R v Pogson; R v Lapham; R v Martin [2012] NSWCCA 225 | Case summary

Ground 1: Did his Honour err by making an ICO? 35Imprisonment is an available sentence for each of the offences committed by the respondent. An ICO is a form of custodial sentence. There is no impediment to the use of an ICO emerging from the offence provisions breached in this case. 36The Sentencing Procedure Act makes provision for penalties under New South Wales law, including ICOs. The Crimes (Administration of Sentences) Act 1999 provides for the implementation of an ICO once ordered by a court. The practical operation of New South Wales statutory provisions bearing upon the use of ICOs as a sentencing option, and their implementation, was considered in Zreika v R [2012] NSWCCA 44 at [55]ff. 37In the case of Commonwealth offenders, an ICO is an available sentencing alternative by operation of s.20AB Crimes Act 1914 (Cth) and failure to comply with an ICO is addressed by s.20AC of that Act. Provisions in the Sentencing Procedure Act 38A conclusion that a particular form of sentence is not available in respect of an offence or an offender, as a matter of law, can be reached only by way of clear words in the relevant statute or by necessary implication. To reach such a conclusion, it would be necessary to construe a penal statute, the Sentencing Procedure Act, in a manner which excluded a form of penalty with the likely (if not inevitable) consequence that offenders so excluded would be required to serve a sentence of full-time imprisonment. 39To the extent to which this process of construction involves competing conclusions, it is appropriate to take into account the penal character of the legislation with an "appreciation of the heavy hand that may be brought down by the criminal law" operating against a harsh construction: Stevens v Kabushiki Kaisha Sony Computer Entertainment and Ors [2005] HCA 58; 224 CLR 193 at 210-211 [45]; Pearce and Geddes, "Statutory Interpretation in Australia", 7th edn, 2011, paragraph [9.9]. 40There is a broad analogy with the approach to construction of legislation which is said to impose a mandatory or minimum penalty, thereby excluding a range of lesser sentencing options, where there is a requirement for unambiguous language to bring about that result: Palling v Corfield [1970] HCA 53; 123 CLR 52; Sillery v The Queen [1981] HCA 34; 180 CLR 353 at 355-356, 364-365, 368-369. 41Some general provisions in the Sentencing Procedure Act point away from a construction confining particular forms of sentence from application to an offence. Section 4 Sentencing Procedure Act provides: "4 Penalties generally (1) The penalty to be imposed for an offence is to be the penalty provided by or under this or any other Act or law. (2) The penalty to be imposed for a statutory offence for which no penalty is so provided is imprisonment for 5 years. (3) Part 3 applies to the imposition of all penalties imposed by a court, whether under this Act or otherwise." 42Section 18 Sentencing Procedure Act reinforces the general availability of penalties, in the absence of provisions to the contrary. Section 18 provides that the penalty for an offence is that specified in the section referable to the offence, with an offender being liable on conviction to "a penalty not exceeding the penalty so specified". 43ICOs were introduced into the Sentencing Procedure Act in 2010. At that time, Parliament removed the capacity for a judge to impose a sentence of imprisonment by way of periodic detention. The amendments followed a review of the periodic detention system by the New South Wales Sentencing Council, which recommended the abolition of periodic detention and the introduction of ICOs. In making that recommendation in its December 2007 report, "Review of Periodic Detention", the New South Wales Sentencing Council identified the following favourable aspects of an ICO (paragraph 7.26): (a)it permits the courts to impose a sentence of imprisonment which emphasises its seriousness and which has a symbolic value for victims; (b)it enables the offender to maintain contact with family, friends and employment; (c)it can address the causes of the offending behaviour, by providing for frequent contact with a community corrections officer and opportunities for treatment, counselling and education; (d)it can include an element of detention in the form of a curfew or other residential conditions; (e)it avoids the contaminatory effects of imprisonment; (f)it is cheaper than full-time imprisonment; (g)it is compatible with the principle of restorative justice by returning benefit to the community in the form of work on community projects, while retaining a strong element of punishment; and (h)breach of its conditions can attract significant sanctions, including a requirement to serve out the balance of the unserved term in full-time custody. 44In his Second Reading Speech, the Attorney-General described the Bill providing for ICOs as a new sentencing option "designed to reduce an offender's risk of re-offending through the provision of intensive rehabilitation and supervision in the community". The Attorney-General described the elements of an ICO in the following terms: "Essentially, an intensive correction order is a sentence of imprisonment of up to two years that is ordered to be served in the community, where offenders can be subject to a range of stringent conditions including 24 hour monitoring, regular community work and a combination of tailored educational, rehabilitative and other related activities." 45The Attorney-General explained the origins of the proposed new sentencing option and the identified shortcomings of the previous periodic detention system. They included the fact that periodic detention was not available throughout the State and provided no case management or therapeutic or rehabilitative support for offenders. The New South Wales Sentencing Council identified that the "introduction of a community based order would have the benefits of sending offenders to participate in rehabilitative or educational programs". The Attorney-General made plain that ICOs were intended to have a rehabilitative focus "from beginning to end" and, for that reason, a judge making an ICO could not provide for a period of parole. 46Section 7 of the Sentencing Procedure Act provides for a custodial sentence in the form of an ICO: "7 Intensive correction orders (1)A court that has sentenced an offender to imprisonment for not more than 2 years may make an intensive correction order directing that the sentence be served by way of intensive correction in the community. (2)If a court makes an intensive correction order directing that a sentence be served by way of intensive correction in the community, the court is not to set a non-parole period for the sentence. (3)This section is subject to the provisions of Part 5." 47A clear statutory restriction in s.7(1) upon the availability of an ICO is the requirement that the sentence not exceed imprisonment for two years. 48Section 7(3) directs attention to provisions in Part 5 of the Sentencing Procedure Act (ss.64-73A). Sections 64 and 65 provide: "Part 5 Sentencing procedures for intensive correction orders Division 1 Preliminary 64 Application This Part applies in circumstances in which a court is considering, or has made, an intensive correction order. 65 Definitions In this Part: assessment report means a report prepared under section 70. offender's obligations under an intensive correction order means the obligations that the offender has under section 82 of the Crimes (Administration of Sentences) Act 1999 as a consequence of the making of the order." 49Sections 66-68 lie within Division 2 of Part 5, entitled "Restrictions on power to make intensive correction orders". 50Section 66(1) specifies a class of offence where an ICO may not be used: "66 Intensive correction not available for certain sexual offences (1) An intensive correction order may not be made in respect of a sentence of imprisonment for a prescribed sexual offence or with respect to an aggregate sentence of imprisonment with respect to 2 or more offences, any one of which is a prescribed sexual offence." 51Section 67 specifies features of the offender which must be satisfied before an ICO may be used (emphasis added): "67 Suitability of offender for intensive correction order (1) An intensive correction order may not be made with respect to an offender's sentence of imprisonment unless the court is satisfied: (a) that the offender is of or above the age of 18 years, and (b) that the offender is a suitable person to serve the sentence by way of intensive correction in the community, and (c) that it is appropriate in all of the circumstances that the sentence be served by way of intensive correction in the community, and (d) that the offender has signed an undertaking to comply with the offender's obligations under the intensive correction order. (2) In deciding whether or not to make an intensive correction order, the court is to have regard to: (a) the contents of the assessment report on the offender (prepared under section 70), and (b) such evidence from the Commissioner of Corrective Services as the court considers necessary for the purpose of deciding whether to make such an order. (3) A court may, for any reason it considers sufficient, decline to make an intensive correction order despite the contents of the assessment report. (4) A court may make an intensive correction order with respect to an offender's sentence of imprisonment only if the assessment report states that, in the opinion of the person making the assessment, the offender is a suitable person to serve the sentence by way of intensive correction in the community. (5) If a court declines to make an intensive correction order with respect to an offender's sentence of imprisonment despite an assessment report that states that the offender is a suitable person to serve the sentence by way of intensive correction in the community, the court must indicate to the offender, and make a record of, its reasons for doing so. (6) A sentence of imprisonment is not invalidated by a failure to comply with subsection (5)." 52Section 68 prevents the use of an ICO where a concurrent or cumulative sentence would have the effect that an ICO would end more than two years after it was imposed. 