Heng v The Queen - [2022] SASCA 24

SUPREME COURT OF SOUTH AUSTRALIA
(Court of Appeal: Criminal)
HENG v THE QUEEN
[2022] SASCA 24
Judgment of the Court of Appeal
(The Honourable President Livesey, the Honourable Justice Doyle and the Honourable Justice Bleby)
24 March 2022
CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST SENTENCE - GROUNDS FOR INTERFERENCE - SENTENCE MANIFESTLY EXCESSIVE OR INADEQUATE
CRIMINAL LAW - SENTENCE - SENTENCING ORDERS - NON-PAROLE PERIOD OR MINIMUM TERM - SOUTH AUSTRALIA - FEDERAL OFFENDERS
CRIMINAL LAW - PARTICULAR OFFENCES - PROPERTY OFFENCES - OTHER FRAUDS AND IMPOSITIONS - FRAUD - DEFRAUDING THE COMMONWEALTH - CONSPIRACY
Application for permission to appeal against sentence and appeal against sentence.

The applicant, together with two co-accused, was convicted by a jury of one count of conspiracy to defraud the Commonwealth, contrary to s 135.4(5) of the Criminal Code 1995 (Cth).
The circumstances of the offending were that, between February 2011 and February 2013, the applicant and co-accused defrauded the Commissioner of Taxation by registering six labour hire businesses which failed to pay GST collected from businesses to which labour had been supplied and PAYG tax withheld from workers’ salaries. In this way, the Commissioner of Taxation suffered losses in the order of $4.6 million, comprised of approximately $2.2 million in unremitted GST and $2.4 million in unpaid PAYG tax.
The applicant was sentenced on the basis that, inter alia, he was the architect and instigator of the scheme, had received the greatest benefit from it, and had shown no remorse or contrition. He received a sentence of eight years imprisonment with a non-parole period of six years. His co-accused received head sentences of four years imprisonment (reduced from five years by 20 per cent on account of his plea of guilty) and five years imprisonment, with non-parole periods of two and three years respectively.
The applicant seeks permission to appeal against his sentence on the singular ground of manifest excess. In doing so, the applicant emphasises that the head sentence was 80 per cent of the maximum penalty for the offence and that the non-parole period was fixed at 75 per cent of the head sentence. The applicant also contends that the sentencing Judge erred in apportioning greater culpability to the applicant over another of the co-accused.
Held, by the majority (Doyle and Bleby JJA), granting permission to appeal and allowing the appeal:
1.There was a clear basis for differentiating between the applicant and his co-accused.
2.The head sentence imposed, while heavy, was not manifestly excessive.
3.In circumstances where the sentencing Judge did not make any finding that would justify a heavy non-parole period, and the evidence did not otherwise reveal any basis for making such a finding, the non-parole period (being 75 per cent of the head sentence imposed) was manifestly excessive.
4.The sentence is set aside, and the applicant resentenced.
Held, by Livesey P (in dissent), granting permission to appeal but dismissing the appeal:
1.There was no issue of disparity in this case.
2.The head sentence and non-parole period were not, in the circumstances, manifestly excessive.

Criminal Code 1995 (Cth) s 135.4(5); Crimes Act 1914 (Cth) ss 4AA, 4B, 16A, 19AB, 21B, referred to.
Hili v The Queen (2010) 242 CLR 520; Bertilone v The Queen (2009) 197 A Crim R 78, applied.
Ndreka v The Queen [2021] SASCA 11; R v McIntyre [2020] SASCFC 101; R v Palmer [2016] SASCFC 34; R v Boughen (2012) 215 A Crim R 476; DPP (Cth) v Gregory (2011) 34 VR 1; R v Stitt (1998) 102 A Crim R 428; R v Creed (1985) 37 SASR 566; Bugmy v The Queen (1990) 169 CLR 525; R v Alqudsi [2016] NSWSC 1227; R v Tran (2007) 172 A Crim R 436; R v Ruha (2010) 198 A Crim R 430; Tsen v The Queen [2010] WASCA 21; R v Paull (1990) 20 NSWLR 427; R v Marshall (2010) 199 A Crim R 331; Sayed v The Queen (2012) 220 A Crim R 236, considered.

HENG v THE QUEEN
[2022] SASCA 24
Court of Appeal: Criminal – Livesey P, Doyle and Bleby JJA
LIVESEY P:
Introduction

The applicant was convicted of one count of conspiracy to defraud the Commonwealth following a trial before a jury.[1] On the question of manifest excess, the applicant seeks permission to appeal his sentence, emphasising that his eight˗year sentence was 80 per cent of the maximum penalty for this type of offending. The applicant also contends that, though the offending spanned two years, six different companies and a number of people recruited as the directors of those companies, the offending involved only one count. He says that the sentences relied upon by the prosecutor in the schedule of comparative sentences concerned offenders convicted of multiple counts.
[1] Contrary to s 135.4 of the Criminal Code Act 1995 (Cth).
As for the non-parole period, the sentencing Judge fixed that at 75 per cent of the head sentence. Though the applicant accepts that the sentencing Judge appeared to be influenced by his lack of contrition and remorse, he contends that the non-parole period was a much greater proportion of the head sentence when compared with the non-parole periods fixed for Mr Sarinn and Mr Chy. In addition, he contends that there ought to have been greater recognition of the scope for rehabilitation.
