De Hollander v The Queen
[2012] WASCA 127
•26 JUNE 2012
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: DE HOLLANDER -v- THE QUEEN [2012] WASCA 127
CORAM: McLURE P
BUSS JA
MAZZA JA
HEARD: 23 APRIL 2012
DELIVERED : 26 JUNE 2012
FILE NO/S: CACR 128 of 2011
BETWEEN: JOANNE KAREN DE HOLLANDER
Appellant
AND
THE QUEEN
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram :STAVRIANOU DCJ
File No :IND 1467 of 2010
Catchwords:
Criminal law - Appeal against sentence - Appellant convicted on very late pleas of guilty of three counts of defrauding the revenue - Total effective sentence of 3 years' immediate imprisonment with a recognizance release order after serving 20 months - Whether sentencing judge erroneously applied the State sentencing framework and case law in deciding whether the appellant should be released forthwith under s 20(1)(b) of the Crimes Act (Cth) - Whether, in the circumstances of the case, any erroneous approach by reference to the wrong statutory framework and case law involved a material error of substance - Whether the sentencing judge erred by failing to order that the appellant be released forthwith under s 20(1)(b) of the Crimes Act (Cth) - Whether, in any event, a different sentence should have been imposed
Legislation:
Crimes Act 1914 (Cth), s 16A, s 17A, s 19AB, s 19AC, s 20, s 29D (now repealed)
Criminal Appeals Act 2004 (WA), s 31(3), s 31(4)
Criminal Code (Cth), s 134.2(1)
Judiciary Act 1903 (Cth), s 68
Proceeds of Crime Act 2002 (Cth), s 94, s 116, s 320(a)
Sentencing Act 1995 (WA), s 6, s 7, s 8, s 39(2), s 39(3), s 76, s 89, s 93(1)
Result:
Leave to appeal granted on ground 1
Leave to appeal refused on the additional ground
Appeal dismissed
Category: A
Representation:
Counsel:
Appellant: Mr D Grace QC
Respondent: Mr W G Roser SC
Solicitors:
Appellant: Michael Tudori & Associates
Respondent: Director of Public Prosecutions (Cth)
Case(s) referred to in judgment(s):
Bugmy v The Queen [1990] HCA 18; (1990) 169 CLR 525
Deakin v The Queen [1984] HCA 31; (1984) 58 ALJR 367
Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321
Director of Public Prosecutions (Cth) v Rowson [2007] VSCA 176
Director of Public Prosecutions v Ka-Hung-Ip [2005] ACTCA 24
El Rakhawy v The Queen [2011] WASCA 209
Fogg v The State of Western Australia [2011] WASCA 11
Gok v The Queen [2010] WASCA 185
Graziosi v Director of Public Prosecutions (Cth) [2011] VSCA 418
Griffiths v The Queen [1989] HCA 39; (1989) 167 CLR 372
Hili v The Queen [2010] HCA 45; (2010) 242 CLR 520
Ly v The Queen [2007] NSWCCA 28
Magar v The State of Western Australia [2011] WASCA 122
Magdi v The State of Western Australia [2010] WASCA 234
Moody v French [2008] WASCA 67; (2008) 36 WAR 393
O'Meara v The Queen [2009] NSWCCA 90
Power v The Queen [1974] HCA 26; (1974) 131 CLR 623
R v Baldock [2010] WASCA 170; (2010) 243 FLR 120
R v Barton [2006] QCA 18
R v CAK [2009] QCA 23
R v Desborough [2010] QCA 297
R v Hopkins [2008] NTSC 15; (2008) 22 NTLR 125
R v Lovel [2007] QCA 281
R v Minassian [2007] QCA 39
R v Newton [2010] QCA 101; (2010) 199 A Crim R 288
R v Pipes [2004] NSWCCA 351
R v Rajacic [1973] VR 636
R v Ruha; Ex parte Commonwealth Director of Public Prosecutions [2010] QCA 10; [2011] 2 Qd R 456
Sayed v The Queen [2012] WASCA 17
Skipworth v The State of Western Australia [2008] WASCA 64
Wheeler v The Queen [No 2] [2010] WASCA 105
McLURE P: I agree with Buss JA.
BUSS JA: On 10 May 2011, being the second day of her trial, the appellant pleaded guilty in the District Court to three counts in an indictment.
Count 1 alleged that between about 14 November 2000 and about 21 March 2001 the appellant defrauded the Federal Commissioner of Taxation in that she signed and caused to be submitted to the Australian Taxation Office (ATO) Business Activity Statements of Pasadena Holdings Pty Ltd (Pasadena) for the period 1 July 2000 to 31 December 2000 which were false, contrary to s 29D (now repealed) of the Crimes Act 1914 (Cth) (the Crimes Act).
Count 2 alleged that between about 31 May 2002 and about 11 March 2003 the appellant, by a deception, dishonestly obtained a financial advantage for another person, namely Pasadena, from the Commonwealth in that she authorised and caused information to be sent to the ATO relating to the Business Activity Statements of Pasadena for the period 1 January 2001 to 31 December 2002 which were false, contrary to s 134.2(1) of the Criminal Code (Cth) (the Code).
Count 3 alleged that between about 7 March 2003 and 1 May 2003 the appellant, by a deception, dishonestly obtained a financial advantage for another person, namely Soils Aint Soils 2002 Pty Ltd (Soils Aint Soils), from the Commonwealth in that she authorised and caused to be submitted to the ATO Business Activity Statements of Soils Aint Soils for the period 1 October 2002 to 31 March 2003 which were false, contrary to s 134.2(1) of the Code.
The sentencing judge, Stavrianou DCJ, imposed individual sentences as follows:
Count 1:2 years 6 months' imprisonment;
Count 2:3 years' imprisonment; and
Count 3:2 years 6 months' imprisonment.
The individual sentences were ordered to be served concurrently. The total effective sentence was therefore 3 years' imprisonment. His Honour ordered that, pursuant to s 20(1)(b) of the Crimes Act, the appellant be released after serving 20 months' imprisonment upon giving
security by recognizance in the sum $10,000 to be of good behaviour for the balance of the term of imprisonment.
The appellant appeals to this court against sentence.
The relevant circumstances of the offending: general
Between 1 July 2000 and 31 December 2002, the appellant was the sole director and secretary of Pasadena. She managed the operations of the company.
