Director of Public Prosecutions(Cth) v Keefe; Director of Public Prosecutions(Cth) v Simpson
[2012] VCC 1175
•14 August 2012
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-11-00315
CR-11-00314
| DIRECTOR OF PUBLIC PROSECUTIONS (COMMONWEALTH) |
| v |
| GREGORY WILLIAM KEEFE |
| and |
| ROSS DAVID SIMPSON |
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JUDGE: | HIS HONOUR JUDGE O'NEILL | |
WHERE HELD: | Melbourne | |
DATE OF HEARING (PLEA): | 30, 31 July and 1 August 2012 | |
DATE OF SENTENCE: | 14 August 2012 | |
CASE MAY BE CITED AS: | DPP(Cth) v Keefe; DPP(Cth) v Simpson | |
MEDIUM NEUTRAL CITATION: | [2012] VCC 1175 | |
REASONS FOR SENTENCE
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SUBJECT – CRIMINAL LAW
CATCHWORDS – Sentence – dishonestly causing a risk of loss to a Commonwealth entity (2 charges) –
LEGISLATION CITED – Criminal Code (Cth), s135.4(5); Crimes Act 1914 (Cth), s16A
CASES CITED – Director of Public Prosecutions (Cth) v Cornish [2012] VSCA 45
SENTENCE –
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APPEARANCES: | Counsel | Solicitors |
| For the Director of Public Prosecutions (Cth) | Mr D J Lane with Ms S J Keating | Commonwealth Office of Public Prosecutions |
| For the Accused Keefe | Mr J V O’Sullivan | Victoria Legal Aid |
| For the Accused Simpson | Mr S Ginsbourg | Leanne Warren & Associates |
HIS HONOUR:
1 Gregory William Keefe and Ross David Simpson, you have both been found guilty by a jury of:
(a)one charge of conspiracy to dishonestly cause a risk of loss to a Commonwealth entity, being Australia Post; and
(b)one charge of conspiracy to dishonestly cause a risk of loss to a Commonwealth entity, being effectively the Australian Taxation Office (“ATO”).
the maximum penalty for each being ten years' imprisonment.
Circumstances of Offending
2 Arising out of your directorships with the bulk mail company, Mailing Advantage Pty Ltd (“MA”), you entered an arrangement with Brian Cornish, the manager of the Hughesdale Licensed Post Office (“HPO”), for the delivery and processing of bulk mail items to HPO over the period from February 2004 to March 2008[1]. Pursuant to the arrangement, tens of thousands of mail articles were delivered to HPO on a regular basis, sometimes twice a day. The payment made by MA for that mail was massively less than the payment which ought to have been made in accordance with Australia Post’s regulated charges.
[1]Note the Indictment refers to the period as from December 2003.
3 In the course of the plea hearing, your counsel urged that you were not responsible for initiating the illicit arrangement with Cornish, but rather, he played a major role in its establishment. In particular, it was submitted that there were other persons including a Mr Pat Nugent, with whom it was said Mr Cornish had a similar arrangement to allow mail to pass through HPO without it being properly accounted and paid for.
4 In my view, you were the principal instigators of the scheme. I accept that Mr Cornish was a salaried employee, and the evidence does not disclose any significant financial benefit to him arising out of the enterprise. Further, the lodgement of mail by Nugent, according to Australia Post’s investigations, did not occur until some time in 2007. While the initial meeting with Mr Cornish may have been by chance, I am satisfied that either at that time or some time shortly afterwards, you saw the opportunity to utilise Mr Cornish and HPO so as to enable MA’s mail to be processed without anything other than modest payment. I reject your evidence that it was Cornish who proposed the scheme. Moreover, you were both responsible for either the delivery of the mail items to HPO, or directing other employees of MA to do so. You were the ones who determined which mail would be processed through HPO, the quantity delivered and the payment (or lack of it) made. Further, the mail lodged at HPO ought to have been accompanied by appropriate documentation, in particular mailing statements detailing the mail lodged and the applicable charges. Few if any such statements were lodged. Rather, you arranged for handwritten Post-It-Notes to accompany the articles, which were comprehensively and deliberately inaccurate.