Sentencing for revenue fraud
Offending involving revenue fraud warrants the imposition of significant deterrent sentences.[2] Because the Australian taxation system relies upon self˗assessment and self-reporting, when abuse is discovered, the sentences imposed must be salutary.[3] That is especially so where, as here, a sophisticated scheme is involved.[4] In Director of Public Prosecutions (Cth) v Gregory, the Court of Appeal explained:[5]
A sentence imposed for fraud upon the taxation revenue is intended to reaffirm basic community values that all citizens according to their means should fairly share the burden of the incidence of taxation so as to enable government to provide for the community, that the revenue must accordingly be protected and that the offender should be censured through manifest denunciation. When these considerations are not reflected in the responses of the courts, the criminal justice system itself fails to achieve its objectives.
[2]     R v Boughen (2012) 215 A Crim R 476, [62]-[66] (Simpson J, with whom Hilsop and Latham JJ agreed).
[3]     Director of Public Prosecutions (Cth) v Gregory (2011) 34 VR 1, [51]-[52] (Warren CJ, Redlich JA and Ross AJA).
[4]     R v Stitt (1998) 102 A Crim R 428, 430 (Dunford J, with whom Beazley JA and Wood CJ and CL agreed).
[5]     Director of Public Prosecutions (Cth) v Gregory (2011) 34 VR 1, [57] (Warren CJ, Redlich JA and Ross AJA).
It is necessary that the deterrent and punitive aspects of a sentence for tax fraud be reflected in both the head sentence and the non-parole period.[6]
[6] Hili v The Queen (2010) 242 CLR 520 (Hili), [41] (French CJ, Cummow, Hayne, Crennan, Kiefel and Bell JJ).
Setting non-parole periods
The non-parole period, no less than the head sentence, must reflect the punitive, deterrent and preventative purposes of punishment.[7] More serious offending will warrant a greater minimum term due to the likely deterrent effect on others.[8] The non-parole period reflects the period of imprisonment the sentencing judge determines the offender should actually serve in prison before release.[9] Sentencing judges have great latitude in the exercise of their discretion to fix a non-parole period; that task inherently permits a range of potentially appropriate outcomes, depending upon the view taken by the particular sentencing judge.[10]
[7]     R v Creed (1985) 37 SASR 566, 568 (King CJ, with whom Cox J and Olsson J agreed).
[8]     Bugmy v The Queen (1990) 169 CLR 525, 532 (Mason CJ and McHugh J).
[9]     Hili v The Queen (2010) 242 CLR 520, [36]-[44] (French CJ, Cummow, Hayne, Crennan, Kiefel and Bell JJ); R v Alqudsi [2016] NSWSC 1227, [123] (Adamson J); R v McIntyre (2020) 138 SASR 17 (McIntyre), [84] (Doyle J (as he was), with whom Stanley and Hughes JJ agreed).
[10] R v McIntyre (2020) 138 SASR 17, [86].
Sentences imposed for offences under South Australian State law reflect that “the need for punishment and protection will generally result in non-parole periods of between one half and three quarters of the head sentence”.[11] As Doyle J explained in R v McIntyre:[12]
It is accepted that there is no norm for a non-parole period, or prescriptive range within which all non-parole periods must fall. While thus emphasising the breadth of the trial judge’s discretion when fixing a non-parole period, it would at the same time be unrealistic to ignore that ordinarily (and in the absence of statutory intervention) an appropriate non-parole period will be somewhere around the range from about half to three-quarters of the head sentence.
(footnote omitted).
[11] R v Palmer [2016] SASCFC 34 (Palmer), [4] (Kourakis CJ).
[12] R v McIntyre [2020] SASCFC 101, [84] (Doyle J (as he was), with whom Stanley and Hughes JJ agreed).
In the case of federal offending there neither is, nor should be, any judicially determined normal starting point, whether it is expressed as a percentage of the head sentence or otherwise.[13]
[13] Hili v The Queen (2010) 242 CLR 520, [13] and [36]-[44] (French CJ, Cummow, Hayne, Crennan, Kiefel and Bell JJ); R v Alqudsi [2016] NSWSC 1227, [123] (Adamson J); R v McIntyre (2020) 138 SASR 17, [84] (Doyle J (as he was), with whom Stanley and Hughes JJ agreed).
There is no tension between these approaches to sentencing for State and federal offending. The fact that sentences, or for that matter non-parole periods, tend to fall within a recognisable range of outcomes provides some general guidance. It does not mean that a sentence or a non-parole period must invariably be set within that range or that the exercise of what is a broad judicial discretion is constrained by that range. When a sentence or a non-parole period is set outside the range that does not necessarily and of itself suggest that there has been any error in the exercise of the sentencing discretion. Usually, more is required to be shown before the appeal court can conclude that there is manifest inadequacy or manifest excess.
The decisions of Bertilone and Hili
In Bertilone v The Queen,[14] Buss JA (as he was) carefully reviewed the Australian authorities on the need for consistency in the imposition of sentences for federal offenders,[15] as well as in the setting of non-parole periods for federal offenders. His Honour explained:[16]
Although reasonable consistency in the sentencing of Commonwealth offenders is important, this object must not fetter a sentencing judge's discretion.
[14] Bertilone v The Queen (2009) 197 A Crim R 78 (Bertilone).
[15] Citing, for example, R v Tran (2007) 172 A Crim R 436, [8] (Keane JA, with whom White J agreed).