Between 1 July 2000 and 31 December 2002, Pasadena's main business involved the operation of nine retail garden centres at various locations in the Perth metropolitan area. These retail garden centres sold, in general, garden supplies to the public.
In about November 2002, Pasadena sold the retail garden centres to Soils Aint Soils.
Between 1 October 2002 and 31 March 2003, the appellant was the sole director and secretary of Soils Aint Soils. She managed the operations of the company.
On 1 July 2000, the Goods and Services Tax Scheme commenced in Australia. A business with an annual turnover of $75,000 or more was required to register with the ATO.
Pasadena was registered with the ATO between, relevantly, 1 July 2000 and 31 December 2002, and Soils Aint Soils was registered with the ATO between, relevantly, 1 October 2002 and 31 March 2003, under the Goods and Services Tax Scheme.
Each of Pasadena and Soils Aint Soils was obliged during the period of its registration to lodge a Business Activity Statement with the ATO on a quarterly basis.
A Business Activity Statement accounts for 'taxable supplies' and 'creditable acquisitions'. Taxable supplies relate to goods or services supplied by the business to consumers. Creditable acquisitions relate to goods or services acquired by the business to enable it to operate.
An entity registered under the Goods and Services Tax Scheme must remit to the ATO the goods and services tax it receives from consumers of the goods or services it supplies, as set out in the entity's Business Activity Statement. The entity may reclaim from the ATO, as input tax credits, the goods and services tax it pays on creditable acquisitions, as set out in the Business Activity Statement.
The ATO uses a self‑assessment system under the Goods and Services Tax Scheme. The taxpayer is responsible for calculating any goods and services tax liability or refund. The taxpayer is obliged to ensure that all goods and services tax payable by it is included in the Business Activity Statement, and to claim only the input tax credits to which it is entitled.
The relevant circumstances of the offending: count 1
Count 1 relates to the Business Activity Statements of Pasadena for the quarterly periods between 1 July 2000 and 31 December 2000.
The original Business Activity Statement, for the period 1 July 2000 to 30 September 2000, was approved by the appellant. She caused it to be lodged with the ATO on 14 November 2000. The appellant signed the declaration to this Business Activity Statement, and asserted that the total sales of the company for this period, as stated in the lodged Business Activity Statement, were true and correct, and that she was authorised to make that declaration. In this Business Activity Statement it was asserted that the total sales of the company for this period were $1,288,721.
On 3 June 2002, the appellant caused an amended Business Activity Statement to be lodged with the ATO in relation to this period. In this amended Business Activity Statement the appellant continued to assert that the total sales of Pasadena for this period were $1,288,721. Before lodging this amended Business Activity Statement, the company's tax agent, Marshall Michael, wrote to the appellant on 30 May 2002 and requested her to check the figures stated, which included the sales and the purchases of the company, and if she was satisfied with the figures to sign an acknowledgment that she agreed with the figures stated. The appellant signed the acknowledgment and returned it to Mr Michael. On receiving the acknowledgment, Mr Michael lodged the amended Business Activity Statement with the ATO.
On 30 August 2002, a further amended Business Activity Statement for this period was lodged by the appellant, through Mr Michael, which asserted that the total sales of the company for this period were $850,190. Before lodging this amended Business Activity Statement, Mr Michael wrote to the appellant on 29 August 2002 and requested her to check the figures stated, which included the sales and the purchases of the company, and if she was satisfied with the figures to sign an acknowledgment that she agreed with the figures stated. The appellant signed the acknowledgment and returned it to Mr Michael. On receiving the acknowledgment, Mr Michael lodged the amended Business Activity Statement with the ATO.
The Sybiz accounting records of Pasadena, for this period, recorded that the amount of cash from all the cash sales made during this period, in all the retail outlets of the business, was $53.75. The bank records of the company, for this period, showed that the cash banked by it during this period was $7,148.25. However, the daily centre analysis records of the company showed that the actual amount of cash received by it, during this period, was $577,100.75. These records revealed that $544,094.35 cash, which had been received from sales made during this period in all the retail outlets of the business, was not banked.
If the $544,094.35 cash had been included in the Business Activity Statement for this period, as was required, Pasadena would have been liable to pay additional tax to the ATO under the Goods and Services Tax Scheme. The Crown alleged that in relation to this period the appellant, by her dishonesty, defrauded the Federal Commissioner of Taxation.
The original Business Activity Statement, for the period 1 October 2000 to 31 December 2000, was approved by the appellant. She caused it to be lodged with the ATO on 9 March 2001. This Business Activity Statement was lodged electronically by the company's tax agent, Mr Michael. An undated Business Activity Statement, which contained the same sales figures as those in the Business Activity Statement lodged with the ATO, had been signed by the appellant. In this Business Activity Statement it was asserted that the total sales of the company for this period were $1,545,320.
On 31 May 2002, the appellant caused an amended Business Activity Statement to be lodged with the ATO in relation to this period. In this amended Business Activity Statement the appellant continued to assert that the total sales of Pasadena for this period were $1,545,320. Before lodging this amended Business Activity Statement, Mr Michael wrote to the appellant on 30 May 2002 and requested her to check the figures stated, which included the sales and the purchases of the company, and if she was satisfied with the figures to sign an acknowledgment that she agreed with the figures stated. The appellant signed the acknowledgment and returned it to Mr Michael. On receiving the acknowledgement, Mr Michael lodged the amended Business Activity Statement with the ATO.
The Sybiz accounting records of Pasadena, for this period, recorded that the amount of cash from all the cash sales made during this period, in all the retail outlets of the business, was $215.25. The bank records of the company, for this period, showed that the cash banked by it during this period was $852.60. However, the daily centre analysis records of the company showed that the actual amount of cash received by it, during this period, was $913,014.10. These records revealed that $903,230.90 cash, which had been received from sales made during this period in all the retail outlets of the business, was not banked.
If the $903,230.90 cash had been included in the Business Activity Statement for this period, as was required, Padadena would have been liable to pay additional tax to the ATO under the Goods and Services Tax Scheme. The Crown alleged that in relation to this period the appellant, by her dishonesty, defrauded the Federal Commissioner of Taxation.
