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[2025] NSWDC 304
General information, not legal advice.
District Court of NSW
2025-08-08
Newlinds SC DCJ
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: R v The Grape House Pty Ltd [2025] NSWDC 304
Hearing dates: 1 August 2025
Date of orders: 8 August 2025
Decision date: 08 August 2025
Jurisdiction: Criminal
Before: Newlinds SC DCJ
Decision: For Sequences 1-6 individual fines totalling $1,050,000 (see [113])
Catchwords: CRIME – Sentencing – Dishonestly describing to Commonwealth officials the source of table grapes for export to New Zealand so as to avoid cold storage requirement on grapes from non-fruit fly pest-free-areas – Dishonestly influencing public official by false representations – Damage to national interest of Australia in context of Australian-New Zealand Bilateral Quarantine Arrangement – Real risk to both Australia and New Zealand growers – Significant objective seriousness – Need for general deterrence – Subjective case weak – Consideration of concepts such as character, remorse, and contrition in context of corporate offender – Penalties – Fines – “Financial circumstances” or “means” of Offender – Totality
Legislation Cited: Crimes Act 1914 (Cth) s 16A, s 16BA, s 16C
Criminal Code (Cth) s 12, s 135.1(7)
Cases Cited: Attorney General's Application Under s37 of the Crimes (Sentencing Procedure) Act 1999 No 1 of 2002 (2002) 56 NSWLR 146
Azari v R; Al-Talebi v R [2021] NSWCCA 199
Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683
De Lorenzo v DPP (Cth) [2017] VSCA 270
DPP v Hamman (Unreported, NSWCCA, 1 December 1998)
Environment Protection Authority v Barnes [2006] NSWCCA 246
Giourtalis v The Queen [2013] NSWCCA 216
Johnson v The Queen (2004) 78 ALJR 616
Lazarus v R [2023] NSWCCA 214
Morex Meat Australia Pty Ltd & Doube v R (1995) 129 ALR 546
R v El Rashid (unreported, NSWCCA, 7 April 1995)
R v Lamella [2014] NSWCCA 122
R v Leonard Properties [2019] QDC 209
R v Moxon [2015] QCA 65
R v Pham (2015) 256 CLR 550
R v Rivkin (2004) 59 NSWLR 284
R v Scook (2008) 185 A Crim R 164
R v Singleton [2019] QCA 302
R v Zhu [2013] NSWSC 127
Totaan v R [2022] NSWCCA 75
Trade Practices Commission v CSR Ltd [1990] FCA 762 [1991] ATPR 41 – 076
Category: Sentence
Parties: Rex (Crown)
The Grape House Pty Ltd (Offender)
Representation: Counsel:
P McEniery / C Nicholson (Crown)
G McCormick / G O’Shea (Offender)
Solicitors:
CDPP (Crown)
Goldsmiths Lawyers (Offender)
File Number(s): 2021/96336
Publication restriction: Nil
“The Commonwealth legislative regime as to export inspection and certification was aimed at maintaining Australia’s highly favourable plant health status and wide access to overseas markets. Australia was a signatory to the IPPC [International Plant Protection Convention] with the purpose of protecting plants internationally by preventing the introduction and spread of pests. […] The applicant’s actions risked compromising the integrity of Australia’s export inspection and certification system and exposed Australia to criticism for noncompliance with the IPPC. It could result in importing countries closing market access to not only the applicant’s company but to all Australian exporters and in the imposition of tougher requirements on all Australian exporters with higher costs and fewer competitors in the international market. The applicant’s offending undermined Australia’s international standing and the role it played in assisting other nations to comply with the IPPC. It exposed Australia to criticism from foreign competitors. It put at risk Australia’s $2 billion annual timber export industry. It had the potential to damage Australia’s reputation and to cause economic harm to the timber industry including to the competitors of the applicant’s company and to all those employed in the Australian timber industry.” - R v Moxon [2015] QCA 65 (“Moxon”) per McMurdo P, with whom Philippides JA agreed, at [29].
Unlike Australia, there are no fruit flies in New Zealand. For obvious reasons, New Zealand wishes that to continue. In Australia, for the purpose of the Australian-New Zealand Bilateral Quarantine Arrangement, table grapes are designated as either being grown in “fruit fly pest-free-areas” or “non-fruit fly pest-free-areas”. If grapes come from anywhere other than a designated fruit fly pest-free-area, they must be disclosed as such and subjected to 16 days’ cold storage to kill any fruit flies, thus protecting New Zealand from Australian fruit flies.