[16] Bertilone v The Queen (2009) 197 A Crim R 78, [38] (Buss JA, with whom McLure and Miller JJA agreed).
Buss JA also examined the approach taken in other States to the setting of non-parole periods as “a ratio” of the head sentence for federal offences. For example, in New South Wales his Honour noted the following decisions, amongst others:[17]
[17] Bertilone v The Queen (2009) 197 A Crim R 78, [42]-[44] (Buss JA, with whom McLure and Miller JJA agreed).
In R v Viana [2001] NSWCCA 171, the offender appealed against a head sentence of 14 years and a non-parole period of 10 years for, amongst other offences, conspiracy to import commercial quantities of cocaine. He contended, relevantly, that the non-parole period represented too high a proportion of the head sentence. The Court of Criminal Appeal of New South Wales dismissed his appeal. Meagher JA (Wood CJ at CL and Studdert J agreeing) held (at [3]):
The principles of law applicable in this area have been laid down by this court in R v Bernier (1998) 102 A Crim R 44. There is in fact no statute which requires the non-parole period to bear any particular proportion in relation to the head sentence, nor is there any mandatory precedent in this Court which requires a fixed sentence. The most that can be said is that this Court has usually in cases of this sort, thought the proportion ought to be somewhere between 60 and 66 percent. That is not to say that higher percentages cannot stand. Indeed, if one looks at a survey of similar cases, there are many cases in which this court has approved of high percentages as high as 75 percent at least.
Bick was a social security fraud case. The ratio of the non-parole period to the aggregate head sentence was about 78% (at [12]). Counsel for the offender submitted that “the norm” for non-parole periods was in the range of about 60% to 66% of the head sentence. Price J said (at [13]-[14]):
The applicant referred to authorities which indicate that the norm for non-parole periods is in the range of about 60 to 66% of the head sentence: see, for example, R v Bernier (1998) 102 A Crim R 44 at 49 and R v Behar [1998] NSWSC 567.
The determination of the appropriate non-parole period for offences in breach of the criminal law of the Commonwealth involves the exercise of judicial discretion.
The Court of Criminal Appeal of New South Wales was not persuaded in Bick that, notwithstanding the high percentage, the offender’s non-parole period was such as ought to attract the intervention of the court (at [24]). See also the similar observations in Ly v The Queen [2007] NSWCCA 28 at [16]-[17], a tax fraud case.
In James v The Queen [2009] NSWCCA 62, the Court of Criminal Appeal of New South Wales referred to a ratio between non-parole periods and head sentences of 60%-66% for Commonwealth sentences as “a general guide” (at [15]). Blanch J (Beazley JA and Howie J agreeing) said, in dealing with an appeal against sentence for offences relating to child pornography (at [14]-[15]):
The contention is that the usual proportion between the head sentence and the non˗parole period is 60-66% in Commonwealth sentences. In this case the 18 month sentence is cumulative on 3 months of the State sentence, the effective total sentence is 21 months and the non-parole period is 15 months.
On the other hand in this case the proportion of the sentence for the Commonwealth offence to be served was in fact 66%. Although that is disturbed by the 3 month accumulation, in my view the proportion of the sentences to be served in custody is not outside an acceptable range even if both the sentences were for Commonwealth offences. The ratio of 60 to 66% is a general guide and is not a statutory ratio.
See also R v Riddell [2009] NSWCCA 96, where Beazley JA (Blanch and Howie JJ agreeing) noted, in the course of re-sentencing an offender for two offences involving attempted possession, and possession, of commercial quantities of cocaine, contrary to the Criminal Code (Cth), that (at [86]):
in setting the non-parole period, I have applied the proportion usually set for Commonwealth offences: see, for example, James v The Queen [2009] NSWCCA 62 at [15].
Buss JA referred to the Queensland decision of R v Mokoena as follows:[18]
In Mokoena v The Queen [2009] QCA 36, the appellant sought leave to appeal against a sentence of nine years imprisonment, with a non-parole of four years and nine months, imposed in respect of one count of importing a marketable quantity of heroin into Australia. The prosecutor informed the sentencing judge that it was generally accepted, in sentencing for Commonwealth drug offences, that an appropriate range for the non-parole period was between 60% and 66% of the head sentence (at [8]). At the Court of Appeal of Queensland’s request, counsel for the respondent provided some information as to the practice of setting non-parole periods for Commonwealth drug offences at a point beyond the half-way mark of the sentence (at [10]). Holmes JA (Fraser JA and McMurdo J agreeing) said (at [10]-[11]):
An examination of sentence appeals from other jurisdictions bears out the statement of the prosecutor below. In R v Selim [1998] NSWSC 165, for example, the New South Wales Court of Criminal Appeal observed (at 5),
There is no rigid rule as to the proportion that a non-parole period should bear to the head sentence, but more often than not the non-parole period is more than fifty percent of the head sentence and is ordinarily of the order of 60% to 66 2/3% of it.
Similar comments can be found elsewhere in the judgments of the New South Wales Court of Criminal Appeal (R v Bernier (1998) 102 A Crim R 44 at 49; R v Viana [2001] NSWCCA 171). The practice has been consistently applied in other states (see, eg, R v [Ha Khanh] Phong (2005) 12 VR 17[; 153 A Crim R 477]; R v Thomas [1999] VSCA 204; R v Ngui [(2000) 1 VR 579; 111 A Crim R 593]; Mustafa v The Queen (2002) 133 A Crim R 133; R v Cheng (1999) 73 SASR 502[; 107 A Crim R 460]). It does not seem, however, that any similar uniformity has developed in respect of Commonwealth offences which do not involve drugs (R v Robertson [(2008) 185 A Crim R 441] at [18]).
