Regina v William John Walters

The Requirements of Part 1B: Generally 12 Section 16A(1) requires that the sentences now to be passed be "of a severity appropriate in all the circumstances" of the offences. Section 17A(1) requires that a Federal offender is not to be sentenced to imprisonment unless the sentencing Court "after having considered all other available sentences, is satisfied that no other sentence is appropriate in all the circumstances of the case". 13 In the case of the present prisoner it was not submitted by learned counsel appearing for him that there was any available penalty other than appropriate sentences of imprisonment, that might satisfy the just requirements of the present case. That was, in my opinion, a correct and sensible stance. The course of events as I shall presently describe them; the magnitude of the loss to the public revenue; the proper denunciation of the offences; and the proper requirements of deterrence, both general and particular; put beyond any reasonable challenge the need for some properly crafted sentences of full-time detention. 14 Such sentences, when duly imposed, will be served in this State. Because there is no system of remissions or reductions in this State, it is necessary to adjust the sentences on that account, and in conformity with the explicit requirements in that behalf of section 16G. It is now a well settled principle of sentencing law and practice in this State that an adjustment in the order of one-third satisfies the statutory requirement. 15 The framing of appropriate sentences in the present case entails consideration of the propriety of including in the sentences provision for a non-parole period. A non-parole period is defined in section 16(1) as "that part of the period of imprisonment ……………….during which ……………..(the person sentenced) ………is not to be released on parole ……………". Section 19AB(2) gives a sentencing Court a discretion to decline to set a non-parole period should the Court think such a course to be justified "having regard to the nature and circumstances of the offence or offences concerned and to the antecedents of the person ………………". In the case of the present prisoner it suffices to say that I see no reasonable basis upon which it would be proper to deny to the prisoner the encouragement, and the other advantages, given by the fixing of a non-parole period. No submission was put to the contrary. 16 And, finally, sections 16B(a) and 19 of the Act authorise in the present case, and put simply, cumulative, partly cumulative, or concurrent sentences. The practical application of sections 16B(a) and 19 in the present case is linked to the principles established by the decisions, earlier mentioned, in Mill and in Pearce.

The Requirements of Part 1B: Objective Criminality 17 Section 16A(2) lists a number of matters which a sentencing Court must take into account in so far as they are "relevant and known to the court". The list is inclusive and not exclusive; but it touches upon various objective, and various subjective, factors; and it is, thus, a convenient framework for the particular discussion of the prisoner's case. I shall note in turn each relevant paragraph of section 16A(2), and deal with that paragraph. It is convenient to note that paragraphs (d), (g) and (h) have no application in the present case.

(a) The nature and circumstances of the offence 18 At all material times the prisoner was a bricklayer. The available evidence establishes clearly that he was good at his trade. He had an established connection with the developers behind the Meriton apartment developments, being one of only two bricklaying contractors regularly engaged by those developers. The scope, and the value in dollar terms, of that established connection are usefully illustrated by the details contained in a trial exhibit, which is a schedule prepared by the Meriton developers. Exhibit D shows that between 1990 and 1998 payments aggregating some $34 million were made by the developers to various of the companies named in the indictment. 19 As might be expected, operations of such magnitude required the prisoner to employ large numbers of tradesmen. The evidence is that he never employed, over the years now relevant, less than 60 tradesmen; and that he sometime employed as many as 250. An average of 150 employees at any one given time seems to be a fair estimate. The prisoner seems to have been a good employer, paying good wages, maintaining as much as possible continuity of employment, and generally taking an appropriate interest in terms and conditions of employment. 20 Unfortunately for the prisoner, two conflicting but closely intertwined forces became predominant in his personal and business affairs. One was his aspiration to a very high standard of living. The other was the grossly disorganised manner in which he managed what was, on any reasonable reckoning, a major, successful and lucrative business enterprise. An off-shoot of that chaotic business management style was that the prisoner, although he made proper taxation deductions from the weekly pay packet of every employee, failed persistently to account as he was lawfully required to do to the Commissioner of Taxation for the group tax deductions which came into his hands. 21 The amounts involved were not trivial. The Crown's written submissions on sentence provide the following table showing in convenient form the relevant details: Count No . Company Period Amount 1 Lymkom Pty Ltd 1/89-4/90 (1 yr 4 mths) $500,230.42 2 Kindby Pty Ltd 2/90-7/93 (3 yrs 6 mths) $484,142.60 3 Frego Pty Ltd 5/90-6/93 (3 yrs 2 mths) $191,939.92 4 Taureema Pty Ltd 3/92-2/94 (2 yrs) $892,996.84 5 Budscan Pty Ltd 2/94-2/95 (1 yr 1 mth) $639,508.98 6 Milcoy Pty Ltd 2/95-1/96 (1 yr) $1,087,939.27 7 Camotray Pty Ltd 1/96-9/96 (9 mths) $559,397.65 8 Convoy Pty Ltd 9/96-6/97 (10 mths) $1,082,955.25 9 Aloprom Pty Ltd 7/97- 4/98 (10 mths) $1,701,760.28 10 AJ Australia Pty Ltd 4/98-5/98 (6 wks) $161,350.37