Since 1989, The Grape House Pty Ltd (“TGH”) has operated a packhouse and treatment facility for table grapes and citrus from 15 Kilpatrick Road Euston, New South Wales. TGH was granted registered establishment number 5149, which enabled it, at that facility, to fumigate and cold store grapes for export to New Zealand. During the 2017 and 2018 grape seasons, TGH purchased table grapes from Australian growers for export by air and sea to customers in New Zealand.
At all times during the offending period, Carmelo (aka Charlie) Costa (“Mr Costa”) was the sole director of TGH and Mr Colin Egan (“Mr Egan”) was the Warehouse and Logistics Manager. In that role, Mr Egan was in charge of preparing documents to be submitted to the then named Department of Agriculture and Water (“the Department”) and carrying out the mandatory treatment of grapes prior to export.
The relevant conduct is attributed to TGH through Mr Egan who, as its Warehouse and Logistics Manager, was a “high managerial agent” of TGH. He caused representations to be made to the Department by signing Transfer Certificates, which were deliberately false, as to where the grapes had been grown.
On 3 June 2025, TGH entered guilty pleas, on a fresh indictment presented that day, to six offences of dishonestly influencing a Commonwealth public official, contrary to s 135.1(7) of the Criminal Code (Cth) (“the Code”). As TGH is a body corporate, the maximum penalty for each offence is 1,500 penalty units ($270,000 for Counts 1-3 and $315,000 for Counts 4-6). The discrepancy between the maximum penalty amounts is explained by the fact that, up until 30 June 2017, the value of a Commonwealth penalty unit was $180, and on 1 July 2017, the value of a Commonwealth penalty unit increased from $180 to $210.
Pursuant to s 16BA of the Crimes Act 1914 (Cth) (“Crimes Act”), TGH admits a further 23 offences contrary to s 135.7(1) of the Code and asks that they be taken into account by the Court in passing sentence for two of the offences, namely Counts 3 and 5, for which it will be convicted. Eight offences are to be taken into account in relation to Count 3 and fifteen offences are to be taken into account in relation to Count 5.
The facts of the six offences are set out in an Agreed Statement of Facts and annexures.
Each offence involved false representations made to various Commonwealth public officials at the Department, in documents submitted to the Department via email, by TGH across the two export seasons between 24 January 2017 and 7 February 2017 (counts 1-3) and 17 January 2018 and 27 February 2018 (counts 4-6). The 23 scheduled offences concern the same kind of offending between 20 January 2017 and 28 February 2017 and 9 January 2018 and 28 March 2018.
The false representations were that grapes had been obtained from a “fruit fly pest*-free-*area” in South Australia, which meant the grapes were not required to undergo cold storage treatment. In fact, the grapes were not from South Australia, they were from various “non-fruit fly pest-free-areas” and were exported by TGH without undergoing the required cold storage treatment for fruit fly. By making the false representations, TGH intended to dishonestly influence a Commonwealth public official to authorise the export of the grapes to New Zealand. In so doing, it deliberately avoided its obligation to “disinfect” grapes from fruit fly areas by putting them in cold storage for a period of 16 days. The obvious purpose of the bilateral arrangement between Australia and New Zealand, to protect New Zealand from fruit flies, was thus deliberately subverted.
