Regina v Walsh

LOWER COURT District Court JURISDICTION : LOWER COURT 03/11/0113 FILE NUMBER(S) : LOWER COURT Christie DCJ JUDICIAL OFFICER :

IN THE COURT OF CRIMINAL APPEAL 2004/1737

SULLY J HIDDEN J HOWIE J

WEDNESDAY 8 DECEMBER 2004 REGINA v KERRY MICHAEL WALSH Judgment 1 SULLY J: I agree with Howie J. 2 HIDDEN J I agree with Howie J. 3 HOWIE J: On 11 July 2003 the applicant was arraigned in the District Court on an indictment containing ten counts alleging that he had defrauded the Commonwealth contrary to s 29D of the Crimes Act (Cth). Each offence carried a maximum penalty of imprisonment for 10 years. Each of the charges related to dishonest conduct in relation to the applicant's payment of income tax both on his personal income and that of a company of which he was a director. On his pleading guilty to four of those charges, the Crown accepted the pleas in discharge of the indictment. 4 The applicant was next before the District Court on 24 July 2003 when he appeared before Judge Christie QC for sentence. On that date the Crown tendered an agreed statement of facts, evidence was led on the applicant's behalf and counsel addressed. The matter was then stood over to the 30 July 2003 when Christie DCJ imposed sentence upon the applicant as follows:

(a) Count 6 imprisonment for 3 years 6 months with a non-parole period of 18 months to date from 24 July 2003;

(b) Counts 1 and 3 fixed term of imprisonment of 3 months to commence on 24 January 2005 and expire on 23 April 2005;

(c) Count 2 fixed term of imprisonment of 3 months to commence on 24 April 2005 and expire on 23 July 2006.

This was an effective sentence of imprisonment for 3 years 6 months with a non-parole period of 2 years to date from 24 July 2003. The applicant is eligible to be released to parole on 23 July 2005. 5 On 18 December the matter was returned to Judge Christie for a correction of the sentence. It was contended that His Honour had failed to comply with s 19A of the Crimes Act (Cth) in that he had failed to fix an overall non-parole period. Consequently, while not conceding the error, his Honour re-sentenced the applicant as follows:

(a) Count 6 imprisonment for 3 years to date from 24 July 2003 and to expire on 23 July 2006;

(b) Counts 1 and 3 fixed terms of imprisonment for 3 months concurrent with each other but cumulative on Count 6;

(c) Count 2 a fixed term of imprisonment of 3 months cumulative upon Counts 1 and 2;

(d) A non parole period of 2 years from 24 July 2003 and to expire on 23 July 2005. 6 The principal ground of appeal argued by the applicant is that there is fresh evidence that should be admitted by this Court that reveals that his Honour sentenced the applicant upon a false factual basis on count 6. In order to understand this ground it is necessary to refer to the facts that were placed before his Honour and upon which he sentenced the applicant. 7 The applicant and another person were directors of a company named Thermal Power Systems Pty Limited ("TPS"). The applicant, through two other wholly owned companies, owned a 50 per cent share in the company. TPS operated an 'undisclosed' bank account, in addition to its trading accounts, into which income of the company was deposited. Funds in this account were not declared in taxation returns but were distributed (at least in part) to the appellant. 8 The allegations in the counts on the indictment, to which the applicant pleaded guilty, were as follows. Count 1 related to an understatement by the appellant in his personal tax return for 1995 of income totalling $142,422.00 received from bank accounts operated by TPS and applied by him for private use. Count 2 related to an understatement of income in his personal tax return for 1996 of $647,670.00 received from the undisclosed TPS account, the transfer of a term deposit held in the name of the company into his own name, and other payments made from a TPS account and applied by him for his private use. Count 3 related to understatement of income in his personal tax return for 1997 of $220,701.00 received from the undisclosed account, from the account of a related company and from another TPS account. 9 Count 6 related to the 1966 tax return of TPS that the applicant had signed on behalf of the company. The Crown's allegation was that the return was false in that it contained an understatement of income of $1,515,506.00 received by the company from Lend Lease, deductions claimed for expenditure by the company but spent on the private purposes of the appellant and the application of funds to a fellow director's house purchase which were falsely claimed as a deduction by the company. 10 In respect of that part of count 6 which is relevant to the issues raised in the appeal, paragraphs 55 and 56 of the summary of facts stated as follows:

55. TPS also received the following additional payments from a contractor during the 1996 year:

43473 10/4/96 $343,907.00 455261 24-4/96 $679,844.00 $1,023,844.00

56. These cheques were not deposited into the TPS bank account number 50 930 0161 (the trading account) or the undisclosed account. The general journal entries of TPS for the 1996 financial year had no record of these payments being received. The offender through TPS failed to disclose this business income in the sum of $1,023,751.00 in its 1996 company income tax return. 11 As has already been indicated, no objection was taken to the statement of facts and no dispute arose in relation to the allegations contained in count 6 during the sentencing hearing. However, it is now contended that the facts were in error because the Crown had not proved that the two Lend Lease payments had been received by the company and evidence, becoming available to the applicant after sentence, indicates that the cheques were not received by TPS. Therefore, the argument runs, his Honour erroneously found that the offence in count 6 was the most serious by reason of the amount of money involved and sentenced the applicant on a false factual basis: that the amount the subject of the charge was $1,515,506.00 rather than $491,855. 12 The fresh evidence is principally a report from a firm of accountants, Anthony Carmody & Associates, dated 4 May 2004. The substance of the report is that, after examining all the known accounts of TPS and the private accounts of the applicant and others, the accountant was unable to find any record of the receipt of the two cheques from Lend Lease. The applicant has also made an affidavit in which he stated that he did not receive the cheques. This affidavit was filed in answer to Crown submissions commenting on the absence of that evidence. 13 Evidence of events occurring after sentence will be admitted by this Court, whether that evidence be fresh or new, where the absence of that evidence before the sentencing court has led to a miscarriage of justice. There are decisions of this Court setting out the pre-conditions that should be shown to exist before the evidence will be received, but those pre-conditions are merely examples of situations in which the Court may find that a miscarriage of justice has arisen. See R v Goodwin (1990) 51 A Crim R 328 at 330 and R v Fordham (1998) 98 A Crim R 359 at 377-378. 14 The applicant in the present case does not resile from his plea of guilty to count 6 but now seeks to contest the factual basis for that plea. It is said that a miscarriage of justice arose because his Honour dealt with count six as if it were the most serious matter to which the applicant pleaded and determined that the sentence for that offence should in effect be the head sentence to be served by the applicant for the total criminality for which he was before the court. It is submitted in effect that the sentence for count 6 should be reduced to accord with the criminality reflected in the offence charged without the allegation that the company had failed to disclose the receipt of the Lend Lease cheques. 15 In my opinion the fresh evidence should be rejected on the basis that it does not reveal that a miscarriage of justice occurred. The history of the proceedings is important in reaching this conclusion. The applicant was committed for trial on 10 counts of defrauding the Commonwealth, including what became count 6 on the indictment. He appeared in the District Court on 11 July 2003 before the Chief Judge. He was legally represented on that date and pleaded guilty to the four counts when arraigned. It should be noted that the trial of the committal charges was due to commence on 14 July 2003 and the appellant was represented by Senior Counsel experienced in the criminal law. 16 The matter then came before Judge Christie on 24 July for sentence. On that date a statement of facts was admitted by consent, although Senior Counsel who appeared for the applicant at the sentencing hearing raised with his Honour two matters contained in the facts that were disputed. Neither of those matters relates to the factual issue to which the fresh evidence refers. Evidence was adduced on the appellant's behalf, and the matter was stood over to 30 July 2003, the date upon which the appellant was sentenced. The matter was again before Judge Christie on 18 December 2003 when the appellant was re-sentenced. 17 In an affidavit placed before this Court the appellant states:

When I was at Court with my barrister and solicitor, the DPP/ATO were applying for a further extension. A proposal was offered to my solicitor and he advised me to plead guilty and that would be the best result for me. I was not given much time to think about it or discuss the decision with my family. I pleaded guilty.

