Jane Maria Sakovits v R Ronald Rudolf Sakovits v R

[2014] NSWCCA 109

Court of Criminal Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Jane Maria Sakovits v R Ronald Rudolf Sakovits v R [2014] NSWCCA 109

Hearing dates:

13 June 2014

Decision date:

20 June 2014

Before:

Leeming JA
Price J
Bellew J

Decision:

In each case:

1.Leave to appeal granted.

2.Appeal dismissed.

Catchwords:

CRIMINAL LAW - Appeal - Conspiracy to defraud the Commonwealth by participation in tax evasion scheme - Conspiracy extending over more than five years - Loss to the revenue in excess of $1 million - Where applicants married and were separated following the imposition of custodial sentences - Where sentencing judge found that the effect of sentences upon the mother of one of the applicants was not exceptional - Whether sentencing judge erred in so finding - Whether sentences imposed were manifestly excessive - Necessity to have regard to seriousness of the offending - No error on the part of the sentencing judge - Sentences not manifestly excessive

Legislation Cited:

Crimes Act 1914 (Cth)
Criminal Code 1995 (Cth)

Cases Cited:

Agius v R [2011] NSWCCA 119
Beldon v R [2012] NSWCCA 194
Director of Public Prosecutions (Cth) v Gregory [2011] VSCA 145; (2011) 211 A Crim R 147
Eken v R [2007] NSWCCA 320
Hili v R; Jones v R (2010) 242 CLR 520; [2010] HCA 45
Markarian v R (2005) 228 CLR 357; [2005] HCA 25
Pham v R [2009] NSWCCA 25; (2009) 193 A Crim R 190
R v Bateson [2011] NSWSC 643
R v Boughen; R v Cameron [2012] NSWCCA 17
R v Ferrer-Esis (1991) 55 A Crim R 231
R v Hart [1999] NSWCCA 240
R v Hawkins (1989) 45 A Crim R 430
R v Mascall (unreported 11 May 2012 District Court of NSW)
R v Sakovits [2013] NSWSC 464
R v Zerafa [2013] NSWCCA 222

Category:

Principal judgment

Parties:

Jane Maria Sakovits - Applicant
Ronald Rudolf Sakovits - Applicant
Regina - Respondent

Representation:

Counsel:

Mr K Averre - Applicants
Ms S McNaughton SC - Respondent
Solicitors:
Brown Wright Stein - Applicants
Commonwealth Director of Public Prosecutions - Respondent

File Number(s):

2009/252021 2009/249946

Publication restriction:

Nil

 Decision under appeal 

Citation:

R v Sakovits [2013] NSWSC 464

Date of Decision:

2013-04-26 00:00:00

Before:

Hall J

Judgment

1. THE COURT: On 4 February 2013 the applicants Jane Maria Sakovits and Ronald Rudolf Sakovits pleaded not guilty to an indictment containing two counts, namely:

(i)   that between about 1 April 2001 and about 23 May 2001 at Sydney in the state of New South Wales and elsewhere, conspired with Lynette Cataline Liles and each other to defraud the Commonwealth; and

(ii)   that between about 24 May 2001 and about 30 September 2006 at Sydney in the state of New South Wales and elsewhere, did conspire with Lynette Cataline Liles and each other with the intention of dishonestly causing a loss to a third person, namely, the Commonwealth.

1. The first count alleged an offence contrary to ss. 29D and 86(1) of the Crimes Act 1914 (Cth) ("the Act"), the maximum penalty for which is 20 years imprisonment and/or a fine of 2000 penalty units. The second count alleged an offence contrary to s. 134.5(3) of the Criminal Code 1995 (Cth) ("the Code"), the maximum penalty for which is 10 years imprisonment and/or a fine of $66,000.00.

1. It will be apparent that the Crown alleged a single conspiracy between 1 April 2001 and 30 September 2006. The necessity for two separate counts was brought about by legislative changes which came into effect on 24 May 2001 (see generally Agius v R [2011] NSWCCA 119). For the purposes of sentencing, it was accepted that the maximum penalty in respect of count 1 should be regarded as being 10 years imprisonment (see R v Boughen; R v Cameron [2012] NSWCCA 17 at [3]).