53Sections 69 and 70 refer to the process of "assessment" referred to in s.67(2)(a) Sentencing Procedure Act. Sections 69-70 provide: "Division 3 Assessment reports 69 Referral of offender for assessment (1) Before imposing a sentence of imprisonment on an offender, the court may refer the offender for assessment as to the suitability of the offender for intensive correction in the community. (2) A court is not to refer an offender for such an assessment unless satisfied, having considered all the alternatives, that no sentence other than imprisonment is appropriate and that the sentence is likely to be for a period of no more than 2 years. 70 Assessment of suitability (1) When an offender is referred for assessment, the Commissioner of Corrective Services is to investigate and report to the court on the matters referred to in section 67 (1) and such other matters as the regulations may require. (2) An offender's assessment report: (a) must take into account, and specifically address, the matters prescribed by the regulations, and (b) may indicate the nature of any conditions that it would be appropriate for the court to impose on an intensive correction order if such an order is made. (3) The regulations may make provision for or with respect to the conduct of investigations and the preparation of reports for the purposes of this Part." 54Division 4 of Part 5 makes provision for commencement of a sentence by way of ICO (s.71), explanation by the court to an offender of an ICO (s.72), written notice of the ICO (s.73) and review of the ICO provisions by the New South Wales Sentencing Council after five years (s.73A). 55It is significant and an indication that the option of an ICO otherwise is available or at least not excluded for other offenders, that the elaborate provisions in Part 5 of the Sentencing Procedure Act do, in some areas, exclude certain offences and certain offenders. Persons who commit certain sexual offences are not eligible (s.66). Persons who are sentenced to more than two years' imprisonment are not eligible (ss.7(1), 68(1)). The offender must be above the age of 18 years (s.67(1)(a)). 56If the offender is not shut out by any of these mandatory factors, then the eligibility of the person from an ICO will depend upon an assessment that the person is a "suitable person" (s.67(1)(b)) and the formation of an opinion by the sentencing judge that it is "appropriate in all the circumstances" that an ICO be used (s.67(1(c)). An assessment report is required, with s.70(2) requiring the report to address, amongst other things, matters prescribed by the Crimes (Sentencing Procedure) Regulation 2010 ("Sentencing Procedure Regulation"). Provisions in the Sentencing Procedure Regulation 57Part 3 of the Sentencing Procedure Regulation (Clauses 12-15) makes provision for sentencing procedures for ICOs. Clause 14 provides for assessment reports: "14 Assessment reports (1) An offender's assessment report must take into account, and specifically address, the following matters: (a) any criminal record of the offender, and the likelihood that the offender will re-offend, (b) any risks associated with managing the offender in the community (taking into account the offender's response to supervision in the community on previous occasions), (c) the likelihood that the offender will commit a domestic violence offence, (d) whether the offender will have suitable residential accommodation for the duration of an intensive correction order, (e) whether any circumstances of the offender's residence, employment, study or other activities would inhibit effective implementation of an intensive correction order, (f) whether the persons with whom it is likely the offender would reside, or continue or resume a relationship, understand the requirements of an intensive correction order and are prepared to live in conformity with them, so far as may be necessary, (g) whether the making of an intensive correction order would place at risk of harm any person who would be living with or in the vicinity of the offender, (h) any dependency of the offender on alcohol or drugs, or other substance abuse, that would affect the offender's ability to comply with the offender's obligations under an intensive correction order, (i) any physical or mental health conditions of the offender that would affect the offender's ability to comply with the offender's obligations under an intensive correction order, (j) the existence and extent of any self-harm risk, including the likely impact of an intensive correction order on that risk, and the availability in the community of the support and treatment services necessary to manage the risk. (2) If a child under the age of 18 years would be living with an offender serving a sentence of imprisonment by way of intensive correction, the assessment report must take into account, and specifically address, the effect on the child of that fact. (3) If it appears to the officer preparing the assessment report that the offender is homeless: (a) all reasonable efforts must be made by the Commissioner of Corrective Services, in consultation with the offender, to find suitable accommodation for the offender, and (b) the report is not to be finalised until those efforts have been made. (4) An offender's assessment report must also include an assessment of: (a) factors associated with his or her offending that would be able to be addressed by targeted interventions under an intensive correction order, and (b) the availability of resources to address those factors by targeted interventions under an intensive correction order, and (c) any issues relevant to the administration of an intensive correction order in respect of the offender that may be relevant to the court's determination of an appropriate date to be fixed for the commencement of the sentence." 58Clause 14 of the Sentencing Procedure Regulation requires an offender's assessment report to take into account certain specified matters including "the likelihood that the offender will re-offend" (Clause 14(1)(a)), "any risks associated with managing the offender in the community" (Clause 14(1)(b)), other aspects including any dependency of the offender on alcohol or drugs or other substance abuse that "would affect the offender's ability to comply with the offender's obligations" under an ICO (Clause 14(1)(h)) and "any physical or mental health conditions of the offender that would affect the offender's ability to comply" with obligations under an ICO (Clause 14(1)(i)). 59Generally, the matters contained in Clause 14 relate to the potential for harm to others or the offender if ordered to serve a sentence by an ICO. 60Clause 14(4) also requires an offender's assessment report to include an assessment of factors associated with the offending that "would be able to be addressed by targeted interventions" under an ICO, the "availability of resources to address those factors by targeted interventions" under an ICO and any issues relevant to the administration of an ICO in respect of an offender. Provisions in the Crimes (Administration of Sentences) Act 1999 61Part 3 Crimes (Administration of Sentences) Act 1999 (ss.80-93) provides for the administration of ICOs after sentence has been passed. Section 81 relates to the imposition of mandatory and additional conditions by the sentencing court (emphasis added): "81 Conditions governing intensive correction orders (1) An intensive correction order is subject to any conditions imposed by the sentencing court under this section. (2) The sentencing court must at the time of sentence impose on an intensive correction order the conditions prescribed by the regulations as the mandatory conditions of an intensive correction order. (3) The sentencing court may at the time of sentence, or subsequently on the application of the Commissioner or the offender: (a) impose additional conditions on an intensive correction order, or (b) vary or revoke any additional conditions imposed by it on an intensive correction order. (4) The additional conditions that a court can impose are limited to: (a) conditions prescribed by the regulations as additional conditions that can be imposed by the sentencing court, and (b) such other conditions as the court considers necessary or desirable for reducing the likelihood of the offender re-offending. (5) The court may refuse to entertain an application by the offender under this section if the court is satisfied that the application is frivolous or vexatious. (6) The court may, at its discretion, deal with an application under this section with or without the parties being present and in open court or in the absence of the public. (7) Before imposing an additional condition under subsection (4) (b), a court is to consider whether the condition will create a need for additional resources and must not impose the condition unless satisfied that any such additional resources that will be needed are or will be made available. (8) This section does not permit the sentencing court to impose any additional conditions, or vary any additional conditions imposed by it, so as to be inconsistent with any of the conditions prescribed by the regulations as the mandatory conditions of an intensive correction order." 62Section 82 provides for the obligations of the offender under an ICO: "82 Obligations of offender The obligations of an offender while serving a sentence pursuant to an intensive correction order are: (a) to comply with such requirements of this Part and the regulations as apply to the offender, and (b) to comply with the requirements of any conditions to which the offender's intensive correction order is subject." 63Provision is made for the Commissioner for Corrective Services to give permission for non-compliance with work, reporting and other requirements (s.85) and for related procedures (ss.86-87) and for breach action relating to an ICO to be taken by the Commissioner for Corrective Services or the State Parole Authority (ss.88-91). 