22 This analysis shows a total of $7,302,221.58 of unremitted group tax payments over a period of 9 years and 4 months. 23 The affairs of the ten named companies showed, upon analysis, a pattern of conduct on the part of the prisoner, which was the core of the Crown case against him at trial. In the case of each company, it was demonstrable that the prisoner had systematically drawn out for his personal use very large sums of money; that he had failed, just as systematically, to remit the amounts of group tax for which he was accountable to the Commissioner of Taxation; and that when a point was reached in the life of the particular company when it was clear that the company had no chance of paying its accumulated arrears of group tax, the company was wound down; and both its employees and its work in progress were simply transferred over to a new company. This approach entailed, of course, that the Commissioner of Taxation had no practical recourse against the remaining, asset-stripped, corporate shell. 24 Exhibit R at trial exhibits conveniently the extent to which the personal lifestyle drawings made by the prisoner related to the group tax deficits. Corporate Funds Applied to Personal Use as a Percentage of GT Liability Company Corporate Funds Applied Group Tax Liability % Lymkom $425,700 $500,203 85% Kindby-Frego-Taureema $1,870,210 $1,569,079 119% Budscan $508,981 $639,509 80% Milcoy $891,984 $1,087,939 82% Camotray $495,773 $559,398 89% Convoy $751,449 $1,082,955 69% Alopram-Taj $1,340,669 $1,701,760 79% AJ Australia-TAJ $79,599 $161,350 46%