1. Following a trial before Hall J and a jury, the applicants were found guilty of the offences. On 26 April 2013 his Honour sentenced each of the applicants as follows:

(i)   in respect of count 1, imprisonment for a period of 6 months commencing on 26 April 2013 and expiring 25 October 2013;

(ii)   in respect of count 2, imprisonment for a period of 5 years commencing on 26 April 2013 and expiring on 25 April 2018, to be released on a recognizance at the expiration of 2 years and 6 months, namely 25 October 2015, upon giving security in the amount of $200.00 on a condition to be of good behaviour for a period of 2 years and 6 months.

1. Each of the applicants now seeks leave to appeal against the sentences which were imposed. The two grounds of appeal are as follows:

(i)   the learned sentencing judge erred in his determination of the hardship of a custodial sentence to members of the applicants' family, and to the applicants;

(ii)   the sentences imposed in respect of count 2 were manifestly excessive.

1. As we have set out more fully below, the first ground was based partly upon the effect of a custodial sentence upon Mrs Margaret Potts, the mother of the applicant Jane Sakovits. Following the imposition of sentence, Mrs Potts passed away. However, it was conceded by counsel for the applicants on the hearing of the appeal that Mrs Potts' death was not relevant to the determination of the first ground, and that the question of whether the sentencing judge had erred was to be determined according to the circumstances which prevailed at the time of sentencing.

THE FACTS

1. His Honour found the following facts (see R v Sakovits [2013] NSWSC 464 at [18] and following):

"18 During the period of the offending, both offenders were directors of a company, Inform Promotions ("Inform"). Mr Ronald Sakovits was secretary of that company until 30 June 2006, on which date Mrs Sakovits was appointed secretary of the company.

19 Either or both of Mr and Mrs Sakovits authorised the lodgement of the company tax returns for Inform for the financial years ended 30 June 2000 to 30 June 2006.

20 Their involvement in what has been characterised as a tax avoidance scheme during which the offences by them were committed occurred in circumstances in which their accountant, Lynette Liles, introduced them to a scheme which led to them participating in an offshore "round robin" arrangement involving a Vanuatu company, International Prestige Promotions ("IPPI"). The arrangement enabled the offenders to evade payment of both company and personal income tax.

21 The company, IPPI, was incorporated by the offenders in Vanuatu at the suggestion and with the assistance of Ms Liles. The company income tax frauds were achieved through the transfer of monies from Australia to Vanuatu disguised as legitimate payments by Inform for the cost of services such as 'marketing and promotions' provided by IPPI.

22 The offenders created or were party to the creation of false invoices purportedly raised by IPPI to give the appearance of the payments being for legitimate business expenses. The offenders and Liles falsely recorded the payments from Inform to IPPI in Inform's accounts as business expenses. Such false expenses in turn flowed through to the relevant company income tax returns, thereby reducing the company's taxable income declared to the Australian Taxation Office (ATO) and the overall amount of company tax paid. Due to the ATO's system of self-assessment, the tax returns were processed automatically, resulting in assessments being issued based on the tax returns depriving the ATO of the correct amount of tax.

23 The offenders' participation in the arrangement caused a loss to the taxation revenue in the following respects:

(1) unpaid company tax on income fraudulently reduced by claims for the deduction from assessable income of fictitious business expenses; and

(2) unpaid personal tax through the fraudulent failure to declare as assessable income the monies received by the scheme participants in consequence of the international round robins (the receipts being dividends and hence part of their assessable incomes).

24 The company tax shortfall resulting from the false claims for Inform over the years 2000-2006 was $530,789.

25 The amounts falsely claimed as 'marketing and promotion' and other expenses in respect of the individual financial years may be summarised as follows:

(i) The financial year ended 30 June 2000, total expenses claimed amounted to $216,727, resulting in a tax shortfall of approximately $101,862.