So, the Crown alleged, in relation to count 1, that for the period 1 July 2000 to 31 December 2000 the appellant intentionally did not include in the Business Activity Statements for this period $1,447,325.25 of cash sales by Pasadena. By this means, the appellant defrauded the Federal Commissioner.
The relevant circumstances of the offending: count 2
Count 2 relates to the Business Activity Statements of Pasadena for the quarterly periods between 1 January 2001 and 31 December 2002.
The appellant used the same general modus operandi as she used in relation to count 1 to defraud the Commonwealth.
The Crown alleged, in relation to count 2, that for the period 1 January 2001 to 31 December 2002 the appellant intentionally did not include in the Business Activity Statements for this period $3,737,547.32 of cash sales by Pasadena. By this means, the appellant defrauded the Commonwealth.
The relevant circumstances of the offending: count 3
Count 3 relates to the Business Activity Statements of Soils Aint Soils for the quarterly periods between 1 October 2002 and 31 March 2003.
The appellant used the same general modus operandi as she used in relation to counts 1 and 2 to defraud the Commonwealth.
The Crown alleged, in relation to count 3, that for the period 1 October 2002 to 31 March 2003 the appellant intentionally did not include in the Business Activity Statements for this period $2,493,561.23 of cash sales by Soils Aint Soils. By this means, the appellant defrauded the Commonwealth.
The ultimate effect of the appellant's criminality
During the sentencing hearing, the Crown alleged that the ultimate effect of the appellant's criminality, in not declaring the proper amount of sales in the Business Activity Statements, was that goods and services tax of about $700,000 was not paid, and that this was the amount of the fraud or financial advantage.
Later, however, the Crown conceded that, after an extensive audit which took into account the amount of credits for goods and services tax that could have been claimed if purchases had not been understated in the Business Activity Statements, the total amount lost to the revenue was about $90,000.
The sentencing judge sentenced the appellant on the basis that the revenue was defrauded of about $90,000, but that the appellant had intended to defraud the revenue of a greater sum (ts 200 ‑ 201).
The grounds of appeal
The appellant relies principally on two grounds of appeal.
Ground 1 alleges that the sentencing judge erred in the exercise of his sentencing discretion by failing to order that the appellant be released forthwith (upon giving security) from the terms of imprisonment imposed, pursuant to s 20(1)(b) of the Crimes Act.
Ground 2 alleges that his Honour erred in the exercise of his discretion by applying the approach and principles required under Western Australian sentencing law in relation to the imposition of suspended sentences, contrary to pt 1B of the Crimes Act.
On 24 October 2011, Mazza J granted leave to appeal on ground 2, and referred the application for leave to appeal on ground 1 to the hearing of the appeal.
By an application in the appeal dated 18 April 2012 (and filed on 20 April 2012), the appellant applied for leave to rely on an additional ground of appeal. The additional ground reads:
By reason of matters that have arisen since the date of sentence, namely the resolution of the application by the [DPP(Cth)] for a Pecuniary Penalty Order and the written acceptance by the [DPP(Cth)] (in consent orders filed with this Court and dated 22 March 2012) that the Appellant's co‑operation in that resolution is capable of mitigatory effect on sentence pursuant to section 320(a) of the Proceeds of Crime Act 2002 (Commonwealth), that co‑operation, if known at the time of sentence, ought to have resulted in a different and less severe sentence being imposed, thus requiring this Court's intervention.
An affidavit of the appellant's solicitor, Alixandra McGregor, sworn 20 April 2012 reveals that after the appellant was sentenced by the sentencing judge she settled a claim by the Director of Public Prosecutions (Cth) for a pecuniary penalty order under the Proceeds of Crime Act 2002 (Cth). The solicitors for the parties signed a minute of proposed consent orders pursuant to s 94 and s 116 of the Proceeds of Crime Act. Recital M of the minute states:
The [Appellant] acknowledges that the Settlement will not in any way affect any orders that may be made in her appeal against her sentence for the Taxation Offences save that the settlement may be taken into account as evidence of 'cooperation' within the meaning of section 320(a) POCA 02.
None of the grounds of appeal challenges the imposition of the terms of imprisonment or their length. The sentencing disposition is challenged on the basis of the sentencing judge's failure to order that the appellant be released forthwith (upon giving security) from the terms of imprisonment imposed. No challenge is made to the pre‑release period of 20 months in the event that his Honour did not err in failing to order that the appellant be released forthwith.
It is convenient to consider ground 2 before turning to ground 1 and then to the additional ground.
Ground 2: the appellant's submissions
Counsel for the appellant submitted that it was clear from the sentencing judge's remarks that he had approached the exercise of the discretion conferred by s 20(1)(b) of the Crimes Act by reference to principles and case law concerned with the sentencing of offenders under Western Australian sentencing legislation. It was submitted that this approach was erroneous and caused the exercise of the sentencing discretion to miscarry.
Ground 2: the sentencing judge's remarks
The sentencing judge recorded that he was required to take into account, and had taken into account, the matters listed in s 16A of the Crimes Act (ts 205).
A little later, his Honour emphasised that he 'must not impose a term of imprisonment unless the seriousness of the offence is such that only imprisonment can be justified or the protection of the community requires it' (ts 206). He concluded:
Given the systematic and persistent nature of the deception, the period over which it extended, and the amount of money involved, I consider that the offences in question are so serious that only imprisonment can be justified (ts 206).
The sentencing judge then said that he would 'return to whether [he] should suspend the term of imprisonment' (ts 206).
After deciding upon and imposing the individual terms of imprisonment for counts 1, 2 and 3, and deciding upon and imposing the total effective sentence of 3 years' imprisonment, his Honour made these remarks:
I turn to the question of suspension. A suspended sentence is to be viewed as [the] penultimate sentencing option in the scale of sentences, the ultimate being an immediate term of imprisonment. I must be positively satisfied that the option of suspending imprisonment and each remaining lesser option is not appropriate before I can impose a term of immediate imprisonment. See generally McLure JA in Duong [2006] WASCA 110.
I have, as I've said, concluded that in view of the seriousness of the offence a term of imprisonment is the only appropriate disposition. The question is whether you should be required to serve that term or whether I should suspend the term either conditionally or otherwise.