I know that I am guilty of most of the things, but I was confused in relation to Count 6 and the two (2) cheques. I had previously written on four (4) occasions to the investigating officers of the Taxation Department requesting particulars of the two (2) cheques but I never received a reply to those written requests at all. I then got my new solicitor to investigate the matter. 18 Even accepting that the applicant may have been taken somewhat by surprise by the offer on 11 July 2003 and may have had little time to consider his position before pleading guilty to four of the ten counts, there was ample opportunity for him to have considered the appropriateness of the pleas before sentence was imposed on 30 July. Further, if the two cheques allegedly received by the company from Lend Lease had troubled him to the extent that he was trying to have the matter cleared up with investigators, it is surprising that this was one of the counts to which he was prepared to plead guilty. He could not have been unaware that the most serious charge to which he was being asked to plead guilty, as part of the bargain reached with the Crown, was Count 6 or that the substantial part of the fraud alleged by that charge involved the two Lend Lease cheques. There is no evidence as to why it was that the appellant was prepared to put aside his concerns about these cheques until after sentencing but should raise them again many months later. 19 In any event, the fresh evidence is not inconsistent with the way in which the Crown alleged the offence had been committed for the purpose of the appellant being sentenced. The Crown case was that the company had received the Lend Lease cheques even though the prosecution could not establish into which account the cheques had been paid. It was never suggested that the cheques were paid into the company's undisclosed account or any other account of which the Crown was aware. The evidence of the accountant now placed before the Court merely confirms that this was the case. 20 In my opinion the fresh evidence does not suggest that a miscarriage of justice has occurred such as to warrant this Court permitting the appellant to withdraw a plea of guilty apparently voluntarily given and with a full appreciation of the nature of the charge to which the plea related. It has never been suggested that the appellant did not understand that the plea to Count 6, in light of the facts presented to the court, acknowledged his guilt in respect of the two cheques or that he did not apprehend that he would be sentenced on the basis that he acted fraudulently in relation to them. 21 The other grounds relied upon on behalf of the appellant assert that in a number of ways Judge Christie erred in determining the sentence he imposed and that the sentence was manifestly excessive. They can in my view be dealt with relatively briefly. It was submitted that his Honour failed to give sufficient consideration to the following matters relevant to the subjective considerations present in sentencing the appellant: the appellant's contrition; his assistance to the authorities; his payment of the outstanding tax and penalties levied by the Tax Office; his age and health. The difficulty with this argument is that his Honour referred to these matters appropriately during his remarks and, therefore, whether proper weight was accorded to them can only be determined by a consideration of the sentence imposed. 22 It was also submitted that the sentencing judge failed to give proper weight to the delay in the matter being investigated and then prosecuted. No mention was made of this matter during the course of his Honour's remarks but this is no doubt because counsel for the appellant indicated to his Honour that he could not submit that there was any significant delay. In any event, although delay can be a relevant factor in sentencing, the importance of that matter will depend largely upon the seriousness of the offence for which sentence is being passed and the effect of the delay upon the offender. In my view the concession made by the appellant's counsel during the sentencing proceedings was appropriate and there was no error in his Honour acting upon it. 23 It was argued that his Honour failed to give sufficient regard to the effect of the imprisonment upon the appellant's wife and children. Further material in that regard was placed before this Court presumably upon the basis that it might be relevant were this Court required to re-sentence the appellant. The evidence reveals no more than what might be expected as a consequence for the appellant's family of the gaoling of a loving husband and a caring father. No sentencing court can be unaffected by those consequences but the law is clear and unless they are exceptional they cannot be taken into account to permit departure from a sentence otherwise appropriate. 24 Finally, it was argued that there was insufficient weight given to the plea of guilty. His Honour did not indicate the amount by which he was reducing the otherwise appropriate sentence because of the plea of guilty as evidencing the willingness of the appellant to assist the administration of justice. There was, however, no requirement upon him to do so. His Honour did say:

The prisoner entered a plea of guilty at what was conceded was the earliest opportunity, as I understand it, and as I say the Crown accepted the plea of guilty in respect of these matters in discharge of the indictment.

In fact there was no concession that the plea of guilty was entered at the earliest opportunity. To the contrary, the Crown submitted it was not an early plea, and defence counsel accepted that it was not. The plea was entered three days before a trial was to commence. 25 In my opinion there has been no error shown in the sentencing remarks; and, having regard to the seriousness of the criminal activity reflected in the charges and the need for general deterrence in respect of taxation fraud, the sentence was a moderate one. 26 I propose that the appeal against conviction be dismissed. Leave to appeal against sentence should be granted but the appeal should be dismissed. **********

Last Modified: 12/09/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.