen [2006] NSWCCA 369; 166 A Crim R 124). 84In Mrs Milne's letter dated 30 November 2012 she details the hardship which she and her children have suffered over the last two years including that Mr Milne has missed his daughter's 18th birthday and his son's 21st birthday. She expresses concern about the impact of her husband's criminal convictions and imprisonment on her daughter's tertiary education, in particular her poor academic performance culminating in her decision to defer her studies, and the difficulty she has found in finding meaningful work since that time. (I note in Dr Hampshire's report that he has referred Mrs Milne's daughter to a colleague who treats her with a neuroleptic medication for a syndrome which he suggested may include a differential diagnosis of Asperger's Syndrome and attention deficit-hyperactivity disorder. There is nothing to indicate that this referral postdated Mr Milne's conviction or that her condition has been aggravated by his current circumstances.) Mrs Milne also says that the pressure she has been subject to over the criminal and related proceedings have had a "huge psychological effect" necessitating psychiatric care. (In Dr Hampshire's report, he refers to Mrs Milne's increasing insomnia and that he has prescribed her sedatives. That is the only evidence suggestive of the need for psychiatric care.) Mrs Milne's son who was enrolled at Bond University until his father was sentenced has also abandoned his studies in order to support himself and to contribute financially to the family. Mrs Milne has re-entered the workforce and has secured some part-time work but is finding her changed financial circumstances difficult to adjust to and, as a consequence, has had to borrow money from family and friends. She also sets out in some detail the impact of the forfeiture proceedings brought by the Commonwealth against her as the second defendant to those proceedings. While this has doubtless been productive of hardship in a material sense, it has little weight on the sentence to be imposed for her husband's offending. Mrs Milne expresses particular concern that her husband may be reclassified within the prison system if his non-parole period is extended and her concern at how he and the family will cope both mentally and physically were he to face a longer prison sentence. 85I accept that there would inevitably be an adverse effect on Mrs Milne and her children were there any extension of his non-parole period, if for no other reason than their lives are, in some sense, on hold until his release and the family can make decisions as to their future as a family unit. I also accept that after the imposition of the sentence by Johnson J the family appears to have proceeded on the assumption that the non-parole period his Honour imposed would likely see Mr Milne's release from custody at the expiration of that period. It must be said, however, that with the resolution of other criminal proceedings pending at that time and with no suggestion that the prosecution would not proceed at a later time, that expectation was necessarily a qualified one. Nonetheless, I take into account that the hardship suffered by Mr Milne's family, which his Honour acknowledged at the earlier sentence proceedings as "substantial", has materialised and that the effect of an extension to his period in custody will render that hardship more acute.

The plea of guilty 86Given the lateness of the plea, after all necessary preparations and arrangements for a trial were well underway (albeit is an abbreviated manner), and what the Crown submitted was a certain inevitability in convictions resulting from a jury trial and Mr Milne's likely recognition of that fact, the plea of guilty does not significantly mitigate the sentence to be imposed in this case. Mr Dhanji sought to persuade me that the lateness of the plea was as a result of charge negotiations which the Crown engaged in at a late stage of proceedings after he was briefed and had the opportunity to review the evidence and render advice to his client. He submitted that it would not have been reasonable for Mr Milne to have entered a plea at any earlier stage where he would have suffered the forensic prejudice of pleading guilty to six counts and being exposed by that to a penalty for at least two counts which have not been the subject of the rolled up charge. Although I am not satisfied that the plea of guilty reflects, unambiguously, Mr Milne's willingness to facilitate the course of justice, instructing his lawyer to engage in plea negotiations which were ultimately productive of the Crown abandoning altogether two of the substantive counts on which he was arraigned, with the plea of guilty being entered to a rolled up count, will attract a reduction in sentence which, it being a Commonwealth offence, I am not required to quantify (see Tyler v R; R v Chalmers [2007] NSWCCA 247; 173 A Crim R 458). I will also take into account his willingness to shorten the length of trial in the event that charge negotiations were unsuccessful.