| Count | Offence | Description | Maximum Penalty | | 1 | Section 135.1(7) Criminal Code (Cth) | Between 24 and 25 January 2017 at Euston, New South Wales, caused false representations to be made to the Department of Agriculture and Water Resources that all required conditions of export were satisfied, with the intention of dishonestly influencing a Commonwealth public official. | 1,500 penalty units ($270,000) | | 2 | Section 135.1(7) Criminal Code (Cth) | Between 1 and 2 February 2017 caused false representations to be made to the Department that all required conditions of export were satisfied, with the intention of dishonestly influencing a Commonwealth public official. | 1,500 penalty units ($270,000) | | 3 | Section 135.1(7) Criminal Code (Cth) | Between 6 and 7 February 2017 caused false representations to be made to the Department that all required conditions of export were satisfied, with the intention of dishonestly influencing a Commonwealth public official. | 1,500 penalty units ($270,000) | | 4 | Section 135.1(7) Criminal Code (Cth) | Between 17 and 18 January 2018 caused false representations to be made to the Department that all required conditions of export were satisfied, with the intention of dishonestly influencing a Commonwealth public official. | 1,500 penalty units ($315,000) | | 5 | Section 135.1(7) Criminal Code (Cth) | Between 22 and 23 February 2018 caused false representations to be made to the Department that all required conditions of export were satisfied, with the intention of dishonestly influencing a Commonwealth public official. | 1,500 penalty units ($315,000) | | 6 | Section 135.1(7) Criminal Code (Cth) | Between 26 and 27 February 2018 caused false representations to be made to the Department that all required conditions of export were satisfied, with the intention of dishonestly influencing a Commonwealth public official. | 1,500 penalty units ($315,000) |
| Count | Summary of offences | | 3 Sch, 1-8 | 20 January 2017-28 February 2017 Dishonestly influence Commonwealth public official | | 5 Sch, 1-15 | 9 January 2018 -28 March 2018 Dishonestly influence Commonwealth public official |
As bodies corporate act by their human employees, officers and agents, the conduct and intentions will be those of those people. Part 2.5 of the Code provides for the legal attribution of the conduct and intentions of a particular class of those people to a body corporate. Sections 12.2 and 12.3 provide for the circumstances in which the physical elements and the fault elements other than negligence must also be attributed to the body corporate. Section 12.3(2) provides a non-exclusive list of the means of establishing that compulsory attribution. It is accepted by TGH that Mr Egan’s conduct and state of mind is attributable to it for the purpose of the plea.
The principles contained within s 16A(2) do not sit entirely comfortably when considering sentencing a corporation.
In Trade Practices Commission v CSR Ltd [1990] FCA 762 [1991] ATPR 41 – 076 (“CSR”), French J, when sitting on the Federal Court, set out some factors relevant to the assessment of penalty for a corporation in the context of civil penalty-type provisions. His Honour concluded that, ultimately, the assessment of a pecuniary penalty for a corporation, by way of fine, needs to be approached so as to:
“put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act."
A primary consideration in sentencing for breaches of Australia’s export regulations is the need for a strong and clear deterrent given the seriousness of those offences to the national interest: see Morex Meat Australia Pty Ltd & Doube v R (1995) 129 ALR 546 at 571; and Moxon.
There are few, if any, cases dealing with this type of offending. Moxon is one, but the facts are very far removed from this case. The Crown contends that principles relating to sentencing for fraud and taxation offences have relevance to this sentencing exercise, given the similarities in the offending conduct and the impact of such offending on the community. I accept that submission
Courts have long recognised that fraud has many harmful, but often hidden, social consequences and the nature of the offending is such that it impacts the entire community. Principles of general deterrence and denunciation are often seen as prime considerations in sentencing for serious fraud on the Commonwealth and its agencies.
Breaches of the export regulation system are difficult to detect. The investigation and prosecution of such breaches, as the history of this case demonstrates, are often complex, difficult, time-consuming, and resource-intensive. As was so clearly explained by McMurdo P in Moxon at [29], offences against the Commonwealth system for export inspection and certification of produce, regardless of an inability to identify particular victims, are not victimless crimes. Serious breaches may well impact the export industry more broadly and affect Australia’s international standing and access to valuable international markets. Her Honour’s comments, although obiter, were cited with apparent approval in R v Singleton [2019] QCA 302.
Section 16BA of the Crimes Act enables other Commonwealth offences to be taken into account when sentencing a Commonwealth offender. The statutory maximum penalty for the offence on which the offender is to be sentenced is not affected by taking into account other offences (s 16BA(4)), and there is no requirement to quantify the effect, or to specify the amount that would have otherwise been imposed but for the other offence(s).
TGH is not to be punished for the s 16BA offences, nor are those offences to be regarded as an offence for which the person has been convicted (s16BA(10)).