64Section 93 provides for the making of regulations (emphasis added): "93 Regulations The regulations may make provision for or with respect to the following matters: (a) the mandatory conditions to be imposed on an intensive correction order by a sentencing court and the additional conditions that may be imposed by a sentencing court, (b) the manner in which an offender's failure to comply with the offender's obligations under an intensive correction order may be dealt with, (c) the service of notices on an offender, (d) the management, administration and supervision of intensive correction orders, (e) the procedures to be followed by an offender when applying for permission to not comply with a work or reporting requirement under section 85, and the circumstances under which such a permission may be granted, (f) the procedures to be followed by an offender who has been granted permission not to comply with a work or reporting requirement under section 85, (g) the procedures to be followed by an offender when applying for a review under section 87 of a decision of the Commissioner, (h) the circumstances in which an offender may be tested for drugs or alcohol (including random and periodic testing), the use of a non-invasive sample provided by, or taken from, an offender for the purposes of a test for drugs or alcohol and the type and nature of the tests to be used, (i) the circumstances under which an offender may be required to submit to a medical examination by a medical officer, (j) the day-to-day routine of offenders, including the performance of work or engagement in an activity or intervention, or attendance at, or reporting to, or remaining at a place, (k) the use of electronic monitoring devices in relation to offenders, (l) the procedure to be followed when an offender reports to carry out work, (m) the performance of work by an offender, (n) the functions of officers of Corrective Services NSW under and in connection with this Part, (o) the form of any warrants issued for the purposes of this Part." Provisions in the Crimes (Administration of Sentences) Regulation 2008 65Finally, Chapter 3 of the Crimes (Administration of Sentences) Regulation 2008 (Clauses 174-178) makes provision for the administration of ICOs. 66Clause 175 provides for mandatory conditions for ICOs: "175 Mandatory conditions for intensive correction orders The following are the mandatory conditions of an intensive correction order to be imposed by a court under section 81 of the Act: (a) a condition that requires the offender to be of good behaviour and not commit any offence, (b) a condition that requires the offender to report, on the date fixed as the date of commencement of the sentence or on such later date as may be advised by the Commissioner, to such local office of Corrective Services NSW or other location as may be advised by the Commissioner, (c) a condition that requires the offender to reside only at premises approved by a supervisor, (d) a condition that prohibits the offender leaving or remaining out of New South Wales without the permission of the Commissioner, (e) a condition that prohibits the offender leaving or remaining out of Australia without the permission of the Parole Authority, (f) a condition that requires the offender to receive visits by a supervisor at the offender's home at any time for any purpose connected with the administration of the order, (g) a condition that requires the offender to authorise his or her medical practitioner, therapist or counsellor to provide to a supervisor information about the offender that is relevant to the administration of the order, (h) a condition that requires the offender to submit to searches of places or things under his or her immediate control, as directed by a supervisor, (i) a condition that prohibits the offender using prohibited drugs, obtaining drugs unlawfully or abusing drugs lawfully obtained, (j) a condition that requires the offender to submit to breath testing, urinalysis or other medically approved test procedures for detecting alcohol or drug use, as directed by a supervisor, (k) a condition that prohibits the offender possessing or having in his or her control any firearm or other offensive weapon, (l) a condition that requires the offender to submit to such surveillance or monitoring (including electronic surveillance or monitoring) as a supervisor may direct, and comply with all instructions given by a supervisor in relation to the operation of surveillance or monitoring systems, (m) a condition that prohibits the offender tampering with, damaging or disabling surveillance or monitoring equipment, (n) a condition that requires the offender to comply with any direction given by a supervisor that requires the offender to remain at a specified place during specified hours or that otherwise restricts the movements of the offender during specified hours, (o) a condition that requires the offender to undertake a minimum of 32 hours of community service work per month, as directed by a supervisor from time to time, (p) a condition that requires the offender to engage in activities to address the factors associated with his or her offending as identified in the offender's assessment report or that become apparent during the term of the order, as directed by a supervisor from time to time, (q) a condition that requires the offender to comply with all reasonable directions of a supervisor." 67Clause 176 provides for optional additional conditions for ICOs: "176 Additional conditions that may be imposed by sentencing court The following are the additional conditions that may be imposed on an intensive correction order by the sentencing court under section 81 of the Act: (a) a condition that requires the offender to accept any direction of a supervisor in relation to the maintenance of or obtaining of employment, (b) a condition that requires the offender to authorise contact between any employer of the offender and a supervisor, (c) a condition that requires the offender to comply with any direction of a supervisor as to the kinds of occupation or employment in which the offender may or may not engage, (d) a condition that requires the offender to comply with any direction of a supervisor that the offender not associate with specified persons or persons of a specified description, (e) a condition that prohibits the offender consuming alcohol, (f) a condition that requires the offender to comply with any direction of a supervisor that the offender must not go to specified places or districts or places or districts of a specified kind. Note. Section 81 of the Act provides that the sentencing court may also impose any other condition that the court considers necessary or desirable for reducing the likelihood of the offender re-offending." What does the Statutory Scheme reveal concerning the availability of ICOs? 68It is apparent that the legislative scheme for ICOs emphasises the availability of this option to assist in the rehabilitation of an offender. To this end, provision is made for the imposition of conditions by the sentencing court which are designed to meet the particular need for rehabilitation of an individual offender. However, there is no statutory provision which confines the use of an ICO to a person expressly in need of measures of this type. The mandatory conditions provided by the legislation will operate to impose significant restrictions on the liberty of an individual including an obligation to perform community service. 69The only persons excluded by the statute are those within s.66(1) of the Sentencing Procedure Act being offenders who have committed a prescribed sexual offence. 70Section 66 lies within Division 2 of Part 5 of the Act which is entitled "Restrictions on power to make intensive correction orders". 71Section 67, which also lies within Division 2, provides in general terms for the suitability of an offender for an ICO. Section 67(1) requires the court to be satisfied of certain matters before an ICO is directed, and s.67(4) requires an assessment report to state that the offender is a suitable person to serve the sentence by way of ICO in the community, before a court may impose an ICO. These requirements are expressed in general terms, and may be contrasted with the express exclusion contained in s.66. 72Section 81 Crimes (Administration of Sentences) Act 1999 provides for the conditions which must be imposed by a court as part of an ICO. The mandatory conditions contained in Clause 175 Crimes (Administration of Sentences) Regulation 2008 are prescriptive and intrusive. The submission that an ICO is not available, in law, in the case of the present respondents is substantially founded upon an argument that at least some of these conditions would have no utility having regard to their personal circumstances. Matters of statutory construction 73As a general rule, subordinate legislation made under an Act of the Parliament is not relevant when the task is to interpret the provisions of the Act itself: Pearce and Geddes, "Statutory Interpretation in Australia", 7th edn, 2011, paragraph [3.41]. The normal purpose of subordinate legislation is to give effect to the provisions of the parent statute: State of New South Wales v Macquarie Bank Limited (1992) 30 NSWLR 307 at 320. Subordinate legislation is typically designed to carry into effect the express intention of the legislature, in ways incidental to the execution of the statute itself: State of New South Wales v Macquarie Bank Limited at 321. 74These principles were recently considered by the High Court in the context of the Migration Act 1958 (Cth): Plaintiff M47/2012 v Director General of Security & Ors [2012] HCA 46. Section 498(1) of the Act provides: "The powers conferred by or under this Act shall be exercised in accordance with any applicable regulations under this Act." 75French CJ said of this provision (at [56]): "The provision does not authorise the making of regulations which abrogate, modify or qualify the scope of the powers conferred by the Migration Act. Nor does it provide a gateway for the construction of the Migration Act by reference to regulations made under it. Generally speaking an Act, which does not provide for its own modification by operation of regulations made under it, is not to be construed by reference to those regulations. That would be a case of the tail wagging the dog." 76The Chief Justice continued, accepting that the "general principle does not exclude the possibility that a regulatory scheme proposed and explained at the time that Parliament enacted the Act under which the scheme was made could constitute material relevant to determination of the statutory purpose". 