5 Bearing in mind all of the evidence, in my view, you were responsible not only for the instigation of the arrangement, but its implementation and regulation over a very considerable period of time. I am further satisfied that the arrangement came to an end only when you became suspicious that you were under investigation by Australia Post.
6 The verdict of the jury reflects the fact that HPO[2] was chosen, not only because Mr Cornish was associated with it, but in addition, that it provided the opportunity for the mail to be delivered there in such a manner so as to reduce the risk of scrutiny of items delivered, and the payment made, which would have occurred had the mail been lodged at one of Australia Post’s larger commercial mail centres, such as the Dandenong Letters Centre (“DLC”).
[2]HPO was approximately 23 kms distant from the MA premises in Ringwood
7 The mail fraud was achieved because of your comprehensive knowledge of the operating system of Australia Post and its various outlets, gained over many years’ employment with it.
8 After investigation by Australia Post, and your subsequent arrest, the business rapidly declined, and ceased completely in 2009.
9 Charge 2 relates to a conspiracy to cause a risk of loss to the ATO by providing false information as to the income and sales of MA, over the period March 2004 to December 2008.
10 The scheme involved two separate methods by which cheques payable to MA for mailing services were disguised or redirected so as to avoid company tax and GST. In the first instance, the bank deposit books used to deposit cheques from MA’s clients into its bank account were falsified so as to make those cheques appear as cash. MA’s bookkeeper, Ms Donna Burrell, was then directed to enter those amounts, not as income of the company, but as directors’ dividends. Further, another 135 cheques were intercepted by you and directed, not into the company’s bank account, but into your personal bank accounts.
11 This scheme was achieved by using invoices (referred to as “off-line” invoices) which were sent by you to the clients but not recorded in the accounting system of the company, and which were concealed from the bookkeeper and the company’s accountant.
12 Both the mail and the tax schemes involved careful planning, significant deception and concealment, and the loss to the public of a very large amount of money. In short, the schemes were theft, and on a grand scale.
13 In relation to the remaining charges, Charge 3 and 4, involving a similar scheme at another licensed post office, and further allegations of tax evasion, the jury returned verdicts of not guilty.
The Amount of the Loss
14 Nothing turns upon the fact that you were convicted of causing a risk of loss, rather than an actual loss to a Commonwealth entity.
15 Again, the amount of the loss, in particular, to Australia Post, was the subject of considerable debate during the course of the pleas. With respect to the mail charge, the prosecution calculates the loss at $3,477,000, being the difference between the total postal billed to MA’s clients, as appeared on invoices over the relevant period, less actual payments made for the mail deposited at HPO, leaving a total of $2,934,000.
16 To this, the prosecution submits, there should be added an increase of 18.5 per cent to reflect “full postal rate”, given, when mail was presented at HPO, it was presented in such a manner so it did not attract discounts as to the sorting and presentation, which would otherwise have been available through one of Australia Post’s large commercial mail centres, including the DLC. Thus, according to the prosecution, the mail lodged at HPO ought to be assessed as if it attracted the full rate, without discount.
17 I reject this submission. It appears to me that when the loss to Australia Post is considered, it is reasonable to assume that, absent the fraudulent scheme, the mail would have been delivered to a large commercial mail centre and in such a manner as to attract the greatest discount available, as had occurred before 2004.
18 The next issue is as to the “profit” said to be built into the figure for postage as appeared on MA’s invoices. In the course of the trial, evidence was given by Mr Terrence Gunn that it was common practice within the industry that the postage component as appeared on invoices had a built-in profit margin. This would depend upon what the market would bear or the customer would tolerate. You each gave similar evidence.
19 The prosecution’s submissions on the issue may be summarised as follows:[3]
·According to Australia Post’s investigators’ calculations, there was no profit margin if one were to assume the mail presented to HPO attracted the “full rate”. I have rejected this submission.