(ii) In respect of the financial year ended 30 June 2001, total expenses falsely claimed was $231,538, resulting in a tax shortfall of approximately $46,313.

(iii) In respect of the financial year ended 30 June 2002, expenses falsely claimed was $181,766, together with 'agency fees' of $16,000 resulting in a tax shortfall of approximately $59,302.

(iv) In respect of the financial year ended 30 June 2003, expenses incorrectly claimed was $208,938.18, and 'agency fees' of $89,624 resulting in a tax shortfall of approximately $89,569.

(v) In respect of the financial year ended 30 June 2004, two groups of expenses were falsely claimed, the first amounted to $216,783.50, and the second, $257,534.80 resulting in a tax shortfall of approximately $112,475.

(vi) In respect of the financial year ended 30 June 2005, expenses falsely amounted to claim $268,582, and a further $94,384 resulting in a tax shortfall of approximately $89,448.

(vii) In respect of the financial year ended 30 June 2006, expenses falsely claimed as 'rent' was $109,150, and 'agency fees' of $106,071 resulting in a tax shortfall of approximately $31,821.

26 The personal income tax shortfall resulting from Jane Sakovits' failure to declare her true assessable income for the seven financial years in question was $326,432.

27 The personal income tax shortfall resulting from Ronald Sakovits' failure to declare his true assessable income for the seven financial years in question was approximately $320,672.

28 The total company and personal income tax shortfall is approximately $1,177,893."

Ground 1 - The learned sentencing judge erred in his determination of the hardship of a custodial sentence to members of the applicants' family and to the applicants

The evidence

1. Evidence was given in the sentence proceedings by the applicants' daughter-in-law, Simone Sakovits, in relation to Mrs Potts' health. Ms Sakovits, who was a registered nurse with experience in aged and palliative care, told the court (commencing at T4 L45) that Mrs Potts:

(i)   was 85 years old;

(ii)   had been admitted to hospital about one week previously, having lived independently in her own home up until that time;

(iii)   suffered from an obstructive pulmonary disease which affected her breathing and which had necessitated the installation of a continuous oxygen supply at her home;

(iv)   had advanced osteoporosis which had resulted in her sustaining two crushed vertebrae for which she had been prescribed oral morphine to control her pain levels;

(v)   had been diagnosed with pneumonia; and

(vi)   had been found to have a mass in her right lung, further investigation of which could not be undertaken due to her inability to be administered the anaesthetic necessary to conduct a biopsy.

1. Ms Sakovits described Mrs Potts' condition as one of "severe frailty". She explained that prior to her admission to hospital, the applicants had provided Mrs Potts with assistance on 4 days of each week, with a registered nurse doing so on the remaining 3 days. She said that she thought it unlikely that Mrs Potts would be able to return home once she was discharged from hospital and that as a consequence, she was about to commence enquiries as to the availability of care facilities. Ms Sakovits explained that there were no family members other than the applicants who could assist her in that regard.

1. In terms of the health of the applicants, two reports of Dr Lachlan Soper were tendered before his Honour. In relation to the applicant Ronald Sakovits, Dr Soper reported (inter alia):

"The stress of this situation over a number of years has resulted in him having clinical stress, anxiety and depression. In May 2011 I referred him to see Dr Asha Yourell, clinical psychologist.

This stress may have contributed to his heart attack which he had on 18 April 2010, for which he was later stented in November 2010...He has left rotator cuff tears for which Dr Graeme McDonald has recommended he undertake shoulder surgery as soon as his trial is finished."

1. Dr Soper then set out the medications which had been prescribed for the applicant, before noting that his past medical history included:

(i)   hypertension;

(ii)   peripheral neuropathy;

(iii)   hypercholesterolemia;

(iv)   restless leg syndrome;

(v)   urinary urgency;

(vi)   osteoarthritis;

(vii)   heart attack;

(viii)   exostoses.