25 The competing cases at trial came down, essentially, to a question of intent. The jury was directed that the Crown case on each separate count could be summarised as follows: "1. That the particular company failed to pay to the Commissioner of Taxation, as required by law, monthly amounts of group tax deducted from the gross wages of the various persons who were employed by that company during its operational lifetime. 2. That the failure of the company so to pay the lawfully required group tax continued in such circumstances as to entail that the Commissioner was left, not only unpaid, but without recourse to any company assets from the proceeds of which he could recover what he was owed by the company. 3. That such failure on the part of the company was dishonest. "Dishonest" in this context means dishonest according to the standards of honesty accepted in contemporary society by ordinary, decent people. The Crown case in that connection is that the company dissipated on other things monies that should have been remitted to the Commissioner in payment of group tax; and that such conduct was dishonest in the relevant sense because it was done in the knowledge and with the intention that the result of the dissipation of its funds would be that the Commissioner would not be paid sums lawfully payable to him on account of group tax. 4. That the accused had the effective control of the operations, and in particular of the financial affairs of that company. 5. That the accused knew, therefore, of the dishonest conduct of the company. 6. That the accused, having that knowledge, acted in such a way as assisted the accomplishment of the dishonesty of the company. At the heart of the Crown case is this question: Did the accused, as the person having the sole effective control of the financial affairs of the particular company, intend, between the dates charged in the relevant count of the indictment, that those affairs should be so conducted that the Commissioner of Taxation would be left without effective recourse to company assets in order to secure the payment of amounts of unpaid group tax to which he, the Commissioner, was lawfully entitled?" 26 The defence case which was put in response was, essentially, that the prisoner was a "big spender"; that he was carried away, but not dishonestly, by a desire for status and for status symbols; that he was hopelessly, but not dishonestly, entwined in chaotic corporate management; and that he genuinely did not grasp how dangerous a situation he was getting himself into in connection with group tax arrears. 27 There was in the Crown case at trial abundant evidence which, if accepted, justified a finding beyond reasonable doubt that the prisoner had been warned, clearly and repeatedly in the early days of his corporate history, that he simply could not go on as he was, drawing large personal sums, and not accounting, whether properly or at all, for group tax deductions. I think that it is a fair inference from the verdicts found by the jury that this body of evidence was in fact accepted. I myself would accept it unreservedly. 28 I am satisfied beyond reasonable doubt, and I infer that the jury was similarly satisfied, that, in the case of each of the ten relevant companies, it was well understood by the prisoner that he could not honestly and properly continue to fund his personal expenditures at the desired level, and meet simultaneously his group tax obligations; that he took the view that if something had to be sacrificed, it was not going to be a lifestyle to which he believed himself to be entitled by reason of his years of hard work in a dirty and demanding occupation; that if the upshot was that the Commissioner of Taxation did not get the group tax to which he was lawfully entitled, then that was too bad for the Commissioner; and that a dexterous corporate re-arrangement could neutralise effectively any adverse action by the Commissioner. 29 It is relevant to note, in this connection, that the prisoner did not give evidence at his trial. This meant, obviously, that there was no direct explanation from him as to his perceptions and their honesty. The contest at trial became, therefore, a contest of inferences; and the inferences adverse to the prisoner on the question of his relevant intent, and properly available to be drawn from the material in the Crown case, were in my opinion, and I infer in the opinion of the jury also, powerful, and ample to support a finding beyond reasonable doubt of the dishonesty, in the relevant sense, of the prisoner. 30 There is another feature of the prisoner's conduct which is, in my opinion, significant as to his objective culpability, namely, the fact that the moneys which he received, week by week, as income tax deductions from the pay packets of his employees were not, in any real sense, his private funds. They were amounts owed by the employees to the Commissioner of Taxation. As a matter of convenience to the employees themselves, to the prisoner as their de facto employer, and to the Commissioner of Taxation, the deductions were allowed by the Commissioner to be collected by the prisoner through his companies, but on the basis that the deductions for any given month would be paid to the Commissioner by the seventh day of the following month. Such arrangements, if they are properly and honestly implemented, benefit all concerned. But fundamental to such a scheme is an assumption that it will be in fact properly and honestly administered. The deductions might not have been, in a pedantic legal sense, trust funds in the hands of the prisoner; but they were certainly funds as to which both his employees and the Commissioner of Taxation trusted the prisoner, as de facto employer and as the mind and will of the relevant company, to account properly and honestly. 31 There is, of course, a legitimate and more public interest at stake in any matter having to do with the imposition and the payment of any form of taxation; but it will be more convenient to deal later with that aspect.

(b) Other offences that are permitted to be taken into account 32 There are five such offences, all of which have to deal with breaches, or in one case an attempted breach, of a restraining order made on 13 May 1998 pursuant to section 43 of the Proceeds of Crime Act 1987 (C'wealth). Each such offence contravenes section 52(1) of that Act, and attracts upon conviction a statutory maximum fine of $10,000 or a statutory maximum sentence of imprisonment for 5 years, or both fine and sentence. In the present case there is no prospect that the prisoner will be able to pay a fine. In any event, the relevant facts as set out in the Statement of Facts forming part of Exhibit B on sentence, reveal in my opinion deliberate, not to say contumelious, offences as to each of which some appropriate full time custodial penalty should be imposed. It is true that the prisoner gave as an explanation, which I infer that he intended to apply to all five matters, that he had used the proceeds of the four completed sales, and would have used the proceeds of the attempted fifth sale, to pay "general living expenses" for himself and for his young son. 33 I propose to bring these matters to account, not in a precisely quantified calculation, but by regarding them in a more general way as adding to the overall culpability of the prisoner; and by structuring the sentences to be passed for the ten indicted offences in a way that reflects the combined overall culpability of those ten offences and of the five additional matters.

