R v Vellinos [2001] VSCA 131

Court of Appeal (Vic)|2001-08-15|Before: WINNEKE, P., BROOKING and BUCHANAN, JJ.A.

Criminal law - Sentencing - Appellant engaging in purchase and sale of tobacco products in fraud of the revenue - Orders for forfeiture and pecuniary penalties made against appellant - Whether sentence of 3 years with release after 21 months excessive - Whether judge in error in failing to regard charges under the Excise Act (Cth) as appropriate method of proceeding against appellant -

R. v. Liang & Li (1995) 82 A.Crim.R.39 referred to - Sentence not manifestly excessive.

On 30 November 2000, the appellant pleaded guilty in the County Court to an indictment alleging that between 1 June 1998 and 8 June 1999 he defrauded the Commonwealth, contrary to s.29D of the Crimes Act 1914 (Cth) by manufacturing and distributing tobacco so as to preclude payment of excise duty otherwise due. The maximum penalty at the relevant time was fixed at 10 years' imprisonment. Following a plea in mitigation of penalty, his Honour, on 8 December 2000, sentenced the appellant to three years' imprisonment and ordered that the appellant be released on a recognisance release order after serving 21 months of that term. His Honour also made, with the consent of the appellant, forfeiture of property orders and pecuniary penalty orders under the Proceeds of Crimes Act 1987 (Cth). Pursuant to leave, the appellant has appealed against his Honour's sentence upon a number of grounds, to which I shall return.

The appellant, who was 48 years old at the time of sentence and who had no previous convictions, was alleged to have engaged in the systematic defrauding of the revenue over a 12-month period by purchasing tobacco from growers and either on-selling it in bulk to customers in various States or cutting and processing it and selling it in its processed form. The manufacture and sale of tobacco is strictly regulated by Commonwealth legislation and is subject to payment of an excise duty under the Excise Act (Cth). For the purpose of sentencing, it was agreed that the duty evaded as a result of the appellant's fraud exceeded the sum of half a million dollars. Although his Honour was sceptical that this amount adequately reflected the gravity or extent of the fraud perpetrated by the appellant, he nevertheless stressed that for the purpose of imposing penalty he was bound by that agreed sum.

The appellant had first come under the notice of the revenue authorities in July 1998 when a vehicle which he was driving had been intercepted fortuitously on a country road with some amounts of tobacco in the boot. Thus commenced a protracted surveillance of the appellant's activities, including telephone surveillance. The surveillance revealed the extensive business being conducted by the appellant from premises in Lalor, where he resided with his family as an unemployed pensioner. When finally, in June 1999, warrants were executed by officers of the National Crime Authority, the Australian Federal Police and the Customs Service at various premises, many hundreds of kilograms of tobacco leaf and other tobacco product were seized, as were eleven "cutting machines" and eleven "pressing machines" used in the process of refining tobacco leaf for distribution. These machines were identified as being constructed upon orders from the appellant.

Not surprisingly, the trial judge found that the appellant was involved in what he described as a far-reaching and extensive distribution of untaxed tobacco leaf, and that his business in the product was both "substantial and significant". He was unpersuaded by submissions made on behalf of the appellant by counsel before him that any prison sentence imposed should be wholly suspended. In his Honour's view, having regard to what he described as the "systematic, deliberate arrangement" of the appellant "which preyed upon growers and customers alike", any punishment less than immediate imprisonment was out of the question.

On this appeal, Mr Lyon, who appears for the appellant, challenges his Honour's conclusions on a number of bases, most of which, if I might say so, suggest error on the part of the judge in failing to accept matters which were put to him and to give them sufficient weight. The grounds are manifold and reveal, again if I might say so, more a sense of hope than they do realistic expectation. In summary form, the grounds allege error in the sentencing process in the following respects:

(1) Erroneous findings of fact with regard to the volume of tobacco distributed, the excise avoided and the profit made.

(2) Failure to give proper weight to the plea of guilty.

(3) Failure to give sufficient weight to the forfeiture and pecuniary penalty orders and the appellant's consent thereto.

(4) Failure to give proper weight to the prior good character, lack of convictions and motivation for offending.

(5) Failure to give adequate weight to the appellant's cooperation with authorities.

(6) Failure to give adequate weight to the fact that the authorities tolerated the appellant's criminal behaviour for too long a period.

(7) Failing to pay any sufficient regard to s.120 of the Excise Act (Cth) in fixing the penalty.

(8) Imposing a sentence which in all the circumstances was manifestly excessive.

The grounds extended to an initial assertion that the learned judge had failed to pay sufficient regard to s.16G of the Crimes Act (Cth), which requires the court in sentencing for an offence against the Commonwealth to have regard to the fact that remissions have been abolished in this State. This ground has not been pursued.

The vast majority of the grounds pursued are really particulars of the final ground, that the sentence imposed is manifestly excessive. This I think must necessarily be so because those grounds were the subject of particular emphasis by the appellant's counsel on the plea and specific attention by the judge in his sentencing remarks. Thus the judge said that he had paid attention to, and given credit for, the early plea of guilty, the appellant's consent to forfeiture and pecuniary penalty orders, and the fact that the appellant was a man of hitherto unblemished criminal record. His Honour referred to the appellant's submission that he was entitled to sentencing consideration for his offer of cooperation to police and to his personal circumstances, which included his age, his efforts for his family, his difficult background, his desire to build a life and home for his family, and the shame which he had brought to it. His Honour had also been urged to take into account the fact that the authorities had continued their surveillance for too long and had prejudiced the appellant by failing to, as it were, "nip his operation in the bud" at an earlier point in time.