The offences taken into account may, however, increase the penalty for the offences before the Court, or attract a sentence of a more serious type by the Court: Attorney General's Application Under s37 of the Crimes (Sentencing Procedure) Act 1999 No 1 of 2002 (2002) 56 NSWLR 146 at 155 and applied in respect of Commonwealth offenders in De Lorenzo v DPP (Cth) [2017] VSCA 270 at [36]; R v Lamella [2014] NSWCCA 122 at [48]; Azari v R; Al-Talebi v R [2021] NSWCCA 199
The nature and seriousness of the offences to be taken into account are relevant considerations in the assessment of the gravity of the whole course of conduct, the need for personal deterrence, and the community’s entitlement to exact retribution for a serious offence.
The Crown contends that the twenty-three counts to be taken into account when passing sentence for Counts 3 and 5 were serious examples of offending of this type, involving as they did 100,206 and 244,107 kilograms of table grapes respectively. I agree.
“Past integrity and good character, devotion to family and work and contributions to the community impeccable though they have been, carry little weight against the confession by a plea of guilty that over a period of three years which ended only when the respondent was caught out, the respondent knowingly on three occasions understated his income by very large amounts for his own benefit or advantage.”
“It may be observed that what is sometimes called white collar crime is rarely committed by people who do have a criminal history. Such people do not usually find themselves with opportunity to commit offences of that character.”
“However, the relevance of good character is of lesser significance for white-collar crimes, since it is that factor which normally places the offender in a position whereby he or she is able to commit the offence.”
In sentencing a Commonwealth offender, the Court is required to have regard to the “means” of TGH: s 16A(2)(m) of the Crimes Act. In addition to this and to any other factors that the Court is permitted or required to take into account, before imposing a fine on a Commonwealth offender, the Court must have regard to the “financial circumstances” of TGH: s 16C(1). However, a court is not precluded from imposing a fine if the financial circumstances of an offender cannot be ascertained by the Court: s 16C(2).
The requirement to take financial circumstances into account does not dictate that the financial circumstances will determine the fine that is to be imposed. That is, the capacity of TGH to pay is relevant but not decisive. A fine or pecuniary penalty which exceeds the capacity of TGH to pay is not necessarily excessive and may be entirely appropriate (to satisfy the requirements of general and specific deterrence) where the offence was committed for financial gain. Consideration of the financial circumstances of TGH may increase, rather than decrease, a fine in order for it to be a real punishment and thus a deterrent for TGH. Self-evidently, what is a large fine for one offender may be de minimis for another. The relative proportion of a fine to an offender’s means must be a relevant factor.
There was debate before me as to the “financial circumstances" or “means” of TGH.
On behalf of TGH, there was tendered a letter from an accountant which contained the following statement:
“2 – Financial circumstances of the Grape – has greatly deteriorated, following the trading losses incurred in FY 23 in excess of $8Mill.
The trading results of the past 2 seasons have been close to break even. Charlie [Mr Costa] is in the process of seeking funding from another bank as his current bank will not provide the financial support required through to next season.”
There is no other evidence. In particular, there is no evidence as to the assets and liabilities of TGH. TGH has a long and successful history as a table grape exporter in Australia, and it was within its power to put before me evidence of particular detriment that might be caused by any particular level of fines imposed.
It goes without saying that the fact that TGH has had two seasons which have been quite close to “break even" and that its Director is in the process of seeking funding for financial support for the next season does not, in any way, demonstrate the financial circumstances or means of TGH in any relevant sense.
There is no evidence that would cause me to pause before imposing any particular level of fine. There is no evidence that, at any level, the imposition of any fine would cause the insolvency or failure of TGH. Because of the paucity of evidence, I regard the “financial circumstances” or “means” of TGH as a neutral matter.
I am satisfied beyond reasonable doubt that:
The offending involved a deliberate and sustained manipulation of the system of export, in pursuit of financial gain;
The offending was not spontaneous, rather, it was premeditated, occurred over a long period of time, and involved a significant degree of sophistication and planning. The offending occurred across two export seasons. In addition, TGH has admitted its guilt in relation to a further 23 offences which together occurred over the 2017/2018 export seasons. The offending was part of a continuing course of conduct;
There was a substantial quantity of table grapes involved. The total number of cartons the subject of counts 1-6 was 16,214, amounting to 145,926 kilograms (145.93 tonnes) of table grapes. 69,219 kilograms (69.22 tonnes) of those table grapes were exported in the 2017 season and 76,707 kilograms (76.71 tonnes) were exported in the 2018 season. The total volume of table grapes exported from Australia to New Zealand in the 2016-2017 financial year was 3000 tonnes. The offending at counts 1-3 therefore represents 2.31% of total table grape exports to New Zealand. The total volume of table grapes exported from Australia to New Zealand in 2017-2018 financial year was 3,480 tonnes. The offending at counts 4-6 therefore represents 2.20% of total table grape exports from Australia to New Zealand;
The offending placed at risk New Zealand's biosecurity and Australia's reputation in managing quarantine arrangements, thus reducing the Australian government's ability to negotiate for reduced regulation or improved market access to overseas markets; and
The offending did not cease voluntarily. Rather, the offending only ceased after the conduct came to the Department's attention through a confidential tipoff.