(c) If the offence forms part of a course of conduct consisting of a series of criminal acts of the same or a similar character - that course of conduct 34 I need not add to what I have previously written.

(e) Any injury, loss or damage resulting from the offence 35 I shall deal with this matter in the section immediately following.

Objective Culpability: Conclusions 36 I do not see any useful purpose to be served in the present case by an extended consideration of the question whether the offences of the prisoner come within what is conventionally described as "the worst kind of case". It is rarely possible to go into that question without becoming enmeshed in inexact, and therefore unhelpful, comparisons. 37 It is better, I believe, to say simply that the ten principal offences were all objectively culpable in high degree. They entailed a systematic dishonesty which has cost the public revenue some $7 million. That dishonesty continued for 9 years and 4 months; and the objective criminality of that dishonesty must be regarded, on a sensible view, as having become progressively worse as time passed, and as it became, therefore, progressively more implausible to mitigate the dishonesty by putting it down to organisational inefficiency, and to merely fortuitous, but unfortunate, personality traits. 38 There is the further consideration that any system that is acceptable in a free society for the imposition and collection of any form of taxation rests, and can only rest, to a large extent upon the honest compliance of every individual tax payer. It is not a criminal offence to resent the current level of taxation; or to protest lawfully against it; or to agitate lawfully for relevant reform. It is a criminal offence deliberately to flout the current requirements of taxation law. The latter attitude, if not checked with all appropriate and lawful firmness, will undermine the public finances. No intelligent and responsible citizen, and certainly no Court charged with upholding the rule of law, can countenance such a prospect.

(f) The degree to which the person has shown contrition for the offence; (i) by taking action to make reparation for any injury, loss or damage resulting from the offence; or (ii) in any other manner 39 As noted previously, the prisoner did not give evidence at trial. Neither did he give evidence at the subsequent proceedings on sentence. The result is a total absence of any indication from the prisoner that he accepts, in a sensibly balanced and focused sort of way, that he did in fact break the law, and break it seriously and persistently. 40 I take this to entail that he is not to receive now any leniency of the kind that is normally given by a sentencing Court as a practical acknowledgment of genuine contrition. It is, of course, necessary to bear in mind that any sentence which is otherwise appropriate is not to be increased simply because there has been no appropriate contrition shown by the prisoner.

(j) The deterrent effect that any sentence or order under consideration may have on the person

( k) The need to ensure that the person is adequately punished for the offence 41 It is convenient to deal with these two matters together. 42 The previous discussion in connection with my conclusions as to objective culpability is applicable to these two subjective matters; and I will not repeat it. 43 It is relevant to note, also, the element of general deterrence. That is not one of the matters enumerated in the section 16A(2) list; but it is certainly a relevant consideration for present purposes. In that connection, also, I need not add to what I have previously written.

(m) The character, antecedents, cultural background, age, means and physical or mental condition of the person 44 The prisoner was born on 7 October 1945. He is now aged, therefore, 55 years and not quite 10 months. There is no evidence to suggest that he is impaired either physically or mentally. He has criminal antecedents, the details of which are noted in Exhibit A on sentence. They entail that he cannot now be treated as a first offender; but they have no other adverse consequences for present purposes. They do have, however, one positive feature, namely, that the latest of those antecedent matters occurred almost 31 years ago. This means that, his present troubles to one side, the prisoner has been, since 1970, a hard working, and apparently responsible, citizen. It is, in community terms as well as in purely personal terms, sad to see the prisoner brought to his present pass by his disdain for his obligations as a tax payer.

(n) The prospect of rehabilitation of the person 45 It suffices to say that, as best I can judge the fact from the sparse evidence available to me, I believe that the serving of the sentences now to be imposed, coupled with proper post-release parole assistance, should ensure that the prisoner will not repeat the offences for which he is now to be sentenced.

(o) The probable effect that any sentence or order under consideration would have on any of the person's family or dependents 46 The prisoner has a young son born in 1994. The boy's mother died early in 1995. The prisoner's daughter has previously cared for the child; and arrangements are in hand either for her to continue to do that, or for the care of the child to be undertaken by another family friend who is available if needed. 47 It would be wrong to brush aside, as it were, the effect that the prisoner's incarceration must have, in the nature of things, upon a child of not quite 7 years of age. It is, however, the fact that there is very little that the Court can properly do in that regard. Certainly, the Court cannot reduce on that account, and in a precise and significant way, sentences otherwise appropriate.