1. In relation to the applicant Jane Sakovits, Dr Soper reported (inter alia):

"Our first appointment was because she was sent to me by her solicitor because of anxiety, headaches, insomnia and depression. I referred her to Dr Kathy Rooney, psychologist that day and put her on Efexor XR antidepressant on our follow up consult in October 2008. I have seen her about 10 times a year since that point and a lot of the focus has been around her anxiety and stress. We have needed to double her Efexor XR dose to 150mg and have failed to be able to successfully reduce the dose".

1. Dr Soper then set out the medications which had been prescribed for the applicant, before noting that her past medical history included:

(i)   depression and anxiety (which he noted was "probably off and on for most of her life");

(ii)   hypercholesterolemia;

(iii)   hyperlipidaemia;

(iv)   obstructive sleep apnoea;

(v)   diabetes;

(vi)   urinary frequency;

(vii)   periodontitis.

The findings of the sentencing judge

1. In terms of the health of Mrs Potts, and the effect upon her of any custodial sentence imposed upon the applicants, his Honour concluded (at [62]):

"I turn to another personal circumstance which concerns the poor health of Mrs Sakovits' mother. The evidence called at the sentence hearing established that Mrs Sakovits' mother is elderly and in a very ill condition. Section 16A(2)(p) of the Crimes Act, entitles and requires that I am to bring into account family consequences subject to one condition. The circumstances may not be given substantial weight in the sentencing determination unless they can be characterised as "exceptional": R v Togias [2001] NSWCCA 522 at [9]-[17]; R v Hinton [2002] NSWCCA 405; 134 A Crim R 286 at [31]; R v Agius [2012] NSWSC 978 at [87]. It appears likely that Mrs Sakovits' mother will not return home and will be admitted to an appropriate care institution. Whilst the impact, in particular, upon Mrs Sakovits of her mother's condition is understandably a matter of great and serious concern, on the construction which the relevant case law authorities have placed upon the provisions of s 16A(2)(p), the evidence does not enable me to make a finding that the circumstances can be characterised as "exceptional" for the purposes of applying that provision."

1. As to the age and health of each of the applicants, his Honour made specific reference (at [49]) to the reports of Dr Soper before concluding (at [51]-[53]):

"51 It is apparent that both offenders will require ongoing medical attendances and supervision and monitoring in relation to a number of medical issues and the prescription of required medications.

52 It is accepted that an offender's psychological and medical health and age may increase the hardship of a sentence and may therefore be taken into account in deciding what sentence is appropriate, but that consideration is limited by the necessity of maintaining proper standards of punishment: R v Hart [1999] NSWCCA 204 per Sperling J at [8].

53 Whilst a sentencing judge is entitled, in arriving at the appropriate penalty, to take into account an offender's age, health, generally speaking, those factors of themselves do not mean that a term of imprisonment should not be imposed if it is otherwise warranted. They are factors that may, instead, affect the length of a custodial sentence. In the present proceedings, I consider that the evidence as to the age and states of health of each of Mr and Mrs Sakovits are matters that must be taken into account in the sentence determinations in accordance with the provisions of s 16A(2)(m)."

The submissions of the applicants

1. Counsel for the applicants accepted that before the sentencing judge could take into account, under s. 16A(2)(p) of the Act, the probable effect upon Mrs Potts of custodial sentences imposed upon the applicants, it was necessary to establish that such effect was exceptional (see R v Zerafa [2013] NSWCCA 222). He submitted that in concluding that the probable effect in the present case was not exceptional, the sentencing judge had erred.

1. Counsel submitted that the effect of the applicants' incarceration upon Mrs Potts went beyond that which was typical. It was submitted that this was because the applicants were, in effect, Mrs Potts' primary carers and that the inevitable result of their incarceration was that Mrs Potts was deprived of their care, as well as their companionship, at a time in her life when she was seriously ill and facing the prospect of transition from hospital into some other care facility.

1. To the extent that this ground asserted an error on the part of the sentencing judge in his determination of the hardship of a custodial sentence upon the applicants themselves, counsel emphasised that the applicants had been married for more than 40 years and now found themselves separated from each other. He submitted that whilst separation from other family members may be an inevitable consequence of a person's incarceration, that situation was to be distinguished from the present because the applicants had been separated from one another. In this regard, counsel sought to draw an analogy between the position of the applicants, and that of a foreign national incarcerated in this country following sentence. He further submitted that the impact of the sentence upon the applicant Jane Sakovits was rendered even greater because she had been separated from an elderly parent.