On behalf of TGH, it is submitted that it could not be found that the offending occurred for financial reward.
I reject that submission. By making the false declarations, the grapes, the subject of the various shipments, were able to be shipped without undergoing the mandatory period of cold storage, which, on any view of it, speeded up TGH’s cash flow as well as saved it the cost of that cold storage. There is no other reason to make the representations other than to achieve that outcome.
I am satisfied that the reason for the false representations was to avoid the 16-day cold storage requirement and that the grapes were, in fact, not the subject of cold storage. I consider that was the inevitable motivation for the offending. The suggestion by TGH that it has not been proved that the cold storage obligation was not complied with is answered by the only inference available, that the grapes were not so treated. This was the purpose of the offending. It is inconceivable to me, that being the purpose, that there is any chance that in fact the grapes spent 16 days in cold storage.
TGH has made submissions that no victim has been identified and that the impact on Australia generally does not engage this factor, relying on cases like R v Zhu [2013] NSWSC 127 at [203], where in an insider trading case, even though it was accepted that the investing community at large was a victim, it was held that there were no particular victims of that type of crime.
I accept that submission and proceed upon the basis that there have been no particular victims injured. However, that does not lessen the significance of the observations made by McMurdo P in Moxon to which I have referred.
I find this a difficult concept when one is considering a corporation. Corporations do not have morals. Rather, morality is the domain of human beings.
In the same way, corporations themselves can only express contrition and remorse for moral failing and the like through individual people. No person has put on any evidence, nor do I have any hearsay material that any person within TGH has any relevant feelings at all.
On behalf of TGH, it has been submitted that it has agreed to not export from fruit fly designated areas in the future. This is said to be evidence of contrition and remorse.
The circumstances whereby that agreement came about were a decision by the relevant Commonwealth Department to revoke TGH's relevant licence to export, which decision was stayed by consent, pending appeal, upon terms by the body then known as the Administrative Appeals Tribunal.
The restriction is only that TGH not export from fruit fly pest-free-areas rather than non-fruit fly pest-free-areas. Whatever the intent of that restriction might be, it firstly cannot, in any sensible way, be said to have been voluntary as it was the quid pro quo for a stay on what would otherwise be a ban on its ability to carry out its export business at all, and secondly, this is a direct consequence of the very offending that is before me.
I do not understand how it can be a fact relevant to the question of whether TGH has expressed any real contrition or remorse.
TGH has also pointed out that Mr Egan no longer works for TGH. He is in extremely poor health. No person with control of TGH has explained to me why Mr Egan no longer works there, nor any connection between him leaving and the offending conduct.
Mr Costa is the guiding mind of TGH. He was also the person ultimately responsible for the affairs of TGH at the time of the offending. There is no suggestion by Mr Costa that he was not aware of what Mr Egan was doing. If Mr Costa was complying with his obligations as a Director of TGH, he ought to have been so aware. Mr Costa has not given any evidence as to his state of mind at the time, but perhaps more importantly, has given no evidence explaining how it is that he believes the offending occurred, why it occurred, and what steps, if any, have been taken to prevent the activities of the same type of thing happening in the future. If there was a problem with the culture of TGH, there is no suggestion that problem has been identified and/or rectified. He has put on no evidence that he is remorseful or that the conduct will not be repeated whilst ever he is in charge.
I am not satisfied that TGH has shown any remorse, contrition, or insight into the offending.
The plea here came very late. It was entered the week before the matter was set down for the hearing of an eight-week trial.
There is a long history of the Prosecution amending various indictments to drop or add charges, the end result being, after a long period, the particular pleas were proffered to a substantially reduced amount of charges, as a result no doubt, of negotiation.