77In Plaintiff M47/2012 Hayne J referred (at [174]), in the context of whether a regulation made under an Act was valid, to the decision in Morton v Union Steamship Co of New Zealand Ltd [1951] HCA 42; 83 CLR 402 at 410 where it was said that regulations may be adopted to facilitate the provisions of the Act, but not regulations which vary or depart from the positive provisions made by the Act. 78Although provisions contained in the Sentencing Procedure Regulation and, more indirectly, the Crimes (Administration of Sentences) Regulation 2008, form part of the legislative scheme for ICOs, they cannot have the effect of qualifying provisions in the Sentencing Procedure Act so as to restrict the availability of ICOs as a matter of law to classes of offences and offenders, given the single express exception contained in s.66 of that Act: McKee v Allianz Australia Insurance Limited [2008] NSWCA 163; 71 NSWLR 609 at 631 [95]. They must, of course, be read together with the Act, in order to identity the nature of a legislative scheme which they comprise, and when determining the appropriate sentencing option for an individual offender. However, there is no warrant for the use of either Regulation to construe the terms of the Act or confine its operation. Regulations are required to be consistent with the statute under which they are made: Master Education Services Pty Limited v Ketchell [2008] HCA 38; 236 CLR 101 at 109-110 [19]. The decision in Boughen 79Boughen was a Crown appeal against the inadequacy of a sentence for an offender who was guilty of "significant tax evasion". The sentencing judge had imposed a sentence of two years' imprisonment and directed that it be served by an ICO. 80Simpson J, who wrote the judgment of the court, expressed a firm view that the sentences imposed at first instance were manifestly inadequate, and to such an extent that an ICO was not an available option. This was because, in her Honour's opinion, the appropriate sentence required was a term of imprisonment greater than two years. Having expressed that conclusion her Honour, in remarks, that the sentencing judge in the present case concluded, in our view correctly, were obiter, considered the nature and availability of ICOs. Her Honour said at [109]-[112]: "[109] First, the use of Intensive Correction orders in these circumstances demonstrates a misconception of the nature of this, relatively new, form of punishment. Section 7 of the Sentencing Procedure Act was inserted by the Crimes (Sentencing Legislation) Amendment (Intensive Correction Orders) Act 2010, with effect from 1 October 2010. It is apparent that there has not been time for any significant judicial consideration of the circumstances in which its application is appropriate, certainly not at appellate level. However, it is clear that the principal focus of this sentencing option is rehabilitation. In the second reading speech the Attorney-General said: 'The Bill introduces a new sentencing option - the intensive correction order - designed to reduce the offender's risk of re-offending through the provision of intensive rehabilitation and supervision in the community. It also abolishes the sentence of periodic detention, giving effect to recommendations from the NSW Sentencing Council and calls from the victims of crime representatives. Essentially, an intensive correction order is a sentence of imprisonment for up to 2 years which is ordered to be served in the community, where offenders can be subject to a range of stringent conditions including 24 hour monitoring, regular community work and a combination of tailored educational, rehabilitative and other related activities. ... While it is not intended to be a direct replacement of periodic detention, the power of the courts to make a periodic detention order will cease upon the commencement of the new intensive correction order. ... The restriction of the court setting a non-parole period for an ICO was an essential feature of the model recommended by the Sentencing Council, on the basis that the offender should be subject to supervision and conditions of the order for its full term. This would ensure that the rehabilitative focus of the order is maintained from beginning to end. (Parliamentary Debates (Hansard), Legislative Council, 22 June 2010, P 24426 and following.)' [110] This was a case in which, although the sentencing judge made no express findings concerning rehabilitation, it is plain that rehabilitation is an irrelevant consideration. There should be no, or minimal, prospect of either of the respondents re-offending. The entire tenor of the Remarks on Sentence was to that effect. That in itself renders the use of the Intensive Correction Order inappropriate. It may be that the removal of the Periodic Detention option has deprived sentencing judges of one vehicle by which to express denunciation of the conduct under consideration; but that is the clear expression of the will of the legislature. The Intensive Correction Order should not be used as a substitute for that now unavailable option. [111] Second, an order that the sentence be served in the community, even with the restrictions it necessarily carries, and any additional restrictions imposed by the sentencing judge (such as abstention from alcohol), is a sentence that has inherent in it a high degree of leniency. That degree of leniency was unwarranted. It cuts directly across the frequently stated principles of sentencing for tax evasion to which his Honour was referred. [112] Moreover, it is plain that his Honour was led into his erroneous course by his excursions into the realities of life in the prison system. These were the irrelevant considerations of which the Director rightly complained." 81The Crown submitted that even if obiter dicta, her Honour's remarks were a considered and clear statement of the operation of the section which the sentencing judge should have followed. The essence of her Honour's conclusion appears to be that in relation to an offender who has "no or minimal" prospect of reoffending, rehabilitation is an irrelevant consideration. As the "principal focus" of an ICO is rehabilitation, an ICO is not relevant and accordingly not available to an offender assessed as unlikely to reoffend and with good prospects of rehabilitation. 82We note, and will consider later in these reasons, her Honour's further conclusion that, even allowing for the restrictions placed on an offender as a consequence of an ICO "it has inherent in it a high degree of leniency". Other decisions in relation to ICOs 83The view expressed by Simpson J has not been the consistent view of judges of the Supreme Court or of this court. 84In R v Dalzell [2011] NSWSC 454; 83 ACSR 407, Hall J imposed an ICO on an offender for an offence of insider trading. There was no issue in that case but that the offender was otherwise of good character. The sentencing judge did not discuss the need for the offender to be rehabilitated. 85In R v Bateson, Buddin J sentenced an offender for an insider-trading offence. His Honour concluded that the offender was unlikely to reoffend and had "extremely good" prospects of rehabilitation. As a consequence, his Honour concluded that there was no need for the sentence to reflect a component for personal, as distinct from general, deterrence. His Honour imposed a sentence to be served by an ICO. At the same time, his Honour expressed the view that, like periodic detention (R v Hallocoglu (1992) 29 NSWLR 67 at 73), ICOs have a strong degree of leniency built into them (at [77]). 86In R v O'Brien, the offender pleaded guilty to four counts of insider trading. He held a senior position with a company which specialised in the provision of advice to shareholder consulting services and shareholder groups. Hoeben J (as he then was) imposed a term of imprisonment to be served by an ICO. His Honour said that he was "satisfied on the material before me that the offender will not commit further offences in the future. In that regard, his prospects of rehabilitation are excellent". 87This court considered whether an ICO was properly imposed in Whelan, an appeal decided after Boughen. The applicant was convicted of two offences contrary to s.52A Crimes Act 1900. His dangerous driving had occasioned injury and death to other road users. Allsop P said of the sentence at [3]: "As to the sentence imposed, it was not vitiated by any error. No rule of law, or principle, or precept required the imprisonment of this man. An intensive correctional order was available. The lack of likely repetition of the offence did not deny the relevance of two aspects of the order: the degree of denunciation implicit in the order to a person of Mr Whelan's character; and, secondly, the utility expressed in the assessment report of Mr Whelan undergoing a driving programme and a counselling programme." 88The approach taken by Allsop P (Davies J agreeing) in Whelan at [3]-[4] is inconsistent with a narrow confinement, as a matter of law, of ICOs to a particular class of offence or offender. In the same case, Schmidt J (Allsop P and Davies J agreeing) referred at [110]-[120] to the decision of the Court of Criminal Appeal in Boughen at [109]-[111], in the context of the assessment of a Crown submission that an ICO was not available as a sentencing option in the circumstances of that case. Nothing said in Whelan assists the Crown submission that ICOs are not available, as a matter of law, in circumstances referrable to the present respondents. 89None of the single-judge decisions which predated Boughen is, of course, binding on this court and they did not bind the sentencing judge. It may be that the issue raised by the Crown in this appeal was not raised in those cases. It is not clear that the issue was raised before the sentencing judge in Boughen (it would seem unlikely) or how it came to be considered in this court. 90The essence of Simpson J's criticism of the use of an ICO was her Honour's view that it demonstrated "a misconception of the nature of this, relatively new, form of punishment". 91Simpson J concluded that, although the sentencing judge had made no express findings about rehabilitation "it is plain that rehabilitation is an irrelevant consideration". Her Honour said that that conclusion "itself renders the use of the Intensive Correction Order inappropriate". 92In R v Agius; R v Zerafa, Simpson J returned to the question of the availability of an ICO as a sentencing option in the context of a tax offender. Her Honour was imposing a sentence after the offender had been found guilty by a jury. Her Honour considered this issue at [92]-[117], before concluding that the case of Mr Zerafa did not call for an ICO, nor did the case permit one to be made. Her Honour's reasoning involved a close examination of provisions in the Sentencing Procedure Act and the Sentencing Procedure Regulation, together with the Crimes (Administration of Sentences) Act 1999 and the Crimes (Administration of Sentences) Regulation 2008. 