The submissions of the Crown

1. The Crown submitted that the sentencing judge was obviously mindful of the principles governing the operation of s. 16A(2)(p), had properly applied them, and had correctly concluded that the effect of the applicants' incarceration upon Mrs Potts was not exceptional. To the extent that the applicants would not be able to care for Mrs Potts if incarcerated, it was submitted that other family members had apparently been available to administer care in the event that the need to do so arose.

1. As to the separation of the applicants from each other, the Crown firstly pointed out that no such submission had been made to the sentencing judge. The Crown further submitted that although the applicants were not able to contact each other, they were nevertheless able to receive visits from other family members and acquaintances. In these circumstances, the Crown submitted that a clear distinction was to be drawn between the position of the applicants and that of a foreign national serving a sentence of imprisonment in Australia. The Crown further submitted that even if such an analogy was drawn, the fact of separation would be a circumstance deserving of limited weight (see R v Ferrer-Esis (1991) 55 A Crim R 231).

Determination

1. Section 16A(2)(p) of the Act provides as follows:

Matters to which court to have regard when passing sentence

(1) In determining the sentence to be passed, or the order to be made, in respect of any person for a federal offence, a court must impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence.

(2) In addition to any other matters, the court must take into account such of the following matters as are relevant and known to the court:

...

(p) the probable effect that any sentence or order under consideration would have on any of the person's family or dependants.

1. In Zerafa (supra) Hoeben CJ at CL and Latham J concluded that the "probable effect" to which reference is made in s.16A(2)(p) must be exceptional. In particular their Honours said (at [93]):

"93 In relation to s16A(2)(p) it is not appropriate for this Court to overrule or depart from cases such as Togias and Hinton. As the respondent accepted, the "exceptional hardship" approach has been followed in Queensland and Victoria, and to a limited extent in South Australia and Western Australia. It is only the ACT which has refused to follow that line of authority. As Spigelman CJ acknowledged in Togias:

"17 If there is to be any change in this position, and that was not put in this case even on a formal basis, only the High Court can effect it."

1. In our view, for a number of reasons, the sentencing judge's conclusion that the probable effect of the applicants' incarceration on Mrs Potts was not exceptional was correct.

1. Firstly, on the evidence before his Honour it was virtually inevitable that Mrs Potts would no longer be able to live independently, and would be transferred from hospital to some other facility within which she would be provided with appropriate care. That would have rendered it unnecessary for the applicants to administer any day to day care. To the extent that enquiries had to be undertaken about the availability of such facility, they were able to be undertaken by Ms Sakovits without the need for assistance from the applicants.

1. Secondly, even if Mrs Potts had been able to return home from hospital (which, on the evidence, was most unlikely) the care which had been provided by the applicants was limited in any event. Moreover, there was at least one other family member, namely Ms Sakovits, who would seemingly have been available to provide care in lieu of the applicants, and who was exceptionally well qualified to do so. All of these circumstances tended wholly against the proposition that the effect upon Mrs Potts of the applicants' incarceration was exceptional (as to which see Eken v R [2007] NSWCCA 320 at [52] per Hidden J (Handley AJA and Hoeben J (as his Honour then was) agreeing); Pham v R [2009] NSWCCA 25; (2009) 193 A Crim R 190 at [49]-[50] per Latham J (Giles JA and Mathews AJA agreeing); R v Bateson [2011] NSWSC 643 at [43] per Buddin J).

1. Thirdly, as a general proposition, the fact that the parents of members of the prison population may be ill or disabled is not uncommon (see Pham (supra) at [51] per Latham J).