I have carefully considered whether or not relevant to all of the material and in particular the judgment of the members of the High Court in Dinsdale v The Crown (2000) 202 CLR 321, whether, in all the circumstances the sentences to be imposed should be suspended. This requires that I consider anew all relevant circumstances and thus to adopt a two‑step approach. See L v The State of Western Australia [2007] WASCA 186.
I've revisited the same considerations that are relevant to the imposition of a term of imprisonment to determine whether to suspend the terms which I have imposed. See Collins v The State of Western Australia [2007] WASCA 108 at paragraph 16. This I have done.
I've also considered the decision of the Court of Appeal in Skaines [2006] WASCA 160 and White v The State of Western Australia [2007] WASCA 119.
You do have excellent antecedents, as I've said, and as I've also said many people speak highly of you. You have pleaded guilty and I accept you're not at a high risk of re‑offending. On the other hand, you face very serious charges involving deception over a long period of time.
I'm required to balance your prospects of rehabilitation against other factors such as the seriousness and character of the offences, the element of persistence in your manner of offending, the issue of deterrence and the need to demonstrate the condemnation of the community for offences of this kind. See Liddington (1997) 18 WAR 394.
In my view, the seriousness of the offence and the need for general deterrence militates strongly against the suspension of the term of imprisonment I have imposed. This must be taken into account in considering the issue of suspension.
In all the circumstances, after having taken this two‑step approach, to revisit all the relevant circumstances, I am not persuaded that given the nature, gravity and extent of your offending that suspension would be warranted. I therefore consider the term of three years must be served (ts 208 ‑ 209).
Finally, his Honour made a recognizance release order, with a pre‑release period of 20 months:
Insofar as release is concerned I further direct that you serve a period of 20 months' imprisonment before being released on your own recognisance in an amount of $10,000 for the balance of the sentence.
Pursuant to section 20(1)(b) of the Crimes Act I order that you be released after serving the 20 months' imprisonment upon your giving security by recognisance in the sum of $10,000 to be of good behaviour for the balance of the term (ts 209).
Ground 2: the Sentencing Act 1995 (WA): suspended imprisonment: State offences
By s 6(4) of the Sentencing Act 1995 (WA) (the Sentencing Act):
A court must not impose a sentence of imprisonment on an offender unless it decides that -
(a)the seriousness of the offence is such that only imprisonment can be justified; or
(b)the protection of the community requires it.
A sentencing court must not impose a term of immediate imprisonment unless satisfied, having regard to the sentencing principles set out in div 1 of pt 2 of the Sentencing Act, relevantly, that it is not appropriate to impose suspended imprisonment. See s 39(2) and s 39(3) of the Act. The court must be positively satisfied that it is not appropriate to suspend a term of imprisonment before the term can be ordered to be served immediately. In a borderline case, it may be reasonably open to impose different types of sentences. See Skipworth v The State of Western Australia [2008] WASCA 64 [11], [13] ‑ [14] (McLure JA), [58] (Buss JA); Fogg v The State of Western Australia [2011] WASCA 11 [9] (McLure P, Mazza J agreeing).
Section 76(1) of the Sentencing Act provides:
A court that sentences an offender to a term of imprisonment, or to an aggregate of terms of imprisonment, of 60 months or less may order that the whole of the term or terms be suspended for a period set by the court; but not more than 24 months.
By s 76(2), suspended imprisonment is not to be imposed unless imprisonment for a term or terms equal to that suspended would, if it were not possible to suspend imprisonment, be appropriate in all the circumstances.
In Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321, Kirby J referred to the two‑step process which a sentencing court must undertake in deciding whether to suspend a term of imprisonment:
[T]he scheme of the legislation, and the two steps which s 76(1) and (2) of the Act requires, suggest, as a matter of construction, that the same considerations that are relevant for the imposition of the term of imprisonment must be revisited in determining whether to suspend that term (Thomas, Principles of Sentencing, 2nd ed (1979), pp 244-245; R v P (1992) 39 FCR 276 at 285). This means that it is necessary to look again at all the matters relevant to the circumstances of the offence as well as those personal to the offender. It would be surprising if the legislation were to warrant, at the second step, concentration of attention only on matters relevant to the offender, such as issues of the offender's rehabilitation and the court's mercy (cf R v Shueard (1972) 4 SASR 36 at 43; R v Prindable (1979) 23 ALR 665 at 669; R v Davey (1980) 2 A Crim R 254 at 259-260). On the contrary, the structure and language of s 76(2) of the Act support the view that what is required by a proposal that a term of imprisonment should be suspended is reconsideration of 'all the circumstances'. This necessitates the attribution of 'double weight' to all of the factors relevant both to the offence and to the offender - whether aggravating or mitigating - which may influence the decision whether to suspend the term of imprisonment (R v Liddington (1997) 18 WAR 394 at 402, per Ipp J) [85].
The discretion to suspend a term of imprisonment is not confined by the personal considerations relating to rehabilitation and mercy. See Dinsdale [18], [26], [84]. The objective features of an offence may, in a particular case, outweigh these considerations. See Dinsdale [86].
The Sentencing Act authorises a sentencing court to wholly suspend a term of imprisonment. The statute does not, however, permit a term of imprisonment to be partly suspended.
Ground 2: the Sentencing Act: parole eligibility orders and non‑parole periods: State offences
Section 89 of the Sentencing Act confers on a court that is sentencing an offender to a fixed term of imprisonment, power to order that the offender be eligible for parole.
The combined effect of s 89(1) and s 89(4) is that the court is required to make a parole eligibility order if none or one of the four factors identified in s 89(4) are present. If two or more of those factors are present, the court is required, without any predisposition or bias, to take all relevant factors into account, including those identified in s 89(4), in deciding whether to make a parole eligibility order. See Moody v French [2008] WASCA 67; (2008) 36 WAR 393 [48], [50] (Steytler P, Wheeler, McLure & Buss JJA).
By s 93(1) of the Sentencing Act, subject to s 94 (which is concerned with the aggregation of parole terms for certain purposes), a prisoner serving a parole term is eligible to be released on parole:
(a)if the term served is 4 years or less - when he or she has served one‑half of the term; or
(b)if the term served is more than 4 years - when he or she has served 2 years less than the term.
So, under the Sentencing Act, if a sentencing court makes a parole eligibility order, the minimum non‑parole period is fixed by the legislation. The court does not have a discretion in relation to the duration of the minimum non‑parole period.