93After examining the relevant provisions, Simpson J continued at [103]-[117]: "103The entire tenor of these provisions, I am satisfied, demonstrates that the objective of intensive correction orders is the rehabilitation of offenders at risk of re-offending, and in need of close supervision and guidance. In Boughen and Cameron I extracted from the Second Reading speech made by the Attorney General in the Parliament of NSW when the legislation was introduced. I do not propose to repeat that material. It is available to be taken into account by s 34 of the Interpretation Act 1987 which permits use of such material in order to confirm that the meaning of a statutory provision is the ordinary meaning conveyed by its text, or in case of ambiguity or obscurity, or manifest absurdity or unreasonableness, to determine the meaning of the provision. In my opinion the speech of the Attorney General confirms that an intensive correction order is precisely what its name implies: an opportunity to be provided to an offender for rehabilitation. 104Administration of an intensive correction order will necessitate the provision of considerable public resources, the magnitude of which will be determined in individual cases by supervisors from time to time, having regard to the particular circumstances of the offenders. 105Supervisors are entrusted with very considerable powers and discretions. Administrative law principles require that those powers and discretions be exercised for the purposes for which they are conferred, and not for extraneous purposes (such as additional punishment of the offender). 106The powers and discretions conferred presuppose an identified need for close supervision of the offender. The only proper purpose for their exercise, in my opinion, is correction - correction from criminal engagement. 107In a case where the risk of re-offending is low or non-existent, there is little, if any, purpose to be served by most of the mandatory conditions. It is difficult to see what purpose could be served by random visits by the supervisor to the offender's home; by provision of information, otherwise confidential, from medical practitioners, therapists or counsellors; by searches of places or things under the immediate control of the offender; by drug and alcohol testing; by surveillance or monitoring, by restriction of movement; by requiring the offender to engage in activities to address factors associated with the offending; or, indeed, compliance with directions of a supervisor. 108The same applies to the additional conditions permitted by reg 176, which include supervision of an offender's employment, associations and movements. 109I appreciate that, in R v Bateson [2011] NSWSC 643, Buddin J referred to two decisions of the Victorian Court of Appeal (DPP v Nikolic [2008] VSCA 226 and DPP v Karazisis [2010] VSCA 350), and one of the Victorian Supreme Court (R v Lanteri [2006] VSC 225), in each of which it was held that an order under apparently corresponding Victorian legislation was 'not a light sentence', and was properly to be seen as 'a significantly punitive disposition'. In Karazisis it was said that the conditions of any such order are extremely onerous. But that was in a case in which the evidence showed clearly that, while the offenders had good prospects of rehabilitation, they were likely to achieve that good with the assistance of intensive supervision. 110 In Nikolic, it was said that an intensive correction order: '... is not a light sentence. It is intended to be, and ordinarily will be, burdensome and will substantially contribute to the punishment of an offender, including where condign punishment is warranted.' 111Putting aside my puzzlement at the last clause - I am not aware of any offence in respect of which condign punishment is not warranted - I cannot accept that the NSW legislature intended that the incidence of an intensive correction order (ie the supervisory elements, as distinct from the sentence itself, which is one of imprisonment) were intended to be burdensome, or to contribute to the punishment of an offender. 112The punishment is the sentence of imprisonment: that sentence is imposed judicially. The intensive correction order specifies the manner in which the sentence is to be served. That is also determined judicially. The incidents of the intensive correction order are determined by a supervisor. They are not determined judicially. They ought not be seen as contributing to the punishment. 113In none of the Victorian cases were the precise terms of the legislation spelled out. I am unable to accept that an intensive correction order under s 7 of the Sentencing Procedure Act is necessarily significantly punitive. I accept that, where an offender is in need of intensive supervision, by reason of a significant risk of re-offending, the incidents of an intensive correction order may be seen (and felt) as burdensome. That will arise as a result of the discretionary power of the supervisor to impose requirements as to residence, association, movement and surveillance or monitoring. 114But those requirements ought only be imposed for the proper purpose of ensuring that the offender does not re-offend. To impose those requirements merely for the purpose of punishment or to bring home to the offender consequences of involvement in criminal conduct (see Lanteri) would, in my opinion, involve the use of the powers for an improper purpose. Considerable power and discretion reside in the person appointed as supervisor. It is inherent in the legislation that those powers and discretions be used for the purpose for which they are conferred. That is not for additional punishment. There are two vices in the potential use of the burdensome incidents of intensive correction orders other than for the purpose of securing the rehabilitation of the offender. One is that the degree of punitiveness would lie in the hands of a Corrective Services officer, and be imposed extra-judicially. That is contrary to all principle. The other is that, it is apparent, as I have said, that significant resources will have to be allocated for the implementation of these orders. It would be wrong to use those resources for the purpose of punishing an offender. The resources are to be provided for the purpose of rehabilitation. 115Properly used, the intensive correction order facility could and should be a beneficial adjunct to sentencing options. It would be a pity if their misuse by courts were to cause them, like other beneficial sentencing options, to be abandoned. And it would be a pity if those resources were applied to the punishment of offenders such as Mr Zerafa, who is plainly not in need of intensive correction or supervision, at the expense of vulnerable offenders who might, if they have access to the resources, benefit. 116If the particular circumstances of an offender do not call for intensive supervision or correction, and on the assumption that the supervisor would not misuse the powers granted, all that is left by way of burden on the offender subject to an intensive correction order is a minimum of 32 hours per month of community service. (There appears to be no specified maximum.) But the option of community service is already, by s 8 of the Sentencing Procedure Act, available. While s 7 requires the imposition of a term of imprisonment, with a direction that it be served by way of intensive correction order, a community service order is an alternative to a sentence of imprisonment. It is true that the maximum number of hours of community service that may be ordered under s 8 is 500 (compared with a minimum of 768 in respect of a 2 year sentence to be served by way of intensive correction). It would, however, be wrong in principle to make an intensive correction order (involving a sentence of imprisonment) in order to increase the number of hours of community service that could be required. 117I am satisfied that this is not a case that calls for an intensive correction order, nor a case that permits one to be made." Conclusion on Ground 1 94It is apparent from her Honour's judgment that Simpson J accepts that, provided an offender is in need of rehabilitation (in the sense of confining the risk that he or she will reoffend) and in need of close supervision and guidance, an ICO will be an available option. Her Honour understands the purpose of the mandatory conditions and the further conditions which may be imposed by the sentencing judge to be directed toward "correction from criminal engagement". This is to be contrasted with conditions which may be burdensome to or contribute to the punishment of an offender which her Honour believes may not legitimately be imposed under the ICO regime. 95There is a tension in her Honour's observations. It would seem that her Honour accepts that the Parliament may validly legislate to provide for ICOs and may make provision for regulations to give practical effect to them. This must include the regulations that provide for an offender to submit to the direction of his or her supervisor. Notwithstanding that such directions may restrict an offender's liberty in a variety of respects, provided that person has an identified need for correction, her Honour accepts that an ICO may be utilised. This will be the case even though the requirements of the supervisor will necessarily impose a burden of compliance and to this extent punish the individual offender. However, when the need for correction cannot be identified, the utilisation of an ICO will, in her Honour's opinion, involve "the use of the powers for an improper purpose". 96With respect to her Honour, we cannot share her view. In particular we cannot find the inhibition on the use of ICOs which Simpson J identified as being in the Attorney-General's speech. Furthermore, in our opinion, the terms of the statute do not support her Honour's conclusion. 