·An assessment of the profit component made in the six-month period before MA commenced to lodge mail at HPO; that is, six months before the commencement of the conspiracy, showed the profit margin to be 5.85 per cent.
·An assessment of mail lodged during the period of the Revenue Protection Check[4] indicated with respect to mail lodged at HPO, the postage payable was greater than the postage invoiced.
·Therefore, if there be any allowance for profit, it ought be modest.
[3]See paragraph 30 of Prosecution Sentencing Submissions dated 30 July 2012
[4]A check carried out by Australia Post’s investigators over the period 19 November 2007 to 13 December 2007 where an intensive assessment was made of MA mail comparing mail lodged with payments made.
20 According to Mr O’Sullivan and Mr Ginsbourg, the loss to Australia Post, taking account of the profit margin, ought be in the order of $2,350,000.
21 According to Mr Ginsbourg, the profit allowance ought be as much as 50 per cent. He said a more reliable method to calculate the profit would have been to identify all mail lodged by MA at the DLC, and compare the invoices rendered to MA’s clients in relation to that mail. I accept the prosecution’s submission that this was not practical, given the investigation would be very complex and lengthy.
22 Having considered the evidence presented during the course of the trial, and examined various documentation and spreadsheets prepared by Australia Post and Federal Police investigating officers, while I accept the invoices rendered by MA to its clients did have some profit component, it is very difficult to quantify what that profit component was. Different invoices appear to have attracted different profit margins. Generally, I accept the prosecution’s submissions that the most reliable manner in which to assess the profit is to have regard to the mail lodged in the six-month period before the conspiracy commenced, and further, to have regard to the profit component in respect of the invoices assessed during the course of the Revenue Protection Check. However, I accept that an examination of the invoices does reveal that on occasions that profit margin was more substantial. Bearing in mind all of the submissions on the issue, I have determined to allow a profit margin of 15 per cent. There is no precise arithmetic calculation as to this figure but is, rather, a general assessment, if anything, a figure erring on the side of a higher profit to MA, and a lesser loss to Australia Post.
23 I therefore calculate the loss to Australia Post as being approximately $2,494,000.
24 In relation to the loss to the ATO arising out of Charge 2, according to the prosecution,[5] the risk of loss is $544,000. This includes underpaid GST and company tax over the relevant years, and an additional amount for the tax in respect of the 2008 financial year. Neither counsel made any significant criticism of the basis of the calculations leading to this figure. I accept this figure as representing the risk of loss in respect of Charge 2.
[5]See paragraph 46 of Prosecution Submissions on Sentence
Factors Personal to You
25 Gregory Keefe, you are now fifty-four years of age. You had a conventional upbringing and schooling. You commenced work with the Postmaster General’s Department (now Australia Post) in 1975 at seventeen years of age. You met your wife, Lynn, who was also employed by Australia Post, and were married in 1983. You have two children with Lynn, and she had a daughter by a previous marriage. Your children are now, respectively, a legal practitioner and a primary school teacher.
26 It is said on your behalf, and I accept, that you have worked throughout your life to provide a secure and stable environment for your family.
27 You worked for Australia Post for eighteen years, and rose to be manager of the Victorian country mail network. You took voluntary redundancy in 1993 and eventually joined Mr Simpson, who you had known through Australia Post, at MA in 1999. You had been involved in gambling for a considerable period. When you met Mr Simpson you both agreed to direct your energies towards building up the MA business. Gambling was not a prominent part of your life in those early years. However, as time progressed and the business became more regulated, you spent more time with Mr Simpson gambling, and it became a major preoccupation and had a destabilising effect upon you, the business and your family. Your involvement in gambling was reflected in a number of recorded telephone calls from people in the gambling industry which were played during the course of the trial.
28 I accept that in 2007 and 2008, you and Mr Simpson spent a very considerable period of time away from the business because of gambling. While it was not responsible for the instigation of the conspiracy, I am satisfied that in the latter years it played a significant role, in that the funds raised from the underpayment of mail were used to fuel your gambling habit. However, your involvement does not in any way excuse your conduct; rather it provides an explanation.