However, throughout the whole of that period, TGH steadfastly denied the offending, the subject of the charges, that have now been the subject of pleas. The charges before me have always been on the various iterations of the indictment.
I understand that, for the purpose of negotiating between offenders and the prosecution, such a stance has its benefits. However, the fact is, in relation to the particular charges, the plea came very late and after considerable and hard-fought interlocutory skirmishes between the parties.
The New South Wales mandatory discount scheme does not apply. Nonetheless, it is a reasonable guide. The pleas have saved the community and many witnesses a considerable amount of time, money, and the inconvenience of an 8-week trial. Whilst, because I consider the Crown case to have been strong, I do not think that the pleas themselves demonstrate any particular remorse, contrition, or insight, I do consider that a discount of 10% from what would otherwise be an appropriate sentence ought be afforded in relation to the pleas for the utilitarian benefit to the community and witnesses.
An opportunity was offered to TGH to be interviewed by the Department. That opportunity was declined. The Department was required to expend significant resources investigating the offending and examining a vast body of documentary material seized from TGH and others under warrant.
TGH takes the point that the Department was not a “law enforcement agency" for the purpose of the legislation. I do not think that there is any definition of “law enforcement agency” in the legislation and do not really understand why the government Department, who by statute has the task of enforcing the relevant law, would not be seen to be a “law enforcement agency”.
Whatever the answer may be, I do not think it matters. Whether the Department is captured by the statutory concept or not, I consider it a relevant matter that TGH did not cooperate with the investigation.
I consider it to be self-evident that general deterrence must loom large in this exercise. That is not to say that there is a hierarchy of factors dictated by the legislation. Each case must be determined on its own merits. However, there are categories of cases where particular factors are often seen to be significant. Fraud on a Commonwealth official is one such category. I consider general deterrence to be a very weighty factor in this case: see Totaan v R [2022] NSWCCA 75 at [99] and Lazarus v R [2023] NSWCCA 214 at [43]-[46].
TGH is a well-known, and before these events, well-respected Australian corporation involved in international trade.
There needs to be a clear and strong message sent to the community that any exporter, large or small, breaching the biosecurity arrangements of Australia by deliberately misleading government officials that there has been compliance when there has, in fact, been non-compliance, will be dealt with sternly by the courts.
As to specific deterrence, the fine needs to be at such a level so as to amount to meaningful punishment, especially in light of my findings as to remorse and contrition.
Again, some of these concepts are difficult to apply to corporations.
TGH has operated a pack house and treatment facility for table grapes and citrus in New South Wales since 1989.
TGH is a significant participant in the Australian table grape export industry. Both TGH as a corporation, its sole Director Mr Costa, and Mr Egan had considerable experience in the industry during the offending period and there is no suggestion that what they did was some sort of mistake or momentary slip.
Having said all that, TGH does not have a criminal history, although, as I have already observed, good character in relation to corporations is not as significant as with natural people.
TGH has a history of donating to various charities, which is consistent with it being generally a good corporate citizen.
Mr Egan no longer works for TGH. As I have said, there is no evidence to connect this state of affairs with the offending conduct. He is in extremely poor health.
As I have said, I do not accept that there is any remorse, contrition, or insight shown by the person ultimately in control of the corporation, Mr Costa.
That being said, I do think that the fact of this investigation and prosecution, and no doubt this sentence, has, and will have, a salutary effect on TGH and Mr Costa and I think it is unlikely that there will be reoffending.
In that sense, I think the prospects of TGH reoffending are low.
On behalf of TGH, emphasis is placed on what is said to be considerable delay between the information that led to this prosecution coming to the attention of the Department in June 2018 and search warrants being executed in July 2018, to the prosecution commencing with 198 charges in May 2021, with various amendments, refinements, and changes to the indictment over the following years, culminating on 3 June 2025 with an amended indictment and the pleas that are before me being accepted by the Crown in full satisfaction.
As is so often the case in crimes involving fraud, and in particular sophisticated fraud, a large degree of investigative work has been required to unravel what happened and thereafter put together a brief so as to prove those matters to the requisite level before a Court.
Of course, a person under investigation has a right of silence and is entitled to invoke that right. It would be quite wrong on sentencing to hold the exercise of that right of silence against an offender.