97It is true that the Attorney-General emphasised that the amendments would provide a new sentencing option designed to reduce an offender's risk of reoffending. However, in the Attorney-General's words, an ICO is a "sentence of imprisonment for up to 2 years which is ordered to be served in the community" where offenders can be subject to a range of stringent conditions including 24-hour monitoring, regular community work and a combination of tailored educational, rehabilitative and other related activities. 98Although the Attorney-General identified the fact that the new regime is designed to reduce the risk of reoffending, this does not mean that all of the other purposes of sentencing referred to in s.3A of the Sentencing Procedure Act are irrelevant. An ICO is an order made in respect of a person who has been sentenced to imprisonment. Even if the sentence is to be served by an ICO, it must fulfil the relevant purposes in s.3A(a)-(g) in respect of an individual offender. They include amongst other matters punishment (a); accountability of an offender (e); and denunciation (f). 99There is nothing in s.7 of the Sentencing Procedure Act which confines the imposition of an ICO to persons who have an identified need for rehabilitation, or of whom it can be positively said there is a risk of reoffending. Although obviously more lenient than a sentence of full-time imprisonment, the conditions imposed by an ICO will be an imposition of varying degrees of significance to an offender depending on his or her personal circumstances. 100It is apparent that the mandatory conditions may operate to impose significant restrictions on an offender's freedom. And, of course, a breach of the conditions may result in his or her sentencing regime being altered, including being required to serve the balance of the sentence in full-time custody. 101We should indicate that although drafted with care, the Crimes (Administration of Sentences) Regulation 2008 do require care in their administration. For example, Condition (j) requires an offender to submit to a breath test for alcohol "as directed by a supervisor" even if, as is the present case, there is no suggestion that the person's offending was in any way associated with alcohol or that a condition requiring that the offender abstain from consuming alcohol was imposed. Although the Regulation prohibits an offender from using prohibited drugs, there is no mandatory condition prohibiting an offender from using alcohol. In the absence of a court-ordered condition inhibiting or prohibiting the use of alcohol (under Clause 176(e) - see [67] above), it is difficult to understand that there could be a legitimate purpose served by breath testing an offender. If a supervisor was to direct an offender in these circumstances to submit to breath testing, the direction would probably be beyond power. It would amount to extra-curial punishment. The capacity to direct must be confined to a legitimate purpose in furtherance of an order made in relation to a particular offender. 102Beyond these considerations, there is a question as to whether it can be said of any offender that they do not have any need for rehabilitation. 103Simpson J appears, with respect, to have assumed that the concept of rehabilitation has the singular purpose of endeavouring to ensure that an offender will not reoffend, in circumstances where there are attributes of the offender's behaviour which require counselling or treatment for issues bearing upon the risk of recidivism. No doubt, the concept of correction is concerned with ensuring that a person is reformed in their attitudes and behaviour so that they do not reoffend. Of course, in former generations, what are now referred to as "correctional centres" were commonly known as "prisons". The change in label reflects a change in the focus of the purpose for which sentences are imposed. It came as a result of the identified objective of endeavouring, through the sentencing process as far as possible, to achieve the reform of the individual offender. 104With respect to her Honour's examination of the circumstances in which the resources involved in the implementation of an ICO may not be used productively or effectively in imposing sentence upon persons such as the present respondents, this is a practical matter concerning the ultimate discretionary selection of the sentencing option, rather than identification of circumstances which disqualify offenders such as the respondents, as a matter of law, from eligibility for a sentence by way of an ICO. 105It is apparent that there is no provision within Division 2 of Part 2 of the Sentencing Procedure Act (ss.5-7), relating to custodial sentences, which specifies that an assessment of the offender's prospects of rehabilitation is required for the purpose of selection of the sentencing option. 106In Division 3 of Part 2 (ss.8-13), concerning non-custodial alternatives, there is express reference in s.11 which relates to deferral of the sentencing of an offender for rehabilitation, participation in an intervention program or other purposes. Section 11(1)(a) and (b) and (2A) all require express consideration to be given to the prospects of rehabilitation, or the demonstration that rehabilitation has taken place or the promotion of rehabilitation of the offender. The express reference to rehabilitation in that context may be contrasted with the absence of such a reference in provisions relating to ICOs. 107An assessment must be made of an offender for the purpose of determining whether an ICO is the appropriate sentence to be selected in the particular case. That process forms part of the sentencing discretion in the context of the particular case. 108It should be kept in mind that an ICO is a substantial punishment to be utilised in an appropriate case: Whelan at [120]. However, as with all sentencing options which do not involve immediate incarceration, it may also reflect a significant degree of leniency: Whelan at [120]. 109The severity of an ICO has been underscored in several Victorian decisions, to which Simpson J recently referred in R v Agius; R v Zerafa: R v Lanteri [2006] VSC 225 at [116]; Director of Public Prosecutions v Nikolic [2008] VSCA 226 at [21]; Director of Public Prosecutions v Karazisis [2010] VSCA 350; 206 A Crim R 14 at 50-51 [184]. 110It should be noted that the Victorian Parliament, in enacting the Sentencing Amendment (Community Correction Reform) Act 2011 (Vic), has since replaced ICOs with Community Correction Orders ("CCOs"). CCOs are intended as a substitute not only for ICOs, but other types of punishment to be served in the community. In the Second Reading Speech that introduced the corresponding Bill, the Victorian Attorney-General criticised ICOs for perpetuating the "legal fiction" that an offender subject to such an order is technically serving a term of imprisonment, despite living among the community: Victoria, Parliamentary Debates (Hansard), Legislative Assembly, 15 September 2011, at 3292. 111However, as we have noted, the stringent conditions attached to an ICO ensure that an offender subject to such an order is not living a carefree existence amongst the community. An ICO deprives an offender of his or her liberty in a real and not merely fictional sense. 112All of this leads to the conclusion that ICOs are not excluded, as a matter of law, from use in sentencing of offenders such as the respondents. 113It ought not be concluded that the option of an ICO is excluded, by necessary implication, from offenders who have committed what might be described as "white-collar" crimes. That is not to say that each offender will be appropriate for an ICO. This conclusion is reinforced by an examination of general sentencing principles, which emphasise the various purposes of sentencing. 114The purposes of sentencing are well recognised as involving different, and sometimes conflicting, purposes: Veen v The Queen (No. 2) [1988] HCA 14; 164 CLR 465 at 476-477; Muldrock v The Queen [2011] HCA 39; 244 CLR 120 at 129 [20]. So much can be seen from s.3A Sentencing Procedure Act which provides: "3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender are as follows: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community." 115It will be observed that s.3A(d) provides for a purpose of sentencing being to promote the "rehabilitation of the offender". The word "rehabilitation" is not defined in the Sentencing Procedure Act. 116The term "rehabilitation" is used, as well, in s.16A(2) Crimes Act 1914 (Cth), which requires a sentencing court to take into account certain "matters as are relevant and known to the court", including "the prospect of rehabilitation of the person" (s.16A(2)(n)). Once again, the term "rehabilitation" is not defined in the Crimes Act 1914 (Cth). 117Although not defined by statute, the term "rehabilitation" has a well-recognised content in the context of sentencing. Rehabilitation as an object of sentencing has not been confined to those who are regarded as being ill or predisposed to crime by environmental factors, including alcohol or drug abuse. A statement frequently cited with respect to the concept of rehabilitation is that of King CJ in Vartzokas v Zanker (1989) 51 SASR 277 at 279 where he said: "The passage which I have quoted from the remarks of the learned sentencing magistrate discloses, in my opinion, an error of principle. It implies that rehabilitation or reform, as an object of sentencing, is confined to those who are 'in need of rehabilitation by reason of factors such as illness or being 'predisposed to such behaviour by his environment or his experiences of life', that is to say, to persons subject to some personal or social disadvantage. That involves a misconception of the meaning of rehabilitation and its place in the sentencing process. Rehabilitation as an object of sentencing is aimed at the renunciation by the offender of his wrongdoing and his establishment or re-establishment as an honourable law-abiding citizen. It is not confined to those who fall into wrongdoing by reason of physical or mental infirmity or a disadvantaged background. It applies equally to those who, while not suffering such disadvantages, nevertheless lapse into wrongdoing. The object of the courts is to fashion sentencing measures designed to reclaim such individuals wherever such measures are consistent with the primary object of the criminal law which is the protection of the community. Very often a person who is not disadvantaged and whose character has been formed by a good upbringing, but who has lapsed into criminal behaviour, will be a good subject for rehabilitative measures precisely because he possesses the physical and mental qualities and, by reason of his upbringing, the potential moral fibre to provide a sound basis for rehabilitation. It would be a great mistake to put considerations of rehabilitation aside in fashioning a sentence for such a person." 