The Sentencing Act does not make any provision for recognizance release orders.
Ground 2: the Crimes Act: the sentencing of offenders for federal offences
The sentencing of offenders for federal offences is, in general, governed by pt 1B of the Crimes Act. See Hili v The Queen [2010] HCA 45; (2010) 242 CLR 520 [23] (French CJ, Gummow, Hayne, Crennan, Kiefel & Bell JJ).
By s 68 of the Judiciary Act 1903 (Cth), some State or Territory laws in relation to the sentencing of federal offenders are picked up and applied when a State or Territory court, exercising federal jurisdiction conferred by s 68, sentences a federal offender. However, to the extent that pt 1B of the Crimes Act makes other provision, State and Territory laws in relation to the sentencing of offenders are not picked up. See Hili [21].
Section 16A(1) of the Crimes Act provides that, in determining the sentence to be passed, or the order to be made, in respect of any person for a federal offence, a sentencing court must impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence.
By s 16A(2), in addition to any other matters, the court must take into account such of the matters listed in s 16A(2) as are relevant and known to the court.
Section 16A(3) states that, without limiting the generality of s 16A(1) and s 16A(2), in determining whether a sentence or order under, relevantly, s 20(1) is the appropriate sentence or order to be passed or made in respect of a federal offence, the court must have regard to the nature and severity of the conditions that may be imposed on, or may apply to, the offender, under that sentence or order.
By s 17A(1), relevantly, a court shall not pass a sentence of imprisonment on any person for a federal offence unless the court, after having considered all other available sentences, is satisfied that no other sentence is appropriate in all the circumstances of the case.
Ground 2: the Crimes Act: recognizance release orders and pre‑release periods: federal offences
Section 19AB(1) of the Crimes Act provides, relevantly, that subject to s 19AB(3), where a person is convicted of a federal offence, and a court imposes on the person a federal sentence of imprisonment that exceeds 3 years, and at the time the sentence is imposed, the person is not already serving or subject to a federal sentence, the court must, relevantly, fix a non‑parole period in respect of that sentence. Section 19AB(3) confers on the court a discretion, in particular circumstances, to decline to fix a non‑parole period.
Section 19AC(1) provides, relevantly, that subject to s 19AC(3) and s 19AC(4), where a person is convicted of a federal offence, and a court imposes on the person a federal sentence of imprisonment that does not exceed 3 years, and at the time the sentence is imposed, the person is not already serving or subject to a federal sentence, the court must make a recognizance release order in respect of that sentence and must not fix a non-parole period. By s 19AC(4):
Where, but for this subsection, a court would be required by this section to make a recognizance release order in respect of a person, the court may decline to do so if, having regard to the nature and circumstances of the offence or offences concerned and to the antecedents of the person, the court is satisfied that such an order is not appropriate.
Section 20 is concerned with the conditional release of federal offenders after conviction.
By s 20(1)(a), where a person is convicted of a federal offence or federal offences, the sentencing court may, if it thinks fit, by order, release the person, without passing sentence on him or her, upon his or her giving security, with or without sureties, by recognizance or otherwise, to the satisfaction of the court, that he or she will comply with the conditions listed in s 20(1)(a).
Section 20(1)(b) provides that where a person is convicted of a federal offence or federal offences, the sentencing court may, if it thinks fit, sentence the person to imprisonment in respect of the offence or each offence, but direct, by order, that the person be released, upon giving security of the kind referred to in s 20(1)(a), either forthwith or after he or she has served a specified period of imprisonment in respect of that offence or those offences, that is calculated in accordance with s 19AF(1).
Although the Crimes Act does not authorise a sentencing court to 'suspend', wholly or partly, a term of imprisonment, the provisions with respect to recognizance release orders (in particular, s 19AC(1) read with s 20(1)(b)) are designed to achieve a similar sentencing outcome.
In R v Ruha; Ex parte Commonwealth Director of Public Prosecutions [2010] QCA 10; [2011] 2 Qd R 456, Keane and Fraser JJA and Atkinson J noted that the principles governing the fixing of the length of a non‑parole period are generally applicable to the fixing of the length of a pre‑release period under a recognizance release order [46]. See also Sayed v The Queen [2012] WASCA 17 [124] (Buss JA, Martin CJ & Hall J agreeing).
In Hili, the plurality said:
The Court of Appeal in Ruha examined ([2010] QCA 10 at [45]‑[55]) what considerations bear upon fixing the length of a pre‑release period under a recognizance release order. As the Court of Appeal rightly said ([2010] QCA 10 at [45]), s 16A(1) and (2) 'make it plain that all of the circumstances, including the matters in the non‑inclusive list in s 16A(2), must be taken into account in making recognizance release orders just as they must be taken into account in imposing a sentence of imprisonment'. In determining what recognizance release order is to be made, s 16A(1) requires the sentencing court to 'make an order that is of a severity appropriate in all the circumstances of the offence'. What is the 'severity appropriate' is determined having regard to the general principles identified by this court in Power v The Queen ((1974) 131 CLR 623), Deakin v The Queen ((1984) 58 ALJR 367; 54 ALR 765) and Bugmy v The Queen ((1990) 169 CLR 525. See also Inge v The Queen (1999) 199 CLR 295) [40].
Where a sentencing court fixes a non-parole period, the non-parole period is part of the sentence. See R v Rajacic [1973] VR 636, 641; R v Hopkins [2008] NTSC 15; (2008) 22 NTLR 125 [12].
The fixing of a non‑parole period serves the interests of the community rather than those of the offender, even though a minimum term confers a benefit on the offender. See Bugmy v The Queen [1990] HCA 18; (1990) 169 CLR 525, 531.
The non‑parole period is the minimum period of imprisonment that justice requires the offender to serve. It mitigates the offender's punishment in favour of rehabilitation through conditional freedom after imprisonment for the minimum period. See Power v The Queen [1974] HCA 26; (1974) 131 CLR 623, 628 - 629; Deakin v The Queen [1984] HCA 31; (1984) 58 ALJR 367, 367; Griffiths v The Queen [1989] HCA 39; (1989) 167 CLR 372, 396; Bugmy (531).