29 I accept that through you and Mr Simpson, MA was involved in a range of local activities and charities.[6]
[6]See Exhibit D1A – various certificates of appreciation
30 Your wife had a thirty-three year career with Australia Post, rising to the position of national manager. She herself was investigated because some of MA’s cheques were directed to her personal account. Her reputation was sullied by her association with you, and I accept that she retired significantly earlier than was otherwise planned. Over the last four years, I accept that your investigation and arrest has caused very substantial distress to her and your children. There has further been the loss of the business, the premises at which it was conducted, and your family home.
31 A Pecuniary Penalty Order was made pursuant to the Proceeds of Crime Act (2002) (Cth). An amount of $248,000 was ordered to be paid in part reparation of the loss.[7] I am satisfied that you co-operated in the Pecuniary Penalty Order process.[8]
[7]Section 320(d) provides that a court must not have regard to any pecuniary penalty order in passing a sentence
[8]See paragraph 84 of prosecution submissions
32 I accept that over the last four years, you have suffered significant anxiety and stress, and associated sleep problems. You are being investigated for high blood pressure.[9]
[9]See report of Dr Skye Hueneka – Exhibit D1B
33 I accept that over the last two years you have taken steps to address your gambling problems, including attending Gamblers Anonymous. According to a testimonial from Barbara Cornhill,[10] you have actively participated in the Gamblers Anonymous Program and have expressed a desire to repair the damage the gambling has caused. I accept that you have been abstinent from gambling over the last two years.
[10]Exhibit D1C
34 Ms Lorraine Davies, a former neighbour, described you as honest, caring and supportive during her late husband’s illness.
35 I accept that because of your offending, you have lost your employment, livelihood and reputation. I accept all of this has had a very significant impact upon your family. Your mother is eighty-seven years of age and physically frail. Without your assistance, it is likely she will be required to enter a nursing home. You will miss various important milestones of your children.
36 Ross Simpson, you are now fifty-six years of age. Your upbringing and education were uneventful. You also commenced work with Australia Post at a young age and progressed through to middle management. You took a voluntary redundancy in 1993. You then worked in a number of areas, including for another mailing house. You commenced the business in 1997, initially out of a garage.
37 You married Caroline in 2003 and the marriage has suffered difficulties because of your investigation and arrest. She has two children from a previous marriage and you have been heavily involved in their lives. Your gambling history is similar to that of Mr Keefe’s. I accept that you also entered a Gamblers Anonymous Program and according to a reference of Mr Andrew Dale,[11] you have participated in the program, been abstinent from gambling over the last several years, and pledged to remain so into the future.
[11]Exhibit D2B
38 You have been extensively involved in sport over your life – in particular, football and cricket – and according to the evidence of a character witness, Mr Peter White, you have been heavily involved in cricket umpiring until recent times.
39 According to references tendered on your behalf from Mr David Read, Mr Mark Orford and Mr Neil Croft,[12] you played a guiding role for your family when your father was killed in a motor traffic accident when you were young. You are regarded as loyal and hardworking, having an exemplary work record and that the offending was completely out of character to the person known by the referees. You were described as genuine, warm, caring and compassionate.
[12]Exhibit D2C
40 According to a report of Associate Professor Sree Appu,[13] you contracted prostate cancer in 2010 which required surgery and resulted in various complications. The report indicates that you have made a near complete recovery.
[13]Exhibit D2A
41 Evidence was given on your behalf by the Reverend Dr Roland Ward, a retired Presbyterian Minister. He has known you and your family over forty years. He confirmed that you were no longer gambling, and have been of considerable assistance to him in his work with Sudanese youth. He noted that your wife remained supportive of you. According to Mr Russell Hanson, formerly the CEO of the Wilderness Society, MA was of significant assistance to that society in its early days, enabling large quantities of mail to be processed when the society had little means for payment. He was shocked to hear of your arrest and conviction and confirmed the effect upon your family was devastating.