There is a balance required here. As Bathurst CJ explained in Giourtalis v The Queen [2013] NSWCCA 216 at [1791], on the question of delay, when referring to the judgment of Buss JA in R v Scook (2008) 185 A Crim R 164 at 176 – 177 [57] – [65]:
“As Buss JA pointed out, the principles are not inflexible and the extent the delay would be taken into account as a mitigating factor must depend on the particular facts of the case in question. However, in the case of a complex fraud it will always be necessary to balance the effect of the delay on the offender against the difficulty and complexity of proving the offence and the need for general deterrence. In particular, although an accused person is entitled to rely on the rights and protection of the criminal law, in circumstances where such reliance has necessitated a complex and lengthy investigation which is carried out with reasonable expedition, the extent that delay can be called upon as a mitigating factor is limited, although the conduct during the delay remains relevant to the extent it indicated prospects of rehabilitation. Further, there may be cases where the delay is so inordinate that notwithstanding the complexity of the investigation, the fact that the accused has been left in a state of uncertainty for a considerable period of time would be a significant mitigating factor.”
Ultimately, what I think that means is that, when one is considering delay in these sort of cases, the difficulty and complexity of proving the offence and the need for general deterrence needs to be balanced against any delay. What must be identified in a particular case is delay so inordinate and, notwithstanding the complexity of the investigation, the fact that the accused has been left in the state of uncertainty for a considerable period of time can be a significant mitigating factor.
I am not satisfied, in all the circumstances of this case, that the delay can be described as “inordinate” or “considerable" and, therefore, have concluded it is a neutral factor.
“The principle of totality is applicable where the penalty imposed is by way of fine: see R v Sgroi (1989) 40 A Crim R 197 at 203. However, it may be that the principle of totality may not have the same force in the case of the imposition of fines, as opposed to the imposition of imprisonment where it has a special operation: see R v Brown (1982) 5 A Crim R 404 at 407.”
The passage was quoted with approval in Environment Protection Authority v Barnes [2006] NSWCCA 246 at [46] (“Barnes”).
In Barnes, the Court said, at [50] that if the sentencing judge believes that the totality principle requires an adjustment to fines which may otherwise be appropriate, the amount of each fine has to be altered, applying the sentencing principles suggested in Johnson v The Queen (2004) 78 ALJR 616.
As fines cannot be made concurrent, the application of the totality principle requires me to fix what I consider an appropriate fine for each offence then consider the total of all those fines, and by reference to that total, consider whether any adjustment needs to be made to any of the fines to achieve an overall penalty consistent with the totality principle, i.e., an overall penalty that is just and appropriate having regard to the totality of the criminal behaviour.
“it is not meaningful to speak of a pattern of past sentences in the case of offences which are not frequently prosecuted and where a relatively small number of sentences make up the set”.
The Court went on to observe that comparable cases decided by intermediate courts of appeal provide the “most useful guidance to a sentencing judge”.
I have already referred to Moxon. TGH has also referred me to R v Leonard Properties [2019] QDC 209. Neither is particularly useful as a comparable case.
In the absence of a body of comparable intermediate appellate authority, my assessment must be based upon general sentencing principles with regard to the guidepost of the maximum penalty provided by Parliament and the s 16A(2) factors, as adjusted for corporations in the way explained by French J in CSR.
This, like all sentencing exercises, involves a process of synthesis weighing up all relevant factors, including, where applicable, those identified in the statute.
I have determined that the objective seriousness of the offending is significant. The risk to Australia’s national interest, many Australian farmers, the Australian economy, as well as the New Zealand economy, and many New Zealand farmers was not insignificant. The offending was a cynical exercise to increase the profitability of TGH without any care for the consequences to others. Against that, there really is not a strong subjective case for TGH.
The maximum penalty of fines dictated by the legislation demonstrates the seriousness with which the community, through Parliament, views this type of offending. The amendments to the legislation in 2017/2018 increased the penalties, perhaps emphasising that significance, although perhaps that was just a catch-up for inflation. I have treated it as such, and kept the fines in the two periods proportionate.
All I can do is fine TGH. I am satisfied TGH is a large, well-established, and successful corporation. In order for there to be adequate punishment, I need to impose a fine that will actually have a punitive effect on TGH, not just to specifically deter TGH from further offending, but to send a clear message of general deterrence to any others in the community who may be considering similar offending.