The considerations which a sentencing court must take into account when fixing a non‑parole period are the same as those applicable to the setting of the head sentence. However, the weight to be given to these factors, and the manner in which they are relevant, will differ in consequence of the different purposes underlying each function. See Bugmy (531).
The statements of principle by the High Court in Power, Deakin and Bugmy in relation to determining a non‑parole period for a federal offence apply by analogy in determining whether a person who has been sentenced to a term of imprisonment for a federal offence should be released under s 20(1)(b), either forthwith or after he or she has served a specified period of imprisonment in respect of that offence.
Ground 2: its merits
In my opinion, the sentencing judge dealt with the question of whether the appellant should be released forthwith under s 20(1)(b) of the Crimes Act on the basis of the statutory framework and case law applicable to the discretion (wholly) to suspend a term of imprisonment for a State offence under s 76 of the Sentencing Act. This is apparent from the following. First, in the relevant passages in his sentencing remarks his Honour refers exclusively to 'suspend' and 'suspension'. He does not refer in these passages to s 20(1)(b) of the Crimes Act or to whether the appellant should be released forthwith from the terms of imprisonment. Secondly, all of the decisions of the High Court and this court cited by his Honour were concerned with the suspension of terms of imprisonment in the context of offenders convicted of State offences in Western Australia. None of the cases involved the sentencing of an offender for a federal offence. Thirdly, his Honour referred in the relevant passages in his sentencing remarks to the 'two‑step approach' which has been mandated in relation to s 76 of the Sentencing Act.
The critical issue, however, is whether, in the circumstances of the present case, his Honour's erroneous approach, by reference to the wrong statutory framework and case law, involved a material error of substance.
The question whether (wholly) to suspend a term of imprisonment under s 76 of the Sentencing Act is part of the two‑step process referred to by Kirby J in Dinsdale [85]. See [57] above. By contrast, the question whether to release a federal offender forthwith under s 20(1)(b) of the Crimes Act is part of a process which may involve three steps. The steps are as follows. First, all relevant sentencing factors (notably, those referred to in s 16A) must be taken into account in deciding whether to impose a term of imprisonment and, if so, the length of the term. Secondly, it may be necessary for the court to consider whether, pursuant to s 19AC(4), it should decline to make a recognizance release order in respect of the offender. Ordinarily, s 19AC(1) requires a court to make a recognizance release order where a person is convicted of a federal offence and the court imposes a term of imprisonment not exceeding 3 years, but that provision is subject to, relevantly, s 19AC(4). Thirdly, the court must take into account, in deciding whether to release the offender forthwith under s 20(1)(b), the same factors as those applicable to the imposition and fixing of the term of imprisonment (notably, those referred to in s 16A). However, the weight to be given to these factors, and the manner in which they are relevant, will differ as a result of the different purposes underlying each function.
In the present case, it was not suggested during the proceedings before the sentencing judge that a recognizance release order should not be made in respect of the appellant. The possible exercise of the discretion under s 19AC(4) was not a live issue.
So, in the present case, the proper application of s 19AC(1), read with s 20(1)(b), involved, in substance, a two‑step process of the kind referred to by Kirby J in Dinsdale [85] in the context of s 76 of the Sentencing Act.
It is true that the sentencing factors relevant to the imposition of sentence on a State offender are, in general, those referred to in s 6, s 7 and s 8 of the Sentencing Act, whereas the sentencing factors relevant to the imposition of sentence on a federal offender are, in general, those set out in div 2 of pt 1B of the Crimes Act (in particular, the matters referred to in s 16A). However, in the circumstances of the present case, there was no material difference in substance between the relevant sentencing factors applicable under the Sentencing Act (if the appellant had committed a State offence and the question was whether a term of imprisonment should be (wholly) suspended), on the one hand, and the sentencing factors applicable under the Crimes Act (the appellant having committed federal offences and the question being whether to release her forthwith, under s 20(1)(b), from the terms of imprisonment), on the other.
In any event, the sentencing judge noted that he was required to take into account, and had taken into account, 'the matters listed in s 16A of the Crimes Act' (ts 205). After deciding that a term of imprisonment was the only appropriate sentence in all the circumstances of the case, his Honour said:
In all the circumstances, after having taken this two‑step approach, to revisit all the relevant circumstances, I am not persuaded that given the nature, gravity and extent of your offending that suspension would be warranted. I therefore consider the term of three years must be served.
Insofar as release is concerned I further direct that you serve a period of 20 months' imprisonment before being released on your own recognisance in an amount of $10,000 for the balance of the sentence.
Pursuant to section 20(1)(b) of the Crimes Act I order that you be released after serving the 20 months' imprisonment upon your giving security by recognisance in the sum of $10,000 to be of good behaviour for the balance of the term (ts 209).
It is apparent from this passage, in the context of the sentencing remarks as a whole (including, in particular, the express reference to s 16A), that his Honour revisited all relevant sentencing factors under s 16A in deciding, first, whether the appellant should be released forthwith and in deciding, secondly, upon the length of the pre‑release period.
As I have mentioned, s 16A(3) of the Crimes Act requires, relevantly, that in determining whether a sentence or order under s 20(1) is the appropriate sentence or order to be passed or made in respect of a federal offence, the court must have regard to the nature and severity of the conditions that may be imposed on, or may apply to, the offender, under that sentence or order. In the present case, s 16A(3) was not a relevant matter of substance. When his Honour made the recognizance release order he did not impose any of the conditions specified in s 20(1)(a), beyond ordering that the appellant must be of good behaviour for the balance of the terms of imprisonment after her release upon recognizance.
I am therefore of the opinion that the sentencing judge's erroneous approach did not involve a material error of substance.
Ground 2 fails.
In any event, by s 31(4) read with s 31(3) of the Criminal Appeals Act 2004 (WA), this court may only allow an appeal against sentence if, in its opinion, a different sentence should have been imposed. For the reasons I give in the course of considering ground 1 and the additional ground, I am satisfied that, even if his Honour's erroneous approach involved a material error of substance, no different sentence should have been imposed.
Ground 1: the appellant's submissions
The character of the submissions made by counsel for the appellant in relation to ground 1 is conveyed adequately by the particulars of the ground.