42 Likewise, you were the subject of a Pecuniary Penalty Order, and an amount of approximately $75,600 was paid by way of partial reparation. As with Mr Keefe, you co-operated in the process.
Parity
43 Mr Cornish was sentenced in this Court on 26 August 2011. He had pleaded guilty to:
· One charge of conspiring to dishonestly cause a risk of loss to a Commonwealth entity
· Four charges of dishonestly causing a risk of loss to the Commonwealth.
44 Charge 1 is the same charge of which you were both found guilty arising out of HPO. Charges 2 to 5 related to the theft of 49 cheques with a total value of $124,000 which were deposited into Mr Cornish’s personal account. The learned trial judge sentenced Mr Cornish to a term of imprisonment of two years and seven months in respect of Charge 1, and varying terms of imprisonment, up to five months in respect of Charges 2 to 5. The total aggregate sentence was three years’ imprisonment, with all but twelve months suspended.
45 The Court of Appeal[14] allowed the appeal in part, and re-sentenced Mr Cornish to a total of three years and six months’ imprisonment, with a non-parole period of two years and four months. The sentence imposed in respect of Charge 1 was not altered. The Court, pursuant to s6AAA of the Sentencing Act, declared that had the accused not pleaded guilty, a term of imprisonment of seven years with a non-parole period of four years and three months would have been imposed. All parties before me agreed that that declaration reflected not only the plea of guilty, but in addition, an offer by Mr Cornish to assist the authorities in their investigation, and, when called upon, to give evidence against you in the present trial. I note, however, the Court stated:[15]
“We assess that culpability in relation to the fraud being principally perpetrated by Simpson and Keefe as being far higher than did her Honour.”
[14]DPP (Cth) v Cornish [2012] VSCA 45
[15]DPP (Cth) v Cornish (supra) at paragraph 47
46 There were distinct similarities and dissimilarities referred to in the sentencing comments of the trial judge and the Court of Appeal. On the one hand, neither of you were involved in the conversion of the cheques, as was Mr Cornish, and, in acting in the conspiracy, there was no breach of the trust which Cornish owed both to his employer, and to Australia Post. On the other hand, Cornish had pleaded guilty, and agreed to assist the authorities. Of most significance is that, in my view, your culpability for the offending was far greater. In particular, I am satisfied that you initiated the scheme, implemented and administered it, and significantly realised a far greater profit. In fact, Cornish, setting aside the misappropriated cheques, received little, if any, profit.
47 In my view, a comparison between this case and that of Mr Cornish does not require an arithmetic assessment, taking away on the one hand the different mitigating factors, and adding on the other hand, the aggravating factors. The proper approach is that careful regard should be had to these factors, and the sentence imposed, but that the “intuitive synthesis” that is required is not a precise adding and subtracting exercise.
48 I have further had regard to other cases to which I was referred. In particular, DPP (Cth) v Trainor & Cahir[16] and various other cases referred to in the table provided by the prosecution.[17] Those cases are a general guide only and each case turns to be determined upon its own facts and circumstances.
[16][2000] VSCA 249
[17]Tab 8 in sentencing materials provided by the prosecution
Sentencing Considerations
49 The matters to be taken into account as sentencing principles are set forth in s16A of the Crimes Act 1914 (Cth). The Court must relevantly have regard to:
· the nature and circumstances of the offence
· your personal circumstances
· the loss resulting from the offence
· the deterrent effect of any sentence upon you, and upon the community
· punishment, to an extent and in a manner which is just in all the circumstances
· your prospects for rehabilitation
· the probable effect of any sentence upon your family.
50 Neither of you have any prior convictions and have not come to the notice of the authorities since offending. Generally, you have made a significant contribution to the community and to your family. I take into account that the term of imprisonment which I will impose will have a significant effect upon your respective wives and children and other close family members, although it is acknowledged that that effect does not fall into the category of “special circumstances” such as to warrant a special grant of mercy.