118Leading Australian sentencing texts have emphasised this statement as an explanation of the concept of rehabilitation: RG Fox and A Freiberg, "Sentencing: State and Federal Law in Victoria", 2nd edn, 1999, Oxford University Press, paragraph 3.411; K Warner, "Sentencing in Tasmania", 2nd edn, 2002, Federation Press, paragraphs 3.217-3.221. King CJ's statement has been cited, without disapproval, as recently as 30 July 2012 in a decision of the Victorian Court of Appeal: Pantazis v R [2012] VSCA 160 at [236]-[237] (Warren CJ, Redlich, Hansen and Osborn JJA and Curtain AJA). Vartzokas v Zanker is referred to in the "Sentencing Bench Book" published by the Judicial Commission of New South Wales, in the context of rehabilitation as a purpose of sentencing (at [2-260]). 119This understanding of rehabilitation finds further support in the academic literature. Criminologist RA Duff has described criminal punishment as "communicative", in the sense that it aims to persuade the offender of the wrongfulness of his or her conduct. Punishment thereby invites the offender to make "secular penance" for the wrong. In "Punishment, Communication and Community", 2001, Oxford University Press, Mr Duff states at 111-12: "The offender comes to recognize and repent his crime as a wrong and to realize that he must, and how he can, so reform himself as to refrain from such crimes in the future. He also comes to accept his punishment as a justified response to his crime - as an appropriate means of inducing that repentance and as an appropriate way in which he can express that repentance to others." 120Inherent in Mr Duff's account of punishment is the assumption that rehabilitation addresses the moral sensibilities of the offender, not just his or her propensity to reoffend. Indeed, were it otherwise, there would be little to distinguish rehabilitation from specific deterrence, which is separately provided for by s.3A(b) Sentencing Procedure Act. To the extent that moral self-correction and renunciation of one's own wrongdoing are captured by the concept of rehabilitation for which s.3A(d) of the Act provides, it can fairly be said that the present respondents are in need of rehabilitation, notwithstanding that they are unlikely to reoffend. 121To our minds, this understanding of rehabilitation is at odds with the view, most recently expressed by Simpson J in R v Agius; R v Zerafa at [92], [103], that ICOs are available only for offenders who are apt to reoffend. In our view, the "correction" sought to be achieved by such orders is not so limited. 122Although it is common for judges, when considering the subjective characteristics of an offender, to evaluate the prospects of the person reoffending and to express an opinion as to whether the person is unlikely to reoffend, it could never be said that a person who has once offended would never reoffend. Furthermore, a person who has offended will always be in need of the opportunity to establish themselves as a law abiding and productive member of the community. Rehabilitation is a concept which is broader than merely avoiding reoffending. 123A finding that an offender is not likely to reoffend may often be made not only because of expressions of remorse, but because the fact that the offender has been caught, convicted and punished (which may include extra-curial punishment) will operate to deter the offender from future wrongdoing. Deterrence will operate in respect of an offender even though the offender may not have restructured his or her thinking so that they thereafter consciously determine to re-establish themselves as a positive member of society. 124By contrast to deterrence, rehabilitation has as its purpose the remodelling of a person's thinking and behaviour so that they will, notwithstanding their past offending, re-establish themselves in the community with a conscious determination to renounce their wrongdoing and establish or re-establish themselves as an honourable law abiding citizen: Vartzokas v Zanker at 279 (King CJ). 125In this sense, every offender is in need of rehabilitation. Some may need greater assistance than others. It has been commonplace to speak of "paying your debt" to society. That phrase, in colloquial parlance, captures the essence of rehabilitation, enabling the offender to re-establish him or herself as an honourable member of the community. 126For these reasons, we would reject Ground 1 of the appeal.

Ground 2 - Were the sentences manifestly inadequate? 127Under the second ground of appeal, the Crown submitted that the sentences that were imposed were manifestly inadequate because the sentencing judge ordered that they be served by ICO. It was submitted that a sentence of imprisonment that can be served by means other than full-time custody has a high degree of leniency in it. It was submitted that such an order directly cuts across the need for general deterrence to be reflected in sentences for offences constituted by acts of blatant dishonesty, which was the situation in the present matter. 128The Crown submitted to this court that the offences were deliberate and planned and executed over a period of time. They involved the deliberate creation of false information by directors of companies for the purposes of falsifying the group profit figure with the intention of deceiving existing and prospective investors who increasingly include members of the ordinary public, whether directly or through superannuation funds. Although no individual investor lost money, it was submitted that the gains by way of facilitating substantial investment and reinvestment in the group were substantial. Pogson and Lapham were executive directors and, effectively, the owners of a group of companies and so had an additional interest in any financial advantage gained by the deception. It was submitted that they were in a similar position to "true insiders" in insider-trading cases for the purposes of sentence. 129Accordingly, it was submitted that the offences required the imposition of sentences that would act as sufficient general deterrence. It was submitted that this could only be adequately provided by the imposition of a sentence of imprisonment to be served by full-time custody. 130It was submitted that there was nothing in the subjective case of the respondents that was so compelling or atypical from the subjective circumstances of most corporate offenders, as to warrant any other disposition of the matter. 131It was submitted that the effect of an ICO for the present offences will be that the respondents will serve a sentence of imprisonment by way of community service. It was submitted that the mandatory conditions of supervision, to which the respondents will be subject, will have little practical bearing on these particular individuals because: (a)they are not likely to commit any further offences; (b)they have stable accommodation and living arrangements; (c)they are unlikely to be in possession of drugs, firearms, weapons or other contraband for which the authorities might need to search any place or thing under their control; (d)they are unlikely to use or abuse drugs or alcohol or require breath testing, urinalysis or other testing for drugs or alcohol use; (e)they do not represent a flight risk and are unlikely to require any surveillance or monitoring (including electronic surveillance or monitoring) or direction that they remain at any specified place; (f)they are unlikely to be required to engage in any rehabilitation programs. 132The Crown submitted that the practical effect of the ICOs ordered in the case of the respondents is that they must undertake a minimum of 32 hours of community service per month and must seek the permission of the Commissioner or the State Parole Authority if they wish to leave or remain out of the State or Australia. It was submitted that this is a manifestly inadequate sentencing outcome in all the circumstances. 133The essence of the criminality of the respondents was the conversion of a projected loss, which would have been slightly in excess of $1 million for the accounting half-year to 31 December 2003, into an apparent profit of considerable proportions. This was achieved by including in the relevant figures a number of pre-completion contracts for sale which had been issued and exchanged, for units which had been sold "off the plan". That, in itself, may not have been a cause for concern. However, the contracts for sale were backdated to indicate that they had been exchanged prior to 31 December 2003, when this had not in fact occurred. 134The respondents submitted to the sentencing judge that, if this arrangement had been included in the prospectus with a note indicating that the prospectus reflected figures updated to 31 March 2004, the value of the later exchanged contracts could legitimately have been included in the profit figures for the company. 135There was a second falsehood that involved the backdating of a contract for a proposed community housing development at Pokolbin. Although included in the figures, the sale never proceeded and was ultimately aborted and the deposit forfeited. 