Determination of an appropriate sentence 87The maximum penalty for an offence against s 135.1(1) of the Code is 5 years. Having regard to the objective seriousness of the offence, Mr Milne's subjective circumstances, in particular his compromised mental health; other matters in s 16A(2) of the Crimes Act (Cth) to which I have made express reference including the issue of proportionality and the need for the sentence to reflect general deterrence and contain a measure of punishment, I impose a sentence of 2 years imprisonment. 88In coming to that determination I have considered comparative sentences in schedules prepared by the Crown, however the somewhat unique circumstances that arise in this sentence proceeding have meant that they are a very general guide only. 89Despite the length of the effective sentence of 8 years and 6 months imposed almost two years ago, I consider that there remains scope for a further penalty to be imposed for the subject offending and that partial accumulation is warranted. In my view, it cannot be fairly said that the sentences imposed by Johnson J, either individually or after accumulation, were "so harsh" that there is no scope for the sentence I must impose to meet the dictates of punishment or that the existing sentence embraces Mr Milne's total proved and admitted criminality. I am fortified in that view by the consideration given to the sentence by the Court of Criminal Appeal in dismissing the sentence appeal: [298] In determining the sentences for each count, the structure of the sentences and the non-parole period, the trial judge here gave consideration to the relevant principles to which we have made reference. In addition, his Honour carefully assessed the actions of the appellant, the duration of those actions and the degree of separate criminality involved in each offence (paragraphs 257-262 ROS). Applying the correct principles to those matters, the trial judge was satisfied that the appellant's conduct involved serious criminality and that his offences should be characterised as "serious examples of money laundering and tax evasion" (263 ROS). The trial judge took into account the maximum penalties involved and the subjective circumstances of the offender together with other matters outlined in the sentencing decision. [299] We conclude that the sentences imposed by his Honour in all their manifestations were open to him and that they were not manifestly excessive. We also consider that the structure of the sentences was one that was open to his Honour to make, having regard to all the matters we have discussed. 90Applying principles of totality in the context of the delay occasioned by the need to prosecute Mr Milne in two separate curial processes, and after taking into account the existing non-parole period as I am required to do under s 19AD(2)(a) of the Crimes Act (Cth) and reflecting again on the nature of the offence and his antecedents, I am satisfied that accumulation of one year on the existing sentence is appropriate and a new single non-parole period should be fixed. 91It is necessary to fix a new non-parole period (as provided for in s 19AD(2)(c) of the Crimes Act (Cth) as the revised minimum period Mr Milne is to spend in custody to reflect the deterrent and punitive objectives of sentencing moderated by the combined weight of his subjective circumstances, including his current psychiatric condition, as a serving prisoner. 92Michael John Milne I sentence you to imprisonment for 2 years to date from 17 June 2018 and to expire on 16 June 2020. That will result in an effective sentence of imprisonment of 9 years and 6 months for all of the offending that has been prosecuted on indictment at trial and in the sentence proceedings before me. I fix a new non-parole period of 5 years to date from 17 December 2010 and to expire on 16 December 2015. 93I am conscious that I have disturbed the ratio between head sentence and non-parole period imposed by Johnson J. The relatively modest extension to the non-parole period is in recognition of the interrelated impact of delay and the need to apply principles of totality in the context of a sentence imposed two years ago. 94I am required by law to explain to you the effect of this sentencing order. The effect of the order I have made is that you will serve a period of imprisonment of not less than 5 years, that is, three months more than the 4 years and 9 months Johnson J imposed on 17 December 2010 with a period under supervision in the community to follow upon your release from custody. As Johnson J informed you: If a parole order is made, it will be subject to conditions, and it may be amended or revoked. In particular, it may be revoked if you fail without reasonable excuse to fulfil those conditions, in which event you may be returned into custody, pending further review and possible re-release, depending upon your behaviour and response to any rehabilitation opportunities which may be offered whilst you are in custody.

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: 25 January 2013