Apart from a lack of any history of criminal offending, TGH has put nothing of substance before me of a subjective nature to mitigate the objective seriousness.
On behalf of TGH, it has been submitted that appropriate fines of the six offences would be $35,000 each, which ought be increased to $50-$75,000 for sequences 3 and 5, to take account of the s 16BA offences.
TGH thus submits that it ought be fined a total of $140,000 for the four offences, to which s 16BA offences are not attached, and between $100,000-$150,000 for the two offences to which they are attached, thus arriving at a total of between $240,000-$290,000, from which TGH submits a discount of 20% for the guilty pleas are appropriate. As I have already explained, I propose to deduct a discount of 10%. I do not agree with the suggestions as to penalty put forward by TGH. I think the objective seriousness and the need for general deterrence and adequate punishment demand a significantly greater penalty than is suggested.
I consider that, in relation to counts 1, 2, and 3, an appropriate fine is $135,000 for each and for counts 4, 5, and 6, $155,000 each. Counts 3 and 5 should be increased to $225,000 and $245,000 respectively, to take account of the s 16BA matters.
I have arrived at each of those fines, after deducting 10% for the utilitarian value of the guilty pleas, with some rounding in favour of TGH.
My orders are as follows:
For sequence 1, the Offender is fined $135,000.
For sequence 2, the Offender is fined $135,000.
For sequence 3, taking into account the s 16BA matters, the Offender is fined $225,000.
For sequence 4, the Offender is fined $155,000.
For sequence 5, taking into account the s 16BA matters, the Offender is fined $245,000.
For sequence 6, the Offender is fined $155,000.
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R
The Grape House Pty Ltd [2025] NSWDC 304
(2002) 56 NSWLR 146
(1993) 32 NSWLR 683
(2004) 78 ALJR 616
(1995) 129 ALR 546
(2015) 256 CLR 550
(2004) 59 NSWLR 284
I am satisfied beyond reasonable doubt that the offending took place for the purpose of the financial benefit of TGH. How much that gain was I do not know, whatever it may be, I am satisfied that there was some financial gain.
TGH submits that it has not been demonstrated that any fruit flies were ever involved and thus there was no risk of fruit flies being exported to New Zealand.
The first proposition is correct, but only by a stroke of good fortune, and the second is wrong.
These arrangements are designed to reduce the risk of pests being transferred across borders into countries which do not have those pests. The fact that the conduct before me has not been shown to have had that effect is lucky for all concerned but does not mean there was no increased risk. It is not for me or TGH to second guess the Australian government’s designation of areas which have or do not have fruit flies.
Australia's reputation in having solid biosecurity arrangements in place for exported products is important for the country, not just for farmers, but for Australia's economy generally. Any break down in compliance with these types of arrangements harms Australia’s national interest.
It is also beside the point to observe that, even if all the appropriate arrangements are scrupulously put in place, there will always be a risk of fruit flies escaping the jurisdiction. That is true, but I do not really understand how such a submission assists TGH. On that logic, there is no need for such arrangements at all. The clear object of the regime is two-fold. The first is to obtain access for Australian growers to the New Zealand market and the second is to free growers from fruit fly pest-free-areas in Australia from the cold storage requirement. If New Zealand lost faith in Australia’s compliance with these arrangements, there is every chance of Australian growers in fruit fly pest-free-areas losing the economic advantage that status currently brings them.
Finally, TGH submits that the amount of grapes, the subject of the charges, is relatively small, amounting to about 2% of TGH’s exports for a financial year.
Overall, TGH has submitted that the offending ought to be found in the low mid-range in terms of seriousness.
There are very few comparable cases to assist me.
The quantity of grapes and amount of exports involved is large, even if it is a relatively small amount of TGHs export quantities. This is because TGH is the largest exporter of table grapes in Australia. The offending was obviously planned and occurred over a long period of time. The only rational reason for the offending was to advantage TGH’s financial bottom line.
The offending risked New Zealand's biosecurity as well as Australia's reputation, which could have, but luckily did not, cause significant financial harm to both the New Zealand and Australian economies and also individual farmers within both countries.
I regard the objective seriousness of the offending as significant.
The total fine is $1,050,000, which I consider to be the appropriate and proportionate total punishment for the overall criminality involved. It is intended to be sufficient to deter repetition by TGH and by others who might be tempted to offend in similar ways.