Before this Court, Mr Lyon submitted that the ultimate penalty imposed by his Honour indeed reveals that he has failed to pay proper regard to these sentencing factors. As I understood him, the essence of the argument was that his Honour had treated legitimate matters of mitigation more as a "check list" which did not reflect their true value in the sentences which were imposed. There was nothing, it was said, about the conduct which called for what his Honour had said was "condign punishment". Particular emphasis, it was said, should have been given to the devastating effect of the forfeiture orders to which the appellant had consented, an effect which was underscored by the evidence given to the learned sentencing judge by the appellant's daughter.

Mr Lyon relied upon his complete and articulate outline of written submissions which had been provided previously to the Court. The Court has read those submissions and has taken them into account in disposing of this appeal. One can readily glean from these submissions that the appellant's complaint with respect to the sentence imposed is that, whilst "making the right noises", his Honour has significantly over-estimated the criminality of the appellant's offending. Notwithstanding the attractiveness of some of these submissions made by Mr Lyon, I must say that for my own part I remain unpersuaded of any of the grounds of appeal, whether considered alone or in combination. They do not demonstrate to me that the sentence which his Honour imposed is manifestly excessive. The definition of error in this regard is largely an appeal to the intuitive processes of the Court, and requires an instinctive satisfaction that the sentence imposed is well beyond what reasonably could have been imposed having regard to the nature and gravity of the crime and the criminality which is displayed by it. The sentence imposed here does not, in my view, come close to meeting those criteria. I think his Honour was correct to regard this crime as a serious, deliberate and protracted fraud on the revenue, carried out in a manner which demonstrated significant criminality on the part of the appellant. I am not in doubt in describing the offence as one which justly required a term of immediate imprisonment. The term which his Honour set does not suggest to me that insufficient regard has been paid, or weight given, to the various factors to which counsel has referred, including the fact that the appellant has been required, and has consented to, the consequential pecuniary orders which have now been made against him. The consequences of those orders are, and will potentially be, a heavy burden on the appellant and his family and, accordingly, a factor required to be given weight in the sentencing process. But they do not expiate the seriousness of the crime, nor can they totally relieve the appellant from just punishment for it. It seems to me to be a little fatuous for the appellant to be, in a sense, blaming the authorities for his plight, on the ground that they failed to bring his criminal venture to an earlier conclusion. As Mr Lyon properly said in this Court, that is not the strongest point of appeal. Nor, as I see it, is there anything in the sentence imposed which reflects a lack of regard for the appellant's early plea of guilty, the fact and nature of his offer of cooperation, and his personal circumstances.

There were two particular grounds argued which were calculated to suggest particular error on the part of the judge. Firstly, it was said that his Honour had made an error of fact by describing estimates of the appellant's profits and the extent of his evasion of duty as "nonsense". It was further contended that even though his Honour claimed to be bound by "the sum agreed", the scepticism revealed by his sentencing remarks had undermined his assessment of the significance of the fraud. I am afraid I cannot agree. In the first place, there was no material error of fact involved. His Honour made comments reflecting his views on the method of assessment of the revenue loss. That was a matter appropriate for comment, but it did not become material to the sentencing process, which was based on the agreed figure. Nor is it apparent to me that the views expressed by his Honour have influenced him into a misconception or miscalculation of the gravity of the appellant's fraud, because, as I have said, he accurately described the crime as a well organised, ongoing and extensive criminal enterprise, one which was deliberate and systematic, and it was an arrangement preying upon the greed and avarice of both growers and customers alike. It was a crime in which general and specific deterrence as purposes of punishment were bound to play a prominent role in the assessment of the appropriate penalty.

The second specific error which the grounds attribute to his Honour was his failure to have proper regard, in mitigation of penalty, to the fact that it would have been more appropriate for prosecuting authorities to have proceeded against the

appellant pursuant to the provisions of the Excise Act. In support of that proposition, counsel has called in aid a little-used, but none the less significant, sentencing principle of fairness, namely, that the prosecuting authority, whilst possessing an unchallengeable right to frame its presentment in whatever manner it thinks fit, cannot thereby preclude the sentencing tribunal from mitigating the penalty if it concludes that the charges alleged exposed the prisoner to a more punitive regime of sentencing than that to which he ought reasonably have been exposed by the preference of charges more appropriate to the crimes alleged. This was the principle applied in Liang & Li[1]. It had been submitted to the sentencing judge that the principle was apt to be applied in the circumstances of this case. His Honour did not agree, and it is now said that his Honour failed to pay proper regard to that sentencing principle. In my view his Honour was quite correct to disregard the principle in the circumstances of this case. The gravamen of the appellant's conduct was his deliberate and sustained fraud upon the revenue, the type of fraud at which the offence created by s.29D of the Crimes Act is traditionally and conventionally aimed. The summary provisions of s.120 of the Excise Act would be singularly inapt to identify and punish the sustained and calculated fraud against the revenue perpetrated by this appellant's conduct. A mere glance at the circumstances of the case of Liang & Li would be sufficient to indicate that the sentencing principle to which it refers can have no application to the circumstances of this case.

For the reasons stated, I am satisfied that none of the grounds of appeal have been made good, and I would dismiss the appeal.

The formal order of the Court is that the appeal against sentence is dismissed.

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