The practice of setting non-parole periods in drug importation cases at around the two-thirds mark seems to have originated in New South Wales, where the idea of “truth in sentencing” reached its zenith with s 28A of the Probation and Parole Act 1983 (NSW). That section required a non-parole period for a serious offence to be at least three-quarters of the head sentence unless the court determined that the circumstances justified a shorter period. Section 44 of the Crimes (Sentencing Procedure) Act 1999 (NSW) currently requires for all offences where imprisonment is imposed that, in the absence of special circumstances, the ratio of the non-parole period to the balance of the sentence be at least 2:1.
[18] Bertilone v The Queen (2009) 197 A Crim R 78, [46] (Buss JA, with whom McLure and Miller JJA agreed), citing R v Mokoena [2009] QCA 36.
Buss JA then considered decisions in Victoria, South Australia and Western Australia and, though a number of these disclosed that non-parole periods had been fixed between one half and around two thirds of the head sentence, none of them suggested that the breadth of the sentencing discretion was constrained by any typical or usual ratio.[19] Buss JA concluded that the case law revealed that, in general, the non‑parole periods for Commonwealth drug importation and related drug offences had usually been about 60 per cent to 66 2/3 per cent of the head sentences, but that sentencing judges must not determine the non‑parole period in any case by applying this “general guide”. The ratio of the non-parole period to a head sentence in a particular case may be higher or lower, as the facts and circumstances in question require.[20]
[19] Bertilone v The Queen (2009) 197 A Crim R 78, [47]-[53] (Buss JA, with whom McLure and Miller JJA agreed).
[20] Bertilone v The Queen (2009) 197 A Crim R 78, [54]-[60] (Buss JA, with whom McLure and Miller JJA agreed). Bertilone has been consistently followed, see R v Ruha (2010) 198 A Crim R 430, R v Marshall (2010) 199 A Crim R 331; Sayed v The Queen (2012) 220 A Crim R 236; Tsen v The Queen [2010] WASCA 21; and Dunning v Tasmania [2018] TASCCA 21.
The following year, in Hili the High Court emphatically rejected the proposition that there was any “norm” regarding the time a federal offender must spend in prison:[21]
… there neither is, nor should be, a judicially determined norm or starting point (whether expressed as a percentage of the head sentence, or otherwise) for the period of imprisonment that a federal offender should actually serve in prison before release on a recognisance release order. More particularly, these are reasons enough to conclude that it is wrong to say, as the Court of Criminal Appeal did, “that the ‘norm’ for a period of mandatory imprisonment under the Commonwealth legislation is between 60 and 66 per cent, which figure will be affected by special circumstances applicable to a particular offender”. It is wrong to begin from some assumed starting point and then seek to identify “special circumstances”. Rather, a sentencing judge should determine the length of sentence to be served before a recognisance release order takes effect by reference to, and application of, the principles identified by this Court in Power, Deakin and Bugmy.
(footnote omitted).
[21] Hili v The Queen (2010) 242 CLR 520, [13], [44] (French CJ, Cummow, Hayne, Crennan, Kiefel and Bell JJ).

The High Court emphasised Hunt J’s finding in R v Paull that “the application of set ratios in fixing non-parole periods necessarily masks the consideration which must be given to the individual facts of a particular case”, and referred to Bertilone with apparent approval.[22]
[22] Hili v The Queen (2010) 242 CLR 520 [43] (Buss JA, with whom McLure and Miller JJA agreed), citing R v Paull (1990) 20 NSWLR 427, 435 (Hunt J); Bertilone v The Queen (2009) 197 A Crim R 78, [41] (Buss JA, with whom McLure and Miller JJA agreed).
The determination of the appeal
In this case, although it was relevant that there was only one charge it was necessary for the sentencing judge to impose a sentence that properly reflected the applicant’s underlying criminal conduct. The offending spanned around two years when a number of returns for six companies were not lodged and sums exceeding $4.6 million were not remitted.
The applicant was properly described as the architect and instigator of the scheme to defraud. The applicant recruited the co-offenders Chy and Sarinn and they received around half of the GST proceeds. The applicant received around half the GST proceeds, being a sum in the order of $1.19 million. The applicant accepted that there was available the inference that he received around half of the PAYG proceeds as well. That is a sum in the order of $1.19 million.
In contrast to his co-offenders, the applicant gave no sign of contrition or remorse, no character references were offered, and he provided only a slender basis upon which the sentencing Judge could assess his rehabilitation prospects. On the question of rehabilitation, the sentencing Judge said:
None of you have offended from the time of the search warrants, and to that extent you have all shown positive indications of rehabilitation. In addition, Mr Chy, you have taken steps to address your gambling addiction, and Mr Sarinn, you have sought psychological assistance and continued working to support your family. There is no information about any steps towards rehabilitation by Mr Heng. I will take the delay into account in relation to issues of rehabilitation, but I do not accept that the lapse of time has caused any unfairness to any of you and I do not otherwise treat it as a matter in a mitigation.