1. To the extent that Ground 1 relied upon the hardship to the applicants resulting from their own separation, s. 16A(2)(p) had no application. Moreover, no such submission was put to the sentencing judge by senior counsel then appearing for the applicants. Generally speaking, a party will be bound by counsel's conduct of proceedings at first instance (see generally Zreika v R [2012] NSWCCA 44; (2012) 223 A Crim R 460 at [79]-[80] per Johnson J (McClellan CJ at CL and Rothman J agreeing); Beldon v R [2012] NSWCCA 194 per Johnson J (at [36]) (McClellan CJ at CL and Hammerschlag J agreeing).

1. In any event, separation of two co-offenders who happen to be married is an unavoidable consequence of incarceration. Even if a submission based upon that circumstance had been put to the sentencing judge, it would have been deserving of little weight.

1. For all of these reasons, his Honour's conclusion that the effect of the applicants' incarceration upon Mrs Potts was not exceptional was correct and no appealable error has been demonstrated. It follows that ground 1 is not made out.

Ground 2 - The sentences imposed in respect of count 2 in each case were manifestly excessive.

The submissions of the applicants

1. In support of this ground counsel for the applicants relied firstly upon sentences imposed in other cases of similar offending including, in particular R v Mascall (unreported 11 May 2012 District Court of NSW). He submitted that the proper application of sentencing principles demanded that the sentences imposed "accord with legitimate community expectations whilst at the same time lean towards mercy".

1. In written submissions it was put on behalf of the applicants that the sentences were manifestly excessive in light of the "particular subjective circumstances of the appellants". Those subjective circumstances were said to include:

(i)   the age of the applicants;

(ii)   the fact that they were each in need of ongoing medical attention; and

(iii)   the deprivation of contact with each other.

1. In oral argument, counsel for the applicants submitted that there were "unique features" in the present case, although in doing so he again concentrated upon the hardship arising from the applicants' separation from each other.

The submissions of the Crown

1. The Crown submitted that there were features which differentiated the present case from those relied upon by the applicants for comparative purposes, and that reference to those cases did nothing other than confirm that the sentences imposed upon the applicants were within the proper range of sentencing discretion.

1. The Crown further submitted that all of the relevant subjective features had been taken into account by the sentencing judge and that when regard was had to the seriousness of the offending, the applicants had failed to demonstrate that the sentences imposed were manifestly excessive.

Determination

1. In order to establish that the sentences were manifestly excessive, the applicants must establish that such sentences were unreasonable or plainly unjust (see Markarian v R (2005) 228 CLR 357; [2005] HCA 25 at 370-371; [25]).

1. It is not necessary, for the purposes of determining this ground, to canvass the facts and circumstances of the sentences imposed in the other cases to which the Court was referred. It is sufficient for present purposes to state that such cases are distinguishable on various bases. They do not, in our view, provide any support for the proposition that the sentences imposed upon the applicants are manifestly excessive.

1. The sentencing judge gave careful and comprehensive consideration to every aspect of the subjective case of each applicant, including:

(i)   their otherwise unblemished character;

(ii)   their mental and physical health;

(iii)   their age; and

(iv)   the delay in prosecuting the matter which, he concluded, would have caused extreme anguish to each of the applicants, particularly given their respective states of health.

1. At the same time, his Honour properly pointed out (at [52]) that it was necessary to balance particular subjective circumstances, such as the applicants' mental health, against the necessity to maintain a proper standard of punishment (see R v Hart [1999] NSWCCA 240 at [8] per Sperling J, Meagher JA and Simpson J agreeing).

1. The necessity to maintain a proper standard of punishment obviously required his Honour to take into account the circumstances of the offending. The Crown submitted to the sentencing judge that the offending was "not particularly complicated". That was correct, in the sense that at its most fundamental level the conspiracy involved:

(i)    the transmission of money from Australia to Vanuatu;

(ii)   the deduction of certain amounts and their transmission to the promoter of the scheme; and

(iii)   the return of the balance of the monies to the applicants.

1. However as evidenced by the following, the Crown's labelling of the offending in that way ran the risk of understating its true seriousness.