136It was submitted on behalf of each respondent that the sentencing judge properly had regard to various aspects of the objective criminality of each offender. They can be summarised in the following manner: (a)It was common ground, and repeated on more than one occasion by the Crown itself, that no investor sustained any particular loss as a result of the wrongful inflation of the profit figures. The Crown, in its written submissions at paragraph 18, said: "It is no part of the offences charged or of the case brought that any particular loss to any individual was occasioned by the false statement." (b)The offences were not motivated by apparent greed or a desire for direct personal enrichment. Unlike insider-trader cases, where the motivation is manifestly for such a purpose, the present respondents could properly be perceived as keen to maintain the continuing investment of funds in order to continue the developments which were in place. Mr Bromwich SC, Counsel for the Crown at first instance, submitted: "In one sense these cases are less serious because of a lack of self-enrichment, albeit that monies were flowing into the companies which particularly Mr Pogson and Mr Lapham were, effectively, through their family companies, owned..." (c)The Crown sought to categorise the conduct as intending to deceive the investors. The respondents submitted that the conduct might more properly be construed as endeavouring to have the stop-order lifted, and to provide figures that would satisfy ASIC's concerns, rather than intending that investors be misled. Previous prospectuses had not included consolidated figures for the other subsidiaries, yet countless investors had invested in the unsecured debentures, presumably on the basis of the attractive rate of return. There is no evidence of a causative nexus between people deciding to invest money in the group and the inclusion of the false figures in R-P 6. (d)It is very significant that, unlike cases such as those arising from the HIH collapse, the subsequent failure, some years later and at the time of Prospectus 9, is conceded by the Crown to not be causally connected to the present offences. (e) There was, in actuality, a substantial delay of almost eight years between the offending conduct and the passing of sentence. Whilst it is not suggested that such delay should be laid at the feet of the Crown, it is a relevant and significant factor in the appropriate disposition of the matters. 137Accordingly, it was submitted that these cases involved lesser criminality than was present in many insider-trading cases justifying a lesser sentence. It was submitted that Martin, being a non-executive director of ACR and Castle, did not stand to gain personally from the offences. It was accepted by the sentencing judge that his criminality was less than Pogson and Lapham - a fact which is conceded by the Crown. As a result of the offending, the respondent Martin has lost his right to practise as a certified practicing accountant and as a tax agent. It was further submitted that the respondents will be punished by a five-year disqualification from holding a directorship in a corporation. 138With respect to the suitability of each respondent for an ICO, counsel for Lapham emphasised the fact that the ICO assessment report, with respect to him, stated that he would be assisted by an ICO "to enable him to understand the ramifications of his actions and assist him in his consequential thinking". 139With respect to Pogson, he was assessed as likely to benefit from an ICO as it would allow him to "continue to address his issues related to mental health and finances". It was further indicated that it was "hoped that such an order would develop the offender's responsible thinking to assist him in living a law abiding lifestyle". 140The evidence before this court indicates that each of the respondents has served, at the time of the hearing on 6 August 2012, in excess of 20% of the term of their sentence. Each of them has complied with all of the conditions to which they are subject and have made their contribution by fulfilling their obligations for community service. The respondents have been subject to breath tests and random urine samples. They have also attended courses on stress management and cognitive behavioural therapy. The respondents have also been subject to random residential visits at home when they have been breath tested. Pogson has attended six one-hour sessions with a psychologist at the direction of his case officer. 141In relation to Martin, the evidence did not include an opinion as to his suitability for an ICO. However, as part of his induction course with the New South Wales Corrective Services, it was recognised that he has a need, as part of his rehabilitation program, for the assistance of a psychologist. He requires a structured mental-health plan for reactive anxiety and a depressive disorder. A plan has been put in place which will continue for an indefinite period. Martin regularly attends sessions of 1.5 hours' duration with a psychologist who has developed a mental health plan for him. Martin accepts that the mental-health plan is integral to restoring him to psychological wellbeing. Consideration 142Although the individual investors who may, by reason of the false prospectus, have been encouraged to place their money with ACR, suffered no loss, the offences committed in this case were serious. Any falsification of the information available in the market place has the potential to occasion loss to many investors who may have invested directly in the market or who may have indirect investments through superannuation or other funds. McClellan CJ at CL has discussed elsewhere the nature and consequences of market offences: R v Hartman [2010] NSWSC 1422; 81 ACSR 121 at [45] and [46]; McClellan CJ at CL, "White Collar Crime: perpetrators and penalties", Keynote address, Fraud and Corruption in Government Seminar, University of New South Wales, Thursday 24 November 2011. 143Sentencing courts have a responsibility to ensure that the sentence imposed punishes the offender, denounces their criminal conduct and provides sufficient disincentive to others who may be tempted to offend, to ensure that they refrain from criminal activities. Although some statements have been made suggesting that in relation to some offences general deterrence may be controversial, this is not the case with respect to crimes involving the market or other forms of business dealings. 144In our view, the offences committed by Pogson and Lapham were the more serious. Their dishonesty deceived investors, who may have taken a different course if they had been given an accurate picture of the adverse financial circumstances of the corporation. It is of the utmost importance that when sentencing for market-related offences, the courts impose sentences of sufficient severity to ensure, as far as possible, that others who may be tempted to engage in dishonest conduct to the benefit of themselves or a company in which they have an interest, are dissuaded from criminal activity. 145In the present case, if we were sentencing at first instance, we would have imposed a term of full-time custody on both Pogson and Lapham. In our opinion, the level of dishonesty was such that a sentence of lesser severity was manifestly inadequate. The lesser criminality in the conduct of Martin would have made an ICO appropriate. However, as this is a Crown appeal, it is important to consider whether the residual discretion of this court should be exercised with regard to Pogson and Lapham. 146It has been said that the primary purpose of Crown appeals against sentence under s.5D Criminal Appeal Act 1912 is to lay down principles for the governance and guidance of courts having the duty of sentencing convicted persons, so that this court, in the exercise of its jurisdiction under s.5D, has a residual discretion to decline to interfere with a sentence even though the sentence is erroneously lenient: Green v The Queen; Quinn v The Queen [2011] HCA 49; 244 CLR 462 at 465-466 [1]-[2]. 147This discretion may be exercised for reasons other than double jeopardy: R v JW [2010] NSWCCA 49; 77 NSWLR 7 at 24 [92], 25 [95], 33 [150]. 148In determining whether or not the discretion should be exercised, it is open to the court to receive evidence of what has happened between the time of sentence and the hearing of the appeal: R v Deng [2007] NSWCCA 216; 176 A Crim R 1 at 8 [28]. Evidence of this type was received in these appeals. 149The sentences were imposed in the District Court on 7 March 2012. The Crown does not argue that the sentences imposed should be lengthened. With respect to each of the respondents, it is apparent that the consequences of their offending, and the sentences imposed upon them, have had significant impacts on their professional and personal lives. Having regard to their age, it may be difficult for them to re-establish successful business careers. They have all complied with the conditions of their ICOs. There is every reason to accept that they have suffered punishment and that the experience will deter them from offending in the future. The significant issue is whether the objective of general deterrence is sufficiently met by requiring the respondents to serve their sentences by ICOs. 150Although it is important, in our opinion, for this court to emphasise the fact that sentences of full-time custody may be necessary to punish offenders and to deter others from offending (consistent with the primary purpose of Crown appeals), we are otherwise of the opinion that, in these cases, this court should exercise its discretion not to resentence and dismiss the Crown appeals. 151The orders we propose, in each case, are that the Crown appeal should be dismissed. 152PRICE J: I have read the joint reasons of McClellan CJ at CL and Johnson J. I agree with their Honours in relation to Ground 1 and to their conclusion that the sentences imposed upon Pogson and Lapham by the sentencing judge were manifestly inadequate, but Martin's sentence was not. My concern lies with the exercise of the residual discretion not to intervene. As I am aware that RA Hulme J and Button J agree with the orders proposed in the joint reasons, I will be brief in stating my view that the residual discretion should not be exercised. 153Although I appreciate that Pogson and Lapham have complied with their ICOs and their experience will deter them from offending in the future, the need for general deterrence remains. I agree without hesitation with the remarks in the joint judgment at [143] above that sentencing courts have a responsibility to ensure that the sentence imposed "provides sufficient disincentive to others who may be tempted to offend, to ensure that they refrain from criminal activities". In my respectful opinion, the circumstances of the offences call for the imposition of full-time custodial sentences to give proper weight to the particular significance that general deterrence plays in white-collar crime. 154In my view, Pogson and Lapham should be resentenced by this court to terms of full-time custody with appropriate reductions being made for the time that they have been subject to their ICOs. 155RA HULME J: I agree with McClellan CJ at CL and Johnson J. 156BUTTON J: I agree with McClellan CJ at CL and Johnson J.

R v Pogson; R v Lapham; R v Martin

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