51 I accept the plea of your counsel that your prospects for rehabilitation are strong, and the consequent risk of re-offending small. I accept this, because you each have a close and supportive family, that otherwise you have led a productive and responsible life, have suffered social stigma and shame as a result of your offending and have taken significant steps to control your gambling habit. I accept that as a consequence, the principle of specific deterrence is reduced. General deterrence however, has a significant role to play in sentences of this type.
52 I accept that there has been a delay of approximately four years between your arrest and the matter coming to trial. That delay has been caused by quite appropriate and extensive investigations by Australia Post and the Federal Police. I accept the plea of your counsel that, as a result, you have suffered the stress and anxiety of these charges “hanging over your heads” over that period and all the necessary court attendances that has entailed. I accept this is a matter to be taken into account.
53 As stated, I am of the view that while your extensive involvement in gambling played a role in the offending, in particular, in the latter years, it provides no excuse for the offending, and is not a mitigating factor. I was not provided with any psychological nor psychiatric reports to suggest there was any irresistible compulsive element to the gambling. The real issue in relation to your gambling is that you have both taken steps towards its treatment, and that is reflected in a consideration of your prospects for rehabilitation.
54 The principle of proportionality is relevant. I accept that s16A of the Crimes Act (Cth) does contemplate both proportionality and totality. The Court must impose a sentence, the severity of which is appropriate to the circumstances of the offence. I further accept that I must not impose a sentence which is, in all the circumstances, crushing.
55 I bear in mind the sentence imposed in respect of Mr Cornish, and the other sentences to which I have referred.
56 The circumstances of your offending are serious. As stated, each charge involves theft, causing very considerable loss to Commonwealth entities. This must, in a general sense, reflect a very substantial loss to the public. As stated, I am satisfied that you were responsible for instigating the conspiracy. I do not accept the plea of your counsel that the offending was opportunistic. The initial meeting with Mr Cornish in December 2003 may have been so, but thereafter, you initiated, implemented and maintained a scheme over four years which has led to a loss of millions of dollars. Aspects of the scheme were sophisticated, in particular, the redirection of cheques and the alteration of bank deposit entries.
57 The delivery of bulk mail to HPO over that period involved many tens of thousands of items, without the provision of appropriate documentation, and undertaken so as to reduce any realistic prospects that the mail would be counted and properly assessed for payment through Australia Post. In substitution for appropriate documentation, you provided Mr Cornish with Post-It Notes which reflected a massive understatement of the numbers of items delivered, and the applicable postage fees.
58 All that can be said as to the seriousness and extent of the offending is that it did not involve very complex legal and accounting arrangements with, for example, overseas entities, and nor did the very substantial loss reflect in an extravagant lifestyle, including the purchase of assets for personal use.
59 As between each of you, it was not put that one or other ought bear a more substantial proportion of the responsibility for the scheme. I regard you as each equally responsible. There is nothing in your personal circumstances to suggest there ought be any disparity between you in the sentence to be imposed.
Sentence to be Imposed
60 Gregory William Keefe and Ross David Simpson, bearing in mind all of the matters to which I have referred, I impose the following sentence:
61 On Charge 1, conspiracy to dishonestly cause a risk of loss to a Commonwealth entity, you are each convicted and sentenced to a term of imprisonment of six (6) years and six (6) months.
62 On Charge 2, conspiracy to dishonestly cause a risk of loss to a Commonwealth entity, you are each convicted and sentenced to a term of imprisonment of two (2) years and six (6) months.
63 In determining whether to order any period of cumulation, and if so, how much, I take into account that the offences occurred over the same period, and each arose out of your directorship with MA. However, the charges are discrete, and involve conspiracy of a different nature. Such is the gravity of the offending that total concurrency would fail to do justice.
64 I direct that twelve (12) months of the sentence imposed in respect of Charge 2 be served cumulatively upon the sentence imposed in respect of Charge 1, the base charge. That results in a total effective sentence of seven years (7) and six (6) months imprisonment. The sentence of imprisonment in respect of charge 2 will commence from 1 August 2017.
65 Given my findings in respect of rehabilitation, I accept that a shorter than normal non-parole period is appropriate. I direct that you serve a minimum term of five (5) years' imprisonment before becoming eligible for parole.