The applicant emphasised that after his offending there was a period of eight years when he started and managed a business which was and is financially successful. It continues to be managed by the applicant’s domestic partner and a colleague. The applicant highlights that he is a first offender in a stable relationship with his domestic partner and mother of their five children. It is likely that after prison the applicant will return to that business and provide for his family; there is no reason to think that he has other than good rehabilitation prospects.
When one has regard to the circumstances of the offender and the offending, it is clear that the head sentence was high. The non-parole period is higher than might usually be fixed for a first offender. The non-parole period is however not outside the range referred to in Palmer and McIntyre.[23]
[23] R v Palmer [2016] SASCFC 34; R v McIntyre (2020) 138 SASR 17.
There are a number of features, some perhaps unusual, which supported a heavy sentence and a high non-parole period. Whilst he had been through very difficult early years, the applicant was in stable employment with the support of his family before he commenced offending. There is no suggestion that the applicant had any financial difficulties; unlike his co-offenders he was not suffering from any apparent gambling addiction nor was he apparently otherwise troubled by debt. There is no explanation at all given for the offending. The applicant still denies his guilt. It is difficult to avoid the conclusion that the applicant’s motive was opportunistic financial greed. The applicant offered very little to reassure the sentencing Judge or this Court that he will not again succumb to this type of temptation.
Whilst his new business has apparently been successful, the applicant has made no attempt to meet his obligation to make reparation. The applicant concedes that it is unlikely he will ever make any reparation. The applicant has never revealed what happened to his $2.4 million or so share of the proceeds of his offending.
Though the applicant points to the fact that he has not engaged in any similar offending in his new business during the eight years preceding sentence, this factor is at best neutral. The new business followed the execution of search warrants and it must have been obvious to the applicant that he and his co-offenders were going to be under very close scrutiny from the revenue authorities.
Pursuant to s 19AB(1) of the Crimes Act 1914 (Cth), the court must fix a non˗parole period in respect of a federal offence if the court imposes a head sentence that exceeds three years’ imprisonment.[24] Section 19AB(1) confers a discretion on a sentencing judge to determine the appropriate non-parole period. Neither s 19AB(1), nor any other relevant statutory provision, require that the non-parole period bear any particular relationship to the head sentence.
[24] Unless the court declines to fix a non-parole period pursuant to s 19AB(3). The prosecution accepts that it was appropriate for the court to fix a non-parole period in this case.
Bearing in mind the obligation imposed by s 16A(1) of the Crimes Act 1914 (Cth) to “impose a sentence … that is of a severity appropriate in all the circumstances of the offence” it cannot be said that the head sentence or the

non-parole period are, in all the circumstances of this case, manifestly excessive.
Conclusion
I agree with Doyle and Bleby JJA that there is no disparity issue in this case.
Permission to appeal should be granted.
In my opinion, the appeal should be dismissed.
DOYLE and BLEBY JJA: This is an application for permission to appeal against sentence on the ground of manifest excess.
Following a trial by jury, the applicant and a co-accused (Mr Chy), were convicted of one count of conspiracy to defraud the Commonwealth.[25] Another co-accused (Mr Sarinn) was convicted upon his plea of guilty. The maximum penalty for this offence is 10 years imprisonment.[26]
[25] Contrary to s 135.4(5) of the Criminal Code 1995 (Cth).
[26] Noting that under s 4B of the Crimes Act 1914 (Cth), when a natural person is convicted of an offence punishable by imprisonment only, the court may, if it thinks appropriate in all the circumstances of the case, impose, instead of or in addition to, a penalty of imprisonment, a pecuniary penalty. The maximum pecuniary penalty that may be imposed is $66,000 (ss 4AA and 4B(2) of the Crimes Act).
The applicant was sentenced to eight years imprisonment with a non-parole period of six years. The sentencing Judge also made a reparation order in favour of the Commonwealth against the three defendants, making them jointly and severally liable for the amount of $4,632,355.[27]
[27] Being the amount of the loss suffered by the Commonwealth by reason of the fraud, pursuant to s 21B of the Crimes Act.
Circumstances of the offending
Between 3 February 2011 and 26 February 2013, the three defendants engaged in a conspiracy to defraud the Commissioner of Taxation by setting up six labour hire companies with sham directors. The people named as directors were overseas students with little or no involvement in running the businesses operated by the companies. The businesses were, in reality, run by the defendants.
The businesses appeared to be legitimate. Labour was supplied to agricultural and associated enterprises. The workers were paid for the work they performed. PAYG tax was withheld from their salaries. The companies rendered invoices to the businesses to which the labour had been supplied. These invoices included amounts for GST. While the companies collected GST and withheld PAYG tax appropriately, these amounts were not paid to the Commissioner of Taxation as required.
The loss suffered by the Commissioner of Taxation was $4,632,355, comprising $2,246,933 in unremitted GST and $2,385,422 in unremitted PAYG tax.
The sentencing Judge accepted that each of the companies had been created and registered for the purpose of defrauding the Commissioner. The companies were set up and used in succession in an attempt to avoid detection. That is, each company was set up and then operated for a period of time before being wound up. The customers and workers were then transferred to the next company.
The sentencing Judge described the offending as serious, committed over a lengthy period of time, and involving a number of steps. Those steps included the creation and registration of the six labour hire companies; establishing bank accounts for each of the companies; obtaining and fulfilling contracts for the provision of labour; recruiting labour; in relation to some workers, arranging accommodation and transportation; payment of wages and issuing payment summaries to labour hire workers; withholding PAYG; rendering invoices inclusive of GST to the business to which labour was supplied; withdrawing funds from the entity bank accounts; the calculation of business profits, expenses and unremitted GST; and the division and disbursement of the unremitted GST and likely also the PAYG tax withheld.