It was asserted that the sentencing judge failed to give 'sufficient weight' to various mitigatory factors and, as a result, his Honour erred by failing to order that the appellant be released forthwith (upon giving security), from the terms of imprisonment, pursuant to s 20(1)(b) of the Crimes Act.
The mitigatory factors asserted on the appellant's behalf, as set out in the particulars to ground 1, were these:
(a)the effect upon the appellant of a significant delay in commencing the prosecution;
(b)the appellant's pleas of guilty;
(c)the appellant's remorse;
(d)the appellant's acceptance of responsibility for the offending;
(e)the stress and major depressive disorder suffered by the appellant;
(f)the appellant's previous good character and good antecedents;
(g)the fact that the appellant obtained no financial gain, had no intention to enrich herself and had suffered financial loss;
(h)the appellant's good prospects of rehabilitation;
(i)the adverse influence of Kevin Pollock upon the appellant;
(j)the absence of the need to specifically deter the appellant; and
(k)the nature and severity that imprisonment would pose for the appellant, given her medical condition, general ill health and good antecedents.
Ground 1: the sentencing judge's remarks
The sentencing judge described the system which the appellant implemented to enable the offences to be committed:
The financial system in place in relation to Pasadena involved the preparation by the manager of each outlet of a float sheet. That float sheet recorded the daily takings. That sheet and the takings would be collected by staff of the company and taken to the head office.
Mrs Susan Clifton, who was the bookkeeper, would prepare documents including a spreadsheet, recording the daily sales. The business also operated a separate accounting system to record expenses and sales. After Mrs Clifton had placed the information into the spreadsheet, she gave the cash that she'd received from creditors [sic] to you.
You then took all or part of the cash and placed it into a safe, which only you and Mrs Clifton had access to. Later, you would direct either Mrs Clifton or other staff to place the reduced amount of cash that you'd separated from the cash you'd placed into the safe, and to place that reduced amount in the accounting system, to represent the cash sales for that particular trading day.
You also directed staff that the nominated cash figure placed in the accounting system was the cash that was to be banked, or as representing the cash sales of the business. You knew the information in the Sybiz accounting system was false.
You directed either the internal accounts employed by the company or the company's external tax agents to use the false information in the preparation of the BAS and then to lodge the statements. You signed BAS statements from time to time. That essentially was the system which you operated in relation to each of the companies, Pasadena and Soils Ain't Soils (ts 198).
His Honour noted the appellant's personal circumstances.
She was born on 22 September 1965, and was aged 45 at the time of sentencing. She worked full time in a garden centre business.
The business operated by Pasadena and Soils Aint Soils had been a family business. The appellant inherited it upon the death of her parents.
The sentencing judge found that the appellant was very diligent and hard working.
When she was aged about 26 or 27, the appellant met Kevin Pollock. He was a married man with a family. Mr Pollock convinced the appellant to commence a business enterprise with him, to which she contributed the family garden centre business and, in essence, all of her other assets.
At Mr Pollock's request, the appellant became a director and a shareholder of various corporate entities that he created to establish and run the enterprise. The appellant trusted Mr Pollock and signed commercial documents at his request. She worked from premises owned by Mr Pollock.
The appellant's relationship with Mr Pollock broadened over time to include a personal relationship in addition to matters of business. Their relationship ended in about 2003. She then commenced a new personal relationship with her current partner.
The appellant had not previously been convicted of an offence involving fraud or dishonesty. She had never previously been imprisoned.
His Honour was provided with a number of written references in relation to the appellant. These references indicated that, in the view of the authors, the appellant was ordinarily of good character and the offences in question were out of character. She was described as honest, hard working and a supportive member of the community.
A report dated 13 May 2011 from the appellant's general medical practitioner, Professor Pearn‑Rowe, was before the sentencing judge. This report indicated that the appellant was suffering from 'ongoing stress and depression'. In May 2003, she was under 'extreme stress, weeping copiously and speaking of suicide'. Professor Pearn‑Rowe managed the appellant's condition by a combination of counselling and anti‑depressant medication. In mid‑2007, he referred the appellant to a consultant psychiatrist, Professor Hood. Professor Hood agreed with Professor Pearn‑Rowe's diagnosis of 'a major depressive disorder', and he also referred to 'substantial suicidal ideation' including 'a couple of overdoses with sleeping tablets'. Professor Pearn‑Rowe said that the appellant's mental state had not improved greatly, and she continued to constitute 'a significant suicide risk as a consequence of her ongoing depression'.
His Honour referred to the appellant's pleas of guilty on the second day of the trial. His Honour said that the pleas had facilitated the administration of justice. He accepted that she was entitled to some discount for the pleas, even though they were late. According to his Honour, the pleas, notwithstanding their lateness, reflected remorse.
The sentencing judge found that the appellant's prospects of rehabilitation were favourable, and that it was unlikely she would reoffend.
His Honour noted that towards the end of 2003 the ATO conducted an audit of the Business Activity Statements lodged on behalf of Pasadena and Soils Aint Soils. In 2004, the matter was referred to the ATO's Fraud Investigation Team and they reported on their investigation in December 2004.
His Honour accepted that the appellant had suffered 'considerable stress and distress from the business collapse and the recovery action' pursued by the ATO. This recovery action involved the ATO issuing assessments. There were legal proceedings in relation to them. In March 2007, the ATO allowed the appellant's objections to the assessments and paid her legal costs. When the recovery action was settled in March 2007, the appellant thought that the matter had come to an end.
However, on 19 October 2009 the appellant was charged with the offences in question.
The sentencing judge found that the delay in commencing the prosecution was 'significant' and that it was 'a mitigating factor in the circumstances' (ts 203).
His Honour mentioned that a freezing order had been made under the Proceeds of Crime Act in relation to a parcel of vacant land owned by the appellant. The land had a value of about $145,000. The proceedings in the Supreme Court under the Proceeds of Crime Act were settled after the appellant was sentenced, and her cooperation in relation to this settlement is the subject of the additional ground of appeal.
Although his Honour referred to 'suspension' of the total effective term of imprisonment he imposed, it is apparent that, in substance, his Honour was of the opinion that the appellant should not be released forthwith under s 20(1)(b) of the Crimes Act because of 'the nature, gravity and extent of [her] offending'.