1. Firstly, the conspiracy required the incorporation of IPPI in Vanuatu.

1. Secondly, it required the opening of a bank account in Vanuatu into which the payments could be made. As his Honour pointed out (at [34]) the use of Vanuatu, a well known tax haven, as the place for IPPI's incorporation was a factor which assisted the applicants in concealing their involvement in the offending.

1. Thirdly, this was not a case in which a single bank account was utilised for the purpose of putting the conspiracy into effect. Leaving aside the accounts in Australia which were used to facilitate the return of the money, diagrammatic spreadsheets tendered by the Crown before the sentencing judge established that in 2001, 2002 and 2004 respectively, money transferred to IPPI in Vanuatu was subsequently directed to:

(i)   an account in the United States, operated in the name of Interglobal Waste Management Inc., which was under the control of one or both of the applicants;

(ii)   another account in the United States, operated in the name FBO Material Technologies Inc., which was similarly under the control of one or both of the applicants; and

(iii)   the purchase, in Chile, of items connected with the business of the applicant Ronald Sakovits.

1. Fourthly, the money which was directed from the account of IPPL in Vanuatu back to the applicants in Australia was not directed to a single account. Amounts were variously deposited into a personal account and a trust account, and additional amounts were accessed by cash withdrawals made through Automatic Teller Machines. The only available conclusion is that this method of distribution, along with the direction of other amounts to accounts and entities overseas, was adopted by the applicants in an effort to conceal their involvement in the conspiracy.

1. Fifthly, the implementation and conduct of the conspiracy required the creation of invoices which falsely represented that expenses had been incurred by Inform Promotions when this was in fact not the case. These documents were obviously created in an attempt to ascribe some air of legitimacy to the transfers which were made to IPPL.

1. Sixthly, the creation of those invoices gave rise to the necessity to construct the accounts of Inform Promotions in a manner which was correspondingly false and misleading.

1. Seventhly, over the period of the conspiracy, the applicants repeatedly lodged personal taxation returns which were false, and caused company taxation returns to be lodged which were similarly false.

1. When viewed in this way, the conspiracy in which the applicants engaged, whilst not particularly complicated in one sense, was (as his Honour correctly found at [32]) nevertheless sophisticated. His His HIts implementation necessarily involved a degree of planning, and its continuation involved a multiplicity of acts which were obviously designed to ensure, as far as possible, that the involvement of the applicants would not be detected.

1. There were other matters which were also relevant to the determination of an appropriate sentence. Neither applicant demonstrated any contrition. His Honour found (at [34]) that they were motivated by self interest. The conspiracy in which they engaged extended over a period of more than five years and resulted in a significant loss to the revenue. The extent of that loss was an obviously significant factor (see R v Hawkins (1989) 45 A Crim R 430 at 435 per Lee J, Newman J and Loveday J agreeing). His Honour took all of these factors into account (at [32]) having correctly observed (at [29]) that general deterrence assumed particular significance (see for example Director of Public Prosecutions (Cth) v Gregory [2011] VSCA 145; (2011) 211 A Crim R 147 at [53] per the Court (Warren CJ, Redlich JA and Ross AJA).

1. On any view, the applicants' offending warranted condign punishment. In Hili v R; Jones v R (2010) 242 CLR 520; [2010] HCA 45 the majority of the High Court (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ) made the following relevant observations (at [63]):

"The applicants' offending was sustained for a long time. It was planned, deliberate and deceitful requiring for its implementation the telling of many lies. The applicants acted out of personal greed. The amount of tax evaded was not small. Detection of offending of this kind is not easy. Serious tax fraud which this was, is offending that affects the whole community. As was pointed out in Ruha [2010] QCA 10, the sentences imposed had to have both a deterrent and punitive effect, and those effects had to be reflected in the head sentences and the recognizance release orders that were made".

1. Those observations are directly apposite to the present case.

1. In our view, the sentences imposed upon each of the applicants were entirely appropriate.

1. It follows that ground 2 is not made out.

ORDERS

1. The Court makes the following orders in each case:

(1)   Leave to appeal is granted;

(2)   The appeal is dismissed.

Decision last updated: 20 June 2014