The sentencing Judge, who had been the trial judge, said that it was apparent from the evidence that the defendants were operating a viable business with a large turnover. Her Honour observed that had the defendants run their business in a legitimate way, paying the appropriate tax, they would have been profitable. She concluded that their decision to defraud the Commonwealth in the way they did was motivated by greed and not need.
The defendants did not voluntarily cease their offending. It was only when the Taxation Office and Federal Police executed search warrants, and it became apparent to the defendants that their scheme had been detected, that their offending came to an end.
Because it is relevant to an aspect of the applicant’s contention of manifest excess, it is appropriate to set out in full the section of the sentencing Judge’s remarks differentiating between the roles of the defendants, and the extent to which each benefited from the fraud:[28]
Each of you had a different role in the conspiracy. Mr Heng, you maintained some of the accounting records. You established, with the assistance of others, the entities relevant to the charge. You dealt directly with at least one of the primary producers. You rented several residential buildings to house workers for the entities. You commissioned the preparation of PAYG summaries for three of the entities. You maintained documents relating to the entities, including wage documents, invoices, letters from the ATO and spreadsheets detailing labour hours. You authored handwritten worksheets which recorded profits, expenses and the division and disbursement of unremitted GST.
Mr Sarinn, you oversaw the day to day operation of the business, including the management of workers and wages, and the provision of invoices to customers and subcontractors. You were a signatory to each of the bank accounts. You withdrew approximately $20.4 million across 551 transactions from the accounts of the various labour hire entities. You rented several residential dwellings to house workers. You rented Australian Post office boxes to which correspondence relating to the entities were sent. You maintained copies of the handwritten worksheets prepared by Mr Heng. You maintained a significant volume of documents relating to each entity, including registration documents, company constitutions, emails from subcontractors, wage documents, bank records and invoices. You obtained and managed public liability insurance for the various entities.
Nay Chy, you withdrew approximately $2.4 million across 41 transactions from the accounts of four entities. You retained deposit and withdrawal slips from transactions on the entity bank accounts and a letter from the ANZ regarding one account. On occasions you provided invoices to service recipients.
On the basis of the evidence I find that you, Mr Heng, were the architect and instigator of the scheme. It was your plan and you persuaded Mr Sarinn and Mr Chy to help you. Mr Sarinn appears to have had a greater involvement in the day to day activities of the business than Mr Chy as evidenced by the banking and other records. He also appears to have received a greater share of the GST amounts. Beyond this it is not possible to say with any precision what your respective roles were, other than that you were both recruited by and acted at the direction of Mr Heng, and that you were both active and significant participants in the conspiracy. I will therefore treat Mr Sarinn and Mr Chy equally in terms of their respective roles.
Whilst Mr Heng was significantly assisted by the work of Mr Sarinn and Mr Chy, I infer that he received the most substantial financial benefit from the scheme. The handwritten worksheets demonstrate a percentage division of unremitted GST in which Mr Heng received 50%, Mr Sarinn between 25 and 30%, and Mr Chy between 20 and 25%. I conclude that Mr Heng therefore received a financial advantage in relation to GST in the order of $1.19 million, Mr Sarinn an advantage in the order of $679,000, and Mr Chy in the order of $477,000. Whilst there is no evidence as to what occurred in relation to the unremitted PAYG withholdings, I conclude that a similar division of profits occurred between you in relation to those amounts. Accordingly, each of you received a large financial benefit from this scheme.
[28] Emphasis added.
The sentencing Judge explained that it was not clear what happened to the financial benefits made by the defendants. None of them cooperated with the authorities or paid any restitution.[29]
[29] Except to the extent that Mr Sarinn was subject to a garnishee order in favour of the Commissioner of Taxation in the order of $70,000, and had been bankrupted in circumstances where his major asset was valued at around $65,000 and may have resulted in some funds being paid to the Commissioner.
The sentencing Judge also remarked upon the impact of the offending upon the community:
Tax fraud is not a victimless crime, it is a crime against the Australian community. First, because it reduces the funds available for the essential services that we all rely upon such as medical care, education, social security, defence, roads and other infrastructure. And, second, because it increases the tax burden on honest tax payers.
The tax system relies heavily on self-assessment and self-reporting and thus is vulnerable to abuse. You took advantage of this vulnerability and dishonestly obtained a large amount of money which is unlikely to be fully recovered by the Tax Office despite the reparation orders I will make. The effects of your offending will be felt by the entire community.
Offending of this type is difficult to detect and once detected, as in this case, it is a complex and time consuming process to prosecute. Further, many legitimate businesses were unwittingly involved in your offending, they no doubt incurred considerable expense and inconvenience because of this investigation and prosecution.
Personal circumstances
The sentencing Judge addressed each of the defendant’s personal circumstances.
In the case of Mr Heng, he was 45 years of age at the date of sentencing, having been between 34 and 36 years of age at the time of the offending. He has no prior convictions of relevance.
Mr Heng was born in Cambodia during the civil war and the rule of the Khmer Rouge. He was separated from his family at the age of one and raised as an orphan by Buddhist monks. He migrated to Australia in 1997. On arrival in Australia he located his four brothers, who are currently living in Adelaide. His mother has also now relocated to Adelaide, and indeed lives with Mr Heng and his partner. Mr Heng and his partner have five children who at the date of sentencing, ranged in age from three to 19 years of age.