Ground 1: its merits
Ground 1, as developed at the hearing by counsel for the appellant, alleges that the individual sentences imposed by the sentencing judge (which were ordered to be served concurrently) were manifestly excessive as a result of his Honour's failure to order that the appellant be released forthwith (upon giving security). The appellant's case involved in essence the assertion of implied error based on the sentencing outcome.
It is necessary, in determining whether a sentence is manifestly excessive, to examine it from the perspective of the maximum sentence prescribed by law for the relevant offence, the standards of sentencing customarily observed with respect to that offence, the place which the criminal conduct occupies on the scale of seriousness of offences of the kind in question, and the personal circumstances of the offender.
The guidance afforded by comparable cases is flexible rather than rigid. The mere fact that a sentence is within the range of other sentences imposed for similar offences does not necessarily establish that there was an appropriate exercise of the sentencing discretion in the particular case. Similarly, the mere fact that a sentence is outside that range does not necessarily establish that the exercise of the sentencing discretion in the particular case miscarried.
There is no 'tariff' for offences of the kind committed by the appellant because of the great variation that is possible in the circumstances of the offending and the offenders. The sentence to be imposed in a particular case depends on its individual facts and circumstances, having regard to the maximum available penalty and any comparable cases.
The maximum available penalty for each of the appellant's contraventions of s 134.2(1) of the Code was imprisonment for 10 years.
The diverse range of sentences which have been imposed for offences against s 134.2(1) is apparent from Wheeler v The Queen [No 2] [2010] WASCA 105; Gok v The Queen [2010] WASCA 185; El Rakhawy v The Queen [2011] WASCA 209; R v Pipes [2004] NSWCCA 351; Ly v The Queen [2007] NSWCCA 28; O'Meara v The Queen [2009] NSWCCA 90; R vKertebani [2010] NSWCCA 221; McMahon v The Queen [2011] NSWCCA 147; R v Barton [2006] QCA 18; R v Minassian [2007] QCA 39; R v Lovel [2007] QCA 281; R v CAK [2009] QCA 23; R v Newton [2010] QCA 101; (2010) 199 A Crim R 288; R v Desborough [2010] QCA 297; Director of Public Prosecutions (Cth) v Rowson [2007] VSCA 176; Graziosi v Director of Public Prosecutions (Cth) [2011] VSCA 418; Director of Public Prosecutions v Ka-Hung-Ip [2005] ACTCA 24; and Sayed. See also, in the context of the analogous offence under s 134.1(1) of the Code, Magdi v The State of Western Australia [2010] WASCA 234 and Magar v The State of Western Australia [2011] WASCA 122.
In Ruha, the Court of Appeal of Queensland reviewed the head sentences and minimum custodial terms imposed on offenders for offences under or comparable to s 134.2(1) of the Code, including offences against s 29D (now repealed) of the Crimes Act. Section 29D provided that a person who defrauded the Commonwealth or a public authority under the Commonwealth was guilty of an indictable offence and liable to a penalty of 1,000 penalty units or imprisonment for 10 years, or both. The provision was repealed by Act No 137 of 2000. See also the review I carried out in R v Baldock [2010] WASCA 170; (2010) 243 FLR 120 [132] ‑ [142].
The offences committed by the appellant, in the present case, were very serious. She perpetrated a systematic fraud on the ATO. The fraud was implemented over a lengthy period of time. She was actively dishonest. Her deceit was planned and deliberate. She had intended to defraud the revenue of a sum greater than the amount of about $90,000 that she did in fact defraud.
The appellant was the sole director and secretary of Pasadena and Soils Aint Soils, and she managed their operations.
The appellant's criminality was aggravated by her involvement of a number of innocent persons to unwittingly assist her in defrauding the ATO. The persons she involved included office staff of Pasadena and Soils Aint Soils, and the tax agent engaged by those companies to prepare and lodge the Business Activity Statements.
As the sentencing judge rightly noted, these types of offences are difficult to detect; the investigations, as in the present case, are often expensive; and there is the potential for significant financial loss to be sustained by the revenue. The ATO relies upon honesty in its self‑assessment scheme. The appellant corrupted the system.
Serious tax fraud, of the kind undertaken by the appellant, is offending that affects the whole community. The sentences imposed must have both a deterrent and a punitive effect. See Hili [63].
The appellant's late pleas of guilty were entered after negotiations between her and the Crown. She had maintained her innocence until after the commencement of the trial. The trial had been listed for three weeks. All witnesses and about 65 jurors had been subpoenaed to attend. The lateness of the appellant's pleas indicates that true or substantial remorse and acceptance of responsibility was not easily embraced.
The individual sentences, the total effective sentence and the recognizance release order made by his Honour, in the present case, properly reflected the important sentencing considerations of appropriate punishment and general deterrence.
The various mitigatory factors listed in the particulars to ground 1, and relied on by counsel for the appellant in his submissions, were relevant matters to be taken into account in determining the sentencing disposition. However, the importance of appropriate punishment and general deterrence necessarily required that less weight be given to the appellant's favourable personal circumstances and the other mitigating features.
I am not persuaded that any of the individual sentences imposed on the appellant was manifestly excessive. In particular, I am not persuaded that his Honour erred in failing to release the appellant forthwith under s 20(1)(b) of the Crimes Act. An evaluation of the length of each individual sentence and the length of the pre‑release period, in the context of the maximum available penalties, the standards of sentencing as revealed in previous cases with some comparable features, the objective seriousness of the appellant's offending and her personal circumstances, does not indicate that the sentencing disposition was in any respect plainly unreasonable or unjust. The existence of error should not be inferred from the sentencing outcome.
Ground 1 fails.
The additional ground
Counsel for the appellant expressly confined the additional ground to 'something that ought to be added to the mix' in the event that ground 1 or ground 2 was made out and it was necessary for this court to resentence the appellant (appeal ts 3). Counsel conceded (correctly, in my opinion) that the mitigatory weight of the fresh evidence underpinning the additional ground was 'slight' (appeal ts 2).
Neither ground 1 nor ground 2 has been made out. In any event, for the reasons I have given in the course of considering ground 1, I am satisfied that no different sentence should have been imposed on the appellant. The additional ground therefore falls away.
Conclusion
I would grant leave to appeal on ground 1 and refuse leave on the additional ground.
The appeal itself must be dismissed.
MAZZA JA: I agree with Buss JA.
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