(p) Section 16A(3): The nature and severity of the conditions that may be imposed on, and may be applied to, the offender, under ……………(any proposed) ……………..sentence or order 48 There is no evidence enabling me to make any findings about these matters, except to say that there do not appear to be any characteristics personal to the prisoner, except perhaps the bare fact of his age, that are likely to exacerbate in a particular way the ordinary incidents of full-time imprisonment.

Structuring Sentences: The effect of the decisions in Pearce and in Mill 49 As to the decision in Pearce, it is sufficient to quote the following passage from paragraphs 45, 46 and 47 of the joint judgment of McHugh, Hayne and Callinan JJ: "To an offender, the only relevant question may be 'how long', and that may suggest that a sentencing judge or appellate court should have regard only to the total effective sentence that is to be or has been imposed on the offender. Such an approach is likely to mask error. A judge sentencing an offender for more than one offence must fix an appropriate sentence for each offence and then consider questions of cumulation or concurrence, as well, of course, as questions of totality. Sentencing is not a process that leads to a single correct answer arrived at by some process admitting of mathematical precision. It is, then, all the more important that proper principle be applied throughout the process. Questions of cumulation and concurrence may well be affected by particular statutory rules. If, in fixing the appropriate sentence for each offence, proper principle is not applied, orders made for cumulation or concurrence will be made on an imperfect foundation." 50 In seeking to give present effect to these principles, I take, but very much as a provisional starting point, the following sentencing structure: Count Provisional Term of Imprisonment

10 5 years 51 These provisional sentences take into account the additional culpability imported by the section 16BA offences. 52 It is then necessary to apply the section 16G adjustment. Using a one-third reduction, the result becomes:

10 3 years 4 months 53 It is then necessary to consider what is conventionally described as the principle of totality . The relevant guidelines in that connection are established by the decision in Mill, from which it suffices to quote for present purposes the following passages appearing at 166 CLR, 62 and 63: "The totality principle is a recognised principle of sentencing formulated to assist the court when sentencing an offender for a number of offences. It is described succinctly in Thomas, Principles of Sentencing, 2nd ed. (1979), pp 56-57, as follows (omitting references): 'The effect of the totality principle is to require a sentencer who has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed and each properly made consecutive in accordance with the principles governing consecutive sentences, to review the aggregate sentence and consider whether the aggregate is 'just and appropriate'. The principle has been stated many times in various forms: 'when a number of offences are being dealt with and specific punishments in respect of them are being totted up to make a total, it is always necessary for the court to take a last look at the total just to see whether it looks wrong; '[when]……….cases of multiplicity of offences come before the court, the court must not content itself by doing the arithmetic and passing the sentence which the arithmetic produces. It must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all of the offences' See also Ruby , sentencing, 3rd ed. (1987), pp 38-41. Where the principle falls to be applied in relation to sentences of imprisonment imposed by a single sentencing court, an appropriate result may be achieved either by making sentences wholly or partially concurrent or by lowering the individual sentences below what would otherwise be appropriate in order to reflect the fact that a number of sentences are being imposed. Where practicable, the former is to be preferred." 54 In applying to the foregoing provisional sentences the principle of totality as thus explained, it seems to me to be necessary in the present case to provide for a measure of both cumulation and concurrence. 55 It seems to me that some measure of cumulation is warranted by the sheer persistence over a very long time of a systematic dishonesty. Acknowledging that it is not possible to make that provision in a simply and rigidly arithmetical way, I think that the affairs of Budscan Pty Ltd, (count 5), mark a practical watershed, in that the resourceful shuffling of companies became markedly more frequent from that time forward. 56 I propose, therefore, to provide a measure of cumulation of the sentences on counts 2, 3 and 4, and the sentences on counts 5, 6, 7, 8 and 9. In aid of doing that with overall fairness, I propose that the sentences on counts 2, 3 and 4 will be concurrent, as will be the sentences on counts 5, 6, 7, 8 and 9. 57 That leaves for consideration the sentences proper to counts 1and 10. 58 As to count 10, I note that AJ Australia Pty Ltd, although the last in sequence, operated relevantly for as little as 6 weeks, although at a cost to the revenue that is not markedly less than the loss accumulated by Frego Pty Ltd over 3 years and 2 months. The individual provisional sentence attempts a practical recognition of the comparatively short life of this particular company. I believe that substantial justice would permit the sentence on count 10 to be imposed so as to run concurrently with the sentences on counts 5, 6, 7, 8 and 9. 59 As to count 1, I believe that a fair overall view would permit the making of that sentence concurrent with the sentences on counts 2, 3 and 4. My reasoning is based, once again, upon my view that Budscan Pty Ltd really did mark the beginning of a clear deterioration in the prisoner's approach to his group tax obligations. In addition, there is the consideration that the prisoner's dishonesty did not have the aggravating feature of persistent, previous and similar dishonesty. 60 Giving effect to the foregoing opinions as to cumulation and concurrence entails that the provisional sentences be grouped and structured as follows: · A fixed term of 2 years and 8 months on Count 1 · A head sentence of 3 years and 4 months on each of Counts 2, 3 and 4 · An order that all four of those sentences be concurrent · A head sentence of 5 years on each of Counts 5, 6, 7, 8 and 9 · A fixed term of 3 years and 4 months on Count 10 · An order that all six of those sentences be concurrent · An order dating those six sentences to commence on the date of expiration of the other four sentences 61 The final shaping of such a sentencing structure will need to make allowance for time spent by the prisoner in pre-trial custody. It was agreed that the correct calculation, as of last week, was 3 months and 26 days. I will treat the period as one of 4 months. It will be necessary, as well, to construct a combination of fixed terms, and of head sentences, with accompanying non-parole periods. 62 There is one final such practical consideration, namely the relativity between the aggregate period to be served and any subsequent parole period. It is impossible to deal with this matter in any precise arithmetical way, especially when there is to be some cumulation of sentences. Looking at the end result which I am about to announce, I am satisfied that there is no error of principle in the relativity in fact resulting. Any increase in the parole period would seem to me to entail a reduction of the time to be served to a level which would not be appropriate to the circumstances of the case. 63 I have considered also whether there is any evidence justifying the view that a greater parole period is required because of some special circumstance(s) having to do with the rehabilitation of the prisoner. There is, so far as I can see, no such evidence. 64 William John Walters:

In respect of the ten matters of which you were found guilty by the jury and thereupon convicted; and taking into account the additional matters notified pursuant to section 16BA of the Crimes Act 1914 (C'wealth) , you are sentenced to the following terms of imprisonment:

On Count 1: To a fixed term of imprisonment for 2 years, commencing on 27 July 2001 and expiring on 26 July 2003

To a fixed term of imprisonment for 3 years, commencing on 27 July 2001 and expiring on 26 July 2004

To imprisonment for 4 years and 8 months, commencing on 27 July 2004 and expiring on 26 March 2009; with a non-parole period of 3 years, commencing on 27 July 2004 and expiring on 26 July 2007

On Count 10: To a fixed term of imprisonment for 3 years, commencing on 27 July 2004 and expiring on 26 July 2007 65 I am required to explain to you that the practical effect of those sentences is that you will serve in all 6 years of full-time custody. That period will end on 26 July 2007. You will then become eligible for release on parole. If a parole order is made, - and there is no reason why it would not be made, provided only that your conduct while in detention is satisfactory, - then you will be on parole, that is to say at conditional liberty, for a period of 1 year and 8 months expiring on 26 March 2009. Your parole order will be subject to conditions entailing, put simply, that you do not break the law in any way while you are on parole. If you do breach your parole conditions, you will be liable to have your parole order cancelled. 66 In the particular circumstances of this case, the Court recommends that, insofar as may be compatible with proper Correctional Centre management and discipline, the prisoner be classified as a matter of priority, and to the end of ensuring that he is detained thereafter at such location or locations, and in such circumstances otherwise, as will maximise his opportunities to be in regular contact with his young son. The Registrar is directed so to advise forthwith the Commissioner of Corrective Services. **********

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