Mr Heng’s native language is Khmer. Since migrating to Australia, he has learnt to communicate verbally in English, although only to a limited degree. Since being in Australia, Mr Heng has worked in various manual labouring jobs, particularly in the agricultural industry. He became involved in the labour hire business on an apparently legitimate basis before embarking upon the conspiracy the subject of the present proceedings.
The sentencing Judge reasoned that, because Mr Heng had not accepted the verdict of the jury, she had no explanation from him as to why he engaged in the offending. The Judge considered that the obvious explanation was greed.
Since the discovery of his offending in February 2013, Mr Heng had commenced operating a successful business growing tomatoes. He had an established client base and 12 staff. He was the main breadwinner for his family, although his wife provided some assistance in the business. The sentencing Judge was informed that this business had complied with all taxation and other statutory obligations.
The sentencing Judge noted that there were no allegations of any offending by Mr Heng since his arrest in February 2013, but concluded that it was difficult to assess his prospects of rehabilitation in view of his continued denial of the charge.
The sentencing Judge also noted that there had been a significant delay between the discovery of the offending in February 2013 and the charge being laid in December 2017. There had been further delays after the charge was laid on account of the complexity of the matter, and a delay of the trial as a result of the Covid-19 pandemic. While stating that the delay was no-one’s fault, the Judge accepted that it would have caused the defendants added anxiety and stress. The Judge also took into account the delay on the issue of rehabilitation, noting that none of the defendants had offended since the discovery of the subject offending, and so to that extent had shown positive indications of rehabilitation. That said, her Honour added that, in the case of Mr Heng, there was no information about any steps that he might have taken towards rehabilitation. The sentencing Judge said that the time that had passed since the offending had not caused any unfairness to the defendants, and so was not otherwise a matter of mitigation.
The sentencing Judge also outlined the personal circumstances of the other two defendants. While obviously different in detail, there was nothing markedly different about their backgrounds that was likely to have weighed heavily in the sentencing process.
In the case of Mr Chy, there was evidence from a psychologist to the effect that at the time of his offending he was suffering from an alcohol use disorder, pathological gambling addiction and also symptoms of a post-traumatic stress disorder related to his difficult childhood. The psychologist had also proffered the opinion that Mr Chy’s decision to participate in the scheme to defraud the Commissioner was underpinned by financial stress and his reliance upon Mr Heng. While the sentencing Judge apparently accepted this opinion, her Honour said that it served merely to explain his offending, rather than excuse it.
The sentencing Judge did attach some significance to the fact that both Mr Chy and Mr Sarinn (including through his guilty plea) had expressed their contrition and remorse for their offending, whereas Mr Heng had continued to deny his offending and had shown no sign of contrition or remorse.
The sentence imposed
After her Honour’s comprehensive summary of the offending, and the personal circumstances of the defendants, largely in the terms set out above, her Honour noted the assistance she had received from the schedule of sentences with which she had been provided.

Her Honour summarised:
General deterrence for offending of this type is an important consideration. Prior good character, whilst of relevance, attracts less weight in a matter such as this. Yours was a calculated, dishonest and systematic fraud over a two-year period which resulted in a significant loss of over $4.6 million to the Tax Office and to the Australian community. The sentence I impose must deter both you and others from engaging in similar offending.
Turning to Mr Heng, and after repeating that it was his scheme and that he involved others in it, and that he had not shown any sign of contrition or remorse, her Honour sentenced him to eight years imprisonment, with a non-parole period of six years imprisonment.
The sentencing Judge sentenced Mr Sarinn on the basis of a notional starting point of five years imprisonment, reduced by 20 per cent on account of his plea to four years imprisonment. Her Honour imposed a non-parole period of two years.
In the case of Mr Chy, the sentencing Judge sentenced him to five years imprisonment with a non-parole period of three years.
Her Honour also made the reparation order mentioned earlier in these reasons.
Consideration
The applicant seeks permission to appeal on the single ground that the sentence imposed upon him was manifestly excessive both as to the head sentence and the non-parole period. In particularising that ground, the applicant also contends that the sentencing Judge erred in apportioning greater culpability to the appellant over that of the co-accused, Mr Sarinn.
In addressing the complaint of manifest excess, there is no dispute as to the relevant principles to be applied. They were recently set out by this Court in Ndreka v The Queen and need not be repeated.[30]
[30] Ndreka v The Queen [2021] SASCA 11 at [28] (Doyle JA, Kelly P and Bleby JA agreeing).
There is no doubt that Mr Heng’s offending was a serious instance of the charged offending. As outlined above, it involved a relatively sophisticated scheme. It took place over a two year period, and involved a number of steps and activities. It involved very significant sums of money, both in terms of the loss inflicted upon the Commonwealth and the benefits received by the defendants, and in particular Mr Heng.
Further, on the sentencing Judge’s findings, Mr Heng had a significant role in the conspiracy. He was the architect and instigator of the scheme, and persuaded Mr Sarinn and Mr Chy to assist him. Mr Sarinn and Mr Chy acted at the direction of Mr Heng.