Pre-Sentence Declaration
66 In relation to each of you I declare that a period of 13 days is to be reckoned as a period of imprisonment already served under this sentence and that this declaration is to be noted in the records of the Court.
Ancillary Orders
67 I shall hear from the parties as to any ancillary orders.
68 HIS HONOUR: Mr Lane, I will hand to you and to other counsel Mr O'Sullivan and Ms Bradley, the proposed orders I intend to make and I would be grateful if you could examine them to see whether the starting periods in respect of Charge 2 are accurate.
69 MR LANE: Yes, Your Honour. My initial impression was that it was, Your Honour, that it does give effect to what Your Honour intended but we will have a look at it.
70 HIS HONOUR: Have a look at them. Yes, you can have a seat, Mr Keefe and Mr Simpson, for the moment, thanks. Apart from attempting to ensure that the order is technically accurate there is the matter of the reparation. What do you want to do about that Mr O'Sullivan? I take it that there is an issue about this.
71 MR O'SULLIVAN: Yes.
72 HIS HONOUR: How much debate do you think there will be.
73 MR O'SULLIVAN: I think it would be brief, Your Honour.
74 HIS HONOUR: Will it?
75 MR O'SULLIVAN: Yes.
76 HIS HONOUR: I have got a reserve list at 10.30. I have got half an hour till then. Will that be adequate time?
77 MR O'SULLIVAN: I think it probably would be, Your Honour. We agree on the principles that Your Honour apply in exercising your discretion so it is really just I would make some submissions about how those principles should be applied in the particular place.
78 HIS HONOUR: Yes. Very well.
79 MR O'SULLIVAN: Could Your Honour just assist me? What was the last day of the plea hearing? In other words the first day that Mr Keefe went into custody?
80 HIS HONOUR: 1 August? I think thirteen days is right. Am I accurate in that?
81 MR LANE: Yes, Your Honour.
82 HIS HONOUR: That is why the sentence in respect of Charge 2 starts from the 1 August which I understand is right but the arithmetic with this is so difficult that I am happy to be checked. I ask that it be checked carefully.
83 MR LANE: Your Honour, our calculation is that Your Honour's orders would give effect to what you intend.
84 HIS HONOUR: Thank you. Very well what about reparation? I have read your submissions, Mr Lane.
85 MR LANE: Yes, Your Honour, there is nothing really more to say except financial - - -
86 HIS HONOUR: I have a discretion and I can take into account the financial position of each of the defendants.
87 MR LANE: Probably must take into account. That seems to be the authorities, Your Honour. And the Crown accepts that obviously there will be no earning capacity whilst they are in prison and that the assets have been frozen and liquidated so that there is practically no ability to meet an order at the moment so it is really only a question of what could be done after a term of imprisonment.
88 HIS HONOUR: Well, it reflects in rehabilitation, to some extent. If I impose a large order then there is a disincentive to work which is an important aspect in my view of rehabilitation.
89 MR LANE: That is a matter for Your Honour as well.
90 HIS HONOUR: Yes, thank you, Mr Lane. Yes, Mr O'Sullivan?
91 MR O'SULLIVAN: Yes, just briefly, Your Honour. The two entities would retain their option to pursue a civil remedy. So there was some discussion on the last occasion about hypothetical winning of the lottery, for instance, and so the entities would not be shut out in that circumstance. And they retain that option and in these proceedings Your Honour does not follow the principles that would apply in civil law. If you wanted an authority for that, Davies v. Taylor, one of cases cited by Mr Lane says that the exercise of the discretion does not equate simply with the ordinary principles of civil law. So, for instance, where you would not take into account a civil law but do here, the utlility of making the order is a consideration for Your Honour to take into account here.
92 And, in my submission, the two key matters are the ability to pay. Your Honour, in my submission, would accept giving the evidence you had about the pecuniary penalty for the proceedings that Mr Keefe and Mr Simpson, for that matter do not currently have the capacity to meet an order and on that basis Your Honour should effectively take into account that we're talking about people who, at the earliest will leave prison in five years' time and what is the utility of them coming out of a prison at that time with, one would have to presume, some issues to deal with in terms of being able to readjust and, hopefully, get themselves into a position of earning income but to do that and with the additional burden of a large debt hanging over them at that time.
93 In Vlahov v. Commissioner of Taxation, again one of the cases referred to. The proposition was put there that it was generally better that orders should be sharp and their effect, rather than protract it in order which requires four years for its fulfilment referring to - in that case would, in general, be unreasonable.
94 In Gould v. Federal Commissioner of Taxation, reparation orders should generally not be made where they would result in prolonged payments by the offender. And the general principle that is set out in Leaver v. Derrington. Again, one of the cases that Your Honour has been referred to but also is in Davies v. Taylor that there is no purpose achieved by making orders which are effectively futile which, in my submission, at least in the short to medium term these orders would be and then, in addition, as Your Honour has already raised it the question about the issue of rehabilitation and the proposition that flows from cases is that to impose a large financial burden is generally counterproductive to the offender's rehabilitation.
95 Your Honour will note - I don't say that the strict application of the principles of parity apply here but Your Honour will note the orders that were made. No order was made in relation to Mr Cornish, who was someone who was serving a prison sentence. Mr Nigro, who was not going actually into custody and who, as we know from the evidence in this case, had re-established himself with a newsagency business.
96 His circumstances in terms of his ability to pay and the impact on his rehabilitation was obviously quite different and so an order was made in relation to him.
97 So, in my submission, obviously there is the capacity to make very large orders in this case but it is that same size of the amount in question that is reflected in the offending and in the sentence and when it comes to this reparation in these circumstances where there is a minimum of five years' imprisonment, where the offenders have made payments to the extent that they were able through the pecuniary penalty order of proceedings and are not currently in a position to make payments in relation to any reparation order. In all the circumstances Your Honour should either use your discretion not to make the order or decline to exercise the discretion in favour of making the order.
98 HIS HONOUR: Thank you, Mr O'Sullivan. Ms Bradley?
99 MS BRADLEY: Thank you, Your Honour. I really adopted the submissions of my friend and it is my view that there really isn't anything I can add in addition to his submissions.
100 HIS HONOUR: Thank you. Mr Lane, do you want to say anything?
101 MR LANE: No. No, Your Honour.
102 HIS HONOUR: Having heard argument in this matter in relation to the Crown's application for a reparation order I accept that neither accused has the capacity to pay at the present time anything more than has already been paid under the Pecuniary Penalties Order. I accept that that will obviously remain for at least five years while each accused is in prison.
103 When each accused is released it is, in my view, important for their prospects of rehabilitation that they be able to enter the workforce if work can be obtained, given their convictions for these offences and that to enter the work force is an important matter to be taken into account in their rehabilitation.
104 It would thus be more than five years before either of them had any capacity to make any reparation for the very substantial debt that was incurred. Bearing in mind my wide discretion in this matter I decline to make any order in respect of reparation.
105 That should not be seen as a reflection of the lack of seriousness of the offences or the amount involved. The offences are very serious and the amount involved very substantial. Nonetheless, in the interests of justice, it seems to me that there will be no order made in respect of reparation.
106 MR O'SULLIVAN: As the court pleases.
107 MS BRADLEY: As Your Honour pleases.
108 HIS HONOUR: Thank you, ladies and gentlemen for your assistance. Is there any 464 order sought or not? Not relevant?
109 MR LANE: I am sorry, Your Honour. No, Your Honour. It is not. I am just thinking 6AAA, Your Honour, hasn't made a declaration under s.6AAA of the Sentencing Act. I am sorry everybody is point out that idiotic submission that was. No, Your Honour, so there is nothing else. As Your Honour pleases.
110 HIS HONOUR: Yes, thank you. Before the accused are taken away I ask the prison officers to allow them access to their family and lawyers in an orderly manner. Temporarily adjourn.
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