Mr Heng has not provided any explanation for his offending or what happened to the proceeds of the scheme. The sentencing Judge concluded that he was motivated by greed, and had not made any restitution. While Mr Heng had been previously been of good character, that was of little significance given the nature of his offending (involving sustained and systematic dishonesty). By reason of him continuing to deny his offending, Mr Heng had shown no sign of contrition or remorse.
Given the importance of general deterrence in offending such as the present, and in line with the schedule of comparative sentences provided to the sentencing Judge (and to this Court),[31] a lengthy period of imprisonment was required and appropriate.
[31] The use of which was endorsed in Hili v The Queen (2010) 242 CLR 520 at [54].
There was also a clear basis for differentiating between the conduct of Mr Heng, on the one hand, and Mr Chy and Mr Sarinn, on the other hand. There was a basis for doing so given the lead role taken by Mr Heng as the architect and instigator of the offending, as reflected in him receiving a larger proportion of the benefits. Also relevant in this context were the expressions of remorse and contrition on the part of Mr Chy and Mr Sarinn, including the latter’s plea of guilty. Mr Heng has not shown any sign of remorse or contrition. For this reason, we do not think that the comparison with the sentences of Mr Chy and Mr Sarinn provides any independent basis for this Court’s intervention.
However, the issue remains whether the head sentence or non-parole period were manifestly excessive.
As the applicant points out, the sentence of eight years imprisonment was 80 per cent of the maximum penalty for this type of offence. It was undoubtedly a heavy sentence; the respondent accepts as much. However, we are not satisfied it was manifestly excessive. It was a very serious instance of the charged offence having regard to the period of time and scale of the offending, Mr Heng’s role as the architect and instigator of the offending, and the fact that his offending was motivated by greed.
In so concluding, we have had regard to the schedule of comparative sentences provided to the sentencing Judge. It is true that the cases in which similar length head sentences have been imposed have tended to involve a larger number of offences. But the significance of this distinction is limited given the period of time, number of acts and financial scale of the offending encapsulated within the single count charged in the present case. Having regard to the full criminality inherent in the applicant’s offending, the head sentence of eight years was not manifestly excessive.
However, in addition to this heavy sentence, the sentencing Judge also fixed a non-parole period that was 75 per cent of the head sentence. In fixing this non͟˗parole period, which was significantly greater as a proportion of Mr Heng’s head sentence than the non-parole periods fixed for Mr Sarinn (50 per cent) and Mr Chy (60 per cent), it would seem that the sentencing Judge was influenced by the lack of contrition and remorse shown by Mr Heng. While this was a relevant consideration, the resulting non-parole period is a very heavy one, both in its length and as a proportion of the head sentence, particularly for a first-time offender.
There is no need to set out the principles governing the selection of an appropriate non-parole period. They are well known and not in dispute, and were in any event recently summarised in R v McIntyre.[32] As this Court also explained in that case,[33] in applying the earlier decision in R v Palmer,[34] it is accepted that there is no norm for a non-parole period, or prescriptive range within which all non-parole periods must fall.[35] While thus emphasising the breadth of a sentencing judge’s discretion when fixing a non-parole period, it would at the same time be unrealistic to ignore that there is an important relationship between the head sentence and non-parole period, and that ordinarily (and in the absence of statutory intervention) an appropriate non-parole period will generally fall somewhere within the range of about half to three-quarters of the head sentence.
[32] R v McIntyre [2020] SASCFC 101 at [78]-[83] (Doyle J, Stanley and Hughes JJ agreeing).
[33] R v McIntyre [2020] SASCFC 101 at [84] (Doyle J, Stanley and Hughes JJ agreeing).
[34] R v Palmer [2016] SASCFC 34 at [4] (Kourakis CJ).
[35] Hili v The Queen (2010) 242 CLR 520 at [36]-[44] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).
As a proportion of the head sentence, the non-parole period fixed in the present case was of a length usually reserved for an offender who is a recidivist, or an offender in respect of whom the sentencing Court otherwise has a basis for concluding that he or she has poor prospects of successful rehabilitation.
It is true that the sentencing Judge had no basis to be confident that the applicant had good prospects of successful rehabilitation. It followed that there was no basis to fix a low or lenient non-parole period. But it did not follow that there was a proper basis for concluding that the applicant had poor prospects of successful rehabilitation, or that the applicant otherwise required a non-parole period at the very top of the usual range.
Put another way, a non-parole period of the length fixed in the present case required a finding that the applicant had poor prospects of successful rehabilitation or that there was some other reason for imposing a heavy non-parole period. The sentencing Judge did not make any such finding, and the evidence does not reveal any basis for making such a finding.
Having maintained his innocence, the applicant has not demonstrated any contrition, or any positive steps to address the criminogenic factors that contributed to his offending (on the sentencing Judge’s finding, his greed). But the applicant had no antecedent offending, and, in the period of approximately eight years between his initial arrest for his offence and his eventual conviction and imprisonment, he did not engage in any further offending. He demonstrated a capacity throughout this period to run a large scale, and apparently successful, tomato-growing business without succumbing to any temptation to offend again. It is also significant, when assessing the applicant’s prospects of rehabilitation, that his wife and family remain supportive of him, and he has the prospect of a business to which he can return upon his release.
All things considered, the non-parole period of six years (being 75 per cent of what was already a heavy sentence) was manifestly excessive.
We would thus grant permission to appeal, allow the appeal, and resentence the applicant. We would impose the same head sentence of eight years imprisonment, but would fix a non-parole period of five years and three months (being